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PURCHASE CONTRACT AGREEMENT, dated as of February 1, 2002, between FPL Group, Inc., a Florida corporation (the "Company"), and The Bank of New York, acting as purchase contract agent, attorney-in-fact and trustee for the Holders of Securities from time to time (in any one or more of such capacities, the "Agent").
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RECITALS
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The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the Securities.
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All things necessary to make the Purchase Contracts, when the Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent, as provided in this Agreement, the valid obligations of the Company and the Holders, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done.
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WITNESSETH:
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For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed as follows:
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ARTICLE I
Definitions and Other Provisions
of General Application
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SECTION 1.1. Definitions.
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For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
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(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;
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(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;
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(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 or other subdivision; and
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(d) the following terms have the meanings given to them in this Section 1.1(d).
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"Act" when used with respect to any Holder, has the meaning specified in Section 1.4.
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"Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act of 1933, as amended, or any successor rule thereunder.
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"Agent" means the Person named as the "Agent" in the first paragraph of this instrument until a successor Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Agent" shall mean such Person.
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"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.
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"Applicable Benchmark Treasury" on a particular determination date shall mean direct obligations of the United States (which may be obligations traded on a when-issued basis only) having a maturity comparable to the remaining term to maturity of the Debentures, which may be two years or two and one quarter years, as applicable, as agreed upon by FPL Group Capital and the Reset Agent. The yield for the Applicable Benchmark Treasury will be the bid side yield displayed at 10:00 a.m., New York City time, on the third Business Day immediately preceding the applicable Reset Date in the Telerate system (or if the Telerate system is (a) no longer available on the third Business Day immediately preceding such Reset Date or (b) in the opinion of the Reset Agent (after consultation with FPL Group Capital) no longer an appropriate system from which to obtain such yield, such other nationally recognized quotation system as, in the opinion of the Reset Agent (after consultation with FPL Group Capital), is appropriate). If such yield is not so displayed, the yield for the Applicable Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to maturity for the Applicable Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis, and computed by taking the arithmetic mean of the secondary market bid yields, as of 10:30 a.m., New York City time, on the third Business Day immediately preceding the applicable Reset Date of three leading United States government securities dealers selected by the Reset Agent (after consultation with FPL Group Capital) (which may include the Reset Agent or an affiliate thereof).
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"Applicable Market Value" has the meaning specified in Section 5.1.
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"Applicable Ownership Interest" means, with respect to each Corporate Unit and the U.S. Treasury securities in a Treasury Portfolio, (1) a 1/20, or 5%, undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security included in such Treasury Portfolio which matures on or prior to February 15, 2005, and (2) for the scheduled interest payment date on the Debentures that occurs on the Purchase Contract Settlement Date, in the case of a successful remarketing on the Initial Remarketing Date, or for each scheduled interest payment date on the Debentures that occurs after the Tax Event Redemption Date or the Mandatory Redemption Date if the Purchase Contracts were not previously terminated pursuant to Section 5.8, a 0.0594% undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security maturing on or prior to the relevant interest payment date.
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"Applicable Principal Amount" means (i) on any date prior to the Reset Date, if any, the aggregate principal amount of Debentures that are components of Corporate Units on such date or (ii) on or after the Reset Date, if any, the aggregate principal amount of the Debentures outstanding on such date.
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"Authorized Newspaper" means a newspaper in the English language of general circulation in The City of New York and generally published each Business Day. As of the date of this Agreement, the Company anticipates that for purposes of each Reset Announcement Date, the Authorized Newspaper will be The Wall Street Journal.
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"Authorized Officer" means the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, or any other officer or agent of the Company duly authorized by the Board of Directors to act in respect of matters relating to this Agreement.
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"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 Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).
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"Board of Directors" means the board of directors of the Company or a duly authorized committee of that board.
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"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 Agent.
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"Book-Entry Interest" means a beneficial interest in a Global Certificate, ownership and transfers of which shall be maintained and made through book entries by a Clearing Agency as described in Section 3.6.
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"Business Day" means any day other than a Saturday, Sunday or any other day on which banking institutions and trust companies in ▇▇▇ ▇▇▇▇ ▇▇▇▇ (▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇) are permitted or required by any applicable law to close.
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"Cash Merger" has the meaning set forth in Section 5.10(a).
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"Cash Merger Date" has the meaning set forth in Section 5.10(a).
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"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
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"Certificate" means a Corporate Unit Certificate or a Treasury Unit Certificate.
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"Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as a depositary for the Securities and in whose name, or in the name of a nominee of that organization, shall be registered as a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Securities.
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"Clearing Agency Participant" means a securities broker or dealer, bank, trust company, clearing corporation, other financial institution or other Person for whom from time to time the Clearing Agency effects book entry transfers and pledges of securities deposited with the Clearing Agency.
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"Closing Price" has the meaning specified in Section 5.1.
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"Collateral" has the meaning specified in Section 2.1 of the Pledge Agreement.
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"Collateral Agent" means JPMorgan Chase Bank, as Collateral Agent under the Pledge Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder.
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"Collateral Substitution" means the substitution of the pledged components of one type of Security for pledged components of the other type of Security (i.e., either Corporate Unit or Treasury Unit) in connection with the establishment or reestablishment of Treasury Units or Corporate Units, as described in Sections 3.13 and 3.14.
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"Common Stock" means the Common Stock, par value $0.01 per share, of the Company, including, where applicable, the preferred share purchase rights appurtenant thereto.
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"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 provisions of this Agreement, and thereafter "Company" shall mean such successor.
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"Company Certificate" means a certificate signed by an Authorized Officer and delivered to the Agent.
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"Contract Adjustment Payments" means the amounts payable by the Company in respect of each Purchase Contract issued in connection with the Corporate Units and the Treasury Units, which amounts shall be equal to 3.75% per annum of the Stated Amount; computed on the basis of a 360-day year of twelve 30-day months, plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.3.
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"Corporate Trust Office" means the corporate trust office of the Agent at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
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"Corporate Unit" means a Security, initially issued in substantially the form set forth as Exhibit A hereto in the Stated Amount of $50, which represents (i) beneficial ownership by the Holder of either (a) (1) one Debenture in a principal amount of $50, or (2) following a successful remarketing of the Debentures on the Initial Remarketing Date, an Applicable Ownership Interest in the Treasury Portfolio, subject to the pledge of such Debenture or Applicable Ownership Interest in the Treasury Portfolio by the Holder pursuant to the Pledge Agreement or (b) upon the occurrence of a Mandatory Redemption or a Tax Event Redemption prior to the Purchase Contract Settlement Date, an Applicable Ownership Interest in the Treasury Portfolio, subject to the Pledge of such Applicable Ownership Interest in the Treasury Portfolio by the Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract.
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"Corporate Unit Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Corporate Units specified on such certificate.
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"Corporate Unit Register" and "Corporate Unit Registrar" have the respective meanings specified in Section 3.5.
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"Coupon Rate" with respect to a Debenture means the percentage rate per annum at which such Debenture will bear interest.
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"Current Market Price" has the meaning specified in Section 5.6(a)(8).
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"Debentures" means the series of debentures of FPL Group Capital designated "Series A Debentures due February 16, 2007" to be issued under the Indenture.
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"Default" means a default by the Company in any of its obligations under this Agreement.
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"Deferred Contract Adjustment Payments" has the meaning specified in Section 5.3.
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"Depositary" means, initially, DTC until another Clearing Agency becomes its successor.
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"DTC" means The Depository Trust Company, the initial Clearing Agency.
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"Early Settlement" has the meaning specified in Section 5.9(a).
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"Early Settlement Amount" has the meaning specified in Section 5.9(a).
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"Early Settlement Date" has the meaning specified in Section 5.9(a).
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"Early Settlement Rate" has the meaning specified in Section 5.9(b).
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"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.
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"Expiration Date" has the meaning specified in Section 1.4.
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"Expiration Time" has the meaning specified in Section 5.6(a)(6).
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"Failed Remarketing" means a remarketing that does not occur because a condition precedent to such remarketing is not fulfilled, or if in spite of using its reasonable efforts, the Remarketing Agent cannot remarket the Debentures of Holders of Corporate Units at a price not less than 100% of the applicable Treasury Portfolio Purchase Price, in the case of the remarketing of Debentures on the Initial Remarketing Date, or 100% of the aggregate principal amount of such Debentures, in the case of the remarketing of Debentures on the Secondary Remarketing Date, in each case, plus accrued and unpaid interest.
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"FPL Group Capital" means FPL Group Capital Inc, a Florida corporation and a wholly-owned subsidiary of the Company, or any successor under the Indenture.
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"Global Certificate" means a Certificate that evidences all or part of the Securities and is registered in the name of the Depositary or a nominee thereof.
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"Guarantee Agreement" means the Guarantee Agreement dated as of June 1, 1999, between the Company and The Bank of New York, as guarantee trustee, as originally executed and delivered and as it may from time to time be supplemented or amended.
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"Guarantor Event" means: (a) the failure of the Guarantee Agreement to be in full force and effect; (b) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency or other similar law or (ii) a decree or order adjudging the Company bankrupt or insolvent, or approving as properly filed a petition by one or more entities other than the Company seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State bankruptcy, insolvency or other similar law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company or for any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief or any such other decree or order shall have remained unstayed and in effect for a period of 90 consecutive days; or (c) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency or other similar law or of any other case or proceeding to be adjudicated bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in a case or proceeding under any applicable Federal or State bankruptcy, insolvency or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the authorization of such action by the Board of Directors of the Company.
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"Holder," when used with respect to a Security, means the Person in whose name a Corporate Unit Certificate and/or a Treasury Unit Certificate evidencing the Security is registered on the related Corporate Unit Register and/or the Treasury Unit Register, as the case may be.
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"Indenture" means the Indenture (For Unsecured Debt Securities), dated as of June 1, 1999, between FPL Group Capital and the Indenture Trustee pursuant to which the Debentures are to be issued, as originally executed and delivered and as it may from time to time be supplemented or amended by one or more indentures supplemental thereto entered into pursuant to the applicable provisions thereof and shall include the terms of a particular series of securities established as contemplated by Section 301 thereof.
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"Indenture Trustee" means The Bank of New York, as trustee under the Indenture, or any successor thereto.
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"Initial Remarketing Date" means the third Business Day immediately preceding November 16, 2004.
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"Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Company by an Authorized Officer and delivered to the Agent.
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"Mandatory Redemption" means, if a Guarantor Event shall occur and be continuing, the redemption of all of the Debentures, within 60 days after the occurrence of a Guarantor Event unless, within 30 days after the occurrence of such Guarantor Event, Standard & Poor's Ratings Service (a Division of the McGraw Hill Companies, Inc.) and ▇▇▇▇▇'▇ Investors Service, Inc. (if the Debentures are then rated by those rating agencies, or, if the Debentures are not then rated by those rating agencies but are then rated by one or more other nationally recognized rating agencies, then at least one of those other nationally recognized rating agencies) shall have reaffirmed in writing that, after giving effect to such Guarantor Event, the credit rating on the Debentures shall be investment grade (i.e. in one of the four highest categories, without regard to subcategories within such rating categories, of such rating agency).
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"Mandatory Redemption Date" means the date on which a Mandatory Redemption is to occur.
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"Merger Early Settlement" has the meaning specified in Section 5.10(a).
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"Merger Early Settlement Amount" has the meaning specified in Section 5.10(b).
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"Merger Early Settlement Date" has the meaning specified in Section 5.10(a).
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"NYSE" has the meaning specified in Section 5.1.
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"Officer's Certificate" means a certificate signed by an authorized signatory of FPL Group Capital establishing the terms of the debt securities of any series pursuant to the Indenture.
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"Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company or an Affiliate and who shall be reasonably acceptable to the Agent.
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"Outstanding," with respect to any Corporate Units and Treasury Units means, as of the date of determination, all Corporate Units or Treasury Units evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except:
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(i) if a Termination Event has occurred, (A) Treasury Units for which Treasury Securities have been deposited with the Agent in trust for the Holders of such Treasury Units and (B) Corporate Units for which the principal amount of the related Debenture or the Stated Amount of the appropriate Applicable Ownership Interest in the Treasury Portfolio (or as contemplated in Section 3.15 hereto with respect to a Holder's Interest in the Treasury Portfolio, cash) has been theretofore deposited with the Agent in trust for the Holders of such Corporate Units;
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(ii) Corporate Units and Treasury Units evidenced by Certificates theretofore cancelled by the Agent or delivered to the Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and
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(iii) Corporate Units and Treasury 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 Agent proof satisfactory to it that such Certificate is held by a bona fide purchaser in whose hands the Corporate Units or Treasury 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 Corporate Units or Treasury Units have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Corporate Units or Treasury Units owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Agent shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Corporate Units or Treasury Units which a Responsible Officer of the Agent actually knows to be so owned shall be so disregarded. Corporate Units or Treasury Units so owned which have been pledged in good faith may be regarded as Outstanding Securities if the pledgee establishes to the satisfaction of the Agent the pledgee's right so to act with respect to such Corporate Units or Treasury Units and that the pledgee is not the Company or any Affiliate of the Company.
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"Payment Date" means each of February 16, May 16, August 16 and November 16, commencing May 16, 2002.
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"Permitted Investments" has the meaning set forth in Article I of the Pledge Agreement.
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"Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof or any other entity of whatever nature.
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"Pledge" means the pledge under the Pledge Agreement of the Debentures, the Treasury Securities or the appropriate Applicable Ownership Interest in the Treasury Portfolio, in each case constituting a part of the Securities.
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"Pledge Agreement" means the Pledge Agreement, dated as of the date hereof, by and among the Company, the Agent, as purchase contract agent and as attorney-in-fact for the Holders from time to time of Securities, and the Collateral Agent, as the collateral agent, the custodial agent and the securities intermediary.
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"Pledged Applicable Ownership Interest in the Treasury Portfolio" has the meaning specified in Section 2.1 of the Pledge Agreement.
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"Pledged Debentures" has the meaning specified in Section 2.1 of the Pledge Agreement.
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"Pledged Treasury Securities" has the meaning specified in Section 2.1 of the Pledge Agreement.
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"Predecessor Certificate" means a Predecessor Corporate Unit Certificate or a Predecessor Treasury Unit Certificate.
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"Predecessor Corporate Unit Certificate" of any particular Corporate Unit Certificate means every previous Corporate Unit Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Corporate Unit evidenced thereby; and, for the purposes of this definition, any Corporate Unit Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Corporate Unit 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 Unit Certificate.
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"Predecessor Treasury Unit Certificate" of any particular Treasury Unit Certificate means every previous Treasury Unit 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 Unit Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Unit 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 Unit Certificate.
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"Primary Treasury Dealer" means a primary U.S. government securities dealer in New York City.
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"Proceeds" has the meaning set forth in Article I of the Pledge Agreement.
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"Purchase Contract," when used with respect to any Security, means the contract forming a part of such Security and obligating the Company (A) to sell to the Holder of such Security and the Holder of such Security to purchase not later than the Purchase Contract Settlement Date, for $50 in cash, a number of newly issued shares of Common Stock equal to the applicable Settlement Rate and (B) to pay the Holder Contract Adjustment Payments, if any, on the terms and subject to the conditions set forth in Article V hereof.
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"Purchase Contract Settlement Date" means February 16, 2005.
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"Purchase Contract Settlement Fund" has the meaning specified in Section 5.5.
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"Purchase Price" has the meaning specified in Section 5.1.
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"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
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"Quotation Agent" means (i) ▇.▇. ▇▇▇▇▇▇ Securities Inc. and its successors, provided, however, that, if the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Company.
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"Record Date" for the payment of distributions and Contract Adjustment Payments payable on any Payment Date means, as to any Global Certificate, the Business Day next preceding such Payment Date, and as to any other Certificate, a day selected by the Company which shall be at least one Business Day but not more than 60 Business Days prior to such Payment Date (and which shall correspond to the related record date for the Debentures).
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"Redemption Amount" means for each Debenture, (a) except as provided in (b) below, the product of (i) the principal amount of such Debenture and (ii) a fraction whose numerator is the applicable Treasury Portfolio Purchase Price and whose denominator is the Applicable Principal Amount of Debentures, or (b) in the case of a Mandatory Redemption (y) prior to the Purchase Contract Settlement Date if the related Purchase Contracts have been previously or concurrently terminated in accordance with Section 5.8 or (z) after the Purchase Contract Settlement Date, the principal amount of the Debenture.
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"Redemption Price" means an amount per Debenture equal to the Redemption Amount plus accrued and unpaid interest, if any, to the date of redemption.
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"Register" means the Corporate Unit Register and the Treasury Unit Register.
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"Registrar" means the Corporate Unit Registrar and the Treasury Unit Registrar.
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"Remarketing Agent" has the meaning specified in Section 5.4(b).
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"Remarketing Agreement" means the Remarketing Agreement dated February 4, 2002 by and among the Company, FPL Group Capital, ▇.▇. ▇▇▇▇▇▇ Securities Inc., as the remarketing agent and The Bank of New York, as the purchase contract agent, including any amendments and supplements thereto.
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"Remarketing Fee" means an amount not exceeding 25 basis points (.25%) of (i) the applicable Treasury Portfolio Purchase Price from any amount of the proceeds from the remarketing of the Debentures in excess of the Treasury Portfolio Purchase Price, in the case of any successful remarketing of Debentures on the Initial Remarketing Date, or (ii) the aggregate principal amount of the remarketed Debentures from any amount of the proceeds from the remarketing of the Debentures in excess of the aggregate principal amount of those remarketed Debentures, in the case of any successful remarketing of Debentures on the Secondary Remarketing Date.
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"Reorganization Event" has the meaning specified in Section 5.6(b).
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"Reset Agent" means ▇.▇. ▇▇▇▇▇▇ Securities Inc., or such other Reset Agent as the Company and FPL Group Capital shall select from time to time.
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"Reset Announcement Date" means the seventh Business Day immediately preceding the Reset Date, the date on which the Reset Spread, and the Applicable Benchmark Treasury will be announced by FPL Group Capital.
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"Reset Date" means November 16, 2004, or, if the remarketing of the Debentures on the Initial Remarketing Date results in a Failed Remarketing, February 16, 2005, unless a remarketing of the Debentures on the Secondary Remarketing Date results in a Failed Remarketing.
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"Reset Rate" means the Coupon Rate to be in effect for the Debentures on and after the Reset Date and determined as provided in Section 4.1.
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"Reset Spread" means an amount determined by the Reset Agent which, when added to the Applicable Benchmark Treasury in effect on the third Business Day immediately preceding the Reset Date, will produce the rate the Debentures should bear in order to have an approximate market value on the third Business Day immediately preceding the Reset Date of 100.5% of (a) the Treasury Portfolio Purchase Price, if the Reset Date is November 16, 2004, or (b) their aggregate principal amount if the Reset Date is February 16, 2005; provided that the Reset Rate shall in no event exceed the maximum permitted by applicable law.
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"Responsible Officer," when used with respect to the Agent, means any officer within the corporate trust department of the Agent, including any vice president, assistant vice president, assistant secretary, assistant treasurer trust officer or any other officer of the Agent who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons' knowledge of any familiarity with the particular subject.
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"Secondary Remarketing Date" means the third Business Day immediately preceding February 16, 2005.
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"Security" means a Corporate Unit or a Treasury Unit.
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"Senior Indebtedness" means indebtedness of any kind of the Company (including the guarantee of the Debentures pursuant to the Guarantee Agreement) unless the instrument under which such indebtedness is incurred expressly provides that it is in parity or subordinate in right of payment to the Contract Adjustment Payments.
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"Settlement Rate" has the meaning specified in Section 5.1.
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"Stated Amount" means $50, which is equal to the stated amount of a Corporate Unit and the face amount of a Treasury Unit.
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"Tax Event" means the receipt by FPL Group Capital of an opinion of a nationally recognized independent tax counsel experienced in such matters to the effect that, as a result of (a) 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 affecting taxation, (b) any amendment to or change in an interpretation or application of any such laws or regulations by any legislative body, court, governmental agency or regulatory authority or (c) any interpretation or pronouncement by any such legislative body, court, governmental agency or regulatory authority that provides for a position with respect to any such laws or regulations that differs from the generally accepted position on January 29, 2002, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after January 29, 2002, there is more than an insubstantial risk that interest payable by FPL Group Capital on the Debentures would not be deductible, in whole or in part, by FPL Group Capital for Federal income tax purposes.
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"Tax Event Redemption" means, if a Tax Event shall occur and be continuing, the redemption of Debentures, in whole but not in part, at the option of FPL Group Capital on not less than 30 days nor more than 60 days prior written notice.
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"Tax Event Redemption Date" means the date on which a Tax Event Redemption is to occur.
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"Termination Date" means the date, if any, on which a Termination Event occurs.
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"Termination Event" means the occurrence of any of the following events: (i) at any time on or prior to the Purchase Contract Settlement Date, a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company or any other similar applicable Federal or State law, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Purchase Contract Settlement Date, such decree or order shall have continued undischarged and unstayed for a period of 60 days; or (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 winding up or liquidation of its affairs, shall have been entered, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Purchase Contract Settlement Date, such judgment, decree or order shall have continued undischarged and unstayed for a period of 60 days; or (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.
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"Threshold Appreciation Price" has the meaning specified in Section 5.1.
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"TIA" means, as of any time, the Trust Indenture Act of 1939, as amended, or any successor statute, as in effect at such time.
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"Trading Day" has the meaning specified in Section 5.1.
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"Treasury Portfolio" means (1) in connection with the remarketing on November 16, 2004, a portfolio of zero-coupon U.S. Treasury securities (a) consisting of interest or principal strips of U.S. Treasury securities that mature on or prior to February 15, 2005 in an aggregate amount equal to the Applicable Principal Amount of Debentures and (b) with respect to the scheduled interest payment date on the Debentures that occurs on February 16, 2005, consisting of interest or principal strips of U.S. Treasury securities which mature on or prior to February 16, 2005 in an aggregate amount equal to the aggregate interest payment that would be due on the Applicable Principal Amount of Debentures that would have been included in Corporate Units assuming no remarketing of the Debentures on the Initial Remarketing Date and that the interest rate on the Debentures was not reset on November 16, 2004 and (2) in connection with a Tax Event Redemption (a) if the Tax Event Redemption Date occurs prior to November 16, 2004, or, if the Initial Remarketing is a Failed Remarketing, prior to the Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury securities consisting of (i) interest or principal strips of U.S. Treasury securities that mature on or prior to February 15, 2005 in an aggregate amount equal to the Applicable Principal Amount of Debentures and (ii) with respect to each scheduled interest payment date on the Debentures that occurs after the Tax Event Redemption Date and on or before the Purchase Contract Settlement Date, interest or principal strips of U.S. Treasury securities that mature on or prior to such interest payment date in an aggregate amount equal to the aggregate interest payment that would be due on the Applicable Principal Amount of Debentures on such date, assuming the Coupon Rate of the Debentures is not reset on the Reset Date, and (b) if the Tax Event Redemption Date occurs on or after November 16, 2004, or, if the Secondary Remarketing is a Failed Remarketing, on or after February 16, 2005, a portfolio of zero-coupon U.S. Treasury securities consisting of (i) principal or interest strips of U.S. Treasury securities that mature on the Business Day prior to February 16, 2007 in an aggregate principal amount equal to the Applicable Principal Amount of Debentures and (ii) with respect to each scheduled interest payment date on the Debentures that occurs after the Tax Event Redemption Date and on or before February 16, 2007, interest or principal strips of U.S. Treasury securities that mature on the Business Day prior to such interest payment date in an aggregate amount equal to the aggregate interest payment that would be due on the Applicable Principal Amount of Debentures on such date, assuming the Coupon Rate of the Debentures is not reset on the Reset Date and (3) in connection with a Mandatory Redemption prior to the Purchase Contract Settlement Date, if the related Purchase Contracts have not been previously or concurrently terminated in accordance with Section 5.8, a portfolio of zero-coupon U.S. Treasury securities as described in clause (2) above, substituting the term Mandatory Redemption Date for the term Tax Event Redemption Date wherever it occurs in clause (2).
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"Treasury Portfolio Purchase Price" means the lowest aggregate price quoted by a Primary Treasury Dealer to the Quotation Agent (a) for the remarketing on the Initial Remarketing Date for the purchase of the Treasury Portfolio for settlement on November 15, 2004 and (b) in the case of a Mandatory Redemption or a Tax Event Redemption, on the third Business Day immediately preceding the Mandatory Redemption Date or the Tax Event Redemption Date, as the case may be, for the purchase of the Treasury Portfolio for settlement on the Mandatory Redemption Date or the Tax Event Redemption Date, as the case may be.
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"Treasury Security" means a zero-coupon U.S. Treasury security having a principal amount at maturity equal to $1,000 and maturing on February 15, 2005 (CUSIP No. 912820 BM8).
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"Treasury Units" means a Security, initially issued in substantially the form set forth as Exhibit B hereto in a Stated Amount of $50, which represents (i) a 1/20 undivided beneficial ownership in a Treasury Security having a principal amount at maturity equal to $1,000, and (ii) the rights and obligations of the Company and the Holder under one Purchase Contract.
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"Treasury Unit Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Treasury Units specified on such certificate.
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"Treasury Unit Register" and "Treasury Unit Registrar" have the respective meanings specified in Section 3.5.
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"Underwriting Agreement" means the Underwriting Agreement dated January 29, 2002 among the Company, FPL Group Capital, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇ Brothers Inc. as representatives of the underwriters.
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"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."
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SECTION 1.2. Compliance Certificates and Opinions.
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Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Agent to take any action under any provision of this Agreement, the Company shall furnish to the Agent a Company Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include:
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(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
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(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
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(3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and
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(4) 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 1.3. Form of Documents Delivered to Agent.
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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.
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Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
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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.
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SECTION 1.4. Acts of Holders; Record Dates.
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(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 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 Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the Company, if made in the manner provided in this Section.
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(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Agent deems sufficient.
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(c) The ownership of Securities shall be proved by the Corporate Unit Register or the Treasury Unit Register, as the case may be.
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(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Certificate shall bind every future Holder of the same Certificate and the Holder of every Certificate 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 Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate.
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(e) The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Securities. If any record date is set pursuant to this paragraph, the Holders of the Outstanding 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 on or prior to the applicable Expiration Date by Holders of the requisite number of Outstanding Securities on such record date. Nothing 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 of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Securities on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Agent in writing and to each Holder of Securities in the manner set forth in Section 1.6.
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With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Agent in writing, and to each Holder of Securities in the manner set forth in Section 1.6, on or prior to 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.
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SECTION 1.5. Notices.
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Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Agreement to be made upon, given or furnished to, or filed with,
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(1) the Agent by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, addressed to the Agent at The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President, Corporate Trust Administration, or at any other address previously furnished in writing by the Agent to the Holders and the Company;
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(2) the Company by the Agent or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, addressed to the Company at FPL Group, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, or at any other address previously furnished in writing to the Agent by the Company;
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(3) the Collateral Agent by the Agent, the Company or any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, addressed to the Collateral Agent at JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Global Trust Services, or at any other address previously furnished in writing by the Collateral Agent to the Agent, the Company and the Holders; or
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(4) the Indenture Trustee by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered or mailed, first-class postage prepaid, addressed to the Indenture Trustee at The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President, Corporate Trust Administration, or at any other address previously furnished in writing by the Indenture Trustee to the Company.
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SECTION 1.6. Notice to Holders; Waiver.
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Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the applicable Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
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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 Agent shall constitute a sufficient notification for every purpose hereunder.
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SECTION 1.7. Effect of Headings and Table of Contents.
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The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
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SECTION 1.8. Successors and Assigns.
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All covenants and agreements in this Agreement by the Company shall bind its successors and assigns, whether so expressed or not.
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SECTION 1.9. Separability Clause.
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In case any provision in this Agreement or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby.
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SECTION 1.10. Benefits of Agreement.
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Nothing in this Agreement or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Securities evidenced by their Certificates by their acceptance of delivery of such Certificates.
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SECTION 1.11. Governing Law.
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THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER JURISDICTION SHALL BE MANDATORILY APPLICABLE.
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SECTION 1.12. Legal Holidays.
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In any case where any Payment Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or the Corporate Unit Certificates or the Treasury Unit Certificates) payment of the Contract Adjustment Payments, if any, shall not be made on such date, but such payments shall be made on the next succeeding Business Day with the same force and effect as if made on such Payment Date, and no interest shall accrue or be payable by the Company or any Holder for the period from and after any such Payment Date, except that, if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day with the same force and effect as if made on such Payment Date.
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In any case where the Purchase Contract Settlement Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement, the Corporate Unit Certificates or the Treasury Unit Certificates), the Purchase Contracts shall not be performed on such date, but the Purchase Contracts shall be performed on the immediately following Business Day with the same force and effect as if performed on the Purchase Contract Settlement Date.
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SECTION 1.13. Counterparts.
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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.
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SECTION 1.14. Inspection of Agreement.
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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.
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ARTICLE II
Certificate Forms
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SECTION 2.1. Forms of Certificates Generally.
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The Corporate Unit Certificates (including the form of Purchase Contract forming part of the Corporate Units evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Corporate Units are listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Corporate Unit Certificates, as evidenced by their execution of the Corporate Unit Certificates.
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The definitive Corporate Unit Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the Corporate Units evidenced by such Corporate Unit Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof.
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The Treasury Unit Certificates (including the form of Purchase Contract forming part of the Treasury Units evidenced thereby) shall be in substantially the form set forth in Exhibit B hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Treasury Units may be listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Treasury Unit Certificates, as evidenced by their execution of the Treasury Unit Certificates.
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The definitive Treasury Unit Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the Treasury Units evidenced by such Treasury Unit Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof.
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Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form:
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THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
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SECTION 2.2. Form of Agent's Certificate of Authentication.
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The form of the Agent's certificate of authentication of the Corporate Units shall be in substantially the form set forth on the form of the Corporate Unit Certificates set forth as Exhibit A hereto.
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The form of the Agent's certificate of authentication of the Treasury Units shall be in substantially the form set forth on the form of the Treasury Unit Certificates set forth as Exhibit B hereto.
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ARTICLE III
The Securities
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SECTION 3.1. Title and Terms; Denominations.
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The aggregate number of Corporate Units and Treasury Units evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to 10,000,000 units (or 11,500,000 if the overallotment provided for in the Underwriting Agreement is exercised in full) except for Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.12, 3.13, 5.9 or 8.5.
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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.
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SECTION 3.2. Rights and Obligations Evidenced by the Certificates.
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Each Corporate Unit Certificate shall evidence the number of Corporate Units specified therein, with each such Corporate Unit representing the ownership by the Holder thereof of a beneficial interest in a Debenture or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, subject to the Pledge of such Debenture or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder thereof and the Company under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of each Corporate Unit shall pledge, pursuant to the Pledge Agreement, each Debenture or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, forming a part of such Corporate Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title, and interest of such Holder in such Debenture or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for the benefit of the Company, to secure the obligation of the Holder under one Purchase Contract to purchase the Common Stock of the Company.
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Each Treasury Unit Certificate shall evidence the number of Treasury Units specified therein, with each such Treasury Unit representing the ownership by the Holder thereof of a 1/20, or 5%, undivided beneficial interest in a Treasury Security, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder thereof and the Company under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of each Treasury Unit shall pledge, pursuant to the Pledge Agreement, each Treasury Security forming a part of such Treasury Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title, and interest of such Holder in such Treasury Security for the benefit of the Company, to secure the obligation of the Holder under one Purchase Contract to purchase the Common Stock of the Company.
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SECTION 3.3 Execution, Authentication, Delivery and Dating.
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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 Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates.
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The Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President, one of its Vice Presidents, its Treasurer, one of its Assistant Treasurers, its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Certificates may be manual or facsimile.
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Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates.
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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 signatory of the Agent, as such Holder's attorney-in-fact. Such signature by an authorized signatory of the Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Purchase Contracts evidenced by such Certificate.
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Each Certificate shall be dated the date of its authentication.
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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 signatory of the 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.
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SECTION 3.4 Temporary Certificates.
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Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates, temporary Certificates which are in substantially the forms set forth in Exhibit A and Exhibit B hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Corporate Units or Treasury Units 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.
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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 Agent, and the 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 Corporate Units or Treasury Units, as the case may be, as the temporary Certificate or Certificates so surrendered. Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the Corporate Units or Treasury Units, as the case may be, evidenced thereby as definitive Certificates.
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SECTION 3.5 Registration; Registration of Transfer and Exchange.
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The Agent shall keep at the Corporate Trust Office a register (the "Corporate Unit Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of Corporate Unit Certificates and of transfers of Corporate Unit Certificates (the Agent, in such capacity, the "Corporate Unit Registrar") and a register (the "Treasury Unit Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of the Treasury Unit Certificates and of transfers of Treasury Unit Certificates (the Agent, in such capacity, the "Treasury Unit Registrar").
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Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Agent, and the 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.
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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 Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates which the Holder making the exchange is entitled to receive.
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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.
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Every Certificate presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Agent, duly executed by the Holder thereof or its attorney duly authorized in writing.
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No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and 8.5 not involving any transfer.
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Notwithstanding the foregoing, the Company will not be obligated to execute and deliver to the Agent, and the Agent will not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate presented or surrendered for registration of transfer or for exchange on or after the Business Day immediately preceding the Purchase Contract Settlement Date or on or after the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date has occurred, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such Certificate, (ii) in the case of Corporate Units, if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer the aggregate principal amount of the Debentures or the aggregate Stated Amount of the Treasury Portfolio, as applicable, evidenced thereby, or (iii) in the case of Treasury Units, if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer the Treasury Securities evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V hereof.
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SECTION 3.6. Book-Entry Interests.
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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 a nominee or custodian thereof by, or on behalf of, the Company. 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 3.9. The 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 3.9:
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(i) the provisions of this Section 3.6 shall be in full force and effect;
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(ii) the Company shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including the payment of Contract Adjustment Payments, if any, and receiving approvals, votes or consents hereunder) as the Holder of the Securities and the sole holder of the Global Certificate(s) and shall have no obligation to the Beneficial Owners;
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(iii) to the extent that the provisions of this Section 3.6 conflict with any other provisions of this Agreement, the provisions of this Section 3.6 shall control; and
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(iv) the rights of the Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants. The Clearing Agency will make book entry transfers among Clearing Agency Participants and receive and transmit payments of Contract Adjustment Payments to such Clearing Agency Participants.
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SECTION 3.7. Notices to Holders.
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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 Certificates registered in the name of a Clearing Agency or the nominee of a Clearing Agency, the Company or the Company's agent shall, except as set forth herein, have no obligations to the Beneficial Owners.
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SECTION 3.8. Appointment of Successor Clearing Agency.
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If any Clearing Agency elects to discontinue its services as securities depositary with respect to the Securities, the Company may, in its sole discretion, appoint a successor Clearing Agency with respect to the Securities.
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SECTION 3.9. Definitive Certificates.
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If (i) a Clearing Agency elects to discontinue its services as securities depositary with respect to the Securities and a successor Clearing Agency is not appointed within 90 days after such discontinuance pursuant to Section 3.8, or (ii) the Company elects to terminate the book-entry system through the Clearing Agency with respect to the Securities, then upon surrender of the Global Certificates representing the Book-Entry Interests with respect to the Securities by the Clearing Agency, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Beneficial Owners in accordance with the instructions of the Clearing Agency. The Company shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be protected in relying on, such instructions.
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SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
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If any mutilated Certificate is surrendered to the Agent, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate at the cost of the Holder, evidencing the same number of Corporate Units or Treasury Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding.
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If there shall be delivered to the Company and the Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity at the cost of the Holder as may be required by them to hold each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Agent that such Certificate has been acquired by a bona fide purchaser, the Company shall execute and deliver to the Agent, and the 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.
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Notwithstanding the foregoing, the Company will not be obligated to execute and deliver to the Agent, and the Agent will not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate on or after the Business Day immediately preceding the Purchase Contract Settlement Date or on or after the Termination Date. In addition, 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 Agent may (i) if the Purchase Contract Settlement Date has occurred, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such Certificate, or (ii) if a Termination Event shall have occurred, transfer the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or the Treasury Securities, as the case may be, forming a part of the Securities represented by such Certificate to such Holder, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V hereof.
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Upon the issuance of any new Certificate under this Section, the Company and the Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Agent) connected therewith.
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Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the Security evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the Securities evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder.
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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.
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SECTION 3.11. Persons Deemed Owners.
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Prior to due presentment of a Certificate for registration of transfer, the Company, FPL Group Capital and the Agent, and any agent of the Company, FPL Group Capital or the Agent, may treat the Person in whose name such Certificate is registered on the Corporate Units Register or the Treasury Units Register, as applicable, as the owner of the Corporate Units or Treasury Units evidenced thereby, for the purpose of receiving interest on the Debentures or distributions on the maturing quarterly interest strips of the Treasury Portfolio, as applicable, receiving payments of Contract Adjustment Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any interest on the Debentures or the Contract Adjustment Payments payable in respect of the Purchase Contracts constituting a part of the Corporate Units or Treasury Units evidenced thereby shall be overdue and notwithstanding any notice to the contrary, and neither the Company, FPL Group Capital nor the Agent, nor any agent of the Company, FPL Group Capital or the Agent, shall be affected by notice to the contrary.
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Notwithstanding the foregoing, with respect to any Global Certificate, nothing herein shall prevent the Company, FPL Capitol, the Agent or any agent of the Company, FPL Group Capital or the Agent, from treating the Clearing Agency as the sole Holder of such Global Certificate or from giving effect to any written certification, proxy or other authorization furnished by any Clearing Agency (or its nominee), as a Holder, with respect to such Global Certificate or impair, as between such Clearing Agency and owners of beneficial interests in such Global Certificate, the operation of customary practices governing the exercise of rights of such Clearing Agency (or its nominee) as Holder of such Global Certificate.
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SECTION 3.12. Cancellation.
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All Certificates surrendered for delivery of shares of Common Stock on or after the Purchase Contract Settlement Date, upon the transfer of the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be, after the occurrence of a Termination Event or pursuant to an Early Settlement or a Merger Early Settlement, or upon the registration of a transfer or exchange of a Certificate, or a Collateral Substitution or the reestablishment of a Corporate Unit shall, if surrendered to any Person other than the Agent, be delivered to the Agent and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Agent for cancellation any Certificates previously authenticated, executed and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the 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 Agent shall upon written request be returned to the Company.
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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 Agent cancelled or for cancellation.
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SECTION 3.13. Establishment or Reestablishment of Treasury Units.
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A Holder of a Corporate Unit may, at any time on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date, create or recreate a Treasury Unit and separate the Debenture or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as applicable, from the related Purchase Contract in respect of such Corporate Unit by substituting Treasury Securities for the Debentures, or appropriate Applicable Ownership Interest in the Treasury Portfolio, that form a part of such Corporate Unit in accordance with this Section 3.13; and if a successful remarketing of the Debentures has occurred on the Initial Remarketing Date or a Mandatory Redemption or a Tax Event Redemption has occurred, Holders of such Corporate Units may make such Collateral Substitutions at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date. Holders may make Collateral Substitutions and establish Treasury Units (i) only in integral multiples of 20 Corporate Units if only Debentures are being substituted for Treasury Securities, or (ii) only in integral multiples of 1,600,000 Corporate Units if the appropriate Applicable Ownership Interests in the Treasury Portfolio are being substituted for Treasury Securities. To create 20 Treasury Units (if Mandatory Redemption or a Tax Event Redemption has not occurred and Debentures remain a component of Corporate Units), or 1,600,000 Treasury Units (if a Mandatory Redemption or a Tax Event Redemption has occurred or the Treasury Portfolio has replaced the Debentures as a component of the Corporate Units as a result of a successful remarketing of such Debentures), the Corporate Unit Holder shall
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(a) if the Treasury Portfolio has not replaced any Debentures as a component of Corporate Units as a result of a successful remarketing or a Tax Event Redemption, deposit with the Collateral Agent a Treasury Security having a principal amount at maturity of $1,000; or
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(b) if the Treasury Portfolio has replaced the Debentures as a component of Corporate Units as a result of a successful remarketing of the Debentures or a Mandatory Redemption or a Tax Event Redemption, on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date, deposit with the Collateral Agent Treasury Securities having an aggregate principal amount at maturity of $80,000,000; and
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(c) in each case, transfer and surrender the related 20 Corporate Units, or, in the event the Treasury Portfolio is a component of Corporate Units, 1,600,000 Corporate Units, to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit B to the Pledge Agreement, stating that the Holder has transferred the relevant types and amounts of Treasury Securities to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the applicable Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying such Corporate Units, whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit A to the Pledge Agreement.
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Upon receipt of the Treasury Securities described in clause (a) or (b) above and the instructions described in clause (c) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release from the Pledge, to the Agent, on behalf of the Holder, Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that had been components of such Corporate Unit, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly:
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(i) cancel the related Corporate Units surrendered and transferred;
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(ii) transfer the applicable Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that had been components of such Corporate Units to the Holder; and
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(iii) authenticate, execute on behalf of such Holder and deliver a Treasury Unit Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Purchase Contracts as were evidenced by the cancelled Corporate Units.
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Holders who elect to separate the Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, from the related Purchase Contracts and to substitute Treasury Securities for such Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses.
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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 a Corporate Unit Certificate to the Agent after depositing the appropriate Treasury Securities with the Collateral Agent, the Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, constituting a part of such Corporate Unit, and any interest on such Debentures or distributions with respect to the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Corporate Unit is so transferred or the Corporate Unit Certificate is so delivered, as the case may be, or, until such Holder provides evidence satisfactory to the Company and the Agent that such Corporate Unit Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company.
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Except as described in this Section 3.13, for so long as the Purchase Contract underlying a Corporate Unit remains in effect, such Corporate Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder in respect of the Debenture or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and Purchase Contract comprising such Corporate Unit may be acquired, and may be transferred and exchanged, only as an entire Corporate Unit.
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SECTION 3.14. Establishment or Reestablishment of Corporate Units.
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A Holder of a Treasury Unit may, at any time on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date, create or recreate Corporate Units by depositing with the Collateral Agent Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, having an aggregate principal amount equal to the aggregate principal amount at maturity of, and in substitution for all, but not less than all, of the Treasury Securities comprising part of the Treasury Unit in accordance with this Section 3.14; provided, however, that if the Treasury Portfolio has replaced the Debentures as a component of Corporate Units as a result of a successful remarketing of the Debentures or a Mandatory Redemption or a Tax Event Redemption, such Collateral Substitutions may be made at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date. Holders of Treasury Units may make such Collateral Substitutions and establish Corporate Units (i) only in integral multiples of 20 Treasury Units if Treasury Securities are being replaced by only Debentures, or (ii) only in integral multiples of 1,600,000 Treasury Units if any Treasury Security is being replaced by the Applicable Ownership Interest in the Treasury Portfolio. To create 20 Corporate Units (if a Mandatory Redemption or a Tax Event Redemption has not occurred and the Debentures remain components of Corporate Units), or 1,600,000 Corporate Units (if a Mandatory Redemption or a Tax Event Redemption has occurred or the Treasury Portfolio has replaced the Debentures as a result of a successful remarketing of the Debentures), the Treasury Unit Holder shall
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(a) if the Treasury Portfolio has not replaced the Debentures as a component of Corporate Units as a result of a successful remarketing or a Mandatory Redemption or a Tax Event Redemption, on or prior to the fifth Business Day preceding the Purchase Contract Settlement Date, deposit with the Collateral Agent $1,000 in aggregate principal amount of Debentures; or
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(b) if the Treasury Portfolio has replaced the Debentures as a component of Corporate Units as a result of a successful remarketing of the Debentures or a Mandatory Redemption or a Tax Event Redemption, on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date, deposit with the Collateral Agent the Applicable Ownership Interest in the Treasury Portfolio for each 1,600,000 Corporate Units being created by the Holder, and having an aggregate principal amount of $80,000,000; and
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(c) in each case, transfer and surrender the related 20 Treasury Units, or in the event the Treasury Portfolio is a component of Corporate Units, 1,600,000 Treasury Units, to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit B to the Pledge Agreement, stating that the Holder has transferred the relevant amount of Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the Treasury Securities underlying such Treasury Units, whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit A to the Pledge Agreement.
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Upon receipt of the Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, described in clause (a) or (b) above and the instructions described in clause (c) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will effect the release of the Treasury Securities having a corresponding aggregate principal amount from the Pledge to the Agent free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly:
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(i) cancel the related Treasury Units surrendered and transferred;
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(ii) transfer the Treasury Securities that had been components of such Treasury Units to the Holder; and
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(iii) authenticate, execute on behalf of such Holder and deliver a Corporate Unit Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Purchase Contracts as were evidenced by the cancelled Treasury Units.
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Holders who elect to separate Treasury Securities from the related Purchase Contract and to substitute Debentures or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for such Treasury Securities shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses.
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In the event a Holder making a Collateral Substitution pursuant to this Section 3.14 fails to effect a book-entry transfer of the Treasury Units or fails to deliver a Treasury Unit Certificate to the Agent after depositing the Debentures or Applicable Ownership Interest in the Treasury Portfolio with the Collateral Agent, the Treasury Securities constituting a part of such Treasury Unit Certificate, and any interest on such Treasury Securities, shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Treasury Unit is so transferred or the Treasury Unit is so delivered, or until such Holder provides evidence satisfactory to the Company and the Agent that such Treasury Unit has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company.
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Except as provided in this Section 3.14, for so long as the Purchase Contract underlying a Treasury Unit remains in effect, such Treasury Unit shall not be separable into its constituent parts and the rights and obligations of the Holder of such Treasury Unit in respect of the Treasury Security and Purchase Contract comprising such Treasury Unit may be acquired, and may be transferred and exchanged only as an entire Treasury Unit.
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SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event.
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Upon the occurrence of a Termination Event and the transfer to the Agent of the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or the Treasury Securities, as the case may be, underlying the Corporate Units and the Treasury Units pursuant to the terms of the Pledge Agreement, the Agent shall request transfer instructions with respect to the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be, from each Holder by written request mailed to such Holder at its address as it appears in the Corporate Unit Register or the Treasury Unit Register, as the case may be. Upon book-entry transfer of the Corporate Units or Treasury Units or delivery of a Corporate Unit Certificate or Treasury Unit Certificate to the Agent with such transfer instructions, the Agent shall transfer the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be, underlying such Corporate Units or Treasury Units, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions. In the event a Holder of Corporate Units or Treasury Units fails to effect such transfer or delivery, the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be, underlying such Corporate Units or Treasury Units, as the case may be, and any interest thereon, shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Corporate Units or Treasury Units are transferred or the Corporate Unit Certificate or Treasury Unit Certificate is surrendered or such Holder provides satisfactory evidence that such Corporate Unit Certificate or Treasury Unit Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. In the case of the Treasury Portfolio or any Treasury Securities, the Agent may dispose of the subject securities for cash and pay the applicable portion of such cash to the Holders in lieu of such Holders' Applicable Ownership Interest in such Treasury Portfolio, or any Treasury Securities, where such Holder would otherwise have been entitled to receive less than $1,000 of any such security.
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SECTION 3.16. No Consent to Assumption.
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Each Holder of a Security, by acceptance thereof, will 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, its trustee in bankruptcy, receiver, liquidator or a person or entity performing similar functions, in the event that the Company becomes a debtor under the Bankruptcy Code or subject to other similar State or Federal law providing for reorganization or liquidation.
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ARTICLE IV
The Debentures
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SECTION 4.1 Payment of Interest; Rights to Interest Preserved; Interest Rate Reset; Notice.
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A payment of interest on the Debentures or distribution with respect to the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, which is paid on any Payment Date shall, subject to receipt thereof by the Agent from the Collateral Agent as provided by the terms of the Pledge Agreement, be paid to the Person in whose name the Corporate Unit Certificate (or one or more Predecessor Corporate Unit Certificates) of which such Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, is a part is registered at the close of business on the Record Date next preceding such Payment Date.
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Each Corporate Unit Certificate evidencing Debentures delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Corporate Unit Certificate shall carry the rights to payment of interest accrued and unpaid, and to accrue interest, which is carried by the Debentures underlying such other Corporate Unit Certificate.
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In the case of any Corporate Unit with respect to which Cash Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Purchase Contract Settlement Date pursuant to prior notice, or with respect to which Early Settlement or Merger Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date or a Merger Early Settlement Date, as the case may be, or with respect to which a Collateral Substitution is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, interest on the Debentures or distributions with respect to the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying such Corporate Units otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement or Early Settlement or Merger Early Settlement or Collateral Substitution, and such interest or distributions shall, subject to receipt thereof by the Agent, be payable to the Person in whose name the Corporate Unit Certificate (or one or more Predecessor Corporate Unit Certificates) was registered at the close of business on the Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Corporate Units with respect to which Cash Settlement or Early Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Purchase Contract Settlement Date or an Early Settlement Date or Merger Early Settlement Date, as the case may be, or with respect to which a Collateral Substitution has been effected, payment of interest on the related Debentures or distributions with respect to the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that would otherwise be payable after the Purchase Contract Settlement Date or Early Settlement Date or Merger Early Settlement Date shall not be payable hereunder to the Holder of such Corporate Units; provided, however, that to the extent that such Holder continues to hold the separated Debentures that formerly comprised a part of such Holder's Corporate Units, such Holder shall be entitled to receive the payment of interest on such separated Debentures.
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The Coupon Rate on the Debentures to be in effect on and after the Reset Date will be reset on the third Business Day immediately preceding the Reset Date to the Reset Rate (such Reset Rate to be effective from and after the Reset Date). If the Initial Remarketing and the Secondary Remarketing result in Failed Remarketings, the Coupon Rate on the Debentures will not be reset but will continue at the initial Coupon Rate. On the Reset Announcement Date, the Reset Spread and the Applicable Benchmark Treasury to be used to determine the Reset Rate will be announced by the Company or FPL Group Capital. On the Business Day immediately following the Reset Announcement Date, the Company will cause a notice of the Reset Spread and Applicable Benchmark Treasury to be published in an Authorized Newspaper.
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Not later than 7 calendar days nor more than 15 calendar days prior to the Reset Announcement Date and the Purchase Contract Settlement Date, if such Purchase Contract Settlement Date is not also a Reset Date, the Company or FPL Group Capital will request that the Depositary (or any successor Clearing Agency or its nominee) notify by first-class mail, postage prepaid, the Beneficial Owners or Clearing Agency Participants holding Corporate Units or Treasury Units, of the Reset Announcement Date and any procedures to be followed by such Holders of Corporate Units who intend to settle their obligation under the Purchase Contract with separate cash on the Purchase Contract Settlement Date.
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SECTION 4.2. Notice and Voting.
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Under and subject to the terms of the Pledge Agreement and this Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Debentures but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of Debentures are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Debentures, the Agent shall, as soon as practicable thereafter, mail to the Holders of Corporate Units a notice (a) containing such information as is contained in the notice or solicitation, (b) stating that each Corporate Unit Holder on the record date set by the Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Debentures entitled to vote) shall be entitled to instruct the Agent as to the exercise of the voting rights pertaining to the Debentures constituting a part of such Holder's Corporate Units and (c) stating the manner in which such instructions may be given. Upon the written request of the Holders of Corporate Units on such record date, the 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 Debentures as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of Corporate Units, the Agent shall abstain from voting the Debentures constituting a part of such Holder's Corporate Units. The Company hereby agrees, if applicable, to solicit Holders of Corporate Units to timely instruct the Agent in order to enable the Agent to vote such Debentures.
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SECTION 4.3. Substitution of the Treasury Portfolio for Debentures.
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(a) Upon the occurrence of (i) a Mandatory Redemption where the related Purchase Contracts have not been previously or concurrently terminated in accordance with Section 5.8 or (ii) a Tax Event Redemption, in each case, prior to the Purchase Contract Settlement Date, the Redemption Price payable on the Mandatory Redemption Date or the Tax Event Redemption Date, as the case may be, with respect to the Applicable Principal Amount of Debentures shall be delivered to the Collateral Agent in exchange for the Pledged Debentures. Pursuant to the terms of the Pledge Agreement, the Collateral Agent will apply an amount equal to the Redemption Amount of such Redemption Price to purchase on behalf of the Holders of Corporate Units the Treasury Portfolio and promptly remit the remaining portion of such Redemption Price to the Agent for payment to the Holders of such Corporate Units. The Treasury Portfolio will be substituted for the outstanding Pledged Debentures, and will be held by the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of a Corporate Unit to purchase the Common Stock of the Company on the Purchase Contract Settlement Date under the Purchase Contract constituting a part of such Corporate Unit. Following the occurrence of a Mandatory Redemption or a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Holders of Corporate Units and the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as the Holder of Corporate Units and the Collateral Agent had in respect of the Debentures subject to the Pledge thereof as provided in Articles II, III, IV, V or VI of the Pledge Agreement, and any reference herein to the Debentures shall be deemed to be reference to such Treasury Portfolio. The Company may cause to be made in any Corporate Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the substitution of the Treasury Portfolio for Debentures as collateral.
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(b) Upon the successful remarketing of the Pledged Debentures on the Initial Remarketing Date, the proceeds of such remarketing (after deducting any Remarketing Fee) shall be delivered to the Collateral Agent in exchange for the Pledged Debentures. Pursuant to the terms of the Pledge Agreement, the Collateral 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 promptly remit the remaining portion of such proceeds to the Agent for payment to the Holders of such Corporate Units. The Treasury Portfolio will be substituted for the outstanding Pledged Debentures, and will be held by the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of a Corporate Unit to purchase the Common Stock of the Company on the Purchase Contract Settlement Date under the Purchase Contract constituting a part of such Corporate Unit. Following the successful remarketing of the Debentures on the Initial Remarketing Date, the Holders of Corporate Units and the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as the Holders of Corporate Units and the Collateral Agent had in respect of the Debentures subject to the Pledge thereof as provided in Articles II, III, IV, V or VI of the Pledge Agreement, and any reference herein to the Pledged Debentures shall be deemed to be reference to the Treasury Portfolio. The Company may cause to be made in any Corporate Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the substitution of the Treasury Portfolio for Debentures as collateral.
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SECTION 4.4. Consent to Treatment for Tax Purposes.
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Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance thereof, covenants and agrees to treat itself as the owner, for Federal, State and local income and franchise tax purposes, of (i) the related Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, in the case of the Corporate Units, or (ii) the Treasury Securities, in the case of the Treasury Units. Each Holder of a Corporate Unit, by its acceptance thereof, further covenants and agrees to treat the Debentures as indebtedness of FPL Group Capital for Federal, State and local income and franchise tax purposes.
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ARTICLE V
The Purchase Contracts
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SECTION 5.1. Purchase of Shares of Common Stock.
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Each Purchase Contract shall, unless a Termination Event or an Early Settlement in accordance with Section 5.9 hereof or a Merger Early Settlement in accordance with Section 5.10 hereof has occurred, obligate the Holder of the related Security to purchase, and the Company to sell, on the Purchase Contract Settlement Date, for $50 in cash (the "Purchase Price"), a number of newly issued shares of Common Stock equal to the applicable Settlement Rate. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal to or greater than $62.02 (the "Threshold Appreciation Price"), 0.8062 shares of Common Stock per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price, but is greater than $52.56, the number of shares of Common Stock equal to $50.00 divided by the Applicable Market Value and (c) if the Applicable Market Value is less than or equal to $52.56, 0.9513 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in Section 5.6 (and in each case rounded upward or downward to the nearest 1/10,000th of a share). As provided in Section 5.11, no fractional shares of Common Stock will be issued upon settlement of Purchase Contracts.
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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 or, in the case of the exercise of the Merger Early Settlement right, the Cash Merger Date. The "Closing Price" of the Common Stock on any date of determination means the closing sale price (or, if no closing price is reported, the last reported sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States national or regional securities exchange on which the Common Stock is so listed, or if the Common Stock is not so listed on a United States national or regional securities exchange, the last sale price of the Common Stock as reported by the NASDAQ Stock Market, or if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Stock on such date as determined by a nationally recognized independent investment banking firm retained by the Company for this purpose. A "Trading Day" means a day on which the Common Stock (A) 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 (B) 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 at the close of business.
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Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance thereof, irrevocably authorizes the Agent to enter into and perform the related Purchase Contract on its behalf as its attorney-in-fact (including the execution of Certificates on behalf of such Holder), 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 hereof, irrevocably authorizes the Agent to enter into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Debentures, the Treasury Portfolio or the Treasury Securities, as the case may be, pursuant to the Pledge Agreement. 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 5.4 and the Pledge Agreement, but subject to the terms thereof, payments in respect of the principal and interest on the Debentures or the Proceeds of the Treasury Securities or the Applicable Ownership Interest in the Treasury Portfolio 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.
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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, except as may be required by the Agent pursuant hereto), under the terms of this Agreement, the Purchase Contracts underlying such Certificate and the Pledge Agreement and the transferor shall be released from the obligations under this Agreement, the Purchase Contracts underlying the Certificates 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.
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SECTION 5.2. Contract Adjustment Payments.
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Subject to Section 5.3 herein, 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 (or one or more Predecessor Certificates) is registered on the Register at the close of business on the Record Date next preceding such Payment Date. The Contract Adjustment Payments will be payable at the Corporate Trust Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Corporate Unit Register or Treasury Unit Register or by wire transfer to an account appropriately designated in writing by the Person entitled to payment.
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Upon the occurrence of a Termination Event, the Company's obligation to pay Contract Adjustment Payments (including any accrued or Deferred Contract Adjustment Payments) shall cease.
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Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Certificate (including as a result of a Collateral Substitution or the reestablishment of a Corporate Unit) shall carry the rights to Contract Adjustment Payments accrued and unpaid, and to accrue Contract Adjustment Payments, which were carried by the Purchase Contracts which were represented by such other Certificates.
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Subject to Section 5.9 and 5.10, in the case of any Security with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date that is after any Record Date and on or prior to the next succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Early Settlement, and such Contract Adjustment Payments shall, subject to receipt thereof by the Agent, be payable to the Person in whose name the Certificate evidencing such Security (or one or more Predecessor Certificates) was registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date, Contract Adjustment Payments that would otherwise be payable after the Early Settlement Date with respect to such Purchase Contract shall not be payable.
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The Company's obligations with respect to Contract Adjustment Payments (including any accrued or Deferred Contract Adjustment Payments), will be subordinate and junior in right of payment to the Company's obligations under any Senior Indebtedness.
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SECTION 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
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The Company shall have the right, at any time prior to the Purchase Contract Settlement Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the 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 of the Securities, but in any event not less than one Business Day prior to such Record Date. In connection with any Contract Adjustment Payments so deferred, additional Contract Adjustment Payments on the amounts so deferred will accrue at the rate of 8.50% per annum (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the accrued additional Contract Adjustment Payments accrued thereon, being referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to this Section 5.3. No Contract Adjustment Payments may be deferred to a date that is after the Purchase Contract Settlement Date. If the Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder's right to receive Contract Adjustment Payments and Deferred Contract Adjustment Payments will terminate.
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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, each Holder will receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a number of shares of Common Stock (in addition to a number of shares of Common Stock equal to the Settlement Rate) equal to (x) the aggregate amount of Deferred Contract Adjustment Payments payable to such Holder divided by (y) the Applicable Market Value.
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No fractional shares of Common Stock will be issued by the Company with respect to the payment of Deferred Contract Adjustment Payments on the Purchase Contract Settlement Date. In lieu of fractional shares otherwise issuable with respect to such payment of Deferred Contract Adjustment Payments, the Holder will be entitled to receive an amount in cash as provided in Section 5.11.
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In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or make guarantee payments with respect to the foregoing other than (i) purchases, redemptions or acquisitions of shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or agents or a stock purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date of such event requiring the Company to purchase, redeem or acquire its capital stock, (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of all or a portion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of the Company's capital stock or the security being converted or exchanged, (iv) dividends or distributions in capital stock of the Company (or rights to acquire capital stock), or repurchases, redemptions or acquisitions of capital stock in connection with the issuance or exchange of capital stock (or securities convertible into or exchangeable for shares of the Company's capital stock) or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future.
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SECTION 5.4. Payment of Purchase Price.
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(a) (i) Unless the Treasury Portfolio has replaced the Debentures as a component of the Corporate Units or a Holder settles the underlying Purchase Contract through the early delivery of cash to the Agent in the manner described in Section 5.9 or 5.10, each Holder of a Corporate Unit must notify the Agent of its intention to pay in cash ("Cash Settlement") the Purchase Price for the shares of Common Stock to be purchased pursuant to the Purchase Contract on the Purchase Contract Settlement Date by presenting and surrendering to the Agent the Corporate Unit Certificate with a notice in substantially the form of Exhibit C hereto on the reverse side of such Certificate completed and executed. Such presentation, surrender and notice must be made at or prior to 5:00 p.m., New York City time, on the fifth Business Day immediately preceding the Purchase Contract Settlement Date. The Agent shall promptly notify the Collateral Agent of the receipt of such a notice from a Holder intending to make a Cash Settlement.
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(ii) A Holder of a Corporate Unit who has so notified the Agent of its intention to make a Cash Settlement is required to pay the Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City time, on the Business Day immediately preceding the Purchase Contract Settlement Date in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the Company. Any cash received by the Collateral Agent will 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 Collateral Agent in respect of the investment earnings from the investment in such Permitted Investments, will be distributed to the Agent when received for payment to the Holder.
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(iii) If a Holder of a Corporate Unit fails to notify the Agent of its intention to effect a Cash Settlement in accordance with paragraph (a)(i) above, such failure shall constitute a default under the Purchase Contract and the Holder shall be deemed to have consented to the disposition of the Pledged Debentures pursuant to the remarketing as described in paragraph (b) below. If a Holder of a Corporate Unit does notify the Agent as provided in paragraph (a)(i) above of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph (a)(ii) above, such failure shall also constitute a default; however, the Debentures of such a Holder will not be remarketed but instead the Collateral Agent, for the benefit of the Company, will exercise its rights as a secured party with respect to such Debentures, including those rights specified in paragraph (c) below.
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(b) In order to dispose of the Debentures of Corporate Unit Holders who have not notified the Agent of their intention to effect a Cash Settlement with respect to the Purchase Contract Settlement Date as provided in paragraph (a)(i) above, the Company shall engage a nationally recognized investment banking firm (the "Remarketing Agent") pursuant to the Remarketing Agreement to sell the Debentures. In order to facilitate the remarketing, the Agent shall notify the Remarketing Agent, by 10:00 a.m., New York City time, on the fourth Business Day immediately preceding the Purchase Contract Settlement Date, of the aggregate number of Debentures to be remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement, will present for remarketing the Debentures to the Remarketing Agent. Upon receipt of such notice from the Agent and the Debentures from the Collateral Agent, the Remarketing Agent will, on the third Business Day immediately preceding the Purchase Contract Settlement Date, use its reasonable efforts to remarket the Debentures on such date at a price of approximately 100.5% (but not less than 100%) of the aggregate principal amount of the Debentures, plus accrued and unpaid interest (including deferred interest), if any, thereon. After deducting any Remarketing Fee then the Remarketing Agent will remit the remaining portion of the proceeds from such remarketing to the Collateral Agent. Such portion of the proceeds, equal to the aggregate principal amount of such Debentures, will automatically be applied by the Collateral Agent, in accordance with the Pledge Agreement to satisfy in full such Corporate Unit Holders' obligations to pay the Purchase Price for the Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. Any proceeds in excess of those required to pay the Purchase Price and the Remarketing Fee will be remitted to the Agent for payment to the Holders of the related Corporate Units. Corporate Unit Holders whose Debentures are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. If such a remarketing results in a Failed Remarketing in accordance with the terms of the Pledge Agreement, the Collateral Agent, for the benefit of the Company, will exercise its rights as a secured party with respect to such Debentures, including those actions specified in paragraph (c) below; provided, that if upon a Failed Remarketing the Collateral Agent exercises such rights for the benefit of the Company with respect to such Debentures, any accrued and unpaid interest on such Debentures will become payable by FPL Group Capital to the Agent for payment to the Holder of the Corporate Units to which such Debentures relate. Such payment will be made by FPL Group Capital on or prior to 11:00 a.m., New York City time, on 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 Agent. The Company will cause a notice of such Failed Remarketing to be published on the Business Day immediately preceding the Purchase Contract Settlement Date in an Authorized Newspaper.
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(c) With respect to any Debentures beneficially owned by Holders who have elected Cash Settlement but failed to deliver cash as required in (a)(ii) above, or with respect to Debentures which are subject to a Failed Remarketing, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect thereto and, subject to applicable law and paragraph (h) below, may, among other things, (i) retain the Debentures in full satisfaction of the Holders' obligations under the Purchase Contracts or (ii) sell the Debentures in one or more public or private sales and apply the proceeds of such sale in full satisfaction of the Holders' obligations under the Purchase Contract.
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(d) (i) Unless a Holder of Treasury Units or Corporate Units (if the Treasury Portfolio has replaced the Debentures as a component of the Corporate Units) settles the underlying Purchase Contract through the early delivery of cash to the Agent in the manner described in Section 5.9, each Holder of a Treasury Unit or a Corporate Unit (if the Treasury Portfolio has replaced the Debentures as a component of the Corporate Units) must notify the Agent of its intention to pay in cash the Purchase Price for the shares of Common Stock to be purchased pursuant to the Purchase Contract on the Purchase Contract Settlement Date by presenting and surrendering to the Agent the Treasury Unit Certificate or Corporate Unit Certificate, as the case may be, with a notice in substantially the form of Exhibit C hereto on the reverse side of such Certificate completed and executed. Such presentation, surrender and notice must be made at or prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the Purchase Contract Settlement Date. The Agent shall promptly notify the Collateral Agent of the receipt of such a notice from a Holder intending to make a Cash Settlement.
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(ii) A Holder of a Treasury Unit or Corporate Unit (if the Treasury Portfolio has replaced the Debentures, as a component of the Corporate Units) who has so notified the Agent of its intention to make a Cash Settlement in accordance with paragraph (d)(i) above is required to pay the Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City time, on the Business Day immediately preceding the Purchase Contract Settlement Date in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the Company. Any cash received by the Collateral Agent will 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 Collateral Agent in respect of the investment earnings from the investment in such Permitted Investments will be distributed to the Agent when received for payment to the Holder.
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(iii) If a Holder of a Treasury Unit or a Corporate Unit (if the Treasury Portfolio has replaced the Debentures as a component of Corporate Units,) fails to notify the Agent of its intention to effect a Cash Settlement in accordance with paragraph (d)(i) above, or if such Holder does notify the Agent as provided in paragraph (d)(i) above of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph (d)(ii) above, then such failure shall constitute a default under the Purchase Contract and upon the maturity of the Pledged Treasury Securities or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, held by the Collateral Agent on the Business Day immediately prior to the Purchase Contract Settlement Date, the principal amount of the Treasury Securities or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, received by the Collateral Agent will be invested promptly in overnight Permitted Investments. On the Purchase Contract Settlement Date an amount equal to the Purchase Price will be remitted to the Company as payment thereof without receiving any instructions from the Holder. In the event the sum of the proceeds from the related Pledged Treasury Securities or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and the investment earnings earned from such investments is in excess of the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent will distribute such excess to the Agent for the benefit of the Holder of the related Treasury Unit or Corporate Unit when received.
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(e) Any distribution to Holders of excess funds and interest described above, shall be payable at the Corporate Trust Office maintained for that purpose or, at the option of the Holder, by check mailed to the address of the Person entitled thereto at such address as it appears on the Register.
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(f) The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificate therefor to the Holder unless it shall have received payment in full of the Purchase Price for the shares of Common Stock to be purchased thereunder in the manner herein set forth.
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(g) Upon Cash Settlement with respect to a Purchase Contract, (i) the Collateral Agent will in accordance with the terms of the Pledge Agreement cause the Pledged Debentures or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, or the Pledged Treasury Securities underlying the relevant Security to be released from the Pledge by the Collateral Agent free and clear of any security interest of the Company and transferred to the Agent for delivery to the Holder thereof or its designee as soon as practicable and (ii) subject to the receipt thereof from the Collateral Agent, the Agent shall, by book-entry transfer, or other appropriate procedures, in accordance with instructions provided by the Holder thereof, transfer the Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, or such Treasury Securities (or, if no such instructions are given to the Agent by the Holder, the Agent shall hold the Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, or such Treasury Securities, and any distribution thereon, in the name of the Agent or its nominee in trust for the benefit of such Holder).
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(h) The obligations of the Holders to pay the Purchase Price on the Purchase Contract Settlement Date are non-recourse obligations and are payable solely out of any Cash Settlement or the proceeds of any Collateral pledged to secure the obligations of the Holders with respect to such Purchase Price and in no event will Holders be liable for any deficiency between the proceeds of Collateral disposition and the Purchase Price.
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SECTION 5.5. Issuance of Shares of Common Stock.
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Unless a Termination Event shall have occurred, and except with respect to Purchase Contracts with respect to which there has been an Early Settlement or a Merger Early Settlement, on the Purchase Contract Settlement Date, upon the Company's receipt of payment in full of the Purchase Price for the shares of Common Stock purchased by the Holders pursuant to the foregoing provisions of this Article and subject to Section 5.6(b), the Company shall issue and deposit with the Agent, for the benefit of the Holders of the Outstanding Securities, one or more certificates representing the newly issued shares of Common Stock registered in the name of the Agent (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions for which both a record date and payment date for such dividend or distribution has occurred after the Purchase Contract Settlement Date, being hereinafter referred to as the "Purchase Contract Settlement Fund") to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Certificate to the Agent on or after the Purchase Contract Settlement Date, together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Common Stock which such Holder is entitled to receive pursuant to the provisions of this Article V (after taking into account all Securities then held by such Holder) together with cash in lieu of fractional shares as provided in Section 5.11 and any dividends or distributions with respect to such shares constituting part of the Purchase Contract Settlement Fund, but without any interest thereon, and any 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 Agent. If any shares of Common Stock issued in respect of a Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Purchase Contract is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Certificate evidencing such Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable.
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SECTION 5.6. Adjustment of Settlement Rate.
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(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
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(1) In case the Company shall pay or make a dividend or other distribution on the Common Stock in Common Stock, the Settlement Rate, in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution, shall be increased by dividing such Settlement Rate by a fraction of which 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 the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (1), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company.
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(2) In case the Company shall issue rights, warrants or options to all holders of its Common Stock (that are not available on an equivalent basis to Holders of the Securities upon settlement of the Purchase Contracts underlying such Securities) entitling such holders of the Common Stock, for a period expiring within 45 days after the record date for the determination of shareholders entitled to receive such rights, options or warrants, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of the Common Stock on the date fixed for the determination of shareholders entitled to receive such rights, options or warrants (other than pursuant to any dividend reinvestment or share purchase plan, including such a plan that provides for purchases of Common Stock by non-shareholders), the Settlement Rate, in effect at the opening of business on the day following the date fixed for such determination, shall be increased by dividing such Settlement Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. 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 shall not issue any such rights, options or warrants in respect of shares of Common Stock held in the treasury of the Company.
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(3) In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, the Settlement Rate, in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective, shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Settlement Rate, in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective.
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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 securities, but excluding any rights or warrants referred to in paragraph (2) of this Section, any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in paragraph (1) of this Section), the Settlement Rate, in effect at the opening of business on the day following the day on which such dividend of distribution was effected, shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution. In any case in which this paragraph (4) is applicable, paragraph (2) of this Section shall not be applicable.
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(5) In case the Company shall, (I) by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed in a Reorganization Event to which Section 5.6(b) applies or as part of a distribution referred to in paragraph (4) of this Section) in an aggregate amount that, combined together with (II) the aggregate amount of any other distributions to all holders of its Common Stock made exclusively in cash within the 12 months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has been made and (III) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of consideration payable in respect of any tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer) by the Company or any of its subsidiaries for all or any portion of the Common Stock concluded within the 12 months preceding the date of payment of the distribution described in clause (I) above and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has been made, exceeds 15% of the product of the Current Market Price per share of the Common Stock on the date for the determination of holders of shares of Common Stock entitled to receive such distribution times the number of shares of Common Stock outstanding on such date, then, and in each such case, immediately after the close of business on such date for determination, the Settlement Rate, shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for determination of the shareholders entitled to receive such distribution by a fraction (i) the numerator of which shall be equal to the Current Market Price per share of the Common Stock on the date fixed for such determination less an amount equal to the quotient of (x) the combined amount distributed or payable in the transactions described in clauses (I), (II) and (III) above and (y) the number of shares of Common Stock outstanding on such date for determination and (ii) the denominator of which shall be equal to the Current Market Price per share of the Common Stock on such date for determination.
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(6) In case (I) a tender or exchange offer made by the Company or any subsidiary of the Company for all or any portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares (as defined below)) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that combined together with (II) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the expiration of such tender or exchange offer, of consideration payable in respect of any other tender or exchange offer (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 the 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 paragraph (5) of this Section or this paragraph (6) has been made and (III) the aggregate amount of any distributions to all holders of the Company's Common Stock made exclusively in cash (other than regular quarterly cash dividends) within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section or this paragraph (6) has been made, exceeds 15% of the product of the Current Market Price per share of the Common Stock as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender or exchange offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time, then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate immediately prior to the close of business on the date of the Expiration Time by a fraction (i) the numerator of which shall be equal to (A) the product of (I) the Current Market Price per share of the 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 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 the 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").
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(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 5.6(b) applies) shall be deemed to involve (a) 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 (b) 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).
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(8) The "Current Market Price" per share of Common Stock on any day means the average of the daily Closing Prices for the five consecutive Trading Days selected by the Company commencing not more than 30 Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex date" with respect to the issuance or distribution requiring such computation. For purposes of this paragraph, the term "ex date," when used with respect to any issuance or distribution, shall mean the first date on which the Common Stock trades regular way on the applicable exchange or in the applicable market without the right to receive such issuance or distribution.
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(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 therein; provided, however, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses (a), (b) or (c) of the definition of Settlement Rate in Section 5.1 will apply on the Purchase Contract Settlement Date. Such adjustment shall be made by multiplying the Applicable Market Value by a fraction of which the numerator shall be the Settlement Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator shall be the Settlement Rate immediately before 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), (7) or (10) of this Section 5.6(a) during the period taken into consideration for determining the Applicable Market Value, appropriate and customary adjustments shall be made to the Settlement Rate.
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(10) The Company may make such increases in the Settlement Rate, in addition to those required by this Section, as it considers to be advisable in order to avoid or diminish the effect of 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 reasons.
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(b) Adjustment for Consolidation, Merger or Other Reorganization Event. 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 Common Stock outstanding immediately prior to the merger or consolidation is 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 exchange of securities of the Company with another Person (other than in connection with a merger or acquisition) or (iv) any liquidation, dissolution or winding up of the Company other than as a result of or after the occurrence of a Termination Event (any such event, a "Reorganization Event"), the Settlement Rate will be adjusted to provide that each Holder of Securities will receive on the Purchase Contract Settlement Date with respect to each Purchase Contract forming a part thereof, the kind and amount of securities, cash and other property receivable upon such Reorganization Event (without any interest thereon, and without any right to dividends or distribution thereon which have a record date that is prior to the Purchase Contract Settlement Date) by a Holder of the number of shares of Common Stock issuable on account of each Purchase Contract if the Purchase Contract Settlement Date had occurred immediately prior to such Reorganization Event assuming such Holder of Common Stock is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or with which such statutory exchange of securities was effected or to which such sale, transfer, lease or conveyance 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). 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 or dissolution of the Company, the Company or a liquidating trust created in connection therewith, shall execute and deliver to the Agent an agreement supplemental hereto providing that the Holders of each Outstanding Security shall have the rights provided by this Section 5.6. 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. The above provisions of this Section shall similarly apply to successive Reorganization Events.
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SECTION 5.7. Notice of Adjustments and Certain Other Events.
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(a) Whenever the Settlement Rate is adjusted as herein provided, the Company shall:
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(i) forthwith compute the Settlement Rate in accordance with Section 5.6 and prepare and transmit to the Agent a Company 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
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(ii) within 10 Business Days following the occurrence of an event that requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or if the Company is not aware of such occurrence, as soon as practicable after becoming so aware), provide a written notice to the Holders of the Securities of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Settlement Rate was determined and setting forth the adjusted Settlement Rate.
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(b) The Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine whether any facts exist which may require any adjustment of the 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 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 Agent makes no representation with respect thereto. The 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.
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SECTION 5.8. Termination Event; Notice.
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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 or any Deferred Contract Adjustment Payments, and the rights and obligations of the Holders to purchase Common Stock, will immediately and automatically terminate, without the necessity of any notice or action by any Holder, the 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 thereof to the Agent, the Collateral Agent and to the Holders at their addresses as they appear in the applicable Register. Upon and after the occurrence of a Termination Event, the Securities shall thereafter represent the right to receive the Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, forming a part of such Securities in the case of Corporate Units, or Treasury Securities in the case of Treasury Units, in accordance with the provisions of Section 4.3 of the Pledge Agreement.
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SECTION 5.9 Early Settlement.
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(a) A holder of Corporate Units may settle the related Purchase Contracts in their entirety at any time on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date in the manner described herein, but only in integral multiples of 20 Corporate Units; provided, however, if the Treasury Portfolio has become a component of the Corporate Units, Holders of Corporate Units may settle early only in integral multiples of 1,600,000 Corporate Units. A holder of Treasury Units may settle the related Purchase Contracts in their entirety at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date in the manner described herein (in either case, an "Early Settlement") but only in integral multiples of 20 Treasury Units. The right to Early Settlement is subject to there being in effect, if so required under Federal securities laws, a registration statement covering the shares of Common Stock to be delivered in respect of the Purchase Contracts being settled. Upon Early Settlement, (i) the holder's rights to receive Deferred Contract Adjustment Payments, if any, on the Purchase Contracts being settled will be forfeited, (ii) the holder's right to receive additional Contract Adjustment Payments in respect of such Purchase Contracts will terminate and (iii) no adjustment will be made to or for the holder on account of Deferred Contract Adjustment Payments, or any amount accrued in respect of Contract Adjustment Payments. In order to exercise the right to effect any Early Settlement with respect to any Purchase Contracts, the Holder of the Certificate evidencing Securities shall deliver such Certificate to the 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 executed and accompanied by payment (payable to the Company in immediately available funds in an amount (the "Early Settlement Amount")) equal to the sum of (i) $50 times the number of Purchase Contracts being settled, plus, (ii) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments payable, if any, on such Payment Date with respect to such Purchase Contracts; provided that no payment is required if the Company has elected to defer the Contract Adjustment Payments which would otherwise be payable on the Payment Date. Except as provided in the immediately preceding sentence and subject to the second to last paragraph of Section 5.2, no payment or adjustment shall be made upon Early Settlement of any Purchase Contract on account of any Contract Adjustment Payments accrued on such Purchase Contract or on account of any dividends on the Common Stock issued upon such Early Settlement. In order for any of the foregoing requirements to be considered satisfied or effective with respect to a Purchase Contract underlying any Security on or by a particular Business Day, such requirement must be met at or prior to 5:00 p.m., New York City time, on such Business Day; the first Business Day on which all of the foregoing requirements have been satisfied by 5:00 p.m., New York City time shall be the "Early Settlement Date" with respect to such Security.
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(b) Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Company shall issue, and the Holder shall be entitled to receive, 0.8062 newly issued shares of Common Stock per Corporate Unit or Treasury Unit (the "Early Settlement Rate") (regardless of the market price of the Common Stock on the date of Early Settlement); provided, however, that upon the Early Settlement of the Purchase Contracts, the Holder of such related Securities will forfeit the right to receive any Deferred Contract Adjustment Payments. The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted, in accordance with Section 5.6. As promptly as practicable after Early Settlement of Purchase Contracts in accordance with the provisions of this Section 5.9, the Company shall issue and shall deliver to the Agent at the Corporate Trust Office 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 5.11.
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(c) 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, and (ii) the related Debentures or the appropriate Applicable Ownership Interest in the Treasury Portfolio, 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 Agent for delivery to the Holder thereof or its designee.
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(d) Upon Early Settlement of any Purchase Contracts, and subject to receipt of shares of Common Stock from the Company and the Debentures, the appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be, from the Collateral Agent, as applicable, the Agent shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Securities, (i) transfer to the Holder the Debentures, Treasury Portfolio or Treasury Securities, as the case may be, forming a part of such Securities, and (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 5.11.
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(e) In the event that Early Settlement is effected with respect to Purchase Contracts underlying less than all the Securities evidenced by a Certificate, upon such Early Settlement the Company shall execute and the Agent shall authenticate, countersign and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Securities as to which Early Settlement was not effected.
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SECTION 5.10. Early Settlement Upon Merger.
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(a) In the event of a merger, consolidation or statutory share exchange of the Company (which for purposes of this Section 5.10 includes any successor company pursuant to a Cash Merger (as defined below)) in which all the Common Stock outstanding immediately prior to such merger, consolidation or statutory share exchange is exchanged for consideration consisting of at least 30% cash or cash equivalents (any such event a "Cash Merger" and the date on which the Cash Merger is consummated being referred to as a "Cash Merger Date"), then, provided the Merger Early Settlement Date (as defined below) is on or before the fifth Business Day immediately preceding the Purchase Contract Settlement Date and further provided that at such time, if so required under Federal securities laws, there is in effect a Registration Statement covering the shares of Common Stock to be delivered in respect of the Purchase Contracts being settled, the Company (or the successor to the Company hereunder) shall be required to offer the Holder of each Outstanding Security the right to settle the Purchase Contract relating to such Security prior to the Purchase Contract Settlement Date (such early settlement, "Merger Early Settlement") as provided herein. On or before the fifth Business Day after the Cash Merger Date, the Company or, at the request and expense of the Company, the Agent, shall give all Holders notice of the occurrence of the Cash Merger and of the right of Merger Early Settlement arising as a result thereof. The Company shall also deliver a copy of such notice to the Agent and the Collateral Agent.
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Each such notice shall contain:
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(i) the date, which shall be not less than 20 Business Days nor more than 30 Business Days after the date of such notice, on which the Merger Early Settlement may be effected (the "Merger Early Settlement Date");
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(ii) the date, which shall be three Business Days prior to the Merger Early Settlement Date, by which the Merger Early Settlement right must be exercised by notice by the Holders to the Agent and the Company;
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(iii) the Settlement Rate in effect as a result of such Cash Merger and the kind and amount of securities, cash and other property receivable by the Holder upon settlement of each Purchase Contract pursuant to Section 5.6(b); and
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(iv) the instructions a Holder must follow to exercise the Merger Early Settlement right.
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(b) To exercise a Merger Early Settlement right, a Holder must (i) deliver to the Agent at the Corporate Trust Office at least three Business Days before the Merger Settlement Date, at or prior to 5:00 p.m., New York City time, the Certificates evidencing the Securities with respect to which the Merger Early Settlement right is being exercised, 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 executed and (ii) make payment (payable to the Company in immediately available funds in an amount equal to the Settlement Rate in effect immediately prior to the Cash Merger (the "Merger Early Settlement Amount").
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(c) On the Merger Early Settlement Date, the Company shall cause to be delivered (i) the securities and other property to be received by such exercising Holder, equal to the Settlement Rate as adjusted pursuant to Section 5.6, in respect of the number of Purchase Contracts for which such Merger Early Settlement right was exercised, (ii) the Company shall cause the number of shares of Common Stock, if any, issuable upon Merger Early Settlement of the related Purchase Contracts, together with any payment in lieu of any fraction of a share, as provided in Section 5.11, to the Holder which has exercised its right to Cash Settlement and (iii) the related Pledged Debentures, or if substituted therefor, the Pledged Treasury Portfolio Interest, in the case of Corporate Units, or Pledged 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 Agent for delivery to the Holder thereof or its designee. In the event a Merger Early Settlement right shall be exercised by a Holder in accordance with the terms hereof, all references herein to Purchase Contract Settlement Date shall be deemed to refer to such Merger Early Settlement Date.
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(d) Upon Merger Early Settlement of any Purchase Contracts, and subject to receipt of such securities or other property from the Company and the Pledged Debentures, Pledged Treasury Portfolio Interest or Pledged Treasury Securities, as the case may be, from the Collateral Agent, the Agent shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Securities, (i) transfer to the Holder the Pledged Debentures, Pledged Treasury Portfolio Interest or Pledged Treasury Securities, as the case may be, forming a part of such Securities, and (ii) deliver to the Holder such net cash, securities or other property issuable upon such Merger Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.11.
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(e) In the event that Merger Early Settlement is effected with respect to Purchase Contracts relating to less than all the Securities evidenced by a Certificate, upon such Merger Early Settlement the Company (or the successor to the Company hereunder) shall execute and the Agent shall authenticate, countersign and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Securities as to which Merger Early Settlement was not effected.
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(f) Notwithstanding anything to the contrary contained herein, Holders may effect Merger Early Settlement (i) only if the Merger Early Settlement established by the Company in accordance with Section 5.10(a)(i) is on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date and (ii) of Securities only in integral multiples of 20 Corporate Units or 20 Treasury Units; provided, however, if the Treasury Portfolio has become a component of the Corporate Units, Holders of Corporate Units may settle early only in integral multiples of 1,600,000 Corporate Units. The right to Early Settlement is subject to there being in effect, if so required under Federal securities laws, a registration statement covering the shares of Common Stock to be delivered in respect of the Purchase Contracts being settled.
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SECTION 5.11. No Fractional Shares.
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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 of any Purchase Contracts. If Certificates evidencing more than one Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Purchase Contracts evidenced by the Certificates so surrendered. Instead of any fractional share of Common Stock which would otherwise be deliverable upon settlement of any Purchase Contracts on the Purchase Contract Settlement Date or upon Early Settlement, the Company, through the Agent, shall make a cash payment in respect of such fractional interest in an amount equal to such fractional share times the (i) the Threshold Appreciation Price, in the case of an Early Settlement or (ii) the Applicable Market Value, in all other circumstances. The Company shall provide the Agent from time to time with sufficient funds to permit the Agent to make all cash payments required by this Section 5.11 in a timely manner.
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SECTION 5.12. Charges and Taxes.
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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 and in payment of any Deferred Contract Adjustment Payments; provided, however, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Certificate evidencing a Security or any issuance of a share of Common Stock in a name other than that of the registered Holder of a Certificate surrendered in respect of the Securities evidenced thereby, other than in the name of the 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 or that no such tax is due.
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