-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DtX9G6jgV3W6PG2IbDEeI3fYC722056XOHIIFMCrm3xH8ZOUjqAfMGuSqxBwXecJ Vv89uxqn5KPAtA8Aw/TlPw== 0000950123-02-007382.txt : 20020801 0000950123-02-007382.hdr.sgml : 20020801 20020731194723 ACCESSION NUMBER: 0000950123-02-007382 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020731 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST PAUL COMPANIES INC /MN/ CENTRAL INDEX KEY: 0000086312 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 410518860 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10898 FILM NUMBER: 02716641 BUSINESS ADDRESS: STREET 1: 385 WASHINGTON ST CITY: SAINT PAUL STATE: MN ZIP: 55102 BUSINESS PHONE: 6123107911 FORMER COMPANY: FORMER CONFORMED NAME: SAINT PAUL COMPANIES INC DATE OF NAME CHANGE: 19900730 FORMER COMPANY: FORMER CONFORMED NAME: ST PAUL COMPANIES INC/MN/ DATE OF NAME CHANGE: 19990219 FORMER COMPANY: FORMER CONFORMED NAME: ST PAUL FIRE & MARINE INSURANCE CO/MD DATE OF NAME CHANGE: 19990219 8-K 1 y62640e8vk.txt THE ST. PAUL COMPANIES, INC SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 31, 2002 THE ST. PAUL COMPANIES, INC. (Exact name of Registrant as specified in its charter) Minnesota 001-10898 41-0518860 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 385 Washington St., St. Paul, MN 55102 (Address of principal executive offices) (Zip Code) (651) 310-7911 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit No. Description - ----------- ----------- 1. Equity Units Underwriting Agreement among The St. Paul Companies, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc. dated July 25, 2002. 4.1 Form of 5.25% Senior Note due 2007. 4.2 Purchase Contract Agreement between The St. Paul Companies, Inc. and JPMorgan Chase Bank, as Purchase Contract Agent, dated July 31, 2002. 4.3 Pledge Agreement among The St. Paul Companies, Inc., JPMorgan Chase Bank, as Purchase Contract Agent and BNY Midwest Trust Company, as Collateral Agent, Custodial Agent and Securities Intermediary, dated July 31, 2002. 4.4 Form of Corporate Unit (Included in Exhibit 4.2).
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE ST. PAUL COMPANIES, INC. By: Bruce A. Backberg ------------------------ Bruce A. Backberg Senior Vice President Date: July 31, 2002 EX-1 3 y62640exv1.txt UNDERWRITING AGREEMENT EXHIBIT 1 EXECUTION COPY -------------- THE ST. PAUL COMPANIES, INC. EQUITY UNITS ------------ Underwriting Agreement ---------------------- July 25, 2002 Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center, 25th Floor New York, New York 10080 Salomon Smith Barney Inc. 388 Greenwich Street, 35th Floor New York, New York 10013 Ladies and Gentlemen: The St. Paul Companies, Inc., a Minnesota corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the firms named in Schedule I (such firms constituting the "Underwriters") of its Equity Units (the "Initial Securities"), consisting of 7,700,000 units (referred to as "Corporate Units") with a stated amount, per Corporate Unit, of $50 (the "Stated Amount"). Each Corporate Unit will initially consist of (a) a stock purchase contract (a "Purchase Contract") under which (i) the holder will agree to purchase from the Company on August 16, 2005 (the "Purchase Contract Settlement Date"), for an amount of cash equal to the Stated Amount, a number of newly issued shares of common stock, without par value (the "Common Stock"), of the Company equal to the Settlement Rate (as defined in the Purchase Contract Agreement) and (ii) the Company will pay to the holder quarterly contract adjustment payments at the rate of 3.75% of the Stated Amount and (b) $50 principal amount of the Company's senior notes due August 16, 2007 (a "Note") issued pursuant to the Indenture (as defined below) with an initial interest rate of 5.25% per year. The Company also proposes to grant to the several Underwriters an option to purchase up to an additional 1,155,000 Corporate Units to cover any over-allotments (the "Option Securities"; the Option Securities, together with the Initial Securities, being hereinafter called the "Securities"). The Notes that will initially constitute a component of the Corporate Units are hereinafter sometimes referred to as the "Underlying Notes". In accordance with the terms of the Purchase Contract Agreement, to be dated as of July 31, 2002 (the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as purchase contract agent (the "Purchase Contract Agent"), the Underlying Notes will be pledged by the Purchase Contract Agent, on behalf of the holders of the Corporate Units, to BNY Midwest Trust Company, as collateral agent (the "Collateral Agent"), pursuant to the Pledge Agreement, to be dated as of July 31, 2002 (the "Pledge Agreement"), among the Company, the Purchase Contract Agent and the Collateral Agent, to secure the holders' obligations to purchase the Common Stock under the Purchase Contracts. The shares of Common Stock issuable pursuant to the Purchase Contracts are hereinafter referred to as the "Shares". The Notes will be issued under an Indenture (the "Indenture") dated as of March 12, 2002, by and between the Company and JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee"). Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to be entered into among the Company, the Purchase Contract Agent and a financial institution to be selected by the Company as the remarketing agent, the Notes may be remarketed, subject to certain terms and conditions. As used in this Agreement, the term "Operative Documents" means this Agreement, the Purchase Contract Agreement (including the Purchase Contracts), the Pledge Agreement, the Remarketing Agreement, the Notes, the Indenture and the certificates evidencing the Corporate Units. Concurrently with the offering of the Securities, the Company is offering 15,500,000 shares of its Common Stock, plus an option to purchase up to 2,325,000 additional shares of Common Stock to cover over-allotments. 1. The Company represents and warrants to, and agrees with, each of the Underwriters that: (a) A registration statement on Form S-3 (File Nos. 333-92466, 333-92466-01, 333-73848, 333-73848-01 and 333-44122) (the "Initial Registration Statement") in respect of the Securities, as well as certain other securities of the Company, the Preferred Securities of St. Paul Capital Trust II (the "Trust"), and the guarantee by the Company with respect to such Preferred Securities of the Trust (the "Guarantee") has been filed with the Securities and Exchange Commission (the "Commission"); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Underwriters and, excluding exhibits to the Initial Registration Statement, but including all documents incorporated by reference in the prospectus included in the latest registration statement, to the Underwriters for each of the other Underwriters, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which became effective upon filing, no other document with respect to the Initial Registration Statement or documents incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission (other than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the Commission under the Act, each in the form heretofore delivered to the Underwriters); and no stop order suspending the effectiveness of any Initial Registration Statement, any post-effective amendment thereto, or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary Prospectus"); the various parts of the Initial Registration Statement, any post-effective amendment thereto, and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the Initial Registration Statement, at the time such part of the Initial Registration Statements became effective but excluding Form T-l, each as amended at the time such part of the Initial Registration Statements became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter called the "Registration Statement"; the prospectus relating to the Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on 2 or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Initial Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Sections 13(a) or 15(d) of the Exchange Act after the effective date of the Initial Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to and include the Prospectus as amended or supplemented in relation to the Securities to be sold pursuant to this Agreement, in the form filed or transmitted for filing with the Commission pursuant to Rule 424(b) under the Act and in accordance with Section 5(a) hereof (including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter expressly for use in the Prospectus as amended or supplemented. (c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter expressly for use in the Prospectus as amended or supplemented. 3 (d) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any direct loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, which is material to the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock or long-term debt of the Company and its subsidiaries taken as a whole (other than any decrease in the capital stock resulting from purchases under the Company's Stock Repurchase Program and any increase resulting from the exercise of stock options or the issuance of restricted shares under the Company's stock incentive and employee compensation plans, or the conversion of Series B Convertible Preferred Stock) or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus; (e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Minnesota, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, and is not subject to any material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and each of the Company's principal subsidiaries (hereinafter called "Principal Subsidiaries"), namely St. Paul Fire and Marine Insurance Company, United States Fidelity and Guaranty Company and The John Nuveen Company, has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification; (f) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. The Shares have been duly and validly authorized and reserved for issuance and, when issued in accordance with the provisions of the Purchase Contracts, will be duly and validly issued, fully paid and non-assessable and will conform with the description of the Common Stock contained in the Prospectus as amended or supplemented. All of the issued shares of capital stock of each of St. Paul Fire and Marine Insurance Company, United States Fidelity and Guaranty Company and The John Nuveen Company held directly or indirectly by the Company have been duly authorized and validly issued, are fully paid and non-assessable and (except as disclosed in the Registration Statement) all shares of the capital stock of such subsidiaries are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; (g) Each of the Remarketing Agreement, the Purchase Contract Agreement and the Pledge Agreement has been duly authorized by the Company and when duly executed 4 and delivered by the Company, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles except that no representation is made concerning the enforceability of any indemnification, contribution or exculpation provisions that may be included in the Remarketing Agreement. (h) The Purchase Contracts have been duly authorized by the Company and, when duly executed, authenticated and delivered in accordance with the Purchase Contract Agreement and paid for in accordance with the terms of this Agreement, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Purchase Contracts will conform in all material respects to the description thereof contained in the Prospectus; and the issuance of the Purchase Contracts is not subject to any preemptive or similar rights. (i) The Securities have been duly authorized by the Company and, when duly executed, authenticated and delivered by the Company against payment of the consideration therefor in accordance with the terms of this Agreement, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Corporate Units and the Shares will be duly registered under the Exchange Act and will be authorized for listing on the New York Stock Exchange subject to official notice of issuance, in each case, prior to the First Time of Delivery; except as set forth in the Prospectus (exclusive of any supplement thereto dated after the date hereof), the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for Common Stock or the Securities; and except as set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock or ownership interests in the Company are outstanding; (j) The Underlying Notes have been duly authorized by the Company, and, when duly executed, authenticated, issued and delivered, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture, and enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (k) The Indenture has been duly authorized and duly qualified under the Trust Indenture Act and is a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture and the Securities will conform to the descriptions thereof contained in the Prospectus as amended or supplemented; 5 (l) The issue and sale of the Securities and the issue of the Shares pursuant to the Purchase Contracts and the compliance by the Company with all of the provisions of the Operative Documents and the consummation of the transactions therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation, as amended, or the By-laws, as amended, of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement or the Indenture, except such as have been, or will have been prior to the First Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters; (m) Neither the Company nor any of its subsidiaries is in violation of its organizational documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties is or may be bound, which default might reasonably be expected to result in a material adverse effect on the current or future consolidated financial position, shareholders' equity, results of operation or business prospects of the Company and its subsidiaries, taken as a whole; (n) The statements set forth in the Prospectus under the captions "Description of the Equity Units", "Description of the Notes", "Description of Debt Securities We May Offer", and "Description of Our Common Stock", insofar as they purport to constitute a summary of the terms of the Securities therein described, and, subject to the limitations set forth therein, and under the captions "Underwriting" and "Plan of Distribution" insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair; (o) Other than as set forth in the Prospectus, and other than litigation (none of which is reasonably likely to be material) incidental to the kinds of business conducted by the Company and its subsidiaries, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party, or of which any property of the Company or any of its subsidiaries is the subject, which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate (after giving effect to any applicable insurance, reinsurance or reserves therefor) have a material adverse effect on the current or future consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; 6 (p) The Company is not and, after giving effect to the offering and sale of the Securities will not be, an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); (q) Immediately after any sale of Securities by the Company hereunder, the aggregate amount of Securities which shall have been issued and sold by the Company hereunder and of any securities of the Company (other than such Securities) that shall have been issued and sold pursuant to the registration statement will not exceed the amount of securities registered under the registration statement; (r) KPMG LLP, who have certified certain financial statements of the Company and its subsidiaries, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder; (s) The Pledge Agreement will create, as collateral security for the performance when due by the holders from time to time of the Securities of their respective obligations under the Purchase Contracts constituting part of such Securities, a valid security interest (as defined in the Uniform Commercial Code, as adopted and in effect in the State of New York (the "New York UCC")) in favor of the Collateral Agent for the benefit of the Company, in the right, title and interest of such holders in the securities and other assets and interests pledged to the Collateral Agent pursuant to the Pledge Agreement; and (t) This Agreement has been duly authorized, executed and delivered by the Company. 2. (a) Subject to the terms and conditions herein set forth, the Company agrees that it will sell to the Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase from the Company, at a purchase price of $48.50 per Corporate Unit, the amount of Initial Securities set forth opposite the name of such Underwriter in Schedule I. (b) In addition, the Company grants an option to the Underwriters, severally and not jointly, to purchase up to 1,155,000 Option Securities, at the price per Security set out in Section 2(a). The option will expire 13 days after the date on which the Initial Securities are issued and may be exercised once, but no more than once, in whole or in part only for the purpose of covering any over-allotments which may be made in connection with the offering and distribution of the Initial Securities upon notice by the Underwriters to the Company setting forth the number of Option Securities as to which the several Underwriters are exercising the option and the time and date of payment and delivery for such Option Securities. Such time and date of delivery shall be determined by the Underwriters, but shall not be earlier than three, nor later than seven, full business days after the exercise of said option, nor in any event prior to the First Time of Delivery, as hereinafter defined. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total amount of Option Securities being purchased which the amount of Initial Securities set forth in Schedule I opposite the name of such Underwriter bears to the total amount of Initial Securities, subject in each case to such adjustments as the Underwriters in their discretion shall make to eliminate any sales or purchases of fractional securities. 8 3. Upon the authorization by the Underwriters of the release of the Initial Securities, the Underwriters will offer the Initial Securities for sale to the public as set forth in the Prospectus as amended or supplemented. 4. The Securities to be purchased by the Underwriters will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company ("DTC") or its designated custodian. The Company will deliver the Securities to the Underwriters, against payment by the Underwriters of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified at least twenty-four hours in advance by the Company to the Underwriters, by causing DTC to credit the Securities to the accounts of the Underwriters at DTC. The Company will cause the certificates representing the Securities to be made available to the Underwriters for checking at least twenty-four hours prior to each Time of Delivery (as defined below) at the office of DTC or its designated custodian (the "Designated Office"). The time and date of such delivery and payment shall be, (i) with respect to the Initial Securities, 10 a.m., New York City time, on July 31, 2002 or such other time and date as the Underwriters and the Company may agree upon in writing and (ii) with respect to the Option Securities, if any, in the manner and at the time and date as the Underwriters in the written notice given by the Underwriters of their election to purchase such Optional Shares, or at such other time and date as the Underwriters and the Company may agree upon in writing, such time and date, if not the First Time of Delivery, herein called the "Second Time of Delivery". Each such time and date for delivery is herein called a "Time of Delivery". 5. The Company agrees with each of the Underwriters: (a) To prepare the Prospectus as amended or supplemented in relation to the Securities in a form approved by the Underwriters and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented after the date of this Agreement and prior to the last Time of Delivery which shall be disapproved by the Underwriters promptly after reasonable notice thereof; to advise the Underwriters promptly of any such amendment or supplement after such Time of Delivery and furnish the Underwriters with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Securities, and during such same period to advise the Underwriters, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any 8 prospectus relating to the Securities or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order; (b) Promptly from time to time to take such action as the Underwriters may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as the Underwriters may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities, PROVIDED, HOWEVER, that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish the Underwriters with copies of the Prospectus as amended or supplemented in such quantities as the Underwriters may from time to time reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Underwriters and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Underwriters may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (d) To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including at the option of the Company Rule 158); and 9 (e) The Company will not, without the prior written consent of the Underwriters, offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any other shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock ("Company Securities"); or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of the Underwriting Agreement, provided, however, that the Company may issue shares of its common stock in the concurrent offering and the Company may (x) issue and sell Company Securities, (y) file a registration statement with the Commission in respect of Company Securities to be issued and sold or (z) publicly announce an intention to effect the issuance or sale of Company Securities: (a) upon the conversion, exchange or exercise of any of its securities outstanding on the date of this Agreement; (b) pursuant to its stock option of other benefit plans maintained for its directors, officers or employees; or (c) in connection with mergers, acquisitions and similar transactions, provided that each person to whom Company Securities are issued or transferred in any such transactions agrees to be bound by the foregoing restrictions if the acquired entity did not, immediately prior to the transaction, have a class of securities registered under the Securities Exchange Act of 1934, as amended; provided that if the Company suffers severe losses as a result of a major catastrophe, and advises the Underwriters that it believes that raising capital through the offering of Company Securities would be appropriate in order to maintain appropriate financial strength, the Company may proceed with such offering without the consent of the Underwriters. (e) To use its best efforts to effect the listing of the Corporate Units and the Shares on the New York Stock Exchange; and (f) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act. 6. (a) The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Indenture, any Blue Sky and Legal Investment Memoranda, closing documents (including compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in 10 Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities rating services for rating the Securities; (v) any filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for any Trustee in connection with any Indenture and the Securities; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make. (b) Each Underwriter has represented, warranted and agreed that: (i) it has not offered or sold and, prior to the expiry of a period of six months from the First Time of Delivery, will not offer or sell any Equity Units to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated and caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of any equity units in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the equity units in, from or otherwise involving the United Kingdom. The Company has been informed of the guidance relating to stabilization provided by the Financial Services Authority, in particular in the section MAR 2 Annex 2G of the Financial Services Handbook, and has not taken or omitted to take any action and will not take any action or omit to take any action (such as issuing any press release relating to any Designated Shares which is issued to or directed at persons in the United Kingdom without the Stabilization/FSA legend) which may result in the loss by any of the Underwriters of the ability to rely on any stabilization safe harbour provided by the Financial Services Authority under the FSMA. 7. The obligations of the Underwriters to purchase and pay for the Securities to be delivered at each Time of Delivery shall be subject, in the discretion of the Underwriters, to the condition that all representations and warranties and other statements of the Company in or 11 incorporated by reference herein relating to such Securities are, at and as of such Time of Delivery for the Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Underwriters' reasonable satisfaction; (b) Cleary, Gottlieb, Steen & Hamilton, counsel for the Underwriters, shall have furnished to the Underwriters such written opinion or opinions, dated such Time of Delivery, with respect to the Indenture, the Securities, the Shares, the Registration Statement, the Prospectus as amended or supplemented and other related matters as the Underwriters may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Sullivan & Cromwell, counsel for the Company, shall have furnished to the Underwriters their written opinion or opinions, dated such Time of Delivery, in form and substance satisfactory to the Underwriters, to the effect that: (i) Each of the Purchase Contract Agreement and the Pledge Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (ii) The Remarketing Agreement has been duly authorized by the Company. (iii) The Purchase Contracts have been duly authorized, executed and delivered by the Company and constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (iv) The Securities have been duly authorized by the Company, and when duly executed and delivered by the Company against payment of the consideration therefor in accordance with the terms of this Agreement, the Corporate Units will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, 12 reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (v) The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act; the Underlying Notes have been duly authorized, executed, authenticated, issued and delivered; and the Indenture and the Underlying Notes constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (vi) Under the Uniform Commercial Code as in effect on the date of such letter in the State of New York (the "New York UCC"), the Pledge Agreement creates, as collateral security for the performance when due by the holders from time to time of the Securities of their respective obligations under the Purchase Contracts, a valid security interest (as that term is defined in the New York UCC) in favor of the Collateral Agent for the benefit of the Company in the right, title and interest of such holders in all of the Pledged Securities that constitute "securities" (as that term is defined in Section 8-102(a)(15) of the New York UCC); and in the case of such Pledged Securities that constitute "securities" (as defined in the New York UCC), such security interest shall be perfected upon delivery of such certificates (indorsed in blank) to the Collateral Agent in the State of New York and, assuming that neither the Collateral Agent nor the Company has notice of an adverse claim with respect to such Pledged Securities, the Collateral Agent will acquire a security interest in the Pledged Securities free of any adverse claim (as that term is defined in the New York UCC); in the case of Pledged Securities that are credited by a securities intermediary (as defined in the New York UCC) to a securities account (as defined in the New York UCC) in the name of the Collateral Agent, the Collateral Agent shall have a perfected security interest in all security entitlements (as defined in the New York UCC) relating to such Pledged Securities; (vii) The discussion set forth in the Prospectus under the heading "Certain United States Federal Income Tax Consequences" constitutes, in all material respects, a fair and accurate summary of the United States federal income tax consequences of the purchase, ownership and disposition of the Securities, based upon current United States federal income tax law; (viii) All regulatory consents, authorizations, approvals and filings required to be obtained or made by the Company under the Federal laws of the United States and the laws of the State of New York for the issuance, sale and delivery of the Securities to the Underwriters have been obtained or made; (ix) Registration of the Company under the Investment Company Act is not required; and (x) This Agreement has been duly authorized, executed and delivered by the Company. 13 Such counsel shall also state that they have reviewed the Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the date of such opinion and that such counsel are of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of the date of the most recent Prospectus Supplement, appeared on their face to be appropriately responsive, in all material respects relevant to the offering of the Securities, to the requirements of the Act, the Trust Indenture Act and the rules and regulations thereunder; such counsel shall further state that nothing has come to their attention in the course of their review to cause them to believe that the Registration Statement, as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of the date of the most recent Prospectus Supplement and as of such Time of Delivery, the Prospectus as amended or supplemented contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. Such counsel may state that they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus except for those made under the captions "Description of the Equity Units", "Description of the Senior Notes", "Underwriting", "Plan of Distribution" and "Certain United States Federal Income Tax Consequences" in the Prospectus insofar as they relate to provisions of documents therein described, and that they do not express any opinion or belief as to the financial statements or other financial data derived from accounting records contained in the Registration Statement or the Prospectus, or as to the statement of the eligibility and qualification of the Trustee under the Indenture. Such counsel may also state that they have relied on the opinion or opinions delivered pursuant to Section 7(d) with respect to matters of Minnesota law. (d) Bruce A. Backberg, Esq., Senior Vice President for the Company, or other counsel for the Company acceptable to the Underwriters, shall have furnished to the Underwriters his written opinion, dated such Time of Delivery, in form and substance satisfactory to the Underwriters, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Minnesota, with corporate power and authority to own its properties and conduct its business as described in the Prospectus as amended or supplemented; (ii) The Company has an authorized share capital as set forth in the Prospectus as amended or supplemented and all of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; (iii) The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each jurisdiction in which, in such counsel's opinion, the Company is required to be so qualified or if the Company is not so qualified in any such state or jurisdiction, the failure to so qualify would not, considering all cases in the aggregate, involve a material risk to the business, 14 properties, financial position or results of operation of the Company and its subsidiaries, taken as a whole; (iv) Each of the Principal Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; all of the issued shares of capital stock of each of St. Paul Fire and Marine Insurance Company, United States Fidelity and Guaranty Company and approximately 78% of the issued shares of the capital stock of The John Nuveen Company have been duly authorized and validly issued, are fully paid and non-assessable, and (except as disclosed in the Registration Statement) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims (such counsel being entitled to rely in respect of the opinion in this clause upon opinions of local counsel and in respect of matters of fact upon certificates of officers of the Company or the Principal Subsidiaries, PROVIDED, HOWEVER, that such counsel shall state that he believes that both the Underwriters and he are justified in relying upon such opinions and certificates); (v) To such counsel's knowledge, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, other than as set forth in the Prospectus and other than litigation or proceedings (none of which is reasonably likely to be material) incident to the kinds of business conducted by the Company and its subsidiaries, which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate (after giving effect to any applicable insurance, reinsurance or reserves therefor) have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (vi) This Agreement has been duly authorized, executed and delivered by the Company; each of the Remarketing Agreement, the Purchase Contract Agreement and the Pledge Agreement has been duly authorized by the Company; (vii) The Securities have been duly authorized by the Company; except as set forth in the Prospectus (exclusive of any supplement thereto), the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for Common Stock or the Securities; and except as set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock or ownership interests in the Company are outstanding; (viii) The Underlying Notes have been duly authorized, executed, authenticated, issued and delivered; (ix) The Indenture has been duly authorized, executed and delivered by the Company; 15 (x) The issue and sale of the Securities and the issue of the Shares pursuant to the Purchase Contracts, the compliance by the Company with all of the provisions of the Operative Documents and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company or any of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the Restated Articles of Incorporation, as amended, or By-laws, as amended, of the Company or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties; (xi) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters; (xii) Neither the Company nor any of its subsidiaries is in violation of its organizational documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties is or may be bound, except where any such default does not have or would not reasonably be expected to have a material adverse effect on the Company and its subsidiaries taken as a whole; (xiii) The Company is not and, after giving effect to each offering and sale of the Securities will not be, an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act; (xiv) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of the registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Act or the 16 Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; and (xv) The Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the date of such opinion for the Securities (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; such counsel has no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company prior to the date of such opinion (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the date of such opinion (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading or that, as of the date of such opinion, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the date of such opinion (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; and such counsel does not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required; PROVIDED, HOWEVER, that in lieu of the delivery of the opinion set forth in paragraph (iv) of this Section 7(c) as to The John Nuveen Company, such counsel may cause Alan G. Berkshire, Vice President and General Counsel to The John Nuveen Company, to deliver an opinion as to such matters, dated such Time of Delivery. Such counsel may also state that he has relied on the opinion or opinions delivered pursuant to Section 7(c) with respect to matters of New York law. (e) On the date of this Agreement and at such Time of Delivery for the Securities, KPMG LLP who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Underwriters a letter, dated the effective date of the Registration Statement or 17 the date of the most recent report filed with the Commission containing financial statements and incorporated by reference in the Registration Statement, if the date of such report is later than such effective date, and a letter dated such Time of Delivery, respectively and, with respect to such letter dated such Time of Delivery, as to such other matters as the Underwriters may reasonably request and in form and substance satisfactory to the Underwriters; (f) (i) Neither the Company nor any of its Principal Subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented, and (ii) since the respective dates as of which information is given in the Prospectus as amended or supplemented there shall not have been any change in the capital stock or long-term debt of the Company and its subsidiaries taken as a whole (other than any decrease in the capital stock resulting from purchases under the Company's Stock Repurchase Program and any increase in the capital stock resulting from the exercise of stock options or the issuance of restricted shares under the Company's stock incentive and employee compensation plans, or the conversion of Series B Convertible Preferred Stock) or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented relative to the Securities, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Underwriters so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus; (g) On or after the date of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company's debt securities or the Company's financial strength or claims paying ability by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act and (ii) other than as disclosed in the Prospectus as amended or supplemented, no such organization shall have publicly announced or otherwise given notice to the Company that it has under surveillance, review or watch, with possible negative implications, its rating of any of the Company's debt securities or the Company's financial strength or claims paying ability, or of any review for a possible change therein that does not indicate the direction of the possible change; (h) On or after the date of this Agreement there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading the Company's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities or a material disruption in the commercial banking or securities settlement or clearance services in the United States; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or the occurrence of any other calamity or crisis or change in financial, political or economic conditions in the United States or 18 elsewhere if the effect of any such event specified in this clause (iv) in the judgment of the Underwriters makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented; (i) The Company shall have furnished or caused to be furnished to the Underwriters at such Time of Delivery for the Securities a certificate or certificates of officers of the Company satisfactory to the Underwriters as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of this Section and as to such other matters as the Underwriters may reasonably request; and (j) The Corporate Units shall have been listed and admitted and authorized for trading on the New York Stock Exchange, and satisfactory evidence of such actions shall have been provided to the Underwriters. (k) On or prior to the First Time of Delivery, the Company shall have furnished to the Underwriters a letter substantially in the form of Exhibit A hereto from each executive officer of the Company addressed to the Underwriters. 8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Underwriter expressly for use in the Prospectus as amended or supplemented relating to such Securities; and PROVIDED, FURTHER, that the Company shall not be liable to any Underwriter under the indemnity agreement in this subsection (a) with respect to any Preliminary Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact such Underwriter sold Securities to a person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) or of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act if the Company has previously furnished copies thereof to such Underwriter and the loss, 19 claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Preliminary Prospectus which was corrected in the Prospectus (or the Prospectus as amended or supplemented). (b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. 20 (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of the Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint. (e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same 21 terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder at a Time of Delivery, the Underwriters may in their discretion arrange for themselves or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Underwriters do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Underwriters to purchase such Securities on such terms. In the event that, within the respective prescribed period, the Underwriters notify the Company that they have so arranged for the purchase of such Securities, or the Company notifies the Underwriters that it has so arranged for the purchase of such Securities, the Underwriters or the Company shall have the right to postpone a Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Underwriters may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement. (b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Underwriters and the Company as provided in subsection (a) above, the aggregate stated amount of such Securities which remains unpurchased does not exceed one-eleventh of the aggregate stated amount of the Securities to be purchased at such Time of Delivery, then the Company shall have the right to require each non-defaulting Underwriter to purchase the stated amount of Securities which such Underwriter agreed to purchase under this Agreement at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the stated amount of Securities which such Underwriter agreed to purchase under this Agreement) of the Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Underwriters and the Company as provided in subsection (a) above, the aggregate stated amount of Securities which remains unpurchased exceeds one-eleventh of the aggregate number of the Securities to be purchased at such Time of Delivery, as referred to in subsection (b) above, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Securities of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company to sell the Option Securities) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 22 10. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. 11. If this Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not then be under any liability to any Underwriter with respect to any Securities covered by this Agreement except as provided in Section 6 and Section 8 hereof; but, if for any other reason any Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters for all out-of-pocket expenses approved in writing by the Underwriters, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Securities not so delivered, but the Company shall then be under no further liability to any Underwriter with respect to any Securities not so delivered except as provided in Section 6 and Section 8 hereof. 12. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the Underwriters at their addresses listed on the first page hereof; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement: Attention: Bruce A. Backberg, Esq., Senior Vice President; PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Underwriters upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Section 8 and Section 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of this Agreement. As used herein, "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 15. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 16. This Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 23 If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof. Very truly yours, THE ST. PAUL COMPANIES, INC. By:__________________________ Name: Title: Accepted as of the date hereof: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By:_______________________________ Name: Title: SALOMON SMITH BARNEY INC. By:_______________________________ Name: Title: On behalf of each of the Underwriters 24 SCHEDULE I UNDERWRITER NUMBER OF ----------- CORPORATE UNITS TO BE PURCHASED Merrill Lynch, Pierce, Fenner & Smith Incorporated 3,850,000 Salomon Smith Barney Inc. 3,850,000 ----------------- Total 7,700,000 ================= EXHIBIT A FORM OF LOCK-UP AGREEMENT The St. Paul Companies, Inc. ---------------------------- Equity Units ------------ Common Stock ------------ July __, 2002 Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center, 25th Floor New York, New York 10080 Salomon Smith Barney Inc. 388 Greenwich Street, 35th Floor New York, New York 10013 As Representatives (the "Representatives") of the several Underwriters Ladies and Gentlemen: This letter is being delivered to you in connection with (i) the proposed pricing agreement between The St. Paul Companies, Inc., a Minnesota corporation (the "Company"), and you as representatives of the underwriters named therein ("the Pricing Agreement"), relating to an underwritten public offering of shares of common stock, without par value ("Common Stock") of the Company; and (ii) the proposed underwriting agreement between the Company and the representatives of the underwriters named therein (the "Equity Unit Underwriting Agreement", and together with the Pricing Agreement, the "Underwriting Agreements"), relating to an underwritten public offering of equity units of the Company. In order to induce you and the other underwriters to enter into the Underwriting Agreements, the undersigned will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any other shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock ("Company Securities") or publicly announce an intention to effect any such transaction, during the period beginning on the date hereof and ending 90 days after the date of the Underwriting Agreements. Notwithstanding the foregoing, the undersigned may offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction that is designed to result in the disposition of) Company Securities (i) as a BONA FIDE gift, (ii) by will or the laws of descent and distribution, (iii) pursuant to a domestic relations order, as defined in the Internal Revenue Code or Title 1 of the Employee Retirement Income Security Act, or the rules thereunder, (iv) as a BONA FIDE pledge to a third party to secure borrowings or (v) to any trust, family partnership or similar entity for the direct or indirect benefit of the undersigned, provided that trust, partnership or similar entity agrees to be bound by the restrictions set forth herein. Notwithstanding the foregoing, the undersigned may file or participate in the filing of a registration statement with the Securities and Exchange Commission in respect of any issuance by the Company of Company Securities in compliance with the conditions set forth in Underwriting Agreements. Yours very truly, --------------------------- Name: Address: 27 EX-4.1 4 y62640exv4w1.txt FORM OF 5.25 SENIR NOTE DUE 2007 EXHIBIT 4.1 CUSIP NO. 792860 50 4 $442,750,000 No. R-1 THE ST. PAUL COMPANIES, INC. 5.25% SENIOR NOTES DUE 2007 SPECIFIED CURRENCY: U.S. DOLLARS ORIGINAL ISSUE DATE: INTEREST RATE: 5.25%, MATURITY DATE: July 31, 2002 SUBJECT TO RESET August 16, 2007 INTEREST PAYMENTS: QUARTERLY ON FEBRUARY 16, MAY 16, AUGUST 16, AND NOVEMBER 16, COMMENCING NOVEMBER 16, 2002 THE ST. PAUL COMPANIES, INC., a corporation duly organized and existing under the laws of the State of Minnesota (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to JPMORGAN CHASE BANK, as Purchase Contract Agent, or registered assigns, the principal sum of $442,750,000 (FOUR HUNDRED FORTY TWO MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS) on August 16, 2007, and to pay interest thereon from July 31, 2002 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on February 16, May 16, August 16 and November 16 of each year, commencing November 16, 2002 (each, an "Interest Payment Date"), initially at the rate of 5.25% per annum through and including the day immediately preceding the Reset Effective Date (as defined on the reverse hereof) and at the Reset Rate (as defined on the reverse hereof) thereafter until the principal hereof shall have been paid or duly made available for payment. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, except as provided in the Indenture, the amount of interest payable for any period shorter than a full quarterly period for which interest is computed will be computed on the basis of the actual number of days elapsed in such 90-day period. In any case where any Interest Payment Date of this Security shall not be a Business Day, then (notwithstanding any other provision of the Indenture or of the Securities of this series) payment of interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, provided that no such interest shall accrue with respect to such payment, for the period from and after such Interest Payment Date. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in said Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be February 1, May 1, August 1 and November 1 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than ten days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of (and premium, if any) and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or by wire transfer to an account in the United States designated to the Trustee by a prior written notice by such Person delivered at least five Business Days prior to the applicable Interest Payment Date. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: July 31, 2002 THE ST. PAUL COMPANIES, INC. By: ----------------------- Name: Title: ATTEST: - ----------------------- Corporate Secretary [SEAL] 2 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. JPMORGAN CHASE BANK, as Trustee, By: ----------------------- Authorized Officer 3 (REVERSE OF SECURITY) THE ST. PAUL COMPANIES, INC. 5.25% SENIOR NOTES DUE 2007 This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of March 12, 2002 (herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and JPMorgan Chase Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), as supplemented by a Board Resolution dated July 25, 2002, and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities of this series and of the terms upon which such Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof limited in aggregate principal amount to $442,750,000. The Securities of this series were initially issued as components of the Company's equity units that are in the form of corporate units (each, a "Corporate Unit"), each such Corporate Unit initially consisting of (a) a stock purchase contract (each, a "Purchase Contract") under which (i) the holder will agree to purchase from the Company on August 16, 2005, a specified number of newly issued shares of common stock, without par value, of the Company and (ii) the Company will pay to the holder quarterly contract adjustment payments and (b) $50 principal amount of the Securities of this series. In accordance with the terms of the Purchase Contract Agreement, dated as of July 31, 2002 (the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as purchase contract agent (the "Purchase Contract Agent"), on their initial issuance the Securities of this series were pledged by the Purchase Contract Agent, on behalf of the holders of the Corporate Units, to BNY Midwest Trust Company, as collateral agent (the "Collateral Agent"), pursuant to the Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement"), among the Company, the Purchase Contract Agent and the Collateral Agent, to secure such holders' obligations to purchase shares of the common stock of the Company under the Purchase Contracts. The interest rate on this Security shall be reset to the Reset Rate, effective as of the Reset Effective Date, in the event of a successful remarketing of the Securities of this series pursuant to the Remarketing Agreement (the "Remarketing Agreement") to be entered into among the Company, JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact of the holders of Purchase Contracts, and a remarketing agent to be designated by the Company (the "Remarketing Agent"). Pursuant to the Remarketing Agreement, the Remarketing Agent shall use its reasonable best efforts to remarket the Securities of this series at a specified aggregate price on the third Business Day R-1 immediately preceding May 16, 2005, and, if the remarketing on such date is unsuccessful or has not occurred because a condition precedent thereto has not been fulfilled, on the third Business Day immediately preceding July 1, 2005, and, if the remarketing on such date is unsuccessful or has not occurred because a condition precedent thereto has not been fulfilled, on the third Business Day immediately preceding August 16, 2005. If a remarketing is successful, the Reset Rate shall be the interest rate at which the Securities of this series were successfully remarketed, and the Reset Effective Date shall be the third Business Day immediately following the date of such successful remarketing, which is also the date on which such remarketing shall settle. If a remarketing fails, the interest rate will not be reset at that time. In the event of a successful remarketing, the interest rate on this Security shall be reset at the Reset Rate as of the Reset Effective Date whether or not the Holder of this Security shall have participated in such remarketing. If a Tax Event (as defined below) occurs and is continuing, the Company may, upon not more than 60 or less than 30 days' notice by mail, at its option, redeem the Securities of this series, in whole, but not in part, at any time at the Redemption Amount (as defined below) for each such Security, plus accrued and unpaid interest on such Security with respect to any Interest Payment Date on or prior to the date of redemption. If the Tax Event redemption occurs prior to May 16, 2005, or, if the remarketing on the third Business Day prior to May 16, 2005 is unsuccessful, but the remarketing on the third Business Day prior to July 1, 2005 is successful, prior to July 1, 2005 or if the remarketing on the third Business Day prior to July 1, 2005 is unsuccessful, prior to August 16, 2005, the Redemption Amount for Securities of this series forming a part of the Corporate Units will be distributed to the Collateral Agent, who in turn will purchase the Treasury portfolio described below on behalf of the holders of the Corporate Units of which the Securities of this series form a part and remit the remainder of the Redemption Amount, if any, to the Purchase Contract Agent for payment to the holders of such Corporate Units. The Treasury portfolio will be substituted for the Securities and will be pledged to the Collateral Agent to secure the Corporate Unit holders' obligations to purchase shares of common stock of the Company under the Purchase Contracts. "Tax Event" means the receipt by the Company of an opinion of nationally recognized independent tax counsel experienced in such matters to the effect that there is more than an insubstantial risk that interest or original issue discount on the Securities of this series would not be deductible, in whole or in part, by the Company for United States federal income tax purposes as a result of any amendment to, change in, or announced proposed change in, the laws, or any regulations thereunder, of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, 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 any interpretation or pronouncement that provides for a position with respect to any such laws or regulations that differs from the generally accepted position on July 25, 2002, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after July 25, 2002. R-2 The Treasury portfolio to be purchased on behalf of the holders of Corporate Units will consist of interest or principal strips of U.S. Treasury securities of this series which mature on or prior to August 15, 2005 in an aggregate amount equal to the aggregate principal amount of the Securities of this series included in Corporate Units and with respect to each scheduled Interest Payment Date on the Securities of this series that occurs after the Tax Event redemption date and on or before August 16, 2005, interest or principal strips of U.S. Treasury securities which 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 aggregate principal amount of the Securities of this series on such date if the interest rate of the Securities was not reset on the applicable Reset Effective Date. Solely for purposes of determining the Treasury portfolio purchase price in the case of a Tax Event redemption date that occurs after August 15, 2005 or the earlier successful remarketing of the Securities of this series, "Treasury portfolio" shall mean a portfolio of zero-coupon U.S. Treasury securities consisting of principal or interest strips of U.S. Treasury securities which mature on or prior to August 15, 2007 in an aggregate amount equal to the aggregate principal amount of the Securities of this series outstanding on the Tax Event redemption date and with respect to each scheduled Interest Payment Date on the Securities of this series that occurs after the Tax Event redemption date, interest or principal strips of U.S. Treasury securities which 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 aggregate principal amount of the Securities of this series outstanding on the Tax Event redemption date. "Redemption Amount" means for each Security of this series an amount in cash equal to (1) in the case of a Tax Event redemption occurring prior to May 16, 2005, or, if the remarketing on the third Business Day prior to May 16, 2005 shall be unsuccessful but the remarketing on the third Business Day prior to July 1, 2005 is successful, prior to July 1, 2005, or prior to August 16, 2005 if the remarketing on the third Business Day prior to July 1, 2005 shall be unsuccessful, the product of (a) the principal amount of such Security and (b) a fraction whose (i) numerator is the Treasury Portfolio Purchase Price (as defined below) and whose (ii) denominator is the aggregate principal amount of Securities of this series included in Corporate Units, and (2) in the case of a Tax Event redemption occurring on or after May 16, 2005 (if the remarketing on the third Business Day prior to May 16, 2005 is successful), or, if the remarketing on the third Business Day prior to July 1, 2005 shall be successful, on or after July 1, 2005, or on or after August 16, 2005 the product of (a) the principal amount of such Security and (b) a fraction whose (i) numerator is the Treasury Portfolio Purchase Price and (ii) whose denominator is the aggregate principal amount of the Securities of this series outstanding on the Tax Event redemption date. "Treasury Portfolio Purchase Price" means the lowest aggregate price quoted by a primary U.S. government securities dealer in New York City to the quotation agent (as defined below) on the third Business Day immediately preceding the Tax Event R-3 redemption date for the purchase of the Treasury portfolio for settlement on the tax event redemption date. "Quotation agent" means Merrill Lynch Government Securities, Inc. or its successor or any other primary U.S. government securities dealer in The City of New York (in the State of New York) selected by the Company. If the remarketing of the Securities of this series on the third Business Day prior to August 16, 2005 has occurred and has resulted in a failed remarketing, each Holder of Securities of this series shall have the right (the "Put Option") to put such Securities to the Company, on August 16, 2005, or if such date is not a Business Day, on the next succeeding Business Day (the "Put Option Settlement Date") at a repayment price equal to the principal amount of such Securities plus an amount equal to any accrued and unpaid interest thereon to the date of payment. In order for a Holder to exercise the Put Option, the Trustee must receive, on or prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the Put Option Settlement Date, at its Corporate Trust Office, or at an office or agency maintained by the Company in the Borough of Manhattan, The City of New York as contemplated by Section 1002 of the Indenture, the Securities of this series to be repurchased with the form entitled "Option to Elect Repayment" on the reverse of or otherwise accompanying such Securities duly completed. Any such notice received by the Trustee shall be irrevocable. All questions as to the validity, eligibility (including time of receipt) and acceptance of the Securities of this series for repayment shall be determined by the Company, whose determination shall be final and binding. Holders of Securities of this series will be notified not later than seven nor more than 15 calendar days prior to the third Business Day immediately preceding August 16, 2005 of the procedures that must be followed if such Holders wish to exercise their Put Option. If the Put Option is exercised, the payment of the repayment price in respect of this Security shall be made no later than 12:00 noon, New York City time, on the Put Option Settlement Date. If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the majority of the Holders in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of R-4 this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $50 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. R-5 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers this Security to: (insert address and zip code of assignee's social security or tax identification number) (insert address and zip code of assignee) and irrevocably appoints agent to transfer this security on the books of the Company. The agent may substitute another to act for him or her. Dated: Signature: Signature Guarantee: (Sign exactly as your name appears on the other side of this Security) Signatures must be guaranteed by an "eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. R-6 SCHEDULE OF INCREASES OR DECREASES IN PLEDGED SECURITIES The following increases or decreases in this pledged Securities certificate have been made:
Amount of Amount of Amount of Signature of Decrease in Increase in this Pledged Authorized Principal Amount Principal Securities Officer of of this Pledged Amount of this Certificate Trustee or Securities Pledged Securities Following Such Securities Date Certificate Certificate Decrease or Increase Custodian
R-7 OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to, in the event of a Final Failed Remarketing, repay $50 principal amount of the _________ aggregate principal amount of 5.25% Senior Notes due 2007 (the "Securities") held by the undersigned, pursuant to its terms on the "Put Option Exercise Date," together with any interest thereon accrued but unpaid to the date of repayment, to the undersigned at: ------------------------------------------------- (Please Print or type Name and Address of the Undersigned) and [insert if Security is in certificated form only - to issue to the undersigned, pursuant to the terms of the Indenture, a new Security or Securities representing the remaining aggregate principal amount of the undersigned's Securities]. For this Option to Elect Repayment to be effective, [insert if Note is in certificated form only, the undersigned's Securities, with] this Option to Elect Repayment form duly completed, must be received by the Trustee at [JPMorgan Chase Bank, 450 West 33rd Street, 15th Floor, New York, NY 10001, Attn: Institutional Trust Services,] no later than 5:00 p.m. at least two Business Days prior to August 16, 2005. Dated: Signature: -------------- --------------------------- Signature Guarantee: ----------------- Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the Securities for which the Put Option is being exercised in every particular without alteration or enlargement or any change whatsoever. R-8 EX-4.2 5 y62640exv4w2.txt PURCHASE CONTRACT AGREEMENT Exhibit 4.2 EXECUTION COPY THE ST. PAUL COMPANIES, INC. and JPMORGAN CHASE BANK, as Purchase Contract Agent ----------------- PURCHASE CONTRACT AGREEMENT ----------------- Dated as of July 31, 2002 ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS Section 1.1 Definitions.................................................................................1 Section 1.2 Compliance Certificates and Opinions.......................................................15 Section 1.3 Form of Documents Delivered to Agent.......................................................16 Section 1.4 Acts of Holders; Record Dates..............................................................16 Section 1.5 Notices....................................................................................17 Section 1.6 Notice to Holders; Waiver..................................................................18 Section 1.7 Effect of Headings and Table of Contents...................................................18 Section 1.8 Successors and Assigns.....................................................................18 Section 1.9 Separability Clause........................................................................18 Section 1.10 Benefits of Agreement......................................................................18 Section 1.11 Governing Law..............................................................................19 Section 1.12 Legal Holidays.............................................................................19 Section 1.13 Counterparts...............................................................................20 Section 1.14 Inspection of Agreement....................................................................20 Section 1.15 Appointment of Financial Institution as Agent for the Company..............................20 Section 1.16 No Waiver..................................................................................20 ARTICLE II CERTIFICATE FORMS Section 2.1 Forms of Certificates Generally............................................................20 Section 2.2 Form of Agent's Certificate of Authentication..............................................21 ARTICLE III THE SECURITIES Section 3.1 Title and Terms; Denominations.............................................................21 Section 3.2 Rights and Obligations Evidenced by the Certificates.......................................22 Section 3.3 Execution, Authentication, Delivery and Dating.............................................22 Section 3.4 Temporary Certificates.....................................................................23 Section 3.5 Registration; Registration of Transfer and Exchange........................................23 Section 3.6 Book-Entry Interests.......................................................................25 Section 3.7 Notices to Holders.........................................................................25 Section 3.8 Appointment of Successor Clearing Agency...................................................25 Section 3.9 Definitive Certificates....................................................................25 Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.........................................26 Section 3.11 Persons Deemed Owners......................................................................27 Section 3.12 Cancellation...............................................................................27 Section 3.13 Establishment of Treasury Units............................................................27 Section 3.14 Reestablishment of Corporate Units.........................................................29 Section 3.15 Transfer of Collateral upon Occurrence of Termination Event................................30 Section 3.16 No Consent to Assumption...................................................................31
-i- Section 3.17 CUSIP Numbers..............................................................................31 ARTICLE IV THE NOTES AND APPLICABLE OWNERSHIP INTEREST IN THE TREASURY PORTFOLIO Section 4.1 Interest and Other Payments; Rights to Payments Preserved; Rate Reset; Notice..............31 Section 4.2 Notice and Voting..........................................................................33 Section 4.3 Tax Event Redemption.......................................................................33 Section 4.4 CUSIP Numbers..............................................................................33 ARTICLE V THE PURCHASE CONTRACTS Section 5.1 Purchase of Shares of Common Stock.........................................................34 Section 5.2 Contract Adjustment Payments...............................................................35 Section 5.3 Deferral of Payment Dates for Contract Adjustment Payments.................................40 Section 5.4 Initial Remarketing and Secondary Remarketing..............................................41 Section 5.5 Payment of Purchase Price, Cash Settlement, Final Remarketing..............................44 Section 5.6 Issuance of Shares of Common Stock.........................................................47 Section 5.7 Adjustment of Settlement Rate..............................................................48 Section 5.8 Notice of Adjustments and Certain Other Events.............................................54 Section 5.9 Termination Event; Notice..................................................................54 Section 5.10 Early Settlement...........................................................................55 Section 5.11 No Fractional Shares.......................................................................57 Section 5.12 Charges and Taxes..........................................................................57 ARTICLE VI REMEDIES Section 6.1 Unconditional Right of Holders to Purchase Common Stock....................................57 Section 6.2 Restoration of Rights and Remedies.........................................................57 Section 6.3 Rights and Remedies Cumulative.............................................................58 Section 6.4 Delay or Omission Not Waiver...............................................................58 Section 6.5 Undertaking for Costs......................................................................58 Section 6.6 Waiver of Stay or Extension Laws...........................................................59 ARTICLE VII THE AGENT Section 7.1 Certain Duties and Responsibilities........................................................59 Section 7.2 Notice of Default..........................................................................60 Section 7.3 Certain Rights of Agent....................................................................60 Section 7.4 Not Responsible for Recitals or Issuance of Securities.....................................61 Section 7.5 May Hold Securities........................................................................61 Section 7.6 Money Held in Custody......................................................................61
-ii- Section 7.7 Compensation and Reimbursement.............................................................61 Section 7.8 Corporate Agent Required; Eligibility......................................................62 Section 7.9 Resignation and Removal; Appointment of Successor..........................................62 Section 7.10 Acceptance of Appointment by Successor.....................................................63 Section 7.11 Merger, Conversion, Consolidation or Succession to Business................................64 Section 7.12 Preservation of Information; Communications to Holders.....................................64 Section 7.13 No Obligations of Agent....................................................................64 Section 7.14 Tax Compliance.............................................................................64 ARTICLE VIII SUPPLEMENTAL AGREEMENTS Section 8.1 Supplemental Agreements Without Consent of Holders.........................................65 Section 8.2 Supplemental Agreements with Consent of Holders............................................65 Section 8.3 Execution of Supplemental Agreements.......................................................66 Section 8.4 Effect of Supplemental Agreements..........................................................67 Section 8.5 Reference to Supplemental Agreements.......................................................67 ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions.........................................................................67 Section 9.2 Rights and Duties of Successor Corporation.................................................67 Section 9.3 Opinion of Counsel Given to Agent..........................................................68 ARTICLE X COVENANTS Section 10.1 Performance Under Purchase Contracts.......................................................68 Section 10.2 Maintenance of Office or Agency............................................................68 Section 10.3 Company to Reserve Common Stock............................................................69 Section 10.4 Covenants as to Common Stock, Dividends and Distributions..................................69 Section 10.5 Tax Treatment..............................................................................69
-iii- PURCHASE CONTRACT AGREEMENT, dated as of July 31, 2002, between The St. Paul Companies, Inc., a Minnesota corporation (the "Company"), and JPMorgan Chase Bank, a New York banking corporation, acting as purchase contract agent for the Holders of Securities (as defined herein) from time to time (the "Agent"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the Securities. All things necessary to make the Purchase Contracts, when the Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done. WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; and nouns and pronouns of the masculine gender include the feminine and neuter genders and of the neuter gender include the masculine and feminine genders; (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States; (c) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (d) the following terms have the meanings given to them in this Section 1.1(d). "Act" when used with respect to any Holder, has the meaning specified in Section 1.4 hereof. "Affiliate" has the same meaning as given to that term in Rule 405 promulgated under the Securities Act or any successor rule thereunder. "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. "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Applicable Market Value" has the meaning specified in Section 5.1 hereof. "Applicable Ownership Interest" means, with respect to a Corporate Unit and the zero-coupon U.S. Treasury securities in the Treasury Portfolio, (i) a 1/20, or 5%, undivided beneficial ownership interest in a $1,000 principal amount of a principal or interest strip in a U.S. Treasury security included in such Treasury Portfolio which matures on or prior to August 15, 2005 and (ii) for the scheduled interest payment date on the Notes that occurs on the Purchase Contract Settlement Date, in the case of a Successful Initial Remarketing or Successful Secondary Remarketing, or for each scheduled interest payment date on the Notes that occurs after the Tax Event Redemption Date and on or before the Purchase Contract Settlement Date, in the case of a Tax Event Redemption, a 0.065625% 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 the Treasury Portfolio that matures on or prior to that interest payment date. "Applicable Principal Amount" means the aggregate principal amount of the Notes which are components of Corporate Units on the Initial Remarketing Date or, upon a Failed Initial Remarketing, the Secondary Remarketing Date. "Authorized Newspaper" means a daily newspaper, in the English language, customarily published on each day that is a Business Day in The City of New York, whether or not published on days that are Legal Holidays, and of general circulation in The City of New York. The Authorized Newspaper for the purposes of the Reset Announcement Date is currently anticipated to be The Wall Street Journal. "Bankruptcy Code" means Title 11 of the United States Code, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws. "Beneficial Owner" means, with respect to a Book-Entry Interest, a Person who is the 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). "Board of Directors" means the board of directors of the Company or a duly authorized committee of that board. "Board Resolution" means one or more resolutions of the Board of Directors or a duly authorized committee thereof, 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 or a duly authorized committee thereof and to be in full force and effect on the date of such certification and delivered to the Agent. -2- "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 hereof. "Business Day" means any day other than a Saturday, a Sunday or any other day on which banking institutions in The City of New York (in the State of New York) are permitted or required by any applicable law to close. "Cash Merger Date" has the meaning set forth in Section 5.7(b)(2) hereof. "Cash Merger Notice" has the meaning set forth in Section 5.7(b)(2) hereof. "Cash Settlement" has the meaning set forth in Section 5.5(a)(i) hereof. "Certificate" means a Corporate Unit Certificate or a Treasury Unit Certificate. "Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section l7A of the Exchange Act that is acting as a depositary for the Securities and in whose name, or in the name of a nominee of that organization, shall be registered a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Securities. "Clearing Agency Participant" means a broker, dealer, bank, 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. "Closing Price" has the meaning specified in Section 5.1 hereof. "Collateral" has the meaning specified in Section 2.1 of the Pledge Agreement. "Collateral Account" has the meaning specified in Article I of the Pledge Agreement. "Collateral Agent" means BNY Midwest Trust Company, as collateral agent under the Pledge Agreement until a successor collateral agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the collateral agent thereunder. "Collateral Substitution" has the meaning specified in Section 3.13 hereof. "Common Equity Securities" means shares of a class of stock of the Company that is not entitled to priority over any other class of stock of the Company in the payment of dividends or with respect to rights upon the liquidation, dissolution or winding up of the Company. "Common Stock" means the common stock, no par value, of the Company. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Company" shall mean such successor. -3- "Constituent Person" has the meaning specified in Section 5.7(b). "Contract Adjustment Payments" means the amount payable by the Company in respect of each Purchase Contract constituting a part of a Corporate Unit or a Treasury Unit equal to 3.75% of the Stated Amount per year, in each case computed on the basis of a 360-day year of twelve 30-day months, plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.2 or 5.3 hereof. Contract Adjustment Payments will accrue from July 31, 2002 and will be payable quarterly in arrears on any Payment Date, commencing on November 16, 2002. "Corporate Trust Office" means the principal 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 450 West 33rd Street, 15th Floor, New York, New York 10001. "Corporate Units" means the collective rights and obligations of a Holder of a Corporate Unit Certificate in respect of a Note or an appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, subject in each case to the Pledge thereof, and the related Purchase Contract. "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. "Corporate Units Register" and "Corporate Units Registrar" have the respective meanings specified in Section 3.5 hereof. "Coupon Rate" means the percentage rate per year at which each Note will bear interest initially. "Current Market Price" has the meaning specified in Section 5.7(a)(8) hereof. "Custodial Agent" has the meaning specified in Article I of the Pledge Agreement, which as described therein shall initially be the same Person as the Collateral Agent. "Deferred Contract Adjustment Payments" has the meaning specified in Section 5.3 hereof. "Depositary" means, initially, DTC until another Clearing Agency becomes its successor. "DTC" means The Depository Trust Company, the initial Clearing Agency. "Early Settlement" has the meaning specified in Section 5.10(a) hereof. "Early Settlement Amount" has the meaning specified in Section 5.10(a) hereof. "Early Settlement Date" has the meaning specified in Section 5.10(a) hereof. -4- "Early Settlement Rate" has the meaning specified in Section 5.10(c) hereof. "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Expiration Date" has the meaning specified in Section 1.4 hereof. "Expiration Time" has the meaning specified in Section 5.7(a)(6) hereof. "Failed Final Remarketing" has the meaning set forth in Section 5.5(b). "Failed Initial Remarketing" has the meaning specified in Section 5.4(a) hereof. "Final Remarketing" has the meaning set forth in Section 5.5(b). "Final Remarketing Date" has the meaning set forth in Section 5.5(b). "Failed Secondary Remarketing" has the meaning specified in Section 5.4(b) hereof. "Global Certificate" means a Certificate that evidences all or part of the Securities and is registered in the name of a Depositary or a nominee thereof. "Global Note Certificate" means a certificate evidencing the respective rights and obligations of Holders in respect of the aggregate principal amount of Notes specified on such certificate and which is registered in the name of a Clearing Agency or a nominee thereof. "Holder," when used with respect to a Security, means the Person in whose name the Security evidenced by a Corporate Unit Certificate and/or a Treasury Unit Certificate is registered in the related Corporate Units Register and/or Treasury Units Register, as the case may be. "Indenture" means the Indenture, dated as of March 12, 2002, by and between the Company and the Indenture Trustee, as it may be amended or supplemented from time to time. "Indenture Trustee" means JPMorgan Chase Bank, as trustee under the Indenture, or any successor thereto. "Initial Remarketing" has the meaning specified in Section 5.4 hereof. "Initial Remarketing Date" has the meaning specified in Section 5.4 hereof. "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Company by its Chairman of the Board, its Chief Executive Officer, its President, an Executive Vice President, or a Senior Vice President, and by its Chief Financial Officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Agent. -5- "New York Office" shall have the meaning set forth in Section 10.2 hereof. "Notes" means the series of senior notes of the Company designated the 5.25% senior notes due August 16, 2007, to be issued under the Indenture as of the date hereof. "NYSE" has the meaning specified in Section 5.1 hereof. "Officer's Certificate" means a certificate of the Company signed on its behalf by the Chairman of the Board, its Chief Executive Officer, its President, an Executive Vice President, a Senior Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Agent. "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. "Outstanding Securities", with respect to the Corporate Units or Treasury Units, means, as of the date of determination, all Corporate Units or Treasury Units, as the case may be, evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except: (i) If a Termination Event has occurred, (A) Treasury Units for which the Stated Amount of Treasury Securities has been theretofore deposited with the Agent in trust for the Holders of such Treasury Units and (B) Corporate Units for which the Stated Amount of the related Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, has been theretofore deposited with the Agent in trust for the Holders of such Corporate Units; (ii) Corporate Units or 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 (iii) Corporate Units or 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 protected purchaser in whose hands the Corporate Units or Treasury Units evidenced by such Certificate are valid obligations of the Company; provided 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 -6- 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. "Payment Date" means each February 16, May 16, August 16 and November 16, commencing November 16, 2002. "Permitted Investments" has the meaning set forth in Article I of the Pledge Agreement. "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof or any other entity of whatever nature. "Pledge" means the pledge under the Pledge Agreement of the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and of the Treasury Securities, in each case constituting a part of the Securities. "Pledge Agreement" means the Pledge Agreement, dated as of July 31, 2002, by and among the Company, the Collateral Agent and the Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the Securities, as the same may hereafter be amended in accordance with the terms thereof. "Predecessor Certificate" means a Predecessor Corporate Unit Certificate or a Predecessor Treasury Unit Certificate. "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 Units evidenced thereby; and, for the purposes of this definition, any Corporate Unit Certificate authenticated and delivered under Section 3.10 hereof 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. "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 hereof 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. "Primary Treasury Dealer" means a primary U.S. government securities dealer in The City of New York. "Proceeds" has the meaning set forth in Article I of the Pledge Agreement. -7- "Purchase Contract", when used with respect to any Security, means the contract forming a part of such Security and obligating the Company to sell and the Holder of such Security to purchase Common Stock on the terms and subject to the conditions set forth in Article V hereof. "Purchase Contract Settlement Date" means August 16, 2005. "Purchase Contract Settlement Fund" has the meaning specified in Section 5.6 hereof. "Purchase Price" has the meaning specified in Section 5.1 hereof. "Purchased Shares" has the meaning specified in clause (6) of Section 5.7(a) hereof. "Put Option" has the meaning set forth in Section 5.5(c) hereof. "Put Option Settlement Date" has the meaning set forth in Section 5.5(c) hereof. "Quotation Agent" means (i) Merrill Lynch Government Securities, Inc. and its respective successors or (ii) any other primary U.S. government securities dealer in The City of New York (in the State of New York) selected by the Company. "Record Date" means: (i) for the distribution payable in respect of the Notes on any Payment Date; (ii) for the distribution payable in respect of the Applicable Ownership Interest in the Treasury Portfolio on any Payment Date; and (iii) for the Contract Adjustment Payment payable on any Payment Date, in each case, the first day of the month in which the relevant Payment Date occurs. "Redemption Amount" means, for each Note, the product of (i) the principal amount of such Note and (ii) a fraction whose numerator is the applicable Treasury Portfolio Purchase Price and whose denominator is the applicable Tax Event Redemption Principal Amount. "Register" means the Corporate Units Register and the Treasury Units Register. "Registrar" means the Corporate Units Registrar and the Treasury Units Registrar. "Remarketing Agent" has the meaning specified in Section 5.4 hereof. "Remarketing Agreement" means the Remarketing Agreement to be entered into by and among the Company, the Remarketing Agent and the Agent. -8- "Remarketing Fee" has the meaning specified in Section 5.4 hereof. "Remarketing Per Note Price" means the Treasury Portfolio Purchase Price divided by the number of Notes held as components of Corporate Units and remarketed in the Initial Remarketing. "Reorganization Event" has the meaning specified in Section 5.7(b) hereof. "Reset Agent" means a nationally recognized investment banking firm chosen by the Company to determine the Reset Rate. "Reset Announcement Date" means, in the case of the Reset Rate to be determined on the Initial Remarketing Date, the tenth Business Day immediately preceding May 16, 2005, in the case of the Reset Rate to be determined on the Secondary Remarketing Date, the tenth Business Day immediately preceding July 1, 2005, and in the case of the Reset Rate to be determined on the Final Remarketing Date, the tenth Business Day immediately preceding the Purchase Contract Settlement Date. "Reset Rate" means the interest rate per year (to be determined by the Reset Agent in accordance with this Agreement), equal to the sum of (X) the Reset Spread and (Y) the rate of interest (1) in the case of the Reset Rate to be determined on the Initial Remarketing Date, on the Two and One-Quarter Year Benchmark Treasury in effect on the Initial Remarketing Date, (2) in the case of the Reset Rate to be determined on the Secondary Remarketing Date, on the Two and One-Eighth Year Benchmark Treasury in effect on the Secondary Remarketing Date or (3) in the case of the Reset Rate to be determined on the Final Remarketing Date, on the Two-Year Benchmark Treasury in effect on the Final Remarketing Date; provided that the Reset Rate shall not exceed the maximum rate permitted by applicable law. "Reset Spread" means in the case of the Reset Rate to be determined on the Initial Remarketing Date, the Secondary Remarketing Date or the Final Remarketing Date, a spread amount to be determined by the Reset Agent on the applicable Reset Announcement Date as the appropriate spread so that the Reset Rate will be the interest rate that the Notes should bear in order for the Applicable Principal Amount of Notes to have an aggregate market value of 100.5% of the Treasury Portfolio Purchase Price on the Initial Remarketing Date or the Secondary Remarketing Date or of 100.5% of the aggregate principal amount of the Notes in the case of the Final Remarketing Date. "Responsible Officer", when used with respect to the Agent, means any officer of the Agent with primary responsibility for the administration of this Agreement and the Pledge Agreement. "Secondary Remarketing" has the meaning specified in Section 5.4(b) hereof. "Secondary Remarketing Date" has the meaning specified in Section 5.4(b) hereof. "Securities Act" means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. -9- "Securities Intermediary" has the meaning specified in Article I of the Pledge Agreement, which as described therein shall initially be the same Person as the Collateral Agent. "Security" means a Corporate Unit or a Treasury Unit. "Senior Indebtedness" means indebtedness of any kind of the Company unless the instrument under which such indebtedness is incurred expressly provides that it is on a parity in right of payment with or subordinate in right of payment to the Contract Adjustment Payments. "Separate Notes" means Notes that are no longer a component of Corporate Units. "Separate Notes Purchase Price" means the amount in cash equal to the product of the Remarketing Per Note Price multiplied by the number of Separate Notes remarketed in the Initial Remarketing or the Secondary Remarketing. "Settlement Rate" has the meaning specified in Section 5.1 hereof. "Stated Amount" means $50. "Subsidiary" means (i) a corporation, a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is, at the date of determination, directly or indirectly owned by the Company, by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company, (ii) a partnership in which the Company or a Subsidiary of the Company holds a majority interest in the equity capital or profits of such partnership, or (iii) any other Person (other than a corporation) in which the Company, a Subsidiary of the Company or the Company and one or more Subsidiaries of the Company, directly or indirectly, at the date of determination, has (x) at least a majority ownership interest or (y) the power to elect or direct the election of a majority of the directors or other governing body of such Person. "Successful Final Remarketing" has the meaning specified in Section 5.5(b) hereof. "Successful Initial Remarketing" has the meaning specified in Section 5.4(a) hereof. "Successful Secondary Remarketing" has the meaning specified in Section 5.4(b) hereof. "Tax Event" means the receipt by the Company 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, or change (including any 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 such laws or regulations by any legislative body, court, governmental agency or regulatory authority or (c) any interpretation or pronouncement that provides for a position with respect to such laws or regulations that -10- differs from the generally accepted position on July 25, 2002, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after July 25, 2002, there is more than an insubstantial risk that interest or original issue discount on the Notes would not be deductible, in whole or in part, by the Company for United States federal income tax purposes. "Tax Event Redemption" means, if a Tax Event shall occur and be continuing, the redemption of the Notes, at the option of the Company, in whole but not in part, on not less than 30 days nor more than 60 days' written notice. "Tax Event Redemption Date" means the date upon which a Tax Event Redemption is to occur. "Tax Event Redemption Principal Amount" means, either: (a) if the Tax Event Redemption Date occurs: (i) prior to May 16, 2005; (ii) prior to July 1, 2005 (in the event of a Failed Initial Remarketing but a Successful Secondary Remarketing); or (iii) prior to the Purchase Contract Settlement Date (in the event of a Failed Secondary Remarketing), the aggregate principal amount of the Notes which are components of Corporate Units on the Tax Event Redemption Date; or (b) if the Tax Event Redemption Date occurs: (i) on or after May 16, 2005 (in the event of a Successful Initial Remarketing); (ii) on or after July 1, 2005 (in the event of a Successful Secondary Remarketing); or (iii) on or after the Purchase Contract Settlement Date, the aggregate principal amount of the Notes outstanding on the Tax Event Redemption Date. "Termination Date" means the date, if any, on which a Termination Event occurs. "Termination Event" means the occurrence of any of the following events: (i) at any time on or prior to the Purchase Contract Settlement Date, a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company under the Bankruptcy Code 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, -11- 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. "Threshold Appreciation Price" has the meaning specified in Section 5.1 hereof. "TIA" means the Trust Indenture Act of 1939 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Trading Day" has the meaning specified in Section 5.1 hereof. "Treasury Portfolio" means: (1) in connection with the Initial Remarketing or Secondary Remarketing, a portfolio of zero-coupon U.S. Treasury securities consisting of (x) principal or interest strips of U.S. Treasury securities that mature on or prior to August 15, 2005 in an aggregate amount equal to the Applicable Principal Amount and (y) with respect to the scheduled interest payment date on the Notes that occurs on the Purchase Contract Settlement Date, principal or interest strips of U.S. Treasury securities that mature on or prior to August 15, 2005 in an aggregate amount equal to the aggregate interest payment that would be due on the Applicable Principal Amount of the Notes on August 16, 2005 if the applicable Coupon Rate on the Notes were not reset to the Reset Rate as described in Section 4.1 hereof; and (2) in connection with a Tax Event Redemption, either: (a) if the Tax Event Redemption Date occurs: (i) prior to May 16, 2005; (ii) prior to July 1, 2005 (in the event of a Failed Initial Remarketing but a Successful Secondary Remarketing); or (iii) prior to the Purchase Contract Settlement Date (in the event of a Failed Secondary Remarketing), -12- a portfolio of zero-coupon U.S. Treasury securities consisting of (x) principal or interest strips of U.S. Treasury securities which mature on or prior to August 15, 2005 in an aggregate amount equal to the applicable Tax Event Redemption Principal Amount and (y) with respect to each scheduled interest payment date on the Notes that occurs after the Tax Event Redemption Date and on or before the Purchase Contract Settlement Date, principal or interest strips of U.S. Treasury securities that mature on or prior to such date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Principal Amount of the Notes on such date; or (b) if the Tax Event Redemption Date occurs: (i) on or after May 16, 2005 (in the event of a Successful Initial Remarketing); (ii) on or after July 1, 2005 (in the event of a Successful Secondary Remarketing); or (iii) on or after the Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury securities consisting of (x) principal or interest strips of U.S. Treasury securities which mature on or prior to August 15, 2007 in an aggregate amount equal to the applicable Tax Event Redemption Principal Amount and (y) with respect to each scheduled interest payment date on the Notes that occurs after the Tax Event Redemption Date, principal or interest strips of such U.S. Treasury Securities that mature on or prior to such date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Principal Amount of the Notes on such date. "Treasury Portfolio Purchase Price" means: (a) in the case of a Tax Event Redemption, the lowest aggregate price quoted by the Primary Treasury Dealer to the Quotation Agent on the third Business Day immediately preceding the Tax Event Redemption Date for the purchase of the applicable Treasury Portfolio for settlement on the Tax Event Redemption Date; or (b) in the case of the Initial Remarketing, the lowest aggregate price quoted by the Primary Treasury Dealer to the Quotation Agent on the Initial Remarketing Date for the purchase of the applicable Treasury Portfolio for settlement on May 16, 2005; or (c) in the case of the Secondary Remarketing, the lowest aggregate price quoted by the Primary Treasury Dealer to the Quotation Agent on the Secondary Remarketing Date for the purchase of the applicable Treasury Portfolio for settlement on July 1, 2005. "Treasury Security" means zero-coupon U.S. Treasury securities (CUSIP Number 912803AG8), which are the principal strip of the U.S. Treasury securities that are scheduled to mature on August 15, 2005. -13- "Treasury Units" means the collective rights and obligations of a Holder of a Treasury Unit Certificate in respect of the Treasury Securities, subject to the Pledge thereof, and the related Purchase Contract. "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. "Treasury Units Register" and "Treasury Units Registrar" have the respective meanings specified in Section 3.5 hereof. "Two-Year Benchmark Treasury" means 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 Notes, as agreed upon by the Company and the Reset Agent. The rate for the Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M., New York City time, on the third Business Day immediately preceding the Purchase Contract Settlement Date in the Telerate system (or if the Telerate system is (a) no longer available on the Final Remarketing Date or (b) in the opinion of the Reset Agent (after consultation with the Company) no longer an appropriate system from which to obtain such rate, such other nationally recognized quotation system as, in the opinion of the Reset Agent (after consultation with the Company), is appropriate). If such rate is not so displayed, the rate for the Two-Year Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to maturity for the Two-Year 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 rates, as of 10:30 A.M., New York City time, on the Final Remarketing Date of three leading United States government securities dealers selected by the Reset Agent after consultation with the Company (which may include the Reset Agent or an Affiliate thereof). "Two and One-Eighth Year Benchmark Treasury" means 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 Notes, as agreed upon by the Company and the Reset Agent. The rate for the Two and One-Eighth Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M., New York City time, on the Secondary Remarketing Date in the Telerate system (or if the Telerate system is (a) no longer available on the Secondary Remarketing Date or (b) in the opinion of the Reset Agent (after consultation with the Company), no longer an appropriate system from which to obtain such rate, such other nationally recognized quotation system as, in the opinion of the Reset Agent (after consultation with the Company), is appropriate). If such rate is not so displayed, the rate for the Two and One-Eighth Year Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to maturity for the Two and One-Eighth Year 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 rates, as of 10:30 A.M., New York City time, on the Secondary Remarketing Date of three leading United States government securities dealers selected by the Reset Agent after consultation with the Company (which may include the Reset Agent or an Affiliate thereof). -14- "Two and One-Quarter Year Benchmark Treasury" means 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 Notes, as agreed upon by the Company and the Reset Agent. The rate for the Two and One-Quarter Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M., New York City time, on the Initial Remarketing Date in the Telerate system (or if the Telerate system is (a) no longer available on the Initial Remarketing Date or (b) in the opinion of the Reset Agent (after consultation with the Company) no longer an appropriate system from which to obtain such rate, such other nationally recognized quotation system as, in the opinion of the Reset Agent (after consultation with the Company), is appropriate). If such rate is not so displayed, the rate for the Two and One-Quarter Year Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to maturity for the Two and One-Quarter Year 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 rates, as of 10:30 A.M., New York City time, on the Initial Remarketing Date of three leading United States government securities dealers selected by the Reset Agent after consultation with the Company (which may include the Reset Agent or an Affiliate thereof). "Underwriting Agreement" means the Underwriting Agreement dated July 25, 2002 between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc., as underwriters therein. Section 1.2 Compliance Certificates and Opinions. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Agent to take any action under any provision of this Agreement, the Company shall furnish to the Agent an Officer's Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if reasonably requested by the Agent, an Opinion of Counsel addressed to the Agent 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. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include: (1) a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such Person, he or she or it 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 -15- (4) a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with. Section 1.3 Form of Documents Delivered to Agent. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless the Company 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, the Company stating that the information with respect to such factual matters is in the possession of the Company unless the Person giving such certificate or Opinion of Counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. Section 1.4 Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by 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 hereof) conclusive in favor of the Agent and the Company, if made in the manner provided in this Section 1.4. (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. (c) The ownership of Securities shall be proved by the Corporate Units Register or the Treasury Units Register, as the case may be. (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 -16- 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. (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 hereof. With respect to any record date set pursuant to this Section 1.4, 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 hereof, 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 1.4, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. Section 1.5 Notices. Any request, demand, authorization, direction, instruction, 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, (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 (which may be via facsimile) and personally delivered or mailed, first-class postage prepaid, to the Agent at JPMorgan Chase Bank, 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Institutional Trust Services, Facsimile: (212) 946-8154, or at any other address previously furnished in writing by the Agent to the Holders and the Company; or (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, to the Company at The St. Paul Companies, Inc., 385 Washington Street, St. Paul, Minnesota 55102 Attention: Bruce A. -17- Backberg, Esq., Facsimile: (651) 310-8204 or at any other address previously furnished in writing to the Agent by the Company; or (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 BNY Midwest Trust Company, 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602 Attention: Daniel G. Donovan, or at any other address previously furnished in writing by the Collateral Agent to the Agent, the Company and the Holders; or (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 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Institutional Trust Services, Facsimile: (212) 946-8154, or at any other address previously furnished in writing by the Indenture Trustee to the Company. Section 1.6 Notice to Holders; Waiver. Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the applicable Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Agent shall constitute a sufficient notification for every purpose hereunder. Section 1.7 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.8 Successors and Assigns. All covenants and agreements in this Agreement by the Company shall bind its successors and assigns, whether so expressed or not. -18- Section 1.9 Separability Clause. In case any provision in this Agreement or in the Securities shall be invalid, illegal or unenforceable, then, to the extent permitted by law, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. Section 1.10 Benefits of Agreement. Nothing 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 applicable terms and conditions hereof and of the Securities evidenced by their Certificates by their acceptance of delivery of such Certificates. Section 1.11 Governing Law. THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 1.12 Legal Holidays. In any case where any Purchase Contract Settlement Date or any Early 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 or Early Settlement Date, as applicable. In any case where the Payment 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 Contract Adjustment Payment shall not be made on such date, but shall be made on the immediately following Business Day with the same force and effect as if made on the Payment Date, provided that no interest shall accrue or be payable by the Company or to any Holder for the period from and after any such Payment Date unless there shall be a default in the payment due on such next succeeding Business Day. -19- Section 1.13 Counterparts. This Agreement may be executed in any number of counterparts by the parties hereto on separate counterparts, each of which, when so executed and delivered, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Section 1.14 Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder. Section 1.15 Appointment of Financial Institution as Agent for the Company. The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations and in accepting and enforcing performance of the obligations of the Agent and the Holders, under this Agreement and the Purchase Contracts, by giving notice of such appointment in the manner provided in Section 1.5 hereof. Any such appointment shall not relieve the Company in any way from its obligation hereunder. Section 1.16 No Waiver. No failure on the part of the Company, the Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Company, the Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents of any right, power or remedy hereunder preclude any further exercise thereof or the exercise of any right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. ARTICLE II CERTIFICATE FORMS Section 2.1 Forms of Certificates Generally. 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. The definitive Corporate Unit Certificates may 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 -20- Company executing such Corporate Unit Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. 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 are 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. The definitive Treasury Unit Certificates may 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 such Treasury Unit Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form: THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (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. Section 2.2 Form of Agent's Certificate of Authentication. 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. 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. ARTICLE III THE SECURITIES Section 3.1 Title and Terms; Denominations. 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 8,855,000, except for Certificates authenticated, executed and delivered upon registration of, transfer of, in exchange for, or -21- in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.9, 3.10, 3.13, 3.14, 5.7(b)(2), 5.10 or 8.5 hereof. The Certificates shall be issuable only in registered form and only in denominations of a single Corporate Unit or Treasury Unit and any integral multiple thereof. Section 3.2 Rights and Obligations Evidenced by the Certificates. 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 Note or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, subject to the Pledge of such Note 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, the Note 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 Note 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 each Purchase Contract to purchase the shares of Common Stock. 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 ownership interest in a Treasury Security with a principal amount at maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and 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, the Treasury Security to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title and interest of such Holder in such Treasury Security, for the benefit of the Company, to secure the obligation of the Holder under each Purchase Contract to purchase the Common Stock of the Company. Prior to the purchase of shares of Common Stock under each Purchase Contract, such Purchase Contract shall not entitle the Holder of a Security to any rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a shareholder of the Company. Section 3.3 Execution, Authentication, Delivery and Dating. Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the 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. -22- The Certificates shall be executed on behalf of the Company by (i) any one of its Chairman of the Board, its Chief Executive Officer, its President, an Executive Vice President or a Senior Vice President and (ii) any one of its Treasurer or one of its Assistant Treasurers or its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates. No Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized 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. Each Certificate shall be dated the date of its authentication. No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized 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. Section 3.4 Temporary Certificates. 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 that are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the 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. 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 or the New York 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. -23- Section 3.5 Registration; Registration of Transfer and Exchange. The Agent shall keep at the Corporate Trust Office a register (the "Corporate Units 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 Units Registrar") and a register (the "Treasury Units Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of Treasury Unit Certificates and of transfers of Treasury Unit Certificates (the Agent, in such capacity, the "Treasury Units Registrar"). Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office or the New York 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. 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 or the New York 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 that the Holder making the exchange is entitled to receive. All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of Corporate Units or Treasury Units, as the case may be, and be entitled to the same benefits and subject to the same obligations, under this Agreement as the Corporate Units or Treasury Units, as the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange. Every Certificate presented or surrendered for registration of transfer or for exchange shall (if so required by 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. 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 3.4, 3.6, 3.9 and 8.5 hereof not involving any transfer. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall 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 earlier of the Purchase Contract Settlement Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section 3.5 and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date has occurred, deliver (or request the Company to deliver) the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such Certificate (together with any cash or other property to which the Holder is entitled), or (ii) if a Termination Event shall have occurred prior to the Purchase -24- Contract Settlement Date, transfer the Notes, the appropriate Applicable Ownership Interest in the Treasury Portfolio or the Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V hereof. Notwithstanding anything in this Agreement to the contrary, no transfer by any Holder to any Person other than the Company of any Corporate Unit, Treasury Unit or Note may be made or will be recognized unless such instrument has been surrendered and accepted for registration of transfer in accordance with the provisions of this Section 3.5, or unless such transfer is effectuated through the book-entry system described in Section 3.6 hereof. Section 3.6 Book-Entry Interests. The Certificates, on original issuance, will be issued in the form of one or more fully registered Global Certificates, to be delivered to the Depositary by, or on behalf of, the Company. Such Global Certificate shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of the 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 hereof. 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 hereof: (a) the provisions of this Section 3.6 hereof shall be in full force and effect; (b) the Company and the Agent shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including 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; (c) to the extent that the provisions of this Section 3.6 hereof conflict with any other provisions of this Agreement, the provisions of this Section 3.6 hereof shall control; and (d) 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. Section 3.7 Notices to Holders. Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Agent shall give such notices and communications to the Holders and, with respect to any Securities registered in the name of a Clearing Agency or the nominee of a Clearing Agency, the Company or the Agent shall, except as set forth herein, have no obligations to the Beneficial Owners. -25- Section 3.8 Appointment of Successor Clearing Agency. 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. Section 3.9 Definitive Certificates. 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 hereof or (ii) there shall have occurred and be continuing a default by the Company in respect of its obligations under one or more Purchase Contracts, or the Indenture, 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. Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates. 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. 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 any of them harmless, then, in the absence of notice to the Company or the Agent that such Certificate has been acquired by a protected 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. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate on or after the Business Day immediately preceding the earlier of the Purchase Contract Settlement Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section 3.10 and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date has occurred, deliver (or request the Company to deliver) the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such Certificate (together with any cash or other property to which the Holder is entitled), or (ii) if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer the Notes, the appropriate Applicable Ownership Interest in the Treasury Portfolio or the Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V hereof. -26- Upon the issuance of any new Certificate under this Section 3.10, the Company and the Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Agent) connected therewith. Every new Certificate issued pursuant to this Section 3.10 in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the Security evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the Securities evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder. The provisions of this Section 3.10 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates. Section 3.11 Persons Deemed Owners. Prior to due presentment of a Certificate for registration of transfer, the Company and the Agent, and any agent of the Company or the Agent, may treat the Person in whose name such Certificate is registered as the owner of the Corporate Units or Treasury Units evidenced thereby, for the purpose of (subject to any applicable Record Date) receiving interest on the Notes or on the maturing quarterly interest strips of the Treasury Portfolio, as applicable, receiving payments of Contract Adjustment Payments (if any), for the performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any interest on the Notes shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Agent, nor any agent of the Company or the Agent, shall be affected by notice to the contrary. Notwithstanding the foregoing, with respect to any Global Certificate, nothing herein shall prevent the Company, the Agent or any agent of the Company or the Agent, 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. None of the Company, the Agent nor any agent of the Company or the Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Certificate or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Section 3.12 Cancellation. All Certificates surrendered for delivery of shares of Common Stock on or after the Purchase Contract Settlement Date, upon the transfer of Notes, 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 upon the registration of a transfer or exchange of a Security, or a Collateral Substitution or the reestablishment of a Corporate Unit or Treasury 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 -27- 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 3.12, except as expressly permitted by this Agreement. All cancelled Certificates held by the Agent shall be disposed of by the Agent in its customary manner. 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. Section 3.13 Establishment of Treasury Units. Subject to the conditions set forth in this Agreement, a Holder may separate the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as applicable, from the related Purchase Contracts in respect of a Corporate Unit by substituting for such Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, Treasury Securities in an aggregate principal amount of such Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, as applicable (a "Collateral Substitution"), at any time from and after the date of this Agreement and prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date in the case of the Notes and on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date in the case of the appropriate Applicable Ownership Interest in the Treasury Portfolio, in each case by (a) depositing with the Collateral Agent Treasury Securities having an aggregate principal amount at maturity equal to the aggregate principal amount of the Notes comprising part of such Corporate Units or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio comprising part of such Corporate Unit, as the case may be, and (b) transferring the related Corporate Units to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit D hereto, stating that the Holder has transferred the relevant amount of Treasury Securities to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the Notes 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 C hereto. Notwithstanding the foregoing, a Holder may not separate the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as applicable, from the related Purchase Contracts in respect of the Corporate Units held by such Holder during the period commencing on the fourth Business Day immediately prior to the Initial Remarketing Date (and, upon a Failed Initial Remarketing, prior to the Secondary Remarketing Date) and ending on the fourth Business Day following the Initial Remarketing Date (and, upon a Failed Initial Remarketing, following the Secondary Remarketing Date). Upon receipt of the Treasury Securities described in clause (a) above and the instruction described in clause (b) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release to the Agent, on behalf of the Holder, Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, having the appropriate aggregate principal amount in the case of such Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, from the Pledge, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly: (i) cancel the related Corporate Units; -28- (ii) transfer the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver a Treasury Unit Certificate executed by the Company in accordance with Section 3.3 hereof evidencing the same number of Purchase Contracts as were evidenced by the cancelled Corporate Units. Holders who elect to separate the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, from the related Purchase Contract and to substitute Treasury Securities for such Notes 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. Holders may make Collateral Substitutions (i) only in integral multiples of 20 Corporate Units if Treasury Securities are being substituted for the Notes, or (ii) only in integral multiples of 32,000 Corporate Units if Treasury Securities are being substituted for the appropriate Applicable Ownership Interest in the Treasury Portfolio. 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(s) to the Agent after depositing Treasury Securities with the Collateral Agent, the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, constituting a part of such Corporate Units, and any interest on such Notes or 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 Units are so transferred or the Corporate Unit Certificate is so delivered, as the case may be, or, with respect to a Corporate Unit Certificate, 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. 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 Notes 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 a Corporate Unit. Section 3.14 Reestablishment of Corporate Units. Subject to the conditions set forth in this Agreement, a Holder of a Treasury Unit may recreate Corporate Units at any time (i) prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date, if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has not occurred, and (ii) on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date, if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and an Applicable Ownership Interest in the Treasury Portfolio has become a component of the Corporate Units, in each case by (a) depositing with the Collateral Agent Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, having an aggregate principal amount in the case of the Notes, or -29- an appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, equal to the aggregate principal amount of the Treasury Securities comprising part of the Treasury Units and (b) transferring the related Treasury Units to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit D hereto, stating that the Holder has transferred the relevant amount of Notes 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 C hereto. Notwithstanding the foregoing, a Holder may not reestablish Corporate Units during the period commencing on the fourth Business Day immediately prior the Initial Remarketing Date (and, upon a Failed Initial Remarketing, prior to the Secondary Remarketing Date) and ending on the fourth Business Day following the Initial Remarketing Date (and, upon a Failed Initial Remarketing, following the Secondary Remarketing Date). Upon receipt of the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, described in clause (a) above and the instruction described in clause (b) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release to the Agent, on behalf of the Holder, the Treasury Securities having a corresponding aggregate principal amount from the Pledge, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly: (i) cancel the related Treasury Units; (ii) transfer the Treasury Securities to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver a Corporate Unit Certificate executed by the Company in accordance with Section 3.3 hereof evidencing the same number of Purchase Contracts as were evidenced by the cancelled Treasury Units. Holders who elect to reestablish Corporate Units shall be responsible for any fees or expenses (including, without limitation, fees and expenses payable to the Collateral Agent for its services as Collateral Agent) in respect of the reestablishment and the Company shall not be responsible for any such fees. Holders of Treasury Units may reestablish Corporate Units in integral multiples of 20 Treasury Units for the same multiple of 20 Corporate Units if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has not occurred, and in integral multiples of 32,000 Treasury Units for 32,000 Corporate Units if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred. In the event a Holder re-establishing Corporate Units 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(s) to the Agent after depositing Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, with the Collateral Agent, the Treasury Securities constituting a part of such Treasury Units shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Treasury Units are so transferred or the Treasury Unit Certificate is so delivered, as the case may be, or, with respect to a Treasury Unit Certificate, such Holder provides evidence satisfactory to the Company and the Agent that such Treasury Unit Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. 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 -30- 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 a Treasury Unit. Section 3.15 Transfer of Collateral upon Occurrence of Termination Event. Upon the occurrence of a Termination Event and the transfer to the Agent of the Notes, 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 such Notes or 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 Units Register or the Treasury Units 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 a Treasury Unit Certificate to the Agent with such transfer instructions, the Agent shall transfer the Notes, the 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; provided that, to the extent that a Holder of Corporate Units or Treasury Units would otherwise be entitled to receive less than $1,000 principal amount at maturity of the Treasury Portfolio or the Treasury Securities, the Agent shall dispose of such securities for cash, and transfer the appropriate amount of such cash to such Holder in accordance with such Holder's instructions. In the event a Holder of Corporate Units or Treasury Units fails to effect such transfer or delivery, the Notes, 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 distributions 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. Section 3.16 No Consent to Assumption. Each Holder of a Security, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption under Section 365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company, receiver, liquidator or a Person performing similar functions, its trustee in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or federal law providing for reorganization or liquidation. Section 3.17 CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Agent shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Agent of any changes in the "CUSIP" numbers. -31- ARTICLE IV THE NOTES AND APPLICABLE OWNERSHIP INTEREST IN THE TREASURY PORTFOLIO Section 4.1 Interest and Other Payments; Rights to Payments Preserved; Rate Reset; Notice. Any distribution on any Note or on the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, which is made on any Payment Date shall, subject to receipt thereof by the Agent from the Indenture Trustee or 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 Note 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 for such Payment Date. Each Corporate Unit Certificate evidencing Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Corporate Unit Certificate shall carry the rights to accrued and unpaid distributions, and other amounts that are to accrue, which were or will be carried by the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio underlying such other Corporate Unit Certificate. In the case of any Corporate Units 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 of the underlying Purchase Contract is effected on an Early Settlement Date, 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 Notes or distributions on 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 Collateral Substitution, and such 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 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, as the case may be, or with respect to which a Collateral Substitution has been effected, distributions on the related Notes or on 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 shall not be payable hereunder to the Holder of such Corporate Units; provided that to the extent that such Holder continues to hold the separated Notes that formerly comprised a part of such Holder's Corporate Units, such Holder shall be entitled to receive any payments made on such separated Notes. The applicable Coupon Rate on the Notes on and after May 16, 2005 will be reset on the Initial Remarketing Date to the applicable Reset Rate (such Reset Rate to be in effect on and after May 16, 2005), except in the event of a Failed Initial Remarketing. In the event of a Failed Initial Remarketing, the applicable Coupon Rate on the Notes outstanding on and after July 1, 2005 will be reset -32- on the Secondary Remarketing Date to the applicable Reset Rate (such Reset Rate to be in effect on and after July 1, 2005), except in the event of a Failed Secondary Remarketing. In the event of a Failed Secondary Remarketing, the applicable Coupon Rate on the Notes outstanding on and after the Purchase Contract Settlement Date will be reset on the Final Remarketing Date to the applicable Reset Rate (such Reset Rate to be in effect on and after the Purchase Contract Settlement Date), except in the event of a Failed Final Remarketing. On the applicable Reset Announcement Date, the Reset Spread and the Two-Year Benchmark Treasury, Two and One-Quarter Benchmark Treasury or Two and One-Eighth Benchmark Treasury, as applicable, to be used to determine the Reset Rate will be announced by the Company. On the Business Day immediately following the Reset Announcement Date, the Holders of Notes will be notified of such Reset Spread and Two-Year Benchmark Treasury, Two and One-Quarter Benchmark Treasury or Two and One-Eighth Benchmark Treasury, as applicable, by the Company. Such notice shall be sufficiently given to Holders of Notes if published in an Authorized Newspaper in The City of New York. Not later than seven calendar days nor more than fifteen calendar days prior to the Reset Announcement Date, the Company will notify DTC or its nominee (or any successor Clearing Agency or its nominee) by first-class mail, postage prepaid, to notify the Beneficial Owners or Clearing Agency Participants holding Corporate Units or Treasury Units of such Reset Announcement Date and, in the case of a Final Remarketing, the procedures to be followed by Holders of Corporate Units who intend to settle their obligation under the Purchase Contract with separate cash on the Purchase Contract Settlement Date. Section 4.2 Notice and Voting. Under the terms of the Pledge Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Notes pledged with the Collateral Agent but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as practicable thereafter, mail to the Holders of Corporate Units a notice (prepared by the Company) (a) containing such information as is contained in the notice or solicitation, (b) stating that each 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 Notes entitled to vote) shall be entitled to instruct the Agent as to the exercise of the voting rights pertaining to the Notes underlying their 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 Notes as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Corporate Unit, the Agent shall abstain from voting the Notes underlying such 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 Notes. Section 4.3 Tax Event Redemption. Upon the occurrence of a Tax Event Redemption prior to May 16, 2005, or, in the event of a Failed Initial Remarketing but a Successful Secondary Remarketing prior to July 1, 2005 or, in the event of a Failed Secondary Remarketing, prior to the Purchase Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the Collateral Agent will apply an amount equal to the aggregate Redemption Amount for the Notes that are components of Corporate Units, plus accrued and unpaid interest on such Notes with respect to any Interest Payment Date on or prior to the date of redemption, to -33- purchase on behalf of the Holders of Corporate Units the Treasury Portfolio and promptly remit the remaining portion of such Redemption Amount to the Agent for payment to the Holders of such Corporate Units. The Treasury Portfolio will be substituted for the pledged Notes, and will be held by the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of a Corporate Unit to purchase the Common Stock of the Company under the Purchase Contract constituting a part of such Corporate Units. Following the occurrence of a Tax Event Redemption prior to May 16, 2005 or, in the event of a Failed Initial Remarketing but a Successful Secondary Remarketing, prior to July 1, 2005 or, in the event of a Failed Secondary Remarketing, 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 Holders of Corporate Units and the Collateral Agent had in respect of the Notes, as the case may be, subject to the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein or in the Certificates to the Note shall be deemed to be a reference to such Treasury Portfolio and any reference herein or in the Certificates to interest on the Notes shall be deemed to be a reference to corresponding distributions on 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 Notes as collateral. Section 4.4 CUSIP Numbers. The Company in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Indenture Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Indenture Trustee and the Agent of any changes in the "CUSIP" numbers. ARTICLE V THE PURCHASE CONTRACTS Section 5.1 Purchase of Shares of Common Stock. Each Purchase Contract shall obligate the Holder of the related Security to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a number of newly issued shares of Common Stock equal to the Settlement Rate unless an Early Settlement has occurred in accordance with Section 5.7(b)(2) or Section 5.10 hereof, or, on or prior to the Purchase Contract Settlement Date, there shall have occurred a Termination Event with respect to the Security of which such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal to or greater than $29.04 (the "Threshold Appreciation Price"), 1.7218 shares of Common Stock per Purchase Contract, which is equal to the Stated Amount divided by the Threshold Appreciation Price, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $24.20 (the "Reference Price"), the number of shares of Common Stock per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value and (c) if the Applicable Market Value is less than or equal to the Reference Price, 2.0661 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in Section 5.7 (and -34- in each case rounded upward or downward to the nearest 1/10,000th of a share). As provided in Section 5.11 hereof, no fractional shares of Common Stock will be issued upon settlement of Purchase Contracts. 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 (a) the third Trading Day immediately preceding the Purchase Contract Settlement Date or (b) for purposes of determining cash payable in lieu of fractional shares in connection with an Early Settlement pursuant to Section 5.11 hereof, the third Trading Day immediately preceding the relevant Early Settlement Date or (c) for the purposes of clause (2) of Section 5.7(b) the third Trading Day immediately preceding 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 sale price is reported, the last reported sale price) of the Common Stock on The New York Stock Exchange (the "NYSE") on any such date; or, if the Common Stock is not listed for trading on the NYSE on any such date, the closing sale price 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 closing sale price of the Common Stock as reported by the Nasdaq National 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 Closing Price means the market value of the Common Stock on the date determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. 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. 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, and consents to the provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact 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 Notes, the Treasury Portfolio or the Treasury Securities pursuant to the Pledge Agreement; provided that upon a Termination Event, the rights of the Holder of such Security under the Purchase Contract may be enforced without regard to any other rights or obligations. 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 5.5 hereof and the Pledge Agreement, but subject to the terms thereof, Proceeds of the Treasury Securities, the Notes or the Treasury Portfolio, as applicable, on the Purchase Contract Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such Proceeds. Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of this Agreement, the Purchase Contracts underlying such Certificate and the Pledge Agreement and the transferor shall be released from the obligations under this Agreement, the Purchase Contracts underlying the Certificates so transferred -35- and the Pledge Agreement. The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. Section 5.2 Contract Adjustment Payments. (a) Subject to Section 5.3 herein, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name a Certificate (or one or more Predecessor Certificates) is registered at the close of business on the Record Date next preceding such Payment Date in such coin or currency of the United States as at the time of payment shall be legal tender for payments. The Contract Adjustment Payments, if any, will be payable at the New York Office maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Corporate Units Register or the Treasury Units Register or by wire transfer to the account designated by a prior written notice by such Person. Upon the occurrence of a Termination Event, the Company's obligation to pay Contract Adjustment Payments (including any accrued Deferred Contract Adjustment Payments), if any, shall cease. Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of (including as a result of a Collateral Substitution or the re-establishment of a Corporate Unit) any other Certificate shall carry the rights to Contract Adjustment Payments, if any, accrued and unpaid (including any Deferred Contract Adjustment Payments), and to accrue Contract Adjustment Payments, if any, which were carried by the Purchase Contracts underlying such other Certificates. Subject to Section 5.7(b)(2) and Section 5.10 hereof, in the case of any Security with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date, or in respect of which Cash Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Purchase Contract Settlement Date, or with respect to which a Collateral Substitution or an establishment or re-establishment of Corporate Units pursuant to Section 3.14 hereof is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, Contract Adjustment Payments on the Purchase Contracts underlying such Securities otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement, Early Settlement, Collateral Substitution or establishment or re-establishment of Corporate Units, and such Contract Adjustment Payments shall be paid to the Person in whose name the Certificate evidencing such Security (or one or more Predecessor Certificates) is registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security with respect to which Cash Settlement or Early Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Purchase Contract Settlement Date or on an Early Settlement Date, as the case may be, or with respect to which a Collateral Substitution or an establishment or re-establishment of Corporate Units has been effected, Contract Adjustment Payments, if any (including any Deferred Contract Adjustment Payments), that would otherwise be payable after the Purchase Contract Settlement Date or Early Settlement Date, Collateral Substitution or such establishment or re-establishment with respect to such Purchase Contract shall not be payable. -36- (b) The Company's obligations with respect to Contract Adjustment Payments, if any, will be subordinated and junior in right of payment to the Company's obligations under any Senior Indebtedness. (c) In the event (x) of any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, or (y) subject to the provisions of Section 5.2(e) below, that (i) a default shall have occurred and be continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Senior Indebtedness and such default shall have continued beyond the period of grace, if any, specified in the instrument evidencing such Senior Indebtedness (and the Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture pursuant to which any such Senior Indebtedness may have been issued), or (ii) the maturity of any Senior Indebtedness shall have been accelerated because of a default in respect of such Senior Indebtedness (and the Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture pursuant to which any such Senior Indebtedness may have been issued), then: (i) the holders of all Senior Indebtedness shall first be entitled to receive, in the case of clause (x) above, payment in full of all amounts due or to become due upon all Senior Indebtedness and, in the case of subclauses (i) and (ii) of clause (y) above, payment of all amounts due thereon, or provision shall be made for such payment in money or money's worth, before the Holders of any of the Securities are entitled to receive any Contract Adjustment Payments on the Purchase Contracts underlying the Securities; (ii) any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to which the Holders of any of the Securities would be entitled except for the provisions of Sections 5.2(b) through (n), including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of such Contract Adjustment Payments on the Purchase Contracts underlying the Securities, shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness, before any payment or distribution is made of such Contract Adjustment Payments to the Holders of such Securities; and (iii) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of Contract Adjustment Payments on the Purchase Contracts -37- underlying the Securities, shall be received by the Agent or the Holders of any of the Securities when such payment or distribution is prohibited pursuant to Sections 5.2(b) through (n), such payment or distribution shall be paid over to the holders of such Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any such Senior Indebtedness may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness. (d) For purposes of Sections 5.2(b) through (n), the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Person provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in Sections 5.2(b) through (n) with respect to such Contract Adjustment Payments on the Securities to the payment of all Senior Indebtedness which may at the time be outstanding; provided that (i) the indebtedness or guarantee of indebtedness, as the case may be, that constitutes Senior Indebtedness is assumed by the Person, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Indebtedness are not, without the consent of each such holder adversely affected thereby, altered by such reorganization or readjustment. (e) Any failure by the Company to make any payment on or perform any other obligation under Senior Indebtedness, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding thereof) or any indebtedness or obligation as to which the provisions of Sections 5.2(b) through (d) shall have been waived by the Company in the instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a default or event of default if (i) the Company shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Company which is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, and (B) in the event a judgment that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding for review and a stay of execution shall have been obtained pending such appeal or review. (f) Subject to the payment in full of all Senior Indebtedness, the Holders of the Securities shall be subrogated (equally and ratably with the holders of all obligations of the Company which by their express terms are subordinated to Senior Indebtedness of the Company to the same extent as payment of the Contract Adjustment Payments in respect of the Purchase Contracts underlying the Securities is subordinated and which are entitled to like rights of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Indebtedness until all such Contract Adjustment Payments owing on the Securities shall be paid in full, and as between the Company, its creditors other than holders of such Senior Indebtedness and the Holders, no such payment or distribution made to the holders of Senior Indebtedness by virtue of Sections 5.2(b) through (n) that otherwise would have been made to the Holders shall be deemed to be a payment by the Company on account of such Senior Indebtedness, it being understood that the provisions of Sections 5.2(b) through (n) are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Indebtedness, on the other hand. -38- (g) Nothing contained in Sections 5.2(b) through (n) or elsewhere in this Agreement or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Indebtedness and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders such Contract Adjustment Payments on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the Agent or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under these Sections 5.2(b) through (n), of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. (h) Upon payment or distribution of assets of the Company referred to in these Sections 5.2(b) through (n), the Agent and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any such dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee or agent or other person making any payment or distribution, delivered to the Agent or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to these Sections 5.2(b) through (n). (i) The Agent shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Agent determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to Sections 5.2(b) through (n), the Agent may request such Person to furnish evidence to the reasonable satisfaction of the Agent as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under Sections 5.2(b) through (n), and, if such evidence is not furnished, the Agent may defer payment to such Person pending judicial determination as to the right of such Person to receive such payment. (j) Nothing contained in Sections 5.2(b) through (n) shall affect the obligations of the Company to make, or prevent the Company from making, payment of the Contract Adjustment Payments, except as otherwise provided in these Sections 5.2(b) through (n). (k) Each Holder of Securities, by his acceptance thereof, authorizes and directs the Agent on his, her or its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in Sections 5.2(b) through (n) and appoints the Agent his, her or its attorney-in-fact, as the case may be, for any and all such purposes. (l) The Company shall give prompt written notice to the Agent of any fact known to the Company that would prohibit the making of any payment of moneys to or by the Agent in respect of the Securities pursuant to the provisions of this Section 5.2. Notwithstanding the provisions of Sections 5.2(b) through (n) or any other provisions of this Agreement, the Agent shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Agent, or the taking of any other action by the Agent, unless and until the Agent shall have received written notice thereof mailed or delivered to a Responsible Officer of the Agent from the -39- Company, any Holder, any paying agent or the holder or representative of any Senior Indebtedness; provided that if at least two Business Days prior to the date upon which by the terms hereof any such moneys may become payable for any purpose, the Agent shall not have received with respect to such moneys the notice provided for in this Section 5.2, then, anything herein contained to the contrary notwithstanding, the Agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to or on or after such date. (m) The Agent in its individual capacity shall be entitled to all the rights set forth in this Section 5.2 with respect to any Senior Indebtedness at the time held by it, to the same extent as any other holder of Senior Indebtedness and nothing in this Agreement shall deprive the Agent of any of its rights as such holder. (n) No right of any present or future holder of any Senior Indebtedness to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. (o) Nothing in this Section 5.2 shall apply to claims of, or payments to, the Agent under or pursuant to Section 7.7 hereof. With respect to the holders of Senior Indebtedness, (i) the duties and obligations of the Agent shall be determined solely by the express provisions of this Agreement; (ii) the Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement; (iii) no implied covenants or obligations shall be read into this Agreement against the Agent; and (iv) the Agent shall not be deemed to be a fiduciary as to such holders. Section 5.3 Deferral of Payment Dates for Contract Adjustment Payments. (a) 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. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, bear additional Contract Adjustment Payments thereon at the rate of 9% per year (computed on the basis of a 360-day year of twelve 30-day months), compounded quarterly up to but not including each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the 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 on or after the Purchase Contract Settlement Date and no such deferral period may end other than on a Payment Date. If the Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder's right to receive Contract Adjustment Payments, if any, and Deferred Contract Adjustment Payments will terminate. -40- (b) In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until a Payment Date prior to the Purchase Contract Settlement Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. (c) 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. (d) 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 equal to the fraction of a share times the Applicable Market Value as provided in Section 5.11 hereof. (e) 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, and shall not permit its Subsidiaries to, declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of the Company's capital stock 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 or directors 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 the Company exercises its right to defer the Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock; (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such 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, acquisitions or redemptions of capital stock in exchange for or out of the net cash proceeds of the sale of the Company's capital stock (or securities convertible into or exchangeable for shares of the Company's capital stock); (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; or -41- (vi) mandatory sinking fund payments with respect to any series of preferred stock of the Company; provided that the aggregate stated value of all such series outstanding at the time of such payment does not exceed 5% of the aggregate value of (1) the total principal amount of all then outstanding bonds or other securities representing secured indebtedness issued or assumed by the Company and (2) the Company's capital and surplus to be stated on the Company's books of account after giving effect to such payment; provided that any moneys deposited in to any sinking fund and not in violation of this clause (vi) may thereafter be applied to the purchase or redemption of such preferred stock in accordance with the terms of such sinking fund without regard to the foregoing restrictions. Section 5.4 Initial Remarketing and Secondary Remarketing. (a) Unless a Tax Event Redemption has occurred, the Company shall engage a nationally recognized investment bank (the "Remarketing Agent") pursuant to the Remarketing Agreement to sell the Notes (the "Initial Remarketing") on the third Business Day immediately preceding May 16, 2005 (the "Initial Remarketing Date"). In order to facilitate the remarketing, the Agent shall notify, by 10:00 a.m., New York City time, on the Business Day immediately preceding the Initial Remarketing Date, the Remarketing Agent of the aggregate principal amount of Notes to be remarketed that are part of Corporate Units. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement, or the Custodial Agent, pursuant to clause (c) below, will present for remarketing such Notes (and the Separate Notes that are to be remarketed pursuant to clause (c) below) to the Remarketing Agent. Upon receipt of such notice from the Agent and such Notes from the Collateral Agent or Custodial Agent, the Remarketing Agent will, on the Initial Remarketing Date, use its reasonable best efforts to remarket such Notes on such date at a price of 100.5% of the sum of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price. If the Remarketing Agent is able to remarket the Notes at a price equal to or greater than 100.5% of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price (a "Successful Initial Remarketing"), the portion of the proceeds from such Successful Initial Remarketing equal to the Treasury Portfolio Purchase Price will be applied to purchase the Treasury Portfolio. In addition, the Remarketing Agent may deduct as a remarketing fee ("Remarketing Fee") an amount not exceeding 25 basis points (0.25%) of the sum of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price from any amount of such proceeds in excess of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price. With respect to Separate Notes, any proceeds of the Initial Remarketing in excess of the Remarketing Fee or attributable to the Separate Notes will be remitted to the Custodial Agent for payment to the Holders of Separate Notes. With respect to Notes that are part of Corporate Units, any proceeds in excess of those required to pay the Treasury Portfolio Purchase Price and the Remarketing Fee with respect to such Notes will be remitted to the Agent for payment to the Holders of the related Corporate Units. A Corporate Unit Holder whose Notes are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. The Treasury Portfolio will be substituted for the Notes of Holders of Corporate Units and will be pledged to the Collateral Agent to secure the Corporate Unit Holders' obligation to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. Following the occurrence of a Successful Initial Remarketing, the Holders of Corporate Units and the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as the Holder of Corporate Units and the Collateral Agent had in respect of the Notes, as the case may be, subject to the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein or in the Certificates to the Notes shall be deemed to be a reference to such Treasury Portfolio and any reference herein or in the Certificates to interest on the Notes shall be -42- deemed to be a reference to corresponding distributions on 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 Notes as collateral. If, (i) despite using its reasonable best efforts, the Remarketing Agent cannot remarket the related Notes (other than to the Company) at a price equal to or greater than 100.5% of the sum of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price, or (ii) the Initial Remarketing has not occurred because of a condition precedent to the remarketing has not been fulfilled, the remarketing will be deemed to have failed (a "Failed Initial Remarketing"). The Company will cause a notice of a Failed Initial Remarketing to be published on the second Business Day immediately preceding May 16, 2005 in an Authorized Newspaper. The Notes will continue to be a component of Corporate Units, and another remarketing may be attempted as described in Section 5.4(b) (b) In the event of a Failed Initial Remarketing and unless a Tax Event Redemption has occurred, the Company shall engage the Remarketing Agent pursuant to the Remarketing Agreement to sell the Notes (the "Secondary Remarketing") on the third Business Day immediately preceding July 1, 2005 (the "Secondary Remarketing Date"). In order to facilitate the remarketing, the Agent shall notify, by 10:00 a.m., New York City time, on the Business Day immediately preceding the Secondary Remarketing Date, the Remarketing Agent of the aggregate principal amount of Notes to be remarketed that are part of Corporate Units. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement, or the Custodial Agent, pursuant to clause (c) below, will present for remarketing such Notes (and the Separate Notes that are to be remarketed pursuant to clause (c) below) to the Remarketing Agent. Upon receipt of such notice from the Agent and such Notes from the Collateral Agent or Custodial Agent, the Remarketing Agent will, on the Secondary Remarketing Date, use its reasonable best efforts to remarket such Notes on such date at a price of 100.5% of the sum of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price. If the Remarketing Agent is able to remarket the Notes at a price equal to or greater than 100.5% of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price (a "Successful Secondary Remarketing"), the portion of the proceeds from such Successful Secondary Remarketing equal to the Treasury Portfolio Purchase Price will be applied to purchase the Treasury Portfolio. In addition, the Remarketing Agent may deduct as the Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the sum of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price from any amount of such proceeds in excess of the Treasury Portfolio Purchase Price plus the Separate Notes Price. With respect to Separate Notes, any proceeds of the Secondary Remarketing in excess of the Remarketing or attributable to the Separate Notes will be remitted to the Custodial Agent for payment to the Holders of Separate Notes. With respect to Notes that are part of Corporate Units, any proceeds in excess of those required to pay the Treasury Portfolio Purchase Price and the Remarketing Fee with respect to such Notes will be remitted to the Agent for payment to the Holders of the related Corporate Units. A Corporate Unit Holder whose Notes are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. The Treasury Portfolio will be substituted for the Notes of Holders of Corporate Units and will be pledged to the Collateral Agent to secure the Corporate Unit Holders' obligation to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. Following the occurrence of a Successful Secondary Remarketing, 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 Notes, as the case may be, subject to the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein or in the Certificates to the Notes shall be deemed to be a reference to such Treasury Portfolio and any reference herein or in the Certificates to interest on the Notes -43- shall be deemed to be a reference to corresponding distributions on 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 Notes as collateral. If, (i) despite using its reasonable best efforts, the Remarketing Agent cannot remarket the related Notes (other than to the Company) at a price equal to or greater than 100.5% of the sum of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price, or (ii) the Secondary Remarketing has not occurred because of a condition precedent to the remarketing has not been fulfilled, the remarketing will be deemed to have failed (a "Failed Secondary Remarketing"). The Company will cause a notice of a Failed Secondary Remarketing to be published on the second Business Day immediately preceding July 1, 2005 in an Authorized Newspaper. The Notes will continue to be a component of Corporate Units, and another remarketing may be attempted as described in Section 5.5(b). (c) A Holder of a Note that is no longer part of a Corporate Unit may elect to have such Note remarketed in the Initial Remarketing and, upon a Failed Initial Remarketing, the Secondary Remarketing. A Holder making such an election must notify the Custodial Agent and deliver such Notes to the Custodial Agent prior to 11:00 a.m. (New York City time) on the second Business Day immediately preceding the Initial Remarketing Date or the Secondary Remarketing Date, as applicable, of the aggregate principal amount of Separate Notes that are to be remarketed. Any such notice will be irrevocable and may not be conditioned upon the level at which the Reset Rate is established in the Remarketing. By 11:00 a.m. (New York City time) on the Business Day immediately preceding the Initial Remarketing Date or Secondary Remarketing Date, as applicable, the Custodial Agent shall cause such Separate Notes to be presented to the Remarketing Agent for the Initial Remarketing or the Secondary Remarketing, as the case may be. (d) Not later than seven calendar days nor more than 15 calendar days prior to the Initial Remarketing Date and, upon a Failed Initial Remarketing, the Secondary Remarketing Date, the Company shall notify the Agent and shall request that the Clearing Agency notify the Beneficial Owners or Clearing Agency participants holding securities of the procedures followed in the Initial Remarketing or the Secondary Remarketing, as the case may be. (e) If required by applicable law, the Company agrees to endeavor to ensure that a registration statement with regard to the full amount of the Notes to be remarketed in the Initial Remarketing and, upon a Failed Initial Remarketing, the Secondary Remarketing shall be effective with the Securities and Exchange Commission in a form that will enable the Remarketing Agent to rely on it in connection with the Initial Remarketing and the Secondary Remarketing. Section 5.5 Payment of Purchase Price, Cash Settlement, Final Remarketing. (a) (i) Unless a Tax Event Redemption, Successful Initial Remarketing, Successful Secondary Remarketing, Termination Event or Early Settlement has occurred, each Holder of a Corporate Unit may pay in cash ("Cash Settlement") the Purchase Price for the shares of Common Stock to be purchased pursuant to a Purchase Contract if such Holder notifies the Agent by use of a notice in substantially the form of Exhibit E hereto of its intention to make a Cash Settlement. Such notice shall be made on 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. -44- (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 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. (iii) If a Holder of a Corporate Unit fails to notify the Agent of its intention to make a Cash Settlement in accordance with clause (i) above, such Holder shall be deemed to have consented to the disposition of the pledged Notes pursuant to the Final Remarketing as described in Section 5.5(b) below. If a Holder of a Corporate Unit does notify the Agent as provided in clause (i) above of its intention to pay the Purchase Price in cash, but fails to make such payment as required by clause (ii) above, such failure shall constitute a default; however, the Notes 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 Notes, including but not limited to those rights specified in Section 5.5(d) below. (b) (i) Unless a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, the Notes of Corporate Unit Holders who have not notified the Agent of their intention to effect a Cash Settlement as provided in clause (i) of Section 5.5(a) and the Separate Notes that are to be remarketed pursuant to clause (ii) below will be sold by the Remarketing Agent (the "Final Remarketing") on the third Business Day immediately preceding the Purchase Contract Settlement Date (the "Final Remarketing Date"). The Agent shall notify, by 10:00 a.m., New York City time, on the Business Day immediately preceding the Final Remarketing Date, the Remarketing Agent of the aggregate principal amount of Notes that are part of Corporate Units to be remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement, or the Custodial Agent pursuant to clause (ii) below, will present for remarketing such Notes to the Remarketing Agent. Upon receipt of such notice from the Agent and such Notes (and the Separate Notes that are to be remarketed pursuant to clause (ii) below) from the Collateral Agent or Custodial Agent, the Remarketing Agent will, on the Final Remarketing Date, use its reasonable best efforts to remarket such Notes on such date at a price of 100.5% of the sum of the aggregate principal amount of such Notes plus the Separate Notes Purchase Price. If the Remarketing Agent is able to remarket the Notes at a price equal to or greater than 100% of the sum of the aggregate principal amount of Notes plus the Separate Notes Purchase Price (a "Successful Final Remarketing"), the Remarketing Agent will remit the entire amount of the proceeds from such Successful Final Remarketing to the Collateral Agent; provided that the Remarketing Agent may deduct as the Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the sum of the aggregate principal amount of the remarketed Notes plus the Separate Notes Purchase Price from any amount of the proceeds of a Successful Final Remarketing in excess of the sum of the aggregate principal amount of -45- the remarketed Notes plus the Separate Notes Purchase Price. The portion of the entire proceeds which is equal to the aggregate principal amount of the remarketed Notes 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 shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. With respect to the Separate Notes, any proceeds of the Final Remarketing in excess of the Remarketing Fee or attributable to the Separate Notes will be remitted to the Custodial Agent for payment to the Holders of Separate Notes. With respect to Notes that are part of Corporate Units, any proceeds in excess of those required to pay the Purchase Price for the Purchase Contracts related to such Corporate Units and the Remarketing Fee will be remitted to the Agent for payment to the Holders of such Corporate Units. A Corporate Unit Holder whose Notes are so remarketed will not otherwise be responsible with respect to such Notes for the payment of any Remarketing Fee in connection therewith. If, (i) despite using its reasonable best efforts, the Remarketing Agent cannot remarket the Notes (other than to the Company) at a price not less than 100% of the sum of the aggregate principal amount of the Notes plus the Separate Notes Purchase Price, or (ii) the remarketing has not occurred because of a condition precedent to the remarketing has not been fulfilled, the remarketing will be deemed to have failed (a "Failed Final Remarketing") and the holder of the Notes will have a right to put the Notes to the Company as described in clause (c) below or, 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 Notes, including those actions specified in clause (d) below. The Company will cause a notice of such Failed Final Remarketing to be published on the second Business Day immediately preceding the Purchase Contract Settlement Date in an Authorized Newspaper. (ii) A Holder of a Note that is no longer part of a Corporate Unit may elect to have such Note remarketed in the Final Remarketing. A Holder making such an election must notify the Custodial Agent and deliver such Notes to the Custodial Agent prior to 11:00 a.m. (New York City time) on the second Business Day immediately preceding the Final Remarketing Date of the aggregate principal amount of Notes that are not part of Corporate Units to be remarketed. Any such notice will be irrevocable and may not be conditioned upon the level at which the Reset Rate is established in the Remarketing. By 11:00 a.m. (New York City time) on the Business Day immediately preceding the Final Remarketing Date, the Custodial Agent shall cause such Notes to be presented to the Remarketing Agent for Final Remarketing. (iii) Not later than seven calendar days nor more than 15 calendar days prior to the Final Remarketing Date, the Company shall notify the Agent, and shall request that the Clearing Agency notify the Beneficial Owners or Clearing Agency participants holding securities of the procedures to be followed in the Final Remarketing. (iv) If required by applicable law, the Company agrees to endeavor to ensure that a registration statement with regard to the full amount of the Notes to be remarketed in the Final Remarketing shall be effective with the Securities and Exchange Commission in a form that will enable the Remarketing Agent to rely on it in connection with the Remarketing. -46- (c) If a Failed Final Remarketing has occurred, each holder of the Notes shall have the right ("Put Option") to put such Notes to the Company on August 16, 2005, or if such date is not a Business Day, on the next succeeding Business Day (the "Put Option Settlement Date") at a repayment price equal to the principal amount of the Notes plus an amount equal to any accrued and unpaid interest thereon to the date of payment. To exercise the Put Option, the Indenture Trustee must receive from the holder of the Notes, on or prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the Put Option Settlement Date, at its Corporate Trust Office, or at an office or agency maintained by the Company in the Borough of Manhattan, The City of New York as contemplated by Section 1002 of the Indenture, the Notes to be repurchased with the form on the reverse of or otherwise accompanying such Notes duly completed. Any such notice received by the Indenture Trustee shall be irrevocable. All questions as to the validity, eligibility (including time of receipt) and acceptance of the Notes for repayment shall be determined by the Company, whose determination shall be final and binding. Holders of Notes will be notified not later than seven nor more than 15 calendar days prior to the third Business Day immediately preceding August 16, 2005 of the procedures that must be followed if such holders wish to exercise their Put Option. The payment of the repayment price in respect of the Notes shall be made no later than 12:00 noon, New York City time, on the Put Option Settlement Date. If a Holder has exercised the Put Option but has not otherwise settled the Purchase Contracts in cash by the close of business on the Business Day immediately prior to the Purchase Contract Settlement Date, the put price will be applied by the Collateral Agent, in accordance with the terms of the Pledge Agreement, to satisfy in full the obligations of the Holder to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. (d) With respect to any Notes beneficially owned by Holders who have elected Cash Settlement but failed to deliver cash as required in clause (a)(ii) above, or with respect to Notes which are subject to a Failed Final Remarketing, and for which the Put Option was not exercised, 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 clause (i) below, may, among other things, permit the Company to (i) retain and cancel the Notes or (ii) cause the Notes to be sold in one or more public or private sales, in either case, in full satisfaction of the Holders' obligations under the Purchase Contracts. (e) Unless a Termination Event or an Early Settlement has occurred, the Purchase Contract underlying each Treasury Unit and, if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, each Corporate Unit will be settled with the Proceeds at maturity of the Treasury Security or the Applicable Ownership Interest (as defined in clause (i) of the definition of such term) in the Treasury Portfolio, as applicable. Upon receipt of such Proceeds, the Collateral Agent will invest the Proceeds promptly in Permitted Investments and pay the Proceeds to the Company on the Purchase Contract Settlement Date in accordance with the terms of this Agreement and the Pledge Agreement. Any such Proceeds received by the Collateral Agent in excess of the Purchase Price and 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 Holders. (f) Any distribution to Holders of excess funds and interest described above, shall be payable at the New York 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, or, at the option of the Company, by wire transfer to the bank account designated by such Holders in writing, such payments to be made to the same Persons entitled to receive Common Stock with respect to the Purchase Contracts referred to in clause (d) above. -47- (g) Unless a Holder settles the underlying Purchase Contract through Early Settlement in the manner described in Section 5.10 hereof, 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 set forth in this Section 5.5. (h) Upon Cash Settlement of any Purchase Contract, (i) the Collateral Agent will in accordance with the terms of the Pledge Agreement cause the pledged Notes 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 such Notes (or, if no such instructions are given to the Agent by the Holder, the Agent shall hold such Notes and any distributions thereon in the name of the Agent or its nominee in trust for the benefit of such Holder pending receipt of such instructions). (i) The obligations of the Holders to pay the Purchase Price 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 and in no event will Holders be liable for any deficiency between the Proceeds of Collateral and the Purchase Price. Section 5.6 Issuance of Shares of Common Stock. Unless a Termination Event or an Early Settlement shall have occurred, 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 Sections 5.7(b) and 5.11 hereof, the Company shall issue and deposit with the Agent, for the benefit of the Holders of the Outstanding Securities, one or more certificates representing 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 on or 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 hereof and any dividends or distributions with respect to such shares constituting part of the Purchase Contract Settlement Fund, but without any interest thereon, and the Certificate so surrendered shall forthwith be cancelled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions provided by the Holder to the 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. -48- Section 5.7 Adjustment of Settlement Rate. (a) Adjustments for Dividends, Distributions, Stock Splits, Etc. (1) In case the Company shall pay or make a stock dividend or other distribution on the Common Stock in shares of Common Stock, the Settlement Rate, as in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by dividing such Settlement Rate by a fraction of which (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and (ii) the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this clause (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 share certificates issued in lieu of fractions of shares of Common Stock. The Company shall not pay any stock dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (2) In case the Company shall issue rights, options or warrants, other than pursuant to any dividend reinvestment plan or share purchase plan, to all holders of its Common Stock (not being available on an equivalent basis to Holders of the Securities upon settlement of the Purchase Contracts underlying such Securities) entitling them, for a period expiring within 45 days after the record date for the determination of stockholders 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 stockholders entitled to receive such rights, options or warrants (other than pursuant to a dividend reinvestment plan or share purchase plan), the Settlement Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by dividing such Settlement Rate by a fraction of which (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and (ii) the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date 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 purposes of this clause (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 share 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. (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 -49- be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective. (4) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness, shares of capital stock, securities, cash or other property (but excluding any rights or warrants referred to in clause (2) of this Section 5.7(a), any dividend or distribution paid exclusively in cash, and any dividend or distribution referred to in clause (1) of this Section 5.7(a)), 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 the determination of stockholders entitled to receive such distribution by a fraction of which (i) 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 filed with the Agent) on such date of the portion of the evidences of indebtedness, shares of capital stock, securities, cash or other property so distributed applicable to one share of Common Stock and (ii) the denominator shall be such Current Market Price per share of Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. In any case in which this clause (4) is applicable, clauses (1) and (2) of this Section 5.7(a) shall not be applicable. (5) In case the Company shall, (I) by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding (i) regular quarterly cash distributions, (ii) any cash that is distributed in a Reorganization Event to which Section 5.7(b) applies or (iii) cash that is distributed as part of a distribution referred to in clause (4) of this Section 5.7(a)) 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 (excluding regular quarterly cash distributions) within the 12 months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this clause (5) or clause (6) of this Section 5.7(a) has been made and (III) the aggregate of any cash plus the fair market value, as of the expiration of the applicable tender or exchange offer referred to below (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 clause (5) or clause (6) of this Section 5.7(a) has been made, exceeds 5% 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 stockholders entitled to receive such distribution by a fraction (i) the numerator of which shall be equal to the Current Market Price per share of the Common Stock 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 -50- to the Current Market Price per share of the Common Stock on the date fixed for such determination. (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 stockholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares) 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 clause (5) of this Section 5.7(a) or this clause (6) has been made and (III) the aggregate amount of any distributions (other than regular quarterly cash distributions) to all holders of the Company's Common Stock made exclusively in cash within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to clause (5) of this Section 5.7(a) or this clause (6) has been made, exceeds 5% 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 as 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 as of the Expiration Time and (ii) the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time less (B) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders 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"). (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 5.7(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 stockholders entitled to receive such distribution" and the "date fixed for such determination" within the meaning of clause (4) of this Section 5.7(a)), 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 -51- 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 clause (3) of this Section 5.7(a)). (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 clause (8), 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. (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 that any adjustments which by reason of this clause 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 clause (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.7(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 clause (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.7(a) and the denominator shall be the Settlement Rate immediately before such adjustment; provided that if such adjustment to the Settlement Rate is required to be made pursuant to the occurrence of any of the events contemplated by clause (1), (2), (3), (4), (5), (7) or (10) of this Section 5.7(a) during the period taken into consideration for determining the Applicable Market Value, appropriate and customary adjustments shall be made to the Settlement Rate. (10) The Company may make such increases in the Settlement Rate, in addition to those required by this Section 5.7(a), it considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of capital stock or issuance of rights or warrants to purchase or subscribe for capital stock or from any event treated as such for income tax purposes or for any other reasons. (b) Adjustment for Consolidation, Merger or Other Reorganization Event. (1) In the event of: (i) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the Company is the continuing corporation and in which the 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, -52- (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 described in clauses (i) to (iv) above, 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 (or upon any Early Settlement pursuant to clause (2) of Section 5.7(b)), 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. The adjustment described in the preceding sentence shall apply only to a Holder of Common Stock who is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any 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 5.7(b) 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 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 or leases 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 5.7. 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 5.7(b). The above provisions of this Section 5.7(b) shall similarly apply to successive Reorganization Events. (2) In the event of a consolidation or merger in which (i) the Company merges with or into another Person, (ii) there is any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock, and (iii) 30% or more of the total consideration paid to the Company's shareholders for the outstanding shares of Common Stock consists of cash or cash equivalents (a "Cash Merger"), then a Holder of a Security may settle his Purchase Contract for cash in the manner described in Section 5.10 hereof, mutatis mutandis, at the applicable Settlement Rate in effect immediately prior to the Cash Merger. -53- Within five Business Days after the date of the consummation of a Cash Merger (the "Cash Merger Date"), the Company shall provide written notice to Holders of Securities of such consummation (the "Cash Merger Notice"), which shall specify the deadline for submitting a notice of Early Settlement pursuant to this clause (2), the applicable Early Settlement Date, the applicable Settlement Rate in effect immediately prior to the Cash Merger and the amount (per share of Common Stock) of cash, securities and other consideration receivable by the Holder upon settlement of each Purchase Contract as adjusted pursuant to Section 5.7(b)(1). In this clause (2), the tenth Business Day after the date the Cash Merger Notice is provided to the Holders by the Company shall be the applicable Early Settlement Date and the deadline for submitting the notice to settle early and the related cash payment of the Purchase Price shall be 5:00 p.m. (New York City time) on the ninth Business Day after the date the Cash Merger Notice is provided to the Holders by the Company. Treasury Unit Holders may only effect Early Settlement pursuant to this clause (2) in integral multiples of 20 Purchase Contracts. Other than the provisions relating to timing of notice and settlement, which shall be as set forth above, the provisions of Section 5.1 shall apply with respect to an Early Settlement following a Cash Merger pursuant to this clause (2). Notwithstanding the foregoing, no Early Settlement will be permitted pursuant to this clause (2) unless, at the time such Early Settlement is effected, there is an effective registration statement with respect to the securities to be delivered in connection with such Early Settlement, if such a registration statement is required (in the view of counsel, which need not be in the form of a written opinion, for either the Company or the Agent) under the Securities Act. If such a registration statement is so required, the Company covenants and agrees to use its reasonable best efforts to (A) have in effect a registration statement covering the securities to be delivered in respect of the Purchase Contracts being settled and (B) provide a prospectus in connection therewith, in each case in a form that the Agent may deliver to the applicable Holders in connection with such Early Settlement. (c) All calculations and determinations pursuant to this Section 5.7 shall be made by the Company or its agent and the Agent shall have no responsibility with respect thereto. Section 5.8 Notice of Adjustments and Certain Other Events. (a) Whenever the Settlement Rate is adjusted as herein provided, the Company shall: (i) forthwith compute the Settlement Rate in accordance with Section 5.7 hereof and prepare and transmit to the Agent an Officer's Certificate setting forth the Settlement Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and (ii) within 10 Business Days following the occurrence of an event that requires an adjustment to the Settlement Rate pursuant to Section 5.7 hereof (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. -54- (b) The Agent shall not at any time be under any duty or responsibility to the Company 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. Section 5.9 Termination Event; Notice. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Securities shall thereafter represent the right to receive the Notes or 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; provided that, to the extent that a Holder of Corporate Units or Treasury Units would otherwise be entitled to receive less than $1,000 principal amount at maturity of the Treasury Portfolio or the Treasury Securities, the Agent shall dispose of such securities for cash, and transfer the appropriate amount of such cash to such Holder in accordance with such Holder's written instructions. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Register. -55- Section 5.10 Early Settlement. (a) Subject to and upon compliance with the provisions of this Section 5.10, at the option of the Holder thereof, Purchase Contracts underlying Securities having an aggregate Stated Amount of $1,000 or integral multiples thereof may effect early settlement ("Early Settlement") on or prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date. Holders of Treasury Units may only effect Early Settlement of the related Purchase Contracts in integral multiples of 20 Treasury Units, and if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, Purchase Contracts underlying the Securities may only be settled in integral multiples of 32,000 Corporate Units. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts, the Holder of the Certificate evidencing Securities shall deliver to the Agent at the Corporate Trust Office or at the New York Office an "Election to Settle Early" form (on the reverse side of the Certificate) and any other documents requested by the Agent and accompanied by payment (payable to the Company in immediately available funds) in an amount (the "Early Settlement Amount") equal to the product of (i) (A) the Stated Amount times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, 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 on such Payment Date with respect to such Purchase Contracts. Except as provided in the immediately preceding sentence and subject to Section 5.1 hereof, no payment 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 dividends payable on the Common Stock issued upon such Early Settlement, the record date for which payment occurs prior to the Early Settlement Date. If the foregoing requirements are first satisfied with respect to Purchase Contracts underlying any Securities prior to or at 5:00 p.m. (New York City time) on a Business Day, such day shall be the "Early Settlement Date" with respect to such Securities and if such requirements are first satisfied after 5:00 p.m. (New York City time) on a Business Day or on a day that is not a Business Day, the "Early Settlement Date" with respect to such Securities shall be the next succeeding Business Day (so long as such next succeeding Business Day is not later than the fifth Business Day immediately preceding the Purchase Contract Settlement Date) (b) No Early Settlement will be permitted under this Section 5.10 unless, at the time of delivery of the Election to Settle Early form or the time the Early Settlement is effected, there is an effective registration statement with respect to the shares of Common Stock to be issued and delivered in connection with such Early Settlement, if such a registration statement is required (in the view of counsel, which need not be in the form of a written opinion, for either the Company or the Agent) under the Securities Act. If such a registration statement is so required, the Company covenants and agrees to use its reasonable best efforts to (A) have in effect a registration statement covering the shares of Common Stock to be delivered in respect of the Purchase Contracts being settled and (B) provide a prospectus in connection therewith, in each case in a form that the Agent may use in connection with such Early Settlement. (c) Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, except in the case of Early Settlement following a Cash Merger as described in Section 5.7(b)(2), the Company shall issue, and the Holder shall be entitled to receive 1.7218 shares of Common Stock on account of each Purchase Contract as to which Early Settlement is effected (the "Early -56- Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted. (d) Not later than the third Business Day after the applicable Early Settlement Date, the Company shall cause: (i) the shares of Common Stock issuable upon Early Settlement of Purchase Contracts to be issued and delivered, together with payment in lieu of any fraction of a share, as provided in Section 5.11 hereof; and (ii) the related Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) 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. (e) Upon Early Settlement of any Purchase Contracts, and subject to receipt of shares of Common Stock from the Company and the Notes, the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, or Treasury Securities, as the case may be, from the Securities Intermediary, as applicable, the Agent shall, in accordance with the instructions provided by the Holder thereof on the Election to Settle Early form (on the reverse of the Certificate evidencing the related Securities) (i) transfer to the Holder the Notes, the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio or Treasury Securities, as the case may be, forming a part of such Securities; (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 hereof; and (iii) if so required under the Securities Act, deliver a prospectus for the shares of Common Stock issuable upon such Early Settlement as contemplated by Section 5.10(b). (f) 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, execute on behalf of the Holder 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. -57- Section 5.11 No Fractional Shares. 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 the value of such fractional shares times the Applicable Market Value. 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. Section 5.12 Charges and Taxes. The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the shares of Common Stock pursuant to the Purchase Contracts and in payment of any Deferred Contract Adjustment Payments; provided 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. ARTICLE VI REMEDIES Section 6.1 Unconditional Right of Holders to Purchase Common Stock. The Holder of any Corporate Units or Treasury Units shall have the right, which is absolute and unconditional, (A) subject to the right of the Company to defer payment thereof pursuant to Section 5.3 hereof, and to the forfeiture of any Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section 5.10(a) hereof or upon the occurrence of a Termination Event, to receive payment of each installment of the Contract Adjustment Payments, if any, with respect to the Purchase Contract constituting a part of such Security on the respective Payment Date for such Security, and (B) to purchase Common Stock pursuant to such Purchase Contract and, in each such case, to institute suit for the enforcement of any such payment and right to purchase Common Stock, and such rights shall not be impaired without the consent of such Holder. -58- Section 6.2 Restoration of Rights and Remedies. If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. Section 6.3 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in the last paragraph of Section 3.10 hereof, no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 6.4 Delay or Omission Not Waiver. No delay or omission of any Holder to exercise any right or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. Section 6.5 Undertaking for Costs. All parties to this Agreement agree, and each Holder of Corporate Units or Treasury Units, by its acceptance of such Corporate Units or Treasury Units shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Agent for any action taken, suffered or omitted by it as Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of interest on any Notes on or after the respective Payment Date therefor in respect of any Security held by such Holder, or for enforcement of the right to purchase shares of Common Stock under the Purchase Contracts constituting part of any Security held by such Holder. -59- Section 6.6 Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VII THE AGENT Section 7.1 Certain Duties and Responsibilities. (a) (1) The Agent undertakes to perform, with respect to the Securities, such duties and only such duties as are specifically set forth in this Agreement and the Pledge Agreement, and no implied covenants or obligations shall be read into this Agreement and Pledge Agreement against the Agent; and (2) The Agent may, with respect to the Securities, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Agent and conforming to the requirements of this Agreement, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Agent, the Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement, but need not confirm or investigate the accuracy of mathematical calculations stated therein. (b) No provision of this Agreement shall be construed to relieve the Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct or bad faith, except that: (1) this Section 7.1(b) shall not be construed to limit the effect of Section 7.1(a); (2) the Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Agent was negligent in ascertaining the pertinent facts; and (3) no provision of this Agreement shall require the Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (c) Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Agent shall be subject to the provisions of this Section. -60- (d) The Agent is authorized and directed to execute and deliver the Pledge Agreement in its capacity as Agent and to perform its duties and obligations thereunder. Section 7.2 Notice of Default. Within 30 days after the occurrence of any default by the Company hereunder of which a Responsible Officer of the Agent has actual knowledge, the Agent shall transmit by mail to the Company and the Holders of Securities, as their names and addresses appear in the Register, notice of such default hereunder, unless such default shall have been cured or waived. Section 7.3 Certain Rights of Agent. Subject to the provisions of Section 7.1 hereof: (1) the Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties; (2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (3) whenever in the administration of this Agreement the Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate of the Company; (4) the Agent may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (5) the Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, Note, note, other evidence of indebtedness or other paper or document, but the Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Purchase Contracts as it may see fit, and, if the Agent shall determine to make such further inquiry or investigation, it shall be given a reasonable opportunity to examine the books, records and premises of the Company, personally or by agent or attorney and shall incur no liability of any kind by reason of such inquiry or investigation; (6) the Agent may execute any of the powers, perform any duties hereunder, or delegate any administrative functions either directly to, by or through its employees, officers, agents or attorneys or an Affiliate located in any state of the United States and the Agent shall not -61- be responsible for any misconduct or negligence on the part of any agent or attorney or an Affiliate appointed with due care by it hereunder; (7) the Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement solely at the request or direction of any of the Holders pursuant to this Agreement, unless such Holders shall have offered to the Agent security or indemnity satisfactory to the Agent against the costs, expenses, liabilities which might be incurred by it in compliance with such request or direction; (8) the Agent shall not be deemed to have notice of any default unless a Responsible Officer of the Agent has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Agent at the Corporate Trust Office of the Agent, and such notice references the Securities and this Agreement and states that it is a notice of default; and (9) the Agent may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Agreement, which Officers' Certificate may be signed by any person authorized to sign an Officer's Certificate, including any person specified as so authorized in any such Certificate previously delivered and not superseded. Section 7.4 Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Certificates shall be taken as the statements of the Company and the Agent assumes no responsibility for their accuracy. The Agent makes no representations as to the validity or sufficiency of either this Agreement or of the Securities, or of the Pledge Agreement or the Pledge. The Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Purchase Contracts. Section 7.5 May Hold Securities. Any Registrar or any other agent of the Company, or the Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Registrar or such other agent, or the Agent. Section 7.6 Money Held in Custody. Money held by the Agent in custody hereunder need not be segregated from the other funds except to the extent required by law or provided herein. The Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise expressly provided herein or as otherwise agreed in writing with the Company. Section 7.7 Compensation and Reimbursement. The Company agrees: -62- (1) to pay to the Agent from time to time such compensation for all services rendered by it hereunder as the parties shall agree from time to time in writing; (2) except as otherwise expressly provided herein, to reimburse the Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Agent in carrying out its duties under this Agreement or the Pledge Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence, willful misconduct or bad faith; and (3) to indemnify the Agent for, and to hold it harmless against, any loss, damage, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder or under the Pledge Agreement, including the reasonable costs and expenses of counsel selected by the Agent to defend the Agent against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The provisions of this Section shall survive the termination of this Agreement and the resignation or removal of the Agent. Section 7.8 Corporate Agent Required; Eligibility. There shall at all times be an Agent hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a subsidiary of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority and having an office in the Borough of Manhattan, The City of New York, if there be such a corporation in the Borough of Manhattan, The City of New York, and qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. The provisions of this Section shall survive the termination of this Agreement. Section 7.9 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Agent and no appointment of a successor Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Agent in accordance with the applicable requirements of Section 7.10 hereof. (b) The Agent may resign at any time by giving written notice thereof to the Company 30 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Agent required by Section 7.10 hereof shall not have been delivered to the Agent within 30 days after the giving of such notice of resignation, the resigning Agent may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Agent. -63- (c) The Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Securities delivered to the Agent and the Company. If the instrument of acceptance by a successor Agent required by Section 7.10 hereof shall not have been delivered to the Agent within 30 days after the giving of such notice of resignation, the resigning Agent may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Agent. (d) If at any time (1) the Agent fails to comply with Section 310(b) of the TIA, as if the Agent were an indenture trustee under an indenture qualified under the TIA, after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Agent shall cease to be eligible under Section 7.8 hereof and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Agent or of its property shall be appointed or any public officer shall take charge or control of the Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Agent and the appointment of a successor Agent. (e) If the Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Agent and shall comply with the applicable requirements of Section 7.10 hereof. If no successor Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10 hereof, any Holder who has been a bone fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Agent. (f) The Company shall give, or shall cause such successor Agent to give, notice of each resignation and each removal of the Agent and each appointment of a successor Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the applicable Register. Each notice shall include the name of the successor Agent and the address of its Corporate Trust Office and New York Office, if any. Section 7.10 Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Agent, every such successor Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Agent shall become effective and such successor Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Agent; but, on the request of -64- the Company or the successor Agent, such retiring Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Agent all the rights, powers and trusts of the retiring Agent and shall duly assign, transfer and deliver to such successor Agent all property and money held by such retiring Agent hereunder. (b) Upon request of any such successor Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Agent all such rights, powers and agencies referred to in Section 7.10(a). (c) No successor Agent shall accept its appointment unless at the time of such acceptance such successor Agent shall be qualified and eligible under this Article. Section 7.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Agent, shall be the successor of the Agent hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Agent then in office, any successor by merger, conversion or consolidation to such Agent may adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Agent had itself authenticated and executed such Securities. Section 7.12 Preservation of Information; Communications to Holders. (a) The Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Agent in its capacity as Registrar. (b) If three or more Holders (herein referred to as "applicants") apply in writing to the Agent, and furnish to the Agent reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Agent shall mail to all the Holders copies of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Agent of the materials to be mailed and of payment, or provision for the payment, of the reasonable expenses of such mailing. Section 7.13 No Obligations of Agent. Except to the extent otherwise provided in this Agreement, the Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Pledge Agreement or any Purchase Contract in respect of the obligations of the Holder of any Security thereunder. The Company agrees, and each Holder of a Certificate, by his acceptance thereof, shall be deemed to have agreed, that the Agent's execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in- -65- fact for the Holders, and that the Agent shall have no obligation to perform such Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article V hereof. Section 7.14 Tax Compliance. (a) The Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Securities or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Securities or the Notes. Such compliance shall include, without limitation, (i) preparing, timely filing with the applicable taxing authority, and (to the extent required under applicable tax laws) timely furnishing Holders with copies of, all tax reports or statements with respect to payments on, or redemptions of, the Securities which are required to be prepared, filed, and furnished under applicable tax laws, (ii) withholding and paying over to the applicable taxing authorities any tax withholdings that are required to be made with respect to payments on, or redemptions of, the Securities under applicable tax laws, and (iii) making reasonable efforts to obtain from Holders all IRS Forms (and similar forms under applicable state, local, and foreign tax law) and other documentation required under applicable tax laws in order to establish exemptions from or reductions in withholding taxes. (b) The Agent shall comply with any written direction received from the Company with respect to the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement conclusively rely on any such direction in accordance with the provisions of Section 7.1(a) (2) hereof. (c) The Agent shall maintain all appropriate records documenting compliance with such requirements, until such time as all applicable periods of limitation for assessing or collecting any taxes or penalties for failure to comply fully with such requirements have expired, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request. ARTICLE VIII SUPPLEMENTAL AGREEMENTS Section 8.1 Supplemental Agreements Without Consent of Holders. Without the consent of any Holders, the Company and the Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Agent, for any of the following purposes: (1) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates; or (2) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or -66- (3) to evidence and provide for the acceptance of appointment hereunder by a successor Agent; or (4) to make provision with respect to the rights of Holders pursuant to the requirements of Section 5.7(b) hereof; or (5) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders in any material respect. Section 8.2 Supplemental Agreements with Consent of Holders. With the consent of the Holders of not less than a majority of the Outstanding Purchase Contracts voting together as one class, by Act of said Holders delivered to the Company and the Agent, the Company, when authorized by a Board Resolution, and the Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts or the provisions of this Agreement or the rights of the Holders in respect of the Securities (other than the Notes, which may be modified only in accordance with the applicable provisions of the Indenture); provided that, except as contemplated herein, no such supplemental agreement shall, without the consent of the Holder of each Outstanding Security effected thereby, (1) change any Payment Date; (2) change the amount or the type of Collateral required to be Pledged to secure a Holder's obligations under any Purchase Contract, impair the right of the Holder of any Purchase Contract to receive distributions on the related Collateral or otherwise adversely affect the Holder's rights in or to such Collateral or adversely alter the rights in or to such Collateral; (3) reduce any Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payment, or change any place where, or the coin or currency in which, any Contract Adjustment Payment is payable; (4) impair the right to institute suit for the enforcement of any Purchase Contract, any Contract Adjustment Payment, if any, or any Deferred Contract Adjustment Payment, if any; (5) reduce the number of shares of Common Stock (or the amount of any other property) to be purchased pursuant to any Purchase Contract, increase the price to purchase shares of Common Stock (or any other property) upon settlement of any Purchase Contract, change the Purchase Contract Settlement Date or any Early Settlement Date or otherwise adversely affect the Holder's rights under any Purchase Contract; or (6) reduce the percentage of the outstanding Purchase Contracts the consent of whose Holders is required for any such supplemental agreement; provided that, if any amendment or proposal referred to above would adversely affect only the Corporate Units or the Treasury Units, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or -67- proposal shall not be effective except with the consent of Holders of not less than a majority of such affected class, as applicable. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof. Section 8.3 Execution of Supplemental Agreements. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Agent shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement and that all conditions precedent to the execution and delivery of such amendment have been satisfied. The Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Agent's own rights, duties or immunities under this Agreement or otherwise. Section 8.4 Effect of Supplemental Agreements. Upon the execution of any supplemental agreement under this Article, this Agreement and the Securities shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder shall be bound thereby. Section 8.5 Reference to Supplemental Agreements. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Company or the Agent, bear a notation in form approved by the Company and the Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent in exchange for Outstanding Certificates. ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions. The Company covenants that it will not merge or consolidate with any other Person (in a merger in which the Company in a Constituent Person) or sell, assign, transfer, lease or convey all or substantially all of its properties and assets to any Person or group of affiliated Persons in one transaction or a series of related transactions, unless (i) either the Company shall be the continuing corporation, or the -68- successor (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a state thereof or the District of Columbia and such corporation shall expressly assume all the obligations of the Company under the Purchase Contracts, this Agreement, the Notes, the Indenture (including any supplemental indenture) to the extent the Indenture relates to the Notes, the Remarketing Agreement and the Pledge Agreement by one or more supplemental agreements in form reasonably satisfactory to the Agent and the Collateral Agent, executed and delivered to the Agent and the Collateral Agent by such corporation and (ii) the Company or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale, assignment, transfer, lease or conveyance, be in default of its payment obligations under this Agreement or the Notes, or in default of its obligations to deliver shares of Common Stock (or other property) on the Purchase Contract Settlement Date or any Early Settlement Date, or in material default in the performance of any other covenant hereunder or under the Notes, the Indenture (including any supplemental indenture), to the extent the Indenture relates to the Notes, the Remarketing Agreement, the Purchase Contracts or the Pledge Agreement. Section 9.2 Rights and Duties of Successor Corporation. In case of any such consolidation, merger, sale, assignment, transfer, lease or conveyance and upon any such assumption by a successor corporation in accordance with Section 9.1 hereof, such successor corporation shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company, and its predecessor shall, except in the case of a lease, be released from its obligations under this Agreement. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of The St. Paul Companies, Inc. any or all of the Certificates evidencing Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Agent shall authenticate and execute on behalf of the Holders and deliver any Certificates which previously shall have been signed and delivered by the officers of the Company to the Agent for authentication and execution, and any Certificate evidencing Securities which such successor corporation thereafter shall cause to be signed and delivered to the Agent for that purpose. All the Certificates so issued shall in all respects have the same legal rank and benefit under this Agreement as the Certificates theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Certificates had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale, assignment, transfer, lease or conveyance, such change in phraseology and form (but not in substance) may be made in the Certificates evidencing Securities thereafter to be issued as may be appropriate. Section 9.3 Opinion of Counsel Given to Agent. The Agent, subject to Sections 7.1 hereof and 7.3 hereof, shall receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, assignment, transfer, lease or conveyance, and any such assumption, complies with the provisions of this Article and that all conditions precedent hereunder to the consummation of any such consolidation, merger, sale, assignment, transfer, lease or conveyance have been met. -69- ARTICLE X COVENANTS Section 10.1 Performance Under Purchase Contracts. The Company covenants and agrees for the benefit of the Holders from time to time of the Securities that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement. Section 10.2 Maintenance of Office or Agency. The Company will maintain or cause to be maintained in the Borough of Manhattan, The City of New York an office or agency (a "New York Office") where Certificates may be presented or surrendered for payment and for acquisition of shares of Common Stock (or other property) upon settlement of the Purchase Contracts on the Purchase Contract Settlement Date or Early Settlement and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or re-establishment of Corporate Units and where notices and demands to or upon the Company in respect of the Securities and this Agreement may be served. The Company will give prompt written notice to the Agent of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or at the Agent's office or agency maintained in the Borough of Manhattan, The City of New York, and the Company hereby appoints the Agent as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Borough of Manhattan, The City of New York, as the places of payment for the Securities, and hereby appoints the Agent, acting through its New York Office as the registrar, paying agent and transfer agent for the Corporate Units and the Treasury Units and for the other purposes contemplated by this Section 10.2. Section 10.3 Company to Reserve Common Stock. The Company shall at all times prior to the Purchase Contract Settlement Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Purchase Contracts constituting a part of the Securities evidenced by Outstanding Certificates. -70- Section 10.4 Covenants as to Common Stock, Dividends and Distributions. The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of any Purchase Contract constituting a part of the Outstanding Securities will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. The Company shall comply with all applicable securities laws regulating the offer, issuance and delivery of shares of Common Stock upon settlement of Purchase Contracts and will endeavor to list such shares on each national securities exchange or automated quotation system on which the Common Stock is then listed. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. Section 10.5 Tax Treatment. The Company covenants and agrees to treat each Holder as the owner, for United States federal income tax purposes, of the applicable interest in the Collateral Account, including Notes and Applicable Ownership Interest in the Treasury Portfolio or the Treasury Securities. -71- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. THE ST. PAUL COMPANIES, INC. By --------------------------------------- Name: Title: JPMORGAN CHASE BANK, as Purchase Contract Agent By --------------------------------------- Name: Title: -72- EXHIBIT A (Form of Face of Corporate Unit Certificate) [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. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* No. _________ CUSIP No. Number of Corporate Units __________ 9% CORPORATE UNITS This Corporate Unit Certificate certifies that ___________ is the registered Holder of the number of Corporate Units set forth above. Each Corporate Unit represents (i) either (a) beneficial ownership by the Holder of $50 principal amount of 5.25% senior notes due August 16, 2007 (the "Notes") of The St. Paul Companies, Inc., a Minnesota corporation (the "Company", which term, as used herein, includes its successors pursuant to the Purchase Contract Agreement), subject to the Pledge of such Note by such Holder pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, a Successful Initial Remarketing or Successful Secondary Remarketing, the appropriate Applicable Ownership Interest in the Treasury Portfolio, subject to the Pledge of such Applicable Ownership Interest in the Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with the Company. All capitalized terms used and not defined herein which are defined in the Purchase Contract Agreement have the meaning set forth therein. Pursuant to the Pledge Agreement, the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, constituting part of each Corporate Unit evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising a portion of such Corporate Units. - ---------- * To be inserted in Global Certificates only. A-1 The Pledge Agreement provides that all payments of principal on the pledged Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, as the case may be, or interest payments on any pledged Notes (as defined in the Pledge Agreement) or the appropriate Applicable Ownership Interest (as specified in clause (ii) of the definition of such term) in the Treasury Portfolio, as the case may be, constituting part of the Corporate Units received by the Collateral Agent shall be paid by the Collateral Agent by wire transfer in same day funds (i) in the case of (A) interest payments with respect to pledged Notes or the appropriate Applicable Ownership Interest (as specified in clause (ii) of the definition of such term) in the Treasury Portfolio, as the case may be, and (B) any payments of principal or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such terms) in the Treasury Portfolio, as the case may be, with respect to any Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that have been released from the Pledge pursuant to the Pledge Agreement, to the Agent to the account designated by the Agent, no later than 11:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 10:30 a.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in the case of payments of principal on any pledged Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio that has not been released from the Pledge pursuant to the Pledge Agreement, as the case may be, to the Company on the Purchase Contract Settlement Date (as defined herein) in accordance with the terms of the Pledge Agreement, in full satisfaction of the respective obligations of the Holders of the Corporate Units of which such pledged Notes or the Treasury Portfolio, as the case may be, are a part under the Purchase Contracts forming a part of such Corporate Units. Interest on any Notes or distributions on the appropriate Applicable Ownership Interest (as specified in clause (ii) of the definition of such term) in the Treasury Portfolio, as the case may be, forming part of a Corporate Unit evidenced hereby which are payable quarterly in arrears on February 16, May 16, August 16 and November 16 each year, commencing on November 16, 2002 (each a "Payment Date"), shall, subject to receipt thereof from the Collateral Agent, be paid to the Person in whose name this Corporate Unit Certificate (or a Predecessor Corporate Unit Certificate) is registered at the close of business on the Record Date for such Payment Date. Each Purchase Contract evidenced hereby obligates the Holder of this Corporate Unit Certificate to purchase, and the Company to sell, on August 16, 2005 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated Amount"), a number of newly issued shares of common stock, without par value ("Common Stock"), of the Company equal to the Settlement Rate, unless on or prior to the Purchase Contract Settlement Date there shall have occurred a Termination Event or an Early Settlement with respect to the Corporate Units of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the "Purchase Price") for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of (1) cash received from a Holder or (2) payment received in respect of the Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, as the case may be, pledged to secure the obligations under such Purchase Contract of the Holder of the Corporate Units of which such Purchase Contract is a part. Interest on the Notes or distributions on the appropriate Applicable Ownership Interest (as specified in clause (ii) of the definition of such term) in the Treasury Portfolio, as the case may be, will be payable at the Corporate Trust Office of the Agent and at the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the A-2 Corporate Units Register or by wire transfer to the account designated by a prior written notice from such Person. The Company shall pay on each Payment Date in respect of each Purchase Contract forming part of a Corporate Unit evidenced hereby an amount (the "Contract Adjustment Payments") equal to 3.75% per year of the Stated Amount, computed on the basis of a 360-day year of twelve 30-day months, subject to deferral at the option of the Company as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. Such Contract Adjustment Payments, if any, shall be payable to the Person in whose name this Corporate Unit Certificate (or a Predecessor Corporate Unit Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Agent and at the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Corporate Units Register. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Corporate Unit Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. A-3 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. THE ST. PAUL COMPANIES, INC. By ----------------------------------- Name: Title: By ----------------------------------- Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts evidenced hereby) By: JPMORGAN CHASE BANK not individually but solely as attorney-in-fact of such Holder By ----------------------------------- Name: Title: Dated: AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Corporate Unit Certificates referred to in the within mentioned Purchase Contract Agreement. By: JPMORGAN CHASE BANK, as Purchase Contract Agent By: ----------------------------------- Authorized Signatory Dated: A-4 (Form of Reverse of Corporate Unit Certificate) Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of July 31, 2002 (as may be supplemented from time to time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as Purchase Contract Agent (including its successors thereunder, herein called the "Agent"), to which Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company and the Holders and of the terms upon which the Corporate Unit Certificates are, and are to be, executed and delivered. In the case of any inconsistency between this Certificate and the terms of the Purchase Contract Agreement, the terms of the Purchase Contract Agreement shall prevail. Each Purchase Contract evidenced hereby obligates the Holder of this Corporate Unit Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Purchase Price, a number of newly issued shares of Common Stock of the Company equal to the Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date, there shall have occurred a Termination Event or an Early Settlement with respect to the Security of which such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal to or greater than $29.04 (the "Threshold Appreciation Price"), 1.7218 shares of Common Stock per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $24.20, (the "Reference Price"), the number of shares of Common Stock per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value and (c) if the Applicable Market Value is less than or equal to the Reference Price, 2.0661 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in the Purchase Contract Agreement. No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in the Purchase Contract Agreement. Each Purchase Contract evidenced hereby which is settled either through Early Settlement (other than an Early Settlement following a Cash Merger pursuant to Section 5.7(b)(2) of the Purchase Contract Agreement) or Cash Settlement shall obligate the Holder of the related Corporate Units to purchase at the Purchase Price, and the Company to sell, a number of newly issued shares of Common Stock equal to the Early Settlement Rate or the Settlement Rate, as the case may be. Each Purchase Contract evidenced hereby which is settled through Early Settlement following a Cash Merger pursuant to Section 5.7(b)(2) of the Purchase Agreement shall obligate the Holder of the related Corporate Units to purchase at the Purchase Price, and the Company to sell, a number of newly issued shares of Common Stock equal to the Settlement Rate in effect immediately prior to the Cash Merger (as such Settlement Rate may be adjusted pursuant to Section 5.7(b)(1) of the Purchase Contract Agreement). 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 (a) the third Trading Day immediately preceding the Purchase Contract Settlement Date or (b) for purposes of determining cash payable in lieu of fractional shares in connection with an Early Settlement pursuant to Section 5.11 of the Purchase Contract Agreement, the third Trading Day immediately preceding the relevant Early Settlement Date or (c) for the purposes of clause (2) of Section 5.7(b) of the Purchase Contract Agreement, the third Trading Day immediately preceding 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 sale price is reported, the last reported sale price) of the Common Stock on The New York Stock Exchange (the "NYSE") on any such date; or, if the Common Stock is not listed for trading on the NYSE on any such date, the closing sale price as reported in the composite transactions for the principal United States national or regional A-5 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 closing sale price of the Common Stock as reported by the Nasdaq National 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 Closing Price means the market value of the Common Stock on the date determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. 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. In accordance with the terms of the Purchase Contract Agreement, the Holder of this Corporate Unit Certificate shall pay the Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting a Cash Settlement or an Early Settlement or from the Proceeds of a remarketing of the related pledged Notes of such Holder or of the appropriate Applicable Ownership Interest in the Treasury Portfolio. Unless a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, a Holder of Corporate Units who does not elect to make an effective (1) Cash Settlement on or prior to 5:00 p.m., New York City time, on the fifth Business Day immediately preceding the Purchase Contract Settlement Date, or (2) Early Settlement on or prior to 5:00 p.m. New York City time, on the fifth Business Day immediately preceding the Purchase Contract Settlement Date, shall pay the Purchase Price for the shares of Common Stock to be issued under the related Purchase Contract from the Proceeds of the sale of the related pledged Notes held by the Collateral Agent. Unless a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, such sale will be made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement and any supplemental remarketing agreement executed in connection therewith between the parties thereto, on the third Business Day immediately preceding the Purchase Contract Settlement Date. If a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, a Holder of Corporate Units who does not elect to make an effective Early Settlement on or prior to 5:00 p.m. New York City time, on the second Business Day immediately preceding the Purchase Contract Settlement Date shall pay the Purchase Price with the Proceeds at maturity of the Applicable Ownership Interest (as defined in clause (i) of the definition of such term) in the Treasury Portfolio. If, as provided in the Purchase Contract Agreement, (i) upon the occurrence of a Failed Final Remarketing (unless the Holder of this Certificate has exercised the Put Option or elected Cash Settlement) or (ii) if a Holder notifies the Agent of its intention to effect a Cash Settlement but fails to deliver the purchase price in cash on or prior to the Business Day immediately preceding the Purchase Contract Settlement Date, the Collateral Agent, for the benefit of the Company, exercises its rights as a secured creditor with respect to the pledged Notes related to this Corporate Unit Certificate, any accrued and unpaid interest on such pledged Notes will become payable by the Company to the Holder of the Corporate Unit Certificate in the manner provided for in the Purchase Contract Agreement. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment in full of the aggregate Purchase Price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. Under the terms of the Pledge Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the pledged Notes. Upon receipt of notice of any A-6 meeting at which holders of Notes are entitled to vote or upon the solicitation of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as practicable thereafter, mail to the Corporate Unit Holders 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 Notes entitled to vote) shall be entitled to instruct the Agent as to the exercise of the voting rights pertaining to the Notes 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 Corporate Unit Holders 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 Notes as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Corporate Unit, the Agent shall abstain from voting the Notes evidenced by such Corporate Units. Upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the Collateral Agent will apply an amount equal to the aggregate Redemption Amount for the Notes that are components of Corporate Units to purchase, on behalf of the Holders of Corporate Units, the Treasury Portfolio and promptly remit the remaining portion of such Redemption Amount, if any to the Agent for payment to the Holders of such Corporate Units. Upon the occurrence of a Successful Initial Remarketing or Successful Secondary Remarketing, pursuant to the terms of the Remarketing Agreement, the Remarketing Agent will apply an amount equal to the Treasury Portfolio Purchase Price to purchase on behalf of the Holders of Corporate Units, the Treasury Portfolio, and, after deducting the Remarketing Fee to the extent permitted under the terms of the Remarketing Agreement, promptly remit the remaining portion of such Proceeds of the Successful Initial Remarketing or Successful Secondary Remarketing to the Agent for payment to the Holders of such Corporate Units. Following the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date or following a Successful Initial Remarketing or Successful Secondary Remarketing, 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 Notes, as the case may be, subject to the Pledge thereof as provided in the Pledge Agreement and any reference herein to the Notes shall be deemed to be a reference to such Treasury Portfolio and any reference herein or in the Certificates to interest on the Notes shall be deemed to be a reference to corresponding distributions on the Treasury Portfolio. Upon the occurrence of a Successful Final Remarketing, pursuant to the terms of the Remarketing Agreement, the Remarketing Agent will remit the entire amount of the proceeds from such Successful Final Remarketing to the Collateral Agent after deducting the Remarketing Fee. The portion of the entire proceeds which is equal to the aggregate principal amount of the remarketed Notes will automatically be applied by the Collateral Agent, in accordance with the Pledge Agreement, to satisfy in full the obligations of the Holder of this Corporate Unit to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. With respect to Notes that are part of Corporate Units, any proceeds in excess of those required to pay the Purchase Price for the Purchase Contracts related to such Corporate Units and the Remarketing Fee will be remitted to the Agent for payment to the Holders of such Corporate Units. A Holder of this Corporate Unit whose Notes are so remarketed will not otherwise be responsible with respect to such Notes for the payment of any Remarketing Fee in connection therewith. A-7 Following the occurrence of a Failed Final Remarketing, the holder of the Notes will have a Put Option with regard to the Notes, and, if that Put Option is not exercised by the Holders, the Company will, in accordance with the terms of the Pledge Agreement, at its election, (a) direct the Collateral Agent to dispose of such Holder's Notes in accordance with applicable law or (b) the Company will either retain and cancel the Notes or cause the Notes to be sold in one or more public or private sales, in either case, in full satisfaction of such Holder's obligations under the Purchase Contracts. The Company will cause a notice of such Failed Final Remarketing to be published on the second Business Day immediately preceding the Purchase Contract Settlement Date in an Authorized Newspaper. If a Holder of this Certificate has exercised the Put Option but has not otherwise settled the Purchase Contracts in cash by the close of business on the Business Day immediately prior to the Purchase Contract Settlement Date, the put price will be applied by the Collateral Agent, in accordance with the terms of the Pledge Agreement, to satisfy in full the obligations of the Holder to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. The Corporate Unit Certificates are issuable only in registered form and only in denominations of a single Corporate Unit and any integral multiple thereof. The transfer of any Corporate Unit Certificate will be registered and Corporate Unit Certificates may be exchanged as provided in the Purchase Contract Agreement. The Corporate Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A Holder who elects to substitute Treasury Securities for Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, thereby creating Treasury Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract 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 of such Corporate Unit in respect of Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and the Purchase Contract constituting such Corporate Unit may be transferred and exchanged only as a Corporate Unit. A Holder of a Corporate Unit may create a Treasury Unit at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date by delivering to the Collateral Agent Treasury Securities in an aggregate principal amount equal to the aggregate principal amount of the pledged Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, as the case may be, in exchange for the release of such pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such Collateral Substitution, the Security for which such pledged Treasury Securities secures the Holder's obligation under the Purchase Contract shall be referred to as a "Treasury Unit". A Holder may make such Collateral Substitution at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date and only in integral multiples of 20 Corporate Units for the same multiple of 20 Treasury Units; provided that if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, a Holder may make such Collateral Substitutions at any time prior to the second Business Day immediately preceding the Purchase Contract Settlement Date and only in integral multiples of 32,000 Corporate Units for the same multiple of 32,000 Treasury Units. A-8 A Holder of Treasury Units may recreate Corporate Units at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date by delivering to the Collateral Agent Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, with an aggregate principal amount, in the case of such Notes, or with the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, in the case of such appropriate Applicable Ownership Interest in the Treasury Portfolio, equal to the aggregate principal amount of the pledged Treasury Securities in exchange for the release of such pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Any such recreation of a Corporate Unit may be effected at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date and only in multiples of 20 Treasury Units for the same multiple of 20 Corporate Units; provided that if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, a Holder may make such substitution at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date and only in integral multiples of 32,000 Treasury Units for the same multiple of 32,000 Corporate Units. Notwithstanding the foregoing, a Holder of Corporate Units may not create Treasury Units and a Holder of Treasury Units may not recreate Corporate Units during the period commencing on the fourth Business Day immediately prior to the Initial Remarketing Date (and, upon a Failed Initial Remarketing, prior to the Secondary Remarketing Date) and ending on the fourth Business Day following the Initial Remarketing Date (and, upon a Failed Initial Remarketing, following the Secondary Remarketing Date). Subject to the next succeeding paragraph, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name the Corporate Unit Certificate evidencing such Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Agent and the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Corporate Units Register or by wire transfer to the account designated by such Person in writing. 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, if any, 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) as provided in the Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so deferred shall, to the extent permitted by law, bear additional Contract Adjustment Payments thereon at the rate of 9% per year (computed on the basis of a 360-day year of twelve 30-day months), compounded quarterly on each succeeding Payment Date, until paid in full (such deferred installments of contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments accrued thereon, are 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 the Purchase Contract Agreement. No Contract Adjustment Payments, if any, may be deferred to a date that is on or after the Purchase Contract Settlement Date and no such deferral period may end other than on a Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments, if any, on the Purchase Contracts until a Payment Date prior to the Purchase Contract Settlement Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the A-9 registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments, if any, on the Purchase Contracts until the Purchase Contract Settlement Date, the Holder of this Corporate Unit Certificate will receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a number of shares of Common Stock (in addition to the number of shares of Common Stock equal to the Settlement Rate) equal to (x) the aggregate amount of Deferred Contract Adjustment Payments payable to the Holder of this Corporate Unit Certificate divided by (y) the Applicable Market Value. In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, if any, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not, and shall not permit any of its subsidiaries to, declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any capital stock of the Company 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 or directors 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; (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock; (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such 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, acquisitions or redemptions of capital stock in connection with the issuance or exchange of capital stock (or securities convertible into or exchangeable for shares of capital stock of the Company); (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; or (vi) mandatory sinking fund payments with respect to any series of preferred stock of the Company; provided that the aggregate stated value of all such series outstanding at the time of such payment does not exceed 5% of the aggregate of (1) the total principal amount of all then outstanding bonds or other securities representing secured indebtedness issued or assumed by the Company and (2) the Company's capital and surplus to be stated on the Company's books of account after giving effect to such payment; provided that any moneys deposited into any sinking fund and not in violation of this clause (vi) may thereafter be applied to the purchase or redemption of such preferred stock in accordance with the terms of such sinking fund without regard to the foregoing restrictions. 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 Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, and the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Corporate Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Notes or the appropriate Applicable A-10 Ownership Interest in the Treasury Portfolio, as the case may be, from the Pledge in accordance with the provisions of the Pledge Agreement. Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("Early Settlement") as provided in the Purchase Contract Agreement. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts evidenced by this Corporate Unit Certificate, the Holder of this Corporate Unit Certificate shall deliver to the Agent at the Corporate Trust Office an Election to Settle Early form set forth below and any other documents requested by the Agent duly completed and accompanied by payment in the form of immediately available funds payable to the order of the Company in an amount (the "Early Settlement Amount") equal to (i) the product of (A) $50 and (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, 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 for any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments payable on such Payment Date with respect to such Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, as the case may be, underlying such Securities shall be released from the Pledge as provided in the Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Corporate Unit as to which Early Settlement is effected equal to 1.7218 shares of Common Stock per Purchase Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted as provided in the Purchase Contract Agreement. Upon registration of transfer of this Corporate Unit Certificate in accordance with the Purchase Contract Agreement, 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 to the Purchase Contract Agreement) under the terms of the Purchase Contract Agreement, the Pledge Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contract Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this Corporate Unit Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Corporate Unit Certificate, by its acceptance hereof, authorizes the Agent to enter into and perform the related Purchase Contracts forming part of the Corporate Units evidenced hereby on his behalf as his attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Agent to enter into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying this Corporate Unit Certificate pursuant to the Pledge Agreement and to all other provisions of the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, Proceeds of the pledged Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio on the Purchase Contract Settlement Date shall be paid by the Collateral A-11 Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such Proceeds. The Holder of this Corporate Unit Certificate, by its acceptance hereof, agrees to treat itself as owner of the related Notes or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and to treat the Notes as indebtedness for all tax purposes. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts then outstanding. The Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. Prior to due presentment of this Certificate for registration of transfer, the Company, the Agent and its Affiliates and any agent of the Company or the Agent may treat the Person in whose name this Corporate Unit Certificate is registered as the owner of the Corporate Units evidenced hereby for the purpose of receiving payments of interest payable quarterly on the Notes or on the maturing quarterly interest strips of the Treasury Portfolio, as applicable, receiving payments of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Agent. A-12 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT __________Custodian______________ (cust) (minor) Under Uniform Gifts to Minors Act ______________________________________ (State) TEN ENT - as tenants by the entireties JT TEN as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto____________________________________________________________ ________________________________________________________________________________ (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Corporate Unit Certificates and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________________ attorney to transfer said Corporate Unit Certificates on the books of The St. Paul Companies, Inc. with full power of substitution in the premises. Dated:________________________ ________________________________________ Signature A-13 NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Corporate Unit Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ___________________________________ Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-14 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of Corporate Units evidenced by this Corporate Unit Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: _______________________ ________________________________________ Signature Signature Guarantee: ___________________ (if assigned to another person) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person's name and address REGISTERED HOLDER and (ii) provide a guarantee of your signature: Please print name and address of Registered Holder: Name Name Address Address Social Security or other Taxpayer Identification Number, if any ________________________________________________________ A-15 ELECTION TO SETTLE EARLY The undersigned Holder of this Corporate Unit Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Corporate Units evidenced by this Corporate Unit Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying Corporate Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof; provided that if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, Holders may early settle Corporate Units only in integral multiples of 32,000 Corporate Units. The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Corporate Unit Certificate representing any Corporate Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: _______________________ ________________________________________ Signature Signature Guarantee (if assigned to another person): ________________________________________ Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. Number of Securities evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: A-16 If shares of Common Stock or Corporate Unit Certificates are to be registered in the name of and delivered to and pledged Notes, or an Applicable Ownership Interest in the Treasury Portfolio, as the case may be, are to be transferred to a Person other than the Holder, please (i) print such Person's name and address and (ii) provide a guarantee of your signature: ______________________________________________ Name ______________________________________________ Address ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________ REGISTERED HOLDER Please print name and address of Registered Holder: ______________________________________________ Name ______________________________________________ Address ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________ Social Security or other Taxpayer Identification Number, if any ___________________________________ Transfer Instructions for pledged Notes, or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, Transferable Upon Early Settlement or a Termination Event: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ A-17 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made:
Amount of decrease Amount of increase Stated Amount of this Signature of authorized signatory in Stated Amount of the in Stated Amount of the Global Certificate following of Purchase Contract Agent or Date Global Certificate Global Certificate such decrease or increase Securities Custodian Agent ____________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________ ____________________________________________________________________________________________________________________________________
A-18 EXHIBIT B (Form of Face of Treasury Unit Certificate) [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. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* No. ________ CUSIP No. Number of Treasury Units _______ 9% TREASURY UNITS This Treasury Unit Certificate certifies that ___________ is the registered Holder of the number of Treasury Units set forth above. Each Treasury Unit represents (i) a 1/20, or 5%, undivided beneficial ownership interest in a Treasury Security having a principal amount at maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with The St. Paul Companies, Inc., a Minnesota corporation (the "Company", which term, as used herein, includes its successors pursuant to the Purchase Contract Agreement). All capitalized terms used herein which are defined in the Purchase Contract Agreement have the meaning set forth therein. Pursuant to the Pledge Agreement, the Treasury Securities constituting part of each Treasury Unit evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising a portion of such Treasury Units. The Pledge Agreement provides that all payments of the principal of any Treasury Securities received by the Collateral Agent shall be paid by the Collateral Agent by wire transfer in same day funds (i) in the case of any principal payments with respect to any Treasury Securities that have been released from the Pledge pursuant to the Pledge Agreement, to the Holders of the applicable Treasury Units to the accounts designated by them in writing for such purpose no later than 11:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the - ------------------ * To be inserted in Global Certificates only B-1 event such payment is received by the Collateral Agent on a day that is not a Business Day or after 10:30 a.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day), and (ii) in the case of the principal of any pledged Treasury Securities, to the Company on the Purchase Contract Settlement Date (as defined herein) in accordance with the terms of the Pledge Agreement, in full satisfaction of the respective obligations of the Holders of the Treasury Units of which such pledged Treasury Securities are a part under the Purchase Contracts forming a part of such Treasury Units. Each Purchase Contract evidenced hereby obligates the Holder of this Treasury Unit Certificate to purchase, and the Company to sell, on August 16, 2005 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated Amount"), a number of newly issued shares of class A common stock, without par value ("Common Stock"), of the Company equal to the Settlement Rate, unless on or prior to the Purchase Contract Settlement Date there shall have occurred a Termination Event or an Early Settlement with respect to the Treasury Units of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the "Purchase Price") for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, it not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of the Proceeds from the Treasury Securities pledged to secure the obligations under such Purchase Contract in accordance with the terms of the Pledge Agreement. The Company shall pay on each Payment Date in respect of each Purchase Contract forming part of a Treasury Unit evidenced hereby an amount (the "Contract Adjustment Payments") equal to 3.75% per year of the Stated Amount, computed on the basis of a 360-day year of twelve 30-day months, subject to deferral at the option of the Company as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. Such Contract Adjustment Payments, if any, shall be payable to the Person in whose name this Treasury Unit Certificate (or a Predecessor Treasury Unit Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Agent and at the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Treasury Units Register or by wire transfer to the account designated by such Person by prior written notice. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. B-2 Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Corporate Unit Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. THE ST. PAUL COMPANIES, INC. By ----------------------------------------------- Name: Title: ----------------------------------------------- By ----------------------------------------------- Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts evidenced hereby) By: JPMORGAN CHASE BANK, not individually but solely as attorney- in-fact of such Holder By ----------------------------------------------- Name: Title: AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Corporate Unit Certificates referred to in the within mentioned Purchase Contract Agreement. By: JPMORGAN CHASE BANK, as Purchase Contract Agent By: Authorized Signatory Dated: B-3 (Form of Reverse of Treasury Unit Certificate) Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of July 31, 2002 (as may be supplemented from time to time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as Purchase Contract Agent (including its successors thereunder, herein called the "Agent"), to which the Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company and the Holders and of the terms upon which the Treasury Unit Certificates are, and are to be, executed and delivered. In the case of any inconsistency between this Certificate and the terms of the Purchase Contract Agreement, the terms of the Purchase Contract Agreement shall prevail. Each Purchase Contract evidenced hereby obligates the Holder of this Treasury Unit Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at the Purchase Price, a number of newly issued shares of Common Stock of the Company equal to the Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date, there shall have occurred a Termination Event or an Early Settlement with respect to the Security of which such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal to or greater than $29.04 (the "Threshold Appreciation Price"), 1.7218 shares of Common Stock per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $24.20 (the "Reference Price"), the number of shares of Common Stock per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value and (c) if the Applicable Market Value is less than or equal to the Reference Price, 2.0661 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in the Purchase Contract Agreement. No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in the Purchase Contract Agreement. Each Purchase Contract evidenced hereby which is settled through Early Settlement (other than an Early Settlement following a Cash Merger pursuant to Section 5.7(b)(2) of the Purchase Contract Agreement) shall obligate the Holder of the related Treasury Units to purchase at the Purchase Price, and the Company to sell, a number of newly issued shares of Common Stock equal to the Early Settlement Rate. Each Purchase Contract evidenced hereby which is settled through Early Settlement following a Cash Merger pursuant to Section 5.7(b)(2) of the Purchase Agreement shall obligate the Holder of the related Treasury Units to purchase at the Purchase Price, and the Company to sell, a number of newly issued shares of Common Stock equal to the Settlement Rate in effect immediately prior to the Cash Merger (as such Settlement Rate may be adjusted pursuant to Section 5.7(b)(1) of the Purchase Contract Agreement). 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 (a) the third Trading Day immediately preceding the Purchase Contract Settlement Date or (b) for purposes of determining cash payable in lieu of fractional shares in connection with an Early Settlement pursuant to Section 5.11 of the Purchase Contract Agreement, the third Trading Day immediately preceding the relevant Early Settlement Date or (c) for the purposes of clause (2) of Section 5.7(b) of the Purchase Contract Agreement, the third Trading Day immediately preceding 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 sale 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 composite transactions for the principal United States 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 B-4 last closing sales price on and as reported as reported by the Nasdaq National 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 Closing Price means the market value of the Common Stock on the date determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. 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. In accordance with the terms of the Purchase Contract Agreement, the Holder of this Treasury Unit Certificate shall pay the Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting either an Early Settlement of each such Purchase Contract or by applying a principal amount of the pledged Treasury Securities underlying such Holder's Treasury Units equal to the Stated Amount to the purchase of the Common Stock. A Holder of Treasury Units who does not elect, on or prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the Purchase Contract Settlement Date, to make an Early Settlement, shall pay the Purchase Price for the shares of Common Stock to be issued on the related Purchase Contract by applying a principal amount of the pledged Treasury Securities as aforesaid. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment in full of the aggregate Purchase Price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. The Treasury Unit Certificates are issuable only in registered form and only in denominations of a single Treasury Unit and any integral multiple thereof. The transfer of any Treasury Unit Certificate will be registered and Treasury Unit Certificates may be exchanged as provided in the Purchase Contract Agreement. The Treasury Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A Holder who elects to substitute Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for Treasury Securities, thereby recreating Corporate Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract Agreement, 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 the Purchase Contract constituting such Treasury Unit may be transferred and exchanged only as a Treasury Unit. A Holder of Treasury Units may recreate Corporate Units at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date by delivering to the Collateral Agent Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, with an aggregate principal amount, in the case of such Notes, or with the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, in the case of such appropriate Applicable Ownership Interest in the Treasury Portfolio, equal to the aggregate principal amount of the pledged Treasury Securities in exchange for the release of such pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such substitution, the Security for which such pledged Notes or appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, secures the Holder's B-5 obligation under the Purchase Contract shall be referred to as a "Corporate Unit". A Holder may make such a substitution at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date and only in integral multiples of 20 Treasury Units for the same multiple of 20 Corporate Units; provided that if a Tax Event Redemption, Successful Initial Remarketing or Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, a Holder may make such substitution at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date and only in integral multiples of 32,000 Treasury Units for the same multiple of 32,000 Corporate Units. A Holder of a Corporate Unit may create a Treasury Unit any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date by delivering to the Collateral Agent Treasury Securities in an aggregate principal amount of the pledged Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio, as the case may be, in exchange for the release of such pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Any such creation of a Treasury Unit may be effected at any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date and only in multiples of 20 Corporate Units for the same multiple of 20 Treasury Units; provided if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, a Holder may make such Collateral Substitution at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date and only in integral multiples of 32,000 Corporate Units for the same multiple of 32,000 Treasury Units. Notwithstanding the foregoing, a Holder of Corporate Units may not create Treasury Units and a Holder of Treasury Units may not recreate Corporate Units during the period commencing on the fourth Business Day immediately prior to the Initial Remarketing Date (and, upon a Failed Initial Remarketing, prior to the Secondary Remarketing Date) and ending on the fourth Business Day following the Initial Remarketing Date (and, upon a Failed Initial Remarketing, following the Second Remarketing Date). Subject to the next succeeding paragraph, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name the Treasury Unit Certificate evidencing such Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Agent and the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Treasury Units Register. 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, if any, 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) as provided in the Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so deferred shall, to the extent permitted by law, bear additional Contract Adjustment Payments thereon at the rate of 9% per year (computed on the basis of a 360-day year of twelve 30 day months), compounded quarterly on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments accrued thereon, are 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 the B-6 Purchase Contract Agreement. No Contract Adjustment Payments, if any, may be deferred to a date that is on or after the Purchase Contract Settlement Date and no such deferral period may end other than on a Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments, if any, on the Purchase Contracts until a Payment Date prior to the Purchase Contract Settlement Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments, if any, on the Purchase Contracts until the Purchase Contract Settlement Date, the Holder of this Treasury Unit Certificate will receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a number of shares of Common Stock (in addition to the number of shares of Common Stock equal to the Settlement Rate) equal to (x) the aggregate amount of Deferred Contract Adjustment Payments payable to the Holder of this Treasury Unit Certificate divided by (y) the Applicable Market Value. In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, if any, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not, and shall not permit any of its subsidiaries to, declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any capital stock of the Company 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 or directors 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; (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock; (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such 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, acquisitions or redemptions of capital stock in connection with the issuance or exchange of capital stock (or securities convertible into or exchangeable for shares of capital stock of the Company) ; (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; or (vi) mandatory sinking fund payments with respect to any series of preferred stock of the Company; provided that the aggregate stated value of all such series outstanding at the time of such payment does not exceed 5% of the aggregate of (1) the total principal amount of all then outstanding bonds or other securities representing secured indebtedness issued or assumed by the Company and (2) the Company's capital and surplus to be stated on the Company's books of account after giving effect to such payment; provided that any moneys deposited into any sinking fund and not in violation of this clause (vi) may thereafter be applied to the purchase or redemption of such preferred stock in accordance with the terms of such sinking fund without regard to the foregoing restrictions. 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 Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, and the rights and obligations of Holders to purchase Common Stock shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on B-7 or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Treasury Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Treasury Securities from the Pledge in accordance with the provisions of the Pledge Agreement. Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("Early Settlement") as provided in the Purchase Contract Agreement. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts evidenced by this Corporate Unit Certificate, the Holder of this Treasury Unit Certificate shall deliver to the Agent at the Corporate Trust Office an Election to Settle Early form set forth below and any other documents requested by the Agent duly completed and accompanied by payment in the form of immediately available funds payable to the order of the Company in an amount (the "Early Settlement Amount") equal to (i) the product of (A) $50 times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, 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 for any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments payable on such Payment Date with respect to such Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the related Securities the Pledged Treasury Securities underlying such Securities shall be released from the Pledge as provided in the Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Treasury Unit as to which Early Settlement is effected equal to 1.7218 shares of Common Stock per Purchase Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted as provided in the Purchase Contract Agreement. Upon registration of transfer of this Treasury Unit 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 to the Purchase Contract Agreement) under the terms of the Purchase Contract Agreement, the Pledge Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contract Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this Treasury Unit Certificate. The Company covenants and agrees, and the Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Treasury Unit Certificate, by its acceptance hereof, authorizes the Agent to enter into and perform the related Purchase Contracts forming part of the Treasury Units evidenced hereby on his behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Agent to enter into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Treasury Securities underlying this Treasury Unit Certificate pursuant to the Pledge Agreement and to all other provisions of the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, Proceeds of the pledged Treasury Securities on the Purchase Contract Settlement Date shall be paid by the B-8 Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such Proceeds. The Holder of this Treasury Unit Certificate, by its acceptance hereof, agrees to treat itself as owner of the Applicable Ownership Interest in the Treasury Securities. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts then outstanding. The Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. Prior to due presentment of this Certificate for registration of transfer, the Company, the Agent and its Affiliates and any agent of the Company or the Agent may treat the Person in whose name this Treasury Unit Certificate is registered as the owner of the Treasury Units evidenced hereby for the purpose of receiving payments on the Treasury Securities, receiving payments of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Agent. B-9 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT __________Custodian______________ (cust) (minor) Under Uniform Gifts to Minors Act ______________________________________ (State) TEN ENT - as tenants by the entireties JT TEN as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto____________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Treasury Unit Certificates and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________________ attorney to transfer said Treasury Unit Certificates on the books of The St. Paul Companies, Inc. with full power of substitution in the premises. Dated:________________________ ________________________________________ Signature B-10 NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Treasury Unit Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ___________________________________ Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. B-11 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of Treasury Units evidenced by this Treasury Unit Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated:________________________ ________________________________________ Signature Signature Guarantee: ________________ (if assigned to another person) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person's name and address and (ii) provide a guarantee of your signature: Name Address Social Security or other Taxpayer Identification Number, if any B-12 REGISTERED HOLDER Please print name and address of Registered Holder: Name Address B-13 ELECTION TO SETTLE EARLY The undersigned Holder of this Treasury Unit Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Treasury Units evidenced by this Treasury Unit Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying Treasury Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Treasury Unit Certificate representing any Treasury Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Treasury Securities deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer or similar tax payable incident thereto. Dated:________________________ ________________________________________ Signature Signature Guarantee:______________________________ (if assigned to another person) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. B-14 Number of Securities evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If shares of Common Stock or Treasury Unit Certificates are to be registered in the name of and delivered to and pledged Treasury Securities are to be transferred to a Person other than the Holder, please (i) print such Person's name and address and (ii) provide a guarantee of your signature: Name Address Social Security or other Taxpayer Identification Number, if any Please print name and address of Registered Holder: Name Address Transfer Instructions for pledged Treasury Securities Transferable Upon Early Settlement or Termination Event B-15 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made: The following increases or decreases in this Global Certificate have been made:
Amount of decrease Amount of increase Stated Amount of this Signature of authorized signatory in Stated Amount of the in Stated Amount of the Global Certificate following of Purchase Contract Agent or Date Global Certificate Global Certificate such decrease or increase Securities Custodian Agent
B-16 EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT BNY Midwest Trust Company 2 North LaSalle Street Suite 1020 Chicago, Illinois 60602 Attention: Corporate Trust Department Re: Equity Units of The St. Paul Companies, Inc. (the "Company") We hereby notify you in accordance with Section 4.1 and 4.2 of the Pledge Agreement, dated as of July 31, 2002, (the "Pledge Agreement") among the Company, yourselves, as Collateral Agent, Custodial Agent and Securities Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact for the holders of [Corporate Units] [Treasury Units] from time to time, that the holder of the Securities listed below (the "Holder") has elected to substitute [$_____ aggregate principal amount of Treasury Securities] [$_______ aggregate principal amount of Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] in exchange for an equal Value of [Pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by you in accordance with the Pledge Agreement and has delivered to us a notice stating that the Holder has Transferred [Treasury Securities] [Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,], and upon the payment by such Holder of any applicable fees, to release the [Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Treasury Securities] related to such [Corporate Units] [Treasury Units] to us in accordance with the Holder's instructions. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: _______________ ____________________________ By: _________________________________ Name: Title: Signature Guarantee: ______________ Please print name and address of Registered Holder electing to substitute [Treasury Securities] [Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]: ___________________________ ____________________________________ Name Social Security or other Taxpayer Identification Number, if any ___________________________ Address ___________________________ ___________________________ C-1 EXHIBIT D INSTRUCTION TO PURCHASE CONTRACT AGENT JPMorgan Chase Bank 450 West 33rd Street 15th Floor New York, New York 10001 Attention: Institutional Trust Services Re: Equity Units of The St. Paul Companies, Inc. (the "Company") The undersigned Holder hereby notifies you that it has delivered to, as Collateral Agent, [$_______ aggregate principal amount of Treasury Securities] [$__________ aggregate principal amount of Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] in exchange for an equal Value of [Pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by the Collateral Agent, in accordance with Section 4.1 and 4.2 of the Pledge Agreement, dated July 31, 2002 (the "Pledge Agreement"), between you, the Company and the Collateral Agent. The undersigned Holder has paid the Collateral Agent all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio] [Pledged Treasury Securities] related to such [Corporate Units] [Treasury Units]. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Dated: Signature Signature Guarantee: Please print name and address of Registered Holder: Name Social Security or other Taxpayer Identification Number, if any Address D-1 EXHIBIT E NOTICE TO SETTLE BY SEPARATE CASH JPMorgan Chase Bank 450 West 33rd Street 15th Floor New York, New York 10001 Attention: Institutional Trust Services Re: Equity Units of The St. Paul Companies, Inc. (the "Company") The undersigned Holder hereby irrevocably notifies you in accordance with Section 5.5 of the Purchase Contract Agreement dated as of July 31, 2002 among the Company and yourselves, as Purchase Contract Agent and as attorney-in-fact for the Holders of the Purchase Contracts, that such Holder has elected to pay to the Collateral Agent, on or 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), $__________ as the Purchase Price for the shares of Common Stock issuable to such Holder by the Company under the related Purchase Contract on the Purchase Contract Settlement Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders election to make such cash settlement with respect to the Purchase Contracts related to such Holder's [Corporate Units] [Treasury Units]. Dated: Signature Signature Guarantee: Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. Please print name and address of Registered Holder: Name Social Security or other Taxpayer Identification Number, if any Address E-1 EX-4.3 6 y62640exv4w3.txt PLEDGE AGREEMENT Exhibit 4.3 PLEDGE AGREEMENT DATED AS OF JULY 31, 2002 AMONG THE ST. PAUL COMPANIES, INC. AND BNY MIDWEST TRUST COMPANY, AS COLLATERAL AGENT, CUSTODIAL AGENT AND SECURITIES INTERMEDIARY AND JPMORGAN CHASE BANK, AS PURCHASE CONTRACT AGENT 1 PLEDGE AGREEMENT, dated as of July 31, 2002 (this "Agreement"), among The St. Paul Companies, Inc., a Minnesota corporation (the "Company"), BNY Midwest Trust Company, an Illinois trust company ("BNY Midwest Trust Company"), not individually but solely as collateral agent (in such capacity, together with its successors in such capacity, the "Collateral Agent"), as custodial agent (in such capacity, together with its successors in such capacity, the "Custodial Agent") and as "securities intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein) (in such capacity, together with its successors in such capacity, the "Securities Intermediary"), and JPMorgan Chase Bank, not individually but solely as purchase contract agent and as attorney-in-fact of the Holders (as defined in the Purchase Contract Agreement) from time to time of the Securities (as hereinafter defined) (in such capacity, together with its successors in such capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement (as hereinafter defined). RECITALS WHEREAS, the Company and the Purchase Contract Agent are parties to the Purchase Contract Agreement, dated as of the date hereof (as modified and supplemented and in effect from time to time, the "Purchase Contract Agreement"), pursuant to which there may be issued 8,855,000 equity units of the Company, each having a stated amount of $50 (the "Stated Amount") per equity unit; and WHEREAS, the equity units will initially consist of 8,855,000 units (referred to as "Corporate Units") with a stated amount, per Corporate Unit, equal to the Stated Amount. Each Corporate Unit will initially consist of (a) a stock purchase contract (the "Purchase Contract") pursuant to which the Holder will purchase from the Company not later than August 16, 2005 (the "Purchase Contract Settlement Date"), for an amount in cash equal to the Stated Amount, a number of newly issued shares of common stock, without par value (the "Common Stock"), of the Company equal to the Settlement Rate and (b) either beneficial ownership of a Note (as defined below) or, following a Successful Initial Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption, the Applicable Ownership Interest in the Treasury Portfolio; and WHEREAS, if Holders of Corporate Units substitute collateral as contemplated by Section 4.1 hereof, each unit created thereby (collectively referred to as "Treasury Units" and, together with the Corporate Units, the "Securities") will initially consist of (a) a Purchase Contract pursuant to which the Holders will purchase from the Company not later than the Purchase Contract Settlement Date, for an amount in cash equal to the Stated Amount, a number of newly issued shares of Common Stock of the Company, equal to the Settlement Rate, and (b) a 1/20, or 5.0%, undivided beneficial ownership interest in a zero-coupon U.S. Treasury security (CUSIP No. 912803AG8) having a principal amount at maturity equal to $1,000 and maturing on August 15, 2005 (a "Treasury Security"); and 2 WHEREAS, pursuant to the terms of the Indenture (as defined below), the Company will issue $442,750,000 aggregate principal amount of the Company's 5.25% senior notes due August 16, 2007 (the "Notes"), each having a principal amount equal to $50; and WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the Purchase Contracts, the Holders from time to time of the Securities have irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the Pledge provided hereby of the Notes, any Applicable Ownership Interest in the Treasury Portfolio and the Pledged Treasury Securities to secure each Holder's obligations under the related Purchase Contracts, as provided herein and subject to the terms hereof; and WHEREAS, upon such Pledge, the Pledged Notes or the Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and the Pledged Treasury Securities will be beneficially owned by the Holders but will be owned of record by the Purchase Contract Agent or the Securities Intermediary subject to the Pledge hereunder. NOW THEREFORE, in consideration of the foregoing premises, the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own behalf and as attorney-in-fact for, and on behalf of, the Holders from time to time of the Securities, agree as follows: ARTICLE I DEFINITIONS For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) 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; (c) initially capitalized terms used but not otherwise defined herein have the meanings assigned to such terms in the Purchase Contract Agreement; and (d) the following terms have the meanings assigned to them in this subsection (d): 3 "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. "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. "Business Day" means any day other than a Saturday, a Sunday or any other day on which banking institutions in The City of New York (in the State of New York) are permitted or required by any applicable law to close. "Cash" means any coin or currency of the United States as at the time shall be legal tender for payment of public and private debts. "Code" has the meaning specified in Section 6.1 hereof. "Collateral" has the meaning specified in Section 2.1 hereof. "Collateral Account" means the segregated securities account (number 188410) maintained at BNY Midwest Trust Company in the name of "JPMorgan Chase Bank, as Purchase Contract Agent on behalf of the holders of certain securities of The St. Paul Companies, Inc., Collateral Account subject to the security interest of BNY Midwest Trust Company, as Collateral Agent, for the benefit of The St. Paul Companies, Inc. as pledgee" and any successor account. "Collateral Agent" has the meaning specified in the first paragraph of this Agreement. "Common Stock" has the meaning specified in the recitals of this Agreement. "Company" means the Person named as the "Company" in the first paragraph of this Agreement until a successor shall have become such, and thereafter "Company" shall mean such successor. "Corporate Unit" has the meaning specified in the recitals of this Agreement. "Custodial Agent" has the meaning specified in the first paragraph of this Agreement. "Entitlement Orders" has the meaning specified in Section 8-102(a)(8) of the Code. "Financial Asset" has the meaning specified in Section 8-102(a)(9) of the Code. "Intermediary" means any entity that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. 4 "Notes" has the meaning specified in the recitals of this Agreement. "Note Trustee" means JPMorgan Chase Bank, as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee. "Permitted Investments" means any one of the following which shall mature not later than the next succeeding Business Day: (i) any evidence of indebtedness with an original maturity of 365 days or less issued, or directly and fully guaranteed or insured, by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof or such indebtedness constitutes a general obligation of it); (ii) deposits, certificates of deposit or acceptances with an original maturity of 365 days or less of any institution which is a member of the United States Federal Reserve System having combined capital and surplus and undivided profits of not less than $200.0 million at the time of deposit; (iii) investments with an original maturity of 365 days or less of any Person that is fully and unconditionally guaranteed by a bank referred to in clause (ii); (iv) investments in commercial paper, other than commercial paper issued by the Company or its affiliates, of any corporation incorporated under the laws of the United States or any state thereof, which commercial paper has a rating at the time of purchase at least equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors Service, Inc. ("Moody's"); and (v) investments in money market funds registered under the Investment Company Act of 1940, as amended, rated in the highest applicable rating category by S&P or Moody's. "Person" and "person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Pledge" has the meaning specified in Section 2.1 hereof. "Pledged Applicable Ownership Interest" has the meaning specified in Section 2.1 hereof. "Pledged Notes" has the meaning specified in Section 2.1 hereof. "Pledged Treasury Securities" has the meaning specified in Section 2.1 hereof. "Primary Treasury Dealer" means a primary U.S. government securities dealer in The City of New York (in the State of New York). "Proceeds" means all interest, dividends, cash, instruments, securities, Financial Assets and other property from time to time received, receivable or otherwise distributed upon the sale, exchange, maturity, collection or disposition of the Collateral or any proceeds thereof. 5 "Purchase Contract" has the meaning specified in the recitals of this Agreement. "Purchase Contract Agent" has the meaning specified in the first paragraph of this Agreement. "Purchase Contract Agreement" has the meaning specified in the recitals of this Agreement. "Purchase Contract Settlement Date" has the meaning specified in the recitals of this Agreement. "Securities" has the meaning specified in the recitals of this Agreement. "Securities Intermediary" has the meaning specified in the first paragraph of this Agreement. "Security Entitlement" has the meaning set forth in Section 8-102(a)(17) of the Code. "Separate Notes" means any Notes that are not Pledged Notes. "Stated Amount" has the meaning specified in the recitals of this Agreement. "Supplemental Remarketing Agreement" means the Supplemental Remarketing Agreement, as defined in the Remarketing Agreement. "Tax Event Redemption Date" means the date upon which a Tax Event Redemption is to occur. "TRADES" means the Treasury/Reserve Automated Debt Entry System maintained by the Federal Reserve Bank of New York pursuant to the TRADES Regulations. "TRADES Regulations" means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the TRADES Regulations are used herein as therein defined. "Transfer" means, with respect to the Collateral and in accordance with the instructions of the Collateral Agent, the Purchase Contract Agent or the Holder, as applicable: (i) in the case of Collateral consisting of securities which cannot be delivered by book-entry or which the parties agree are to be delivered in physical form, delivery in appropriate physical form to the recipient accompanied by any duly executed instruments of transfer, assignments in blank, 6 transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient; (ii) in the case of Collateral consisting of securities maintained in book-entry form by causing a "securities intermediary" (as defined in Section 8-102(a)(14) of the Code) to (i) credit a "security entitlement" (as defined in Section 8-102(a)(17) of the Code) with respect to such securities to a "securities account" (as defined in Section 8-501(a) of the Code) maintained by or on behalf of the recipient and (ii) to issue a confirmation to the recipient with respect to such credit. In the case of Collateral to be delivered to the Collateral Agent, the Securities Intermediary shall be the securities intermediary and the securities account shall be the Collateral Account. "Treasury Securities" has the meaning specified in the recitals of this Agreement. "Treasury Unit" has the meaning specified in the recitals of this Agreement. "Value" with respect to any item of Collateral on any date means, as to (i) a Note, the principal amount thereof, (ii) Cash, the face amount thereof and (iii) Treasury Securities, the aggregate principal amount thereof at maturity. ARTICLE II PLEDGE; CONTROL AND PERFECTION Section 2.1 The Pledge. (a) The Holders from time to time as beneficial owners of the Collateral acting through the Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract Agent, as their attorney-in-fact, each hereby pledges and grants to the Collateral Agent, for the benefit of the Company, as collateral security for the performance when due (whether at stated settlement date or earlier settlement date) by such Holders of their respective obligations under the Purchase Contracts, a security interest in and to, and a first lien upon, all of the right, title and interest of the Purchase Contract Agent and such Holders in: (i) (A) the Notes, Treasury Securities and any Applicable Ownership Interest in the Treasury Portfolio constituting a part of the Securities, (B) any Treasury Securities delivered in exchange for any Notes (or, if applicable, the Applicable Ownership Interest in the Treasury Portfolio), and (C) any Notes (or, if applicable, the Applicable Ownership Interest in the Treasury Portfolio) delivered in exchange for any Treasury Securities, in accordance with Article IV hereof, in each case that have been Transferred to or received by the Collateral Agent and not released by the Collateral Agent to such Holders under the provisions of this Agreement; 7 (ii) payments made by Holders pursuant to Section 4.4 hereof; (iii) the Collateral Account and all securities, Financial Assets, Cash and other property credited thereto and all Security Entitlements related thereto; (iv) the Treasury Portfolio purchased on behalf of the Holders of Corporate Units by the Collateral Agent upon the occurrence of a Successful Initial Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption as provided in Article VI hereof, or otherwise; and (v) all Proceeds of the foregoing (all of the foregoing, collectively, the "Collateral"). (b) Prior to or concurrently with the execution and delivery of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the Securities, shall cause the Notes comprising a part of the Corporate Units to be Transferred to the Collateral Agent for the benefit of the Company as secured party. Such Notes shall be Transferred by physically delivering such Notes to the Securities Intermediary indorsed in blank (or accompanied by a bond power indorsed in blank) and causing the Securities Intermediary to credit the Collateral Account with such Notes such that the Notes or the Security Entitlements with respect to such Notes are credited to the Collateral Account. In the event a Holder of Corporate Units so elects, such Holder may Transfer Treasury Securities to the Collateral Agent for the benefit of the Company as provided in Section 4.1 hereof in exchange for the release by the Collateral Agent on behalf of the Company of Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, with an aggregate principal amount equal to the aggregate principal amount of the Treasury Securities so Transferred, in the case of Notes, or with an appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio equal to the aggregate principal amount in the Treasury Securities so Transferred, upon notice from the Company to the Collateral Agent that a Successful Initial Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption has occurred, to the Purchase Contract Agent on behalf of such Holder. In the event that a Holder of Treasury Units so elects, such Holder may Transfer Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio to the Collateral Agent for the benefit of the Company as provided in Section 4.2 hereof in exchange for the release by the Collateral Agent on behalf of the Company of Treasury Securities with an aggregate principal amount at maturity equal to the aggregate principal amount of the Notes or the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio so transferred to the Purchase Contract Agent on behalf of such Holder. Treasury Securities and the appropriate Applicable Ownership Interest in the Treasury Portfolio, as applicable, shall be Transferred to the Collateral Account maintained by the Collateral Agent at the Securities Intermediary by book-entry transfer to the Collateral Account in accordance with the TRADES Regulations and other applicable law and by the notation 8 by the Securities Intermediary on its books that a Security Entitlement with respect to such Treasury Securities or appropriate Applicable Ownership Interest in the Treasury Portfolio has been credited to the Collateral Account. (c) For purposes of perfecting the Pledge under applicable law, including, to the extent applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and in effect in any applicable jurisdiction, the Collateral Agent shall be the agent of the Company as provided herein. The pledge and grant of a security interest and first lien provided in this Section 2.1 is herein referred to as the "Pledge" and the Notes, Treasury Securities or Applicable Ownership Interest subject to the Pledge, excluding any Notes that are delivered pursuant to Section 6.2 hereof or Treasury Securities or Applicable Ownership Interest released from the Pledge as provided in Article IV hereof, are herein referred to as "Pledged Notes," the "Pledged Treasury Securities," or the "Pledged Applicable Ownership Interest" respectively. Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from time to time shall have full beneficial ownership of the Collateral. Whenever directed by the Collateral Agent acting on behalf of the Company, the Securities Intermediary shall have the right to reregister the Notes or any other securities held in physical form in its name. (d) Except as may be required in order to release Notes in connection with a Holder's election to convert its investment from Corporate Units to Treasury Units, or except as otherwise required to release Notes as specified herein, neither the Collateral Agent nor the Securities Intermediary shall relinquish physical possession of any certificate evidencing a Note, Treasury Securities or the Applicable Ownership Interest prior to the termination of this Agreement, except Notes may be held in any clearing corporation in an account including only assets of customers of the Collateral Agent or Securities Intermediary. If it becomes necessary for the Collateral Agent to relinquish physical possession of a certificate in order to release a portion of the Notes evidenced thereby from the Pledge, the Collateral Agent shall use commercially reasonable efforts to obtain physical possession of a replacement certificate evidencing any Notes remaining subject to the Pledge hereunder registered to it or indorsed in blank (or accompanied by a stock or bond power indorsed in blank) within fifteen days of the date it relinquished possession. The Collateral Agent shall promptly notify the Company of the Collateral Agent's failure to obtain possession of any such replacement certificate as required hereby. Section 2.2 Control and Perfection. (a) In connection with the Pledge granted in Section 2.1 hereof, and subject to the other provisions of this Agreement, the Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract Agent each hereby authorizes and directs the Securities Intermediary (without the necessity of obtaining the further consent of the Purchase Contract Agent or any of the Holders), and the Securities Intermediary agrees, to comply with and follow any instructions and Entitlement Orders that the Collateral Agent on behalf of the Company may give in writing with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect to any thereof. In 9 the event the Securities Intermediary receives from the Holders or the Purchase Contract Agent Entitlement Orders that conflict with Entitlement Orders received from the Collateral Agent, the Securities Intermediary shall follow the Entitlement Orders received from the Collateral Agent. Such instructions and Entitlement Orders may, without limitation, direct the Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver or otherwise dispose of the Notes, the Treasury Securities, any Applicable Ownership Interest in the Treasury Portfolio, and any Security Entitlements with respect thereto and to pay and deliver any income, proceeds or other funds derived therefrom to the Company. The Holders from time to time acting through the Purchase Contract Agent hereby further authorize and direct the Collateral Agent, as agent of the Company, to itself issue instructions and Entitlement Orders, and to otherwise take action, with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect thereto, pursuant to the terms and provisions hereof, all without the necessity of obtaining the further consent of the Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the agent of the Company and shall act only as directed in writing by the Company. Without limiting the generality of the foregoing, the Collateral Agent shall issue Entitlement Orders to the Securities Intermediary when and as directed by the Company. (b) The Collateral Agent hereby confirms and agrees that: (i) all securities or other property underlying any Financial Assets credited to the Collateral Account shall be registered in the name of the Collateral Agent, indorsed to the Collateral Agent or in blank or credited to another securities account maintained in the name of the Collateral Agent and in no case will any Financial Asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent, the Company or any Holder, payable to the order of, or specially indorsed to, the Purchase Contract Agent, the Company or any Holder except to the extent the foregoing have been specially indorsed to the Collateral Agent or in blank; (ii) all property delivered to the Collateral Agent pursuant to this Pledge Agreement (including, without limitation, any Notes, Treasury Securities or any Applicable Ownership Interest in the Treasury Portfolio) will be promptly credited on the books of the Securities Intermediary to the Collateral Account; (iii) the Collateral Account is an account to which Financial Assets are or may be credited, and the Securities Intermediary shall, subject to the terms of this Agreement, treat the Collateral Agent as entitled to exercise the rights of any Financial Asset credited to the Collateral Account; (iv) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with any 10 other person relating to the Collateral Account and/or any Financial Assets credited thereto pursuant to which it has agreed to comply with Entitlement Orders of such other person; and (v) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Company, any Holder or the Purchase Contract Agent purporting to limit or condition the obligation of the Securities Intermediary to comply with Entitlement Orders as set forth in this Section 2.2 hereof. (c) The Securities Intermediary hereby agrees that each item of property (whether investment property, financial asset, security, instrument or Cash) credited to the Collateral Account shall be treated as a Financial Asset. (d) In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail. (e) The Purchase Contract Agent hereby irrevocably constitutes and appoints the Collateral Agent and the Company, with full power of substitution, as the Purchase Contract Agent's attorneys-in-fact to take on behalf of, and in the name, place and stead of, the Purchase Contract Agent and the Holders, any action necessary or desirable to perfect and to keep perfected the security interest in the Collateral referred to in Section 2.1 hereof. The grant of such power-of-attorney shall not be deemed to require of the Collateral Agent any specific duties or obligations not otherwise assumed by the Collateral Agent hereunder, it being hereby acknowledged and agreed that the Collateral Agent shall have no duty to file or record any documents in any jurisdiction for purposes of perfecting or maintaining the security interest in the Collateral except those that it shall be directed in writing to execute by the Company. ARTICLE III DISTRIBUTIONS ON PLEDGED COLLATERAL So long as the Purchase Contract Agent is the registered owner of the Pledged Notes, Pledged Treasury Securities or Pledged Applicable Ownership Interest in the Treasury Portfolio, it shall receive all payments thereon. If the Pledged Notes are reregistered, such that the Collateral Agent becomes the registered holder, all payments of principal on the Pledged Notes or, if applicable, the Pledged Treasury Securities or Pledged Applicable Ownership Interest (as specified in clause (i) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, or interest payments on the Pledged Notes or on the appropriate Pledged Applicable Ownership Interest (as specified in clause (ii) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, as the case may be, and all payments of the principal of, or cash distributions on, any Pledged Treasury Securities received by the Collateral Agent that are properly payable hereunder, shall be paid by the Collateral Agent by wire transfer in same day funds: 11 (i) in the case of (A) interest payments with respect to the Pledged Notes or the appropriate Pledged Applicable Ownership Interest (as specified in clause (ii) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, as the case may be, and (B) any payments of principal or, if applicable, the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) in the Treasury Portfolio with respect to any Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that have been released from the Pledge pursuant to Section 4.1 or 4.3 hereof, to the Purchase Contract Agent, for the benefit of the relevant Holders of Securities, to the account designated by the Purchase Contract Agent for such purpose, no later than 11:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 10:30 a.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day); (ii) in the case of any principal payments with respect to any Pledged Treasury Securities that have been released from the Pledge pursuant to Section 4.2 or 4.3 hereof, to the Purchase Contract Agent, for the benefit of the Holders of the Treasury Units, to the accounts designated by the Purchase Contract Agent in writing for such purpose, no later than 11:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 10:30 a.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day); and (iii) in the case of payments of the Proceeds of any Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, or the Proceeds of any Pledged Treasury Securities, to the Company on the Purchase Contract Settlement Date to the extent of the Purchase Price in accordance with the procedure set forth in Section 4.6(a) or 4.6(b) hereof, in full satisfaction of the respective obligations of the Holders under the related Purchase Contracts and, to the extent such Proceeds exceed the Purchase Price, to the Purchase Contract Agent for the benefit of the Holders. All payments received by the Purchase Contract Agent as provided herein shall be applied by the Purchase Contract Agent pursuant to the provisions of the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any payments of the principal amount of the Notes or, if applicable, the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of 12 such term) or any amounts referred to in Section 4.3 of the Purchase Contract Agreement on account of any Pledged Note or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as applicable, or a Holder of Treasury Units shall receive any payments of principal on account of any Treasury Securities that, at the time of such payment, are Pledged Treasury Securities, the Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company or, in the case of amounts referred to in Section 4.3 of the Purchase Contract Agreement, for the benefit of the Collateral Agent for and on behalf of the Company (and promptly deliver the same over to the Company or the Collateral Agent, as applicable) for application to the obligations of the Holders under the related Purchase Contracts, and the Holders shall acquire no right, title or interest in any such payments of principal, or other amounts referred to in this Section, so received. ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES Section 4.1 Substitution for Notes and the Creation of Treasury Units. At any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date (or on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date, if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred), a Holder of Corporate Units shall have the right to create Treasury Units by substituting Treasury Securities for the Pledged Notes (or, if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, the appropriate Pledged Applicable Ownership Interest (as specified in clause (i) of the definition of Applicable Ownership Interest) in the Treasury Portfolio) securing such Holder's obligations under the Purchase Contracts comprising a part of its Corporate Units in integral multiples of 20 Corporate Units by (a) Transferring to the Collateral Agent Treasury Securities having a Value equal to the aggregate principal amount of the Pledged Notes (or appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be), to be released and (b) transferring the related Corporate Units to the Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has Transferred the relevant Treasury Securities to the Collateral Agent pursuant to clause (a) above (stating the Value of the Treasury Securities Transferred by such Holder) and requesting that the Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, related to such Corporate Units. The Purchase Contract Agent shall instruct the Collateral Agent pursuant to the form provided in Exhibit A; provided that if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, Holders of Corporate Units may make such substitution only in integral multiples of 32,000 Corporate Units at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date. 13 Notwithstanding the foregoing, a Holder of Corporate Units may not create Treasury Units by substituting the Treasury Securities for the Pledged Notes pursuant to this Section 4.1 during the period commencing on the fourth Business Day immediately preceding the Initial Remarketing Date (or, upon a Failed Initial Remarketing, the Secondary Remarketing Date) and continuing through the fourth Business Day following the Initial Remarketing Date (or, upon a Failed Initial Remarketing, following the Secondary Remarketing Date). Without limiting the generality of any other provision herein, in no event shall the Collateral Agent have any liability for acting in accordance with instructions in the form provided in Exhibit A. Upon receipt of Treasury Securities from a Holder of Corporate Units and the related instruction from the Purchase Contract Agent and, if applicable, notice from the Company that a Successful Initial Remarketing, a Successful Secondary Remarketing or a Tax Event Redemption has occurred, the Collateral Agent shall release the Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and shall promptly Transfer to the securities account specified by the Purchase Contract Agent such Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, free and clear of any lien, pledge or security interest created hereby. All items Transferred and/or substituted by any Holder pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement shall be Transferred and/or substituted free and clear of all liens, security interests, claims and encumbrances. Section 4.2 Substitution of Treasury Securities and the Recreation of Corporate Units. At any time prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date (or on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date, if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred), a Holder of Treasury Units shall have the right to recreate Corporate Units in integral multiples of 20 Treasury Units by (a) Transferring to the Collateral Agent Notes having a Value equal to the Value of the Pledged Treasury Securities to be released (or the appropriate Applicable Ownership Interest in the Treasury Portfolio with the Applicable Ownership Interest (as specified in clause (i) of the definition of such term) having Value equal to the Value of the Pledged Treasury Securities to be released) and (b) delivering the related Treasury Units to the Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has transferred the relevant amount of Notes (or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be) to the Collateral Agent pursuant to clause (a) above and requesting that the Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Treasury Securities underlying such Treasury Units. The Purchase Contract Agent shall instruct the Collateral Agent in the form provided in Exhibit A; provided that if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred and the Treasury Portfolio has become a component of the Corporate Units, Holders of Treasury Units may make such substitution only in integral multiples of 32,000 Treasury Units, at any time on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date. Notwithstanding the foregoing, a 14 Holder of Treasury Units may not recreate Corporate Units pursuant to this Section 4.2 during the period commencing on the fourth Business Day immediately preceding the Initial Remarketing Date (or, upon a Failed Initial Remarketing, the Secondary Remarketing Date) and continuing through the fourth Business Day following the Initial Remarketing Date (or, upon a failed Initial Remarketing, the Secondary Remarketing Date). Without limiting the generality of any other provision herein, in no event shall the Collateral Agent have any liability for acting in accordance with instructions in the form provided in Exhibit A. Upon receipt of the Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, from such Holder and the instruction from the Purchase Contract Agent, the Collateral Agent shall release the Treasury Securities having a corresponding aggregate principal amount from the Pledge and shall promptly Transfer such Treasury Securities, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent. Section 4.3 Termination Event. Upon receipt by the Collateral Agent of written notice from the Company or the Purchase Contract Agent that there has occurred a Termination Event, the Collateral Agent shall release all Collateral from the Pledge and shall promptly Transfer any Pledged Notes (or the Pledged Applicable Ownership Interest in the Treasury Portfolio if the Company has notified the Collateral Agent that a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred) and Pledged Treasury Securities to the Purchase Contract Agent for the benefit of the Holders of the Corporate Units and the Treasury Units, respectively, free and clear of any lien, pledge or security interest or other interest created hereby. If such Termination Event shall result from the Company's becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail promptly to effectuate the release and Transfer of all Pledged Notes, the Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as provided by this Section 4.3, the Purchase Contract Agent shall: (i) use reasonable best efforts to obtain an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company's being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 4.3, and shall deliver such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (y) the Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (z) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged Notes, the Pledged Applicable Interest in the Treasury Portfolio or the Pledged Treasury Securities, as the case may be, as provided in this Section 4.3, then the Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court with jurisdiction of the Company's case under 15 the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Notes, the Pledged Applicable Interest in the Treasury Portfolio or the Pledged Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii) commence an action or proceeding like that described above within ten days after the occurrence of such Termination Event. Section 4.4 Cash Settlement; Put Option. (a) Upon receipt by the Collateral Agent of (i) a notice from the Purchase Contract Agent promptly after the receipt by the Purchase Contract Agent of notice that a Holder of Corporate Units has elected, in accordance with the procedures specified in Section 5.5(a)(i) of the Purchase Contract Agreement, to settle its Purchase Contract with Cash and (ii) payment of the Purchase Price by such Holder on or 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 immediately available funds payable to or upon the order of the Company, then the Collateral Agent shall, at the written direction of the Company, promptly invest any Cash received from a Holder in connection with a Cash Settlement in Permitted Investments. Upon receipt of the proceeds upon the maturity of the Permitted Investments on the Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of such proceeds and deliver any certified or cashiers' checks received and any funds so wired, in an aggregate amount equal to the Purchase Price, to the Company on the Purchase Contract Settlement Date, and shall distribute any funds in respect of the interest earned from the Permitted Investments to the Purchase Contract Agent for payment to the relevant Holders. (b) If a Failed Final Remarketing has occurred, each Holder of Notes shall have a Put Option, as described in Section 5.5(c) of the Purchase Contract Agreement, giving each Holder the right to put the Notes to the Company on the Put Option Settlement Date at a repayment price equal to the principal amount of the Notes plus an amount equal to any accrued and unpaid interest thereon to the date of payment. If a Holder has exercised the Put Option but has not otherwise settled the Purchase Contracts in cash by the close of business on the Business Day immediately prior to the Purchase Contract Settlement Date, the put price will be applied by the Collateral Agent, in accordance with the terms hereof, to satisfy in full the obligations of the Holder to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. (c) Unless a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred, if a Holder of Corporate Units fails to notify the Purchase Contract Agent of its intention to make a Cash Settlement in accordance with Section 5.5(a)(i) of the Purchase Contract Agreement, such failure shall constitute an event of default under the Purchase Contract Agreement and hereunder, and the Holder shall be deemed to have consented to the disposition of the Pledged Notes pursuant to the remarketing as described in Section 5.5(b) of the Purchase Contract 16 Agreement, which is incorporated herein by reference. If a Holder of Corporate Units does notify the Purchase Contract Agent as provided in Section 5.5(a)(i) of the Purchase Contract Agreement of its intention to pay the Purchase Price in cash, but fails to make such payment as required by Section 5.5(a)(ii) of the Purchase Contract Agreement, the Pledged Notes 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 Pledged Notes at the direction of the Company to retain or dispose of the Collateral in accordance with applicable law. In addition, in the event of a Failed Final Remarketing as described in Section 5.5(b) of the Purchase Contract Agreement, unless such Holder shall have duly exercised its Put Option, such Failed Final Remarketing shall constitute an additional event of default hereunder by such Holder and the Collateral Agent, for the benefit of the Company, will also exercise its rights as a secured party with respect to such Pledged Notes at the direction of the Company to retain or dispose of the Collateral in accordance with applicable law. Section 4.5 Early Settlement. Upon written notice to the Collateral Agent by the Purchase Contract Agent that one or more Holders of Securities have elected to effect Early Settlement of their respective obligations under the Purchase Contracts forming a part of such Securities in accordance with the terms of the Purchase Contracts and the Purchase Contract Agreement (setting forth the number of such Purchase Contracts as to which such Holders have elected to effect Early Settlement), and that the Purchase Contract Agent has received from such Holders, and paid to the Company as confirmed in writing by the Company, the related Early Settlement Amounts pursuant to the terms of the Purchase Contracts and the Purchase Contract Agreement and that all conditions to such Early Settlement have been satisfied, then the Collateral Agent shall release from the Pledge, (a) Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio in the case of a Holder of Corporate Units or (b) Pledged Treasury Securities in the case of a Holder of Treasury Units, as the case may be, in each case with an aggregate principal amount, as the case may be, equal to the product of (i) the Stated Amount times (ii) the number of such Purchase Contracts as to which such Holders have elected to effect Early Settlement and shall Transfer all such Pledged Notes, the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio or the Pledged Treasury Securities, as the case may be, free and clear of the Pledge created hereby, to the Purchase Contract Agent for the benefit of such Holders. Section 4.6 Application of Proceeds; Settlement. (a) In the event a Holder of Corporate Units (unless a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred) has not elected to make an effective Cash Settlement by notifying the Purchase Contract Agent (with a copy to the Collateral Agent) in the manner provided for in Section 5.5(a)(i) in the Purchase Contract Agreement and has not made an Early Settlement of the Purchase Contracts underlying its Corporate Units, such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Purchase Contracts from the Proceeds of the related Pledged Notes. The Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately preceding the Purchase Contract Settlement 17 Date, without any instruction from such Holder of Corporate Units, present the related Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such Pledged Notes, the Remarketing Agent, pursuant to the terms of the Remarketing Agreement and the Supplemental Remarketing Agreement (if any), will use its reasonable best efforts to remarket such Pledged Notes on the Final Remarketing Date at a price of 100.5% of the aggregate Value of such Pledged Notes, provided that such remarketing will not be considered to have failed so long as the Remarketing Agent obtains at least 100% of the aggregate principal amount of such Pledged Notes on the Final Remarketing Date. After deducting as the Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the aggregate Value of the remarketed Pledged Notes from any amount of such Proceeds in excess of the aggregate Value of the remarketed Pledged Notes, the Remarketing Agent will remit the entire amount of the Proceeds of such remarketing to the Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent shall remit to the Company that portion of the Proceeds from such remarketing equal to the aggregate Value of such remarketed Pledged Notes to satisfy in full the obligations of such Holders of Corporate Units to pay the Purchase Price to purchase the shares of Common Stock under the related Purchase Contracts. The remaining portion of such Proceeds, if any, shall be remitted by the Collateral Agent to the Purchase Contract Agent for payment to such Holders of Corporate Units. If the Remarketing Agent advises the Collateral Agent in writing that it cannot remarket the related Pledged Notes of such Holders of Corporate Units at a price not less than 100% of the aggregate Value of such Pledged Notes or if the remarketing shall not have occurred because a condition precedent to the remarketing shall not have been fulfilled, thus resulting in a Failed Final Remarketing and an event of default under the Purchase Contract Agreement and hereunder, the Collateral Agent, for the benefit of the Company will, at the written direction of the Company, retain or dispose of the Pledged Notes in accordance with applicable law and satisfy in full, from any such disposition or retention, such Holder's obligation to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts. (b) In the event a Holder of Treasury Units or Corporate Units (if a Tax Event Redemption, a Successful Initial Remarketing or a Successful Secondary Remarketing has occurred) has not made an Early Settlement of the Purchase Contracts underlying its Treasury Units or Corporate Units, as the case may be, such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Purchase Contracts from the Proceeds of the related Pledged Treasury Securities or the appropriate Pledged Applicable Ownership Interest (as specified in clause (i) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, as the case may be. On the Business Day immediately prior to the Purchase Contract Settlement Date, the Collateral Agent shall, at the written direction of the Purchase Contract Agent, which written direction shall be furnished to the Collateral Agent prior to 11:30 a.m., New York City time, invest the Cash proceeds of the maturing Pledged Treasury Securities or the maturing appropriate Pledged Applicable Ownership Interest (as specified in clause (ii) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, as the case may be, in Permitted Investments; provided that if the Collateral Agent shall not receive any written direction by 11:30 a.m. New York City time, on such date, the Collateral 18 Agent shall invest such proceeds in Permitted Investments of the type specified in clause (v) of the definition of Permitted Investments. Without receiving any instruction from any such Holder of Treasury Units or Corporate Units, the Collateral Agent shall remit to the Company that portion of the Proceeds of the related Pledged Treasury Securities or appropriate Pledged Applicable Ownership Interest (as specified in clause (i) of the definition of Applicable Ownership Interest) in the Treasury Portfolio equal to the aggregate Purchase Price of such Purchase Contracts on the Purchase Contract Settlement Date. In the event the sum of the Proceeds from the related Pledged Treasury Securities or appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and the investment earnings from the investment in Permitted Investments is in excess of the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall remit such excess, when received, to the Purchase Contract Agent for the benefit of the Holders. (c) Pursuant to the Remarketing Agreement and subject to the terms of the Supplemental Remarketing Agreement (if any), on or prior to the second Business Day immediately preceding the Initial Remarketing Date, the Secondary Remarketing Date or the Final Remarketing Date, as applicable, but no earlier than the Payment Date immediately preceding such date, holders of Separate Notes may elect to have their Separate Notes remarketed by delivering their Separate Notes, together with a notice of such election, substantially in the form of Exhibit C hereto, to the Custodial Agent. The Custodial Agent shall hold such Separate Notes in an account separate from the Collateral Account. A holder of Separate Notes electing to have its Separate Notes remarketed will also have the right to withdraw such election by written notice to the Custodial Agent, substantially in the form of Exhibit D hereto, on or prior to the second Business Day immediately preceding the Initial Remarketing Date, the Secondary Remarketing Date or the Final Remarketing Date, as applicable, upon which notice the Custodial Agent shall return such Separate Notes to such holder. On the Business Day immediately preceding the Initial Remarketing Date, the Secondary Remarketing Date or the Final Remarketing Date, as applicable, the Custodial Agent shall notify the Remarketing Agent of the aggregate principal amount of the Separate Notes to be remarketed and will deliver to the Remarketing Agent for remarketing all Separate Notes delivered to the Custodial Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to the terms hereof prior to such date. After deducting the Remarketing Fee to the extent permitted under the terms of the Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent the remaining portion of the proceeds for the benefit of such holders. In the event of a Failed Initial Remarketing, a Failed Secondary Remarketing or a Failed Final Remarketing, as applicable, the Remarketing Agent will promptly return such Separate Notes to the Custodial Agent for redelivery to such holders. 19 ARTICLE V VOTING RIGHTS - NOTES The Purchase Contract Agent may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the Pledged Notes or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Purchase Contract Agreement; provided that the Purchase Contract Agent shall not exercise or, as the case may be, shall not refrain from exercising such right if, in the judgment of the Company, such action would impair or otherwise have a material adverse effect on the value of the Pledged Notes, and provided, further, that the Purchase Contract Agent shall give the Company and the Collateral Agent at least five days' prior written notice of the manner in which it intends to exercise, or its reasons for refraining from exercising, any such right. Upon receipt of any notices and other communications in respect of any Pledged Notes, including notice of any meeting at which holders of Notes are entitled to vote or solicitation of consents, waivers or proxies of holders of Notes, the Collateral Agent shall use reasonable efforts to send promptly to the Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefor from the Purchase Contract Agent, execute and deliver to the Purchase Contract Agent such proxies and other instruments in respect of such Pledged Notes (in form and substance satisfactory to the Collateral Agent) as are prepared by the Purchase Contract Agent with respect to the Pledged Notes. 20 ARTICLE VI RIGHTS AND REMEDIES; TAX EVENT REDEMPTION Section 6.1 Rights and Remedies of the Collateral Agent. (a) In addition to the rights and remedies specified in Section 4.4 hereof or otherwise available at law or in equity, after an event of default hereunder, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the Uniform Commercial Code (or any successor thereto) as in effect in the State of New York from time to time (the "Code") (whether or not, to the extent permitted by law, the Code is in effect in the jurisdiction where the rights and remedies are asserted) and the TRADES Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Wherever reference is made in this Agreement to any section of the Code, such reference shall be deemed to include a reference to any provision of the Code, which is a successor to, or amendment of, such section. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (i) retention of the Pledged Notes or other Collateral in full satisfaction of the Holder's obligations under the Purchase Contracts or (ii) sale of the Pledged Notes or other Collateral in one or more public or private sales. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of the appropriate Applicable Ownership Interest (as specified in clause (i) of the definition of such term) of the Treasury Portfolio or on account of principal payments of any Pledged Treasury Securities as provided in Article III hereof in satisfaction of the obligations of the Holder of the Securities of which such Pledged Treasury Securities, or the appropriate Pledged Applicable Ownership Interest (as specified in clause (i) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, as applicable, is a part under the related Purchase Contracts, the inability to make such payments shall constitute an event of default hereunder and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Securities, or such appropriate Pledged Applicable Ownership Interest (as specified in clause (i) of the definition of Applicable Ownership Interest) in the Treasury Portfolio, as applicable, and such obligations of such Holder, any and all of the rights and remedies available to a secured party under the Code and the TRADES Regulations after default by a debtor, and as otherwise granted herein or under any other law. (c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) principal and interest on the Pledged Notes, (ii) the principal amount of the Pledged Treasury Securities, or (iii) the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, subject, in each case, to the provisions of Article III, and as otherwise granted herein. 21 (d) The Purchase Contract Agent, individually and as attorney-in-fact for each Holder of Securities, agrees that, from time to time, upon the written request of the Collateral Agent, the Purchase Contract Agent or such Holder shall execute and deliver such further documents and do such other acts and things as are necessary or as the Collateral Agent may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Collateral Agent hereunder, except for liability for its own negligent act, its own negligent failure to act or its own willful misconduct. Section 6.2 Tax Event Redemption. Upon the occurrence of a Tax Event Redemption prior to a Successful Initial Remarketing, or, upon a Failed Initial Remarketing but a Successful Secondary Remarketing or, upon both a Failed Initial Remarketing and a Failed Secondary Remarketing, prior to the Purchase Contract Settlement Date, the aggregate Redemption Amount for each Pledged Note, plus accrued and unpaid interest on such Pledged Note with respect to any Payment Date on or prior to the Tax Event Redemption Date, shall be delivered to the Collateral Agent by the Note Trustee on or prior to 12:00 p.m., New York City time, by check or wire transfer in immediately available funds at such place and at such account as may be designated by the Collateral Agent in exchange for the Pledged Notes. In the event the Collateral Agent receives such aggregate Redemption Amount, and such accrued and unpaid interest (if any), the Collateral Agent will, at the written direction of the Company, apply such aggregate Redemption Amount to purchase from the Quotation Agent the Treasury Portfolio and promptly remit the remaining portion of such aggregate Redemption Amount and such accrued and unpaid interest (if any) to the Purchase Contract Agent for payment to the Holders of Corporate Units. The Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account to secure the obligation of all Holders of Corporate Units to purchase shares of Common Stock of the Company under the Purchase Contracts constituting a part of such Corporate Units, in substitution for the Pledged Notes. Thereafter the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as it had in respect of the Pledged Notes as provided in Articles II, III, IV, V and VI hereof, and any reference herein to the Notes shall be deemed to be a reference to such Treasury Portfolio, and any reference herein to interest on the Notes shall be deemed to be a reference to distributions on such Treasury Portfolio. Section 6.3 Initial Remarketing and Secondary Remarketing. The Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately preceding each of May 16, 2005, and, in the event of a Failed Initial Remarketing, July 1, 2005, without any instruction from any Holder of Corporate Units, present the related Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such Pledged Notes, the Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use its reasonable best efforts to remarket such Pledged Notes on such date at a price of 100.5% of the Treasury Portfolio Purchase Price. After deducting as the Remarketing 22 Fee an amount not exceeding 25 basis points (0.25%) of the Treasury Portfolio Purchase Price from any amount of such Proceeds in excess of the Treasury Portfolio Purchase Price, the Remarketing Agent will remit the entire amount of the Proceeds of such remarketing to the Collateral Agent on or prior to 12:00 p.m., New York City time on May 16, 2005 or July 1, 2005, as the case may be, by check or wire transfer in immediately available funds at such place and at such account as may be designated by the Collateral Agent in exchange for the Pledged Notes. In the event the Collateral Agent receives such Proceeds, the Collateral Agent will, at the written direction of the Company, apply an amount equal to the Treasury Portfolio Purchase Price to purchase from the Quotation Agent the Treasury Portfolio and promptly remit the remaining portion of such Proceeds to the Purchase Contract Agent for payment to the Holders of Corporate Units. The Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account to secure the obligation of all Holders of Corporate Units to purchase shares of Common Stock of the Company under the Purchase Contracts constituting a part of such Corporate Units, in substitution for the Pledged Notes. Thereafter the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as it had in respect of the Pledged Notes as provided in Articles II, III, IV, V and VI hereof, and any reference herein to the Notes shall be deemed to be reference to such Treasury Portfolio, and any reference herein to interest on the Notes shall be deemed to be a reference to distributions on such Treasury Portfolio. Section 6.4 Substitutions. Whenever a Holder has the right to substitute Treasury Securities, Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for Collateral held by the Collateral Agent, such substitution shall not constitute a novation of the security interest created hereby. ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS Section 7.1 Representations and Warranties. The Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of any of the Holders), each hereby represents and warrants to the Collateral Agent, which representations and warranties shall be deemed repeated on each day such Holder Transfers Collateral, that: (a) such Holder has the power to grant a security interest in and lien on the Collateral; (b) such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Collateral Agent, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other 23 restriction other than the security interest and lien granted under Article II hereof; (c) upon the Transfer of the Collateral to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any Intermediary or other entity not within the control of such Holder involved in the Transfer of the Collateral, including the Collateral Agent, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Section 2.2 hereof); and (d) the execution and performance by such Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Article II hereof or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets. Section 7.2 Covenants. The Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any covenant made by or on behalf of any of the Holders), each hereby covenants to the Collateral Agent that for so long as the Collateral remains subject to the Pledge: (a) neither the Purchase Contract Agent nor such Holder will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and (b) neither the Purchase Contract Agent nor such Holder will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the pledge hereunder, transferred in connection with the Transfer of the Securities. ARTICLE VIII THE COLLATERAL AGENT Section 8.1 Appointment, Powers and Immunities. The Company hereby appoints the Collateral Agent as collateral agent and the Collateral Agent hereby accepts such appointment. The Collateral Agent shall act as Agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. Each 24 of the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against any of them, nor shall any of them be bound by the provisions of any agreement beyond the specific terms hereof; (b) shall not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Securities or the Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent), the Securities or the Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be) to perform any of its obligations hereunder or thereunder or for the perfection, priority or, except as expressly required hereby, maintenance of any security interest created hereunder (it being acknowledged and agreed that the Collateral Agent shall have no duty to file or record any documents in any jurisdiction for purposes of perfecting or maintaining the security interest in the Collateral except those documents provided to it that it shall be directed in writing to execute and shall be filed by the Company or the Purchase Contract Agent); (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder (except in the case of the Collateral Agent, pursuant to directions furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own negligence, bad faith or willful misconduct; (e) shall not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, the Securities or other property deposited hereunder; and (f) shall not be responsible for the acts or omissions of any clearing corporation with whom collateral is deposited. Notwithstanding anything to the contrary contained herein, none of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall have any obligation, duty or responsibility to take any action unless such action is non-discretionary and explicitly required hereunder or in a written direction from the Company or the Purchase Contract Agent given in accordance with the terms hereof. Subject to the foregoing, during the term of this Agreement, the Collateral Agent shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder. No provision of this Agreement shall require the Collateral Agent, the Custodial Agent or the Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or the Securities Intermediary be liable for any amount in excess of the Value of the Collateral or for any indirect, special, consequential or punitive damages. Notwithstanding the foregoing, the Collateral Agent, the Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each in its individual capacity, hereby waive any right of setoff, bankers lien, liens or perfection rights as securities intermediary or any counterclaim with respect to any of the Collateral. 25 Section 8.2 Instructions of the Company. The Company shall have the right, by one or more instruments in writing executed and delivered to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided that (i) such direction shall not conflict with the provisions of any law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and the Securities Intermediary shall be adequately indemnified as provided herein. Nothing in this Section 8.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. Section 8.3 Reliance. Each of the Securities Intermediary, the Custodial Agent and the Collateral Agent shall be entitled conclusively to rely upon any certification, order, judgment, opinion, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telex or facsimile) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein), and upon advice and statements of legal counsel and other experts selected by the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be. As to any matters not expressly provided for by this Agreement, the Collateral Agent, the Custodial Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. Section 8.4 Rights in other Capacities. The Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of banking, trust or other business with the Purchase Contract Agent, any Holder of Securities and any holder of Separate Notes (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may accept fees and other consideration from the Purchase Contract Agent, any Holder of Securities or any holder of Separate Notes without having to account for the same to the Company; provided that each of the Securities Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral and the Collateral shall be segregated or the books and records of the Collateral Agent and not commingled with any other assets of any such Person. 26 Section 8.5 Non-Reliance. None of the Securities Intermediary, the Custodial Agent or the Collateral Agent shall be required to keep itself informed as to the performance or observance by the Company, the Purchase Contract Agent, the Remarketing Agent or any Holder of Securities of this Agreement, the Purchase Contract Agreement, the Securities or any other document referred to or provided for herein or therein or to inspect the properties or books of the Purchase Contract Agent or any Holder of Securities. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall not have any duty or responsibility to provide the Company or the Remarketing Agent with any credit or other information concerning the affairs, financial condition or business of the Purchase Contract Agent, any Holder of Securities or any holder of Separate Notes (or any of their respective subsidiaries or affiliates) that may come into the possession of the Collateral Agent, the Custodial Agent or the Securities Intermediary or any of their respective affiliates. Section 8.6 Compensation and Indemnity. The Company agrees: (i) to pay BNY Midwest Trust Company from time to time such compensation as shall be agreed in writing between the Company and BNY Midwest Trust Company for all services rendered by BNY Midwest Trust Company as Collateral Agent, Custodial Agent and Securities Intermediary hereunder and (ii) to indemnify the Collateral Agent, the Custodial Agent and the Securities Intermediary for, and to hold each of them harmless from and against, any loss, liability, claim, damage or reasonable out-of-pocket expense incurred without gross negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its powers and duties under this Agreement, including the reasonable out-of-pocket costs and expenses (including reasonable fees and expenses of counsel) of defending itself against any claim or liability in connection with the exercise or performance of such powers and duties. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall each promptly notify the Company of any third party claim which may give rise to the indemnity hereunder and give the Company the opportunity to participate in the defense of such claim with counsel reasonably satisfactory to the indemnified party, and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld. Section 8.7 Failure to Act. In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, each of the Collateral Agent, the Custodial Agent and the Securities Intermediary, as the case may be, shall be entitled, after notice to the Company and the Purchase Contract Agent, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and none of the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, shall be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall be entitled to refuse to act until either (i) such conflicting or adverse claims or demands shall have been 27 finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing, satisfactory to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, shall have received security or an indemnity reasonably satisfactory to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, sufficient to save the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, harmless from and against any and all loss, liability or reasonable out-of-pocket expense which the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, may incur by reason of its acting without bad faith, willful misconduct or gross negligence. The Collateral Agent, the Custodial Agent or the Securities Intermediary may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, may deem necessary. Notwithstanding anything contained herein to the contrary, none of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability. Section 8.8 Resignation. Subject to the appointment and acceptance of a successor Collateral Agent, Custodial Agent or Securities Intermediary as provided below, (a) the Collateral Agent, the Custodial Agent and the Securities Intermediary may resign at any time by giving notice thereof to the Company and the Purchase Contract Agent as attorney-in-fact for the Holders of Securities, (b) the Collateral Agent, the Custodial Agent and the Securities Intermediary may be removed at any time by the Company and (c) if the Collateral Agent, the Custodial Agent or the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Collateral Agent, the Custodial Agent or the Securities Intermediary may be removed by the Purchase Contract Agent. No such removal shall be effective until a successor Collateral Agent has been appointed pursuant to this Section. The Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to clause (c) of the immediately preceding sentence. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be. If no successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's giving of notice of resignation or such removal, then the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be. Each of the Collateral Agent, the Custodial Agent and the Securities Intermediary shall be a bank with a combined capital and surplus of at least $75,000,000, which directly or 28 or through an affiliate maintains an office in The City of New York (in the State of New York). Upon the acceptance of any appointment as Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, hereunder by a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, such successor shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, and the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall take all appropriate action to transfer any money and property held by it hereunder (including the Collateral) to such successor. The retiring Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Collateral Agent, Custodial Agent or Securities Intermediary hereunder. After any retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of this Article VIII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent, Custodial Agent or Securities Intermediary. Any resignation or removal of the Collateral Agent hereunder shall be deemed for all purposes of this Agreement as the simultaneous resignation or removal of the Custodial Agent and the Securities Intermediary. Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents pursuant to this Section 8.9 shall be subject to prior consent of the Company, which consent shall not be unreasonably withheld. Section 8.10 Survival. The provisions of this Article VIII shall survive termination of this Agreement and the resignation or removal of the Collateral Agent or the Custodial Agent. Section 8.11 Exculpation. Anything in this Agreement to the contrary notwithstanding, in no event shall any of the Collateral Agent, the Custodial Agent or the Securities Intermediary or their officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent, the Custodial Agent or the Securities Intermediary, incurred without any act or deed that is found to be attributable to gross negligence or willful misconduct on the part of the Collateral Agent, the Custodial Agent or the Securities Intermediary. 29 ARTICLE IX AMENDMENT Section 9.1 Amendment Without Consent of Holders. Without the consent of any Holders or the holders of any Separate Notes, the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, for any of the following purposes: (a) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company; or (b) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company so long as such covenants or such surrender do not adversely affect the validity, perfection or priority of the security interests granted or created hereunder; or (c) to evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Securities Intermediary or Purchase Contract Agent; or (d) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other such provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided that such action shall not adversely affect the interests of the Holders. Section 9.2 Amendment with Consent of Holders. With the consent of the Holders of not less than a majority of the Purchase Contracts at the time outstanding, by Act of said Holders delivered to the Company, the Purchase Contract Agent or the Collateral Agent, as the case may be, the Company, when duly authorized, the Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the Securities Intermediary may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the Securities; provided that no such supplemental agreement shall, without the consent of the Holder of each Outstanding Security affected thereby, (a) change any payment date; or (b) change the amount or type of Collateral underlying a Security, except for the rights of Holders of Corporate Units to substitute the Treasury Securities for the Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, or the rights of Holders of Treasury Units to substitute Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as applicable, for the Pledged Treasury Securities; or 30 (c) impair the right of the Holder of any Securities to receive distributions on the underlying Collateral or otherwise adversely affect the Holder's rights in or to such Collateral; or (d) change the place or currency of payment or reduce any contract adjustment payments or deferred contract adjustment payments; or (e) reduce the above-stated percentage of outstanding Purchase Contracts the consent of Holders of which is required for the modification or amendment of the provisions of this Agreement. If any amendment referred to above would adversely affect only the Corporate Units or the Treasury Units, then only the affected class of Holders shall be entitled to vote on the amendment and the amendment shall not be effective except with the consent of the Holders of not less than a majority of the affected class. It shall not be necessary for any Act of Holders under this Article IX to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof. Section 9.3 Execution of Amendments. In executing any amendment permitted by this Section, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent shall be entitled to receive and (subject to Section 8.1 hereof, with respect to the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied. All amendments must be in writing, signed by all parties to this Agreement. The Collateral Agent shall not be obligated to execute any amendment that affects its own rights, duties, protections or obligations. Section 9.4 Effect of Amendments. Upon the execution of any amendment under this Article IX, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Securities evidenced by Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Purchase Contract Agreement shall be bound thereby. Section 9.5 Reference to Amendments. Certificates evidencing Securities that are authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Article IX may, and shall if required by the Company, the Collateral Agent or the Purchase Contract Agent, bear a notation in form approved by the Company, the Purchase Contract Agent and the Collateral Agent as to any matter provided for in such amendment. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the 31 Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in accordance with the Purchase Contract Agreement and without charge or expense to Holders in exchange for Certificates evidencing Outstanding Securities. ARTICLE X MISCELLANEOUS Section 10.1 No Waiver. To the extent permitted by law, no failure on the part of any party hereto or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by any party hereto or any of its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. To the extent permitted by law, the remedies herein are cumulative and are not exclusive of any remedies provided by law. Section 10.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above choice of law is expressly agreed to by the Securities Intermediary, the Collateral Agent and the Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact, in connection with the establishment and maintenance of the Collateral Account. The Company, the Collateral Agent and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum, as well as to trial by jury. Section 10.3 Notices. All notices, requests, directions, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally 32 delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. Section 10.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, and the Holders from time to time of the Securities, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Purchase Contract Agent. Section 10.5 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. Section 10.6 Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. Section 10.7 Expenses, etc. The Company agrees to reimburse BNY Midwest Trust Company for: (a) all reasonable out-of-pocket costs and expenses of BNY Midwest Trust Company (including, without limitation, the reasonable fees and expenses of counsel to BNY Midwest Trust Company), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement; (b) all reasonable costs and expenses of BNY Midwest Trust Company as Collateral Agent hereunder (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of Securities to satisfy its obligations under the Purchase Contracts forming a part of the Securities and (ii) the enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby. Section 10.8 Security Interest Absolute. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of: 33 (a) any lack of validity or enforceability of any provision of the Purchase Contracts or the Securities or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of Securities under the related Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Purchase Contract Agreement or any Purchase Contract or any other agreement or instrument relating thereto; or (c) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor. Section 10.9 Incorporation by Reference. Each of the Company, the Collateral Agent, the Custodial Agent and the Securities Intermediary agrees that the Purchase Contract Agent is, in acting hereunder with respect to the Company, entitled to all rights, privileges, benefits, protections, immunities and indemnities provided to it under the Purchase Contract Agreement. 34 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. THE ST. PAUL COMPANIES, INC. By:_______________________________ Name: Title: Address for Notices: The St. Paul Companies, Inc. 385 Washington Street St. Paul, Minnesota 55102 Attention: Bruce A. Backberg, Esq. Telecopy: (651) 310-8204 JPMORGAN CHASE BANK, as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Securities By:_______________________________ Name: Title: Address for Notices: JPMorgan Chase Bank 450 West 33rd Street, 15th Floor New York, New York 10001 Attention: Institutional Trust Services Telecopy: (212) 946-8154 BNY Midwest Trust Company, as Collateral Agent, Custodial Agent and as Securities Intermediary By:_______________________________ Name: Title: Address for Notices: BNY Midwest Trust Company 2 North LaSalle Street, Suite 1020 Chicago, Illinois 60602 Attn: Daniel G. Donovan Telecopy: (312) 827-8542 35 EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT BNY Midwest Trust Company, 2 North LaSalle Street Suite 1020 Chicago, Illinois 60602 Re: The St. Paul Companies, Inc. (the "Company") We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement"), among the Company, yourselves, as Collateral Agent, Custodial Agent and Securities Intermediary, and ourselves, as Purchase Contract Agent and as attorney-in-fact for the holders of [Corporate Units] [Treasury Units] from time to time, that the holder of the Securities listed below (the "Holder") has elected to substitute $_____ [aggregate principal amount of Treasury Securities] [aggregate principal amount of Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] in exchange for an equal Value of [Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by you in accordance with the Pledge Agreement and has delivered to us a notice stating that the Holder has Transferred [Treasury Securities] [Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be,], and upon the payment by such Holder of any applicable fees, to release the [Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Treasury Securities] related to such [Corporate Units] [Treasury Units] to us in accordance with the Holder's instructions. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date:_____________ JPMORGAN CHASE BANK, By:_______________________________ Name: Title: Signature Guarantee:______________ 1 Please print name and address of Registered Holder electing to substitute [Treasury Securities] [Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]: _____________________________________________________________ Name Social Security or other Taxpayer Identification Number, if any ___________________________ Address ___________________________ ___________________________ 2 EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT JPMorgan Chase Bank, 450 West 33rd Street 15th Floor New York, New York 10001 Re: Equity Units of The St. Paul Companies, Inc. (the "Company") The undersigned Holder hereby notifies you that it has delivered to BNY Midwest Trust Company, as Collateral Agent, [$_______ aggregate principal amount of Treasury Securities] [$_____aggregate principal amount of Notes or the appropriate Applicable Ownership Interest in the Treasury Portfolio, the case may be,] in exchange for an equal Value of [Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by the Collateral Agent, in accordance with Section [4.1][4.2] of the Pledge Agreement, dated July 31, 2002 (the "Pledge Agreement"), among you, the Company and the Collateral Agent. The undersigned Holder has paid the Collateral Agent all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Notes or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio] [Pledged Treasury Securities] related to such [Corporate Units] [Treasury Units]. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Dated:_____________ __________________________ Signature Signature Guarantee:______________ Please print name and address of Registered Holder: ____________________________ ____________________________________ Name Social Security or other Taxpayer Identification Number, if any ___________________________ Address ____________________________ ____________________________ 1 EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING BNY Midwest Trust Company, 2 North LaSalle Street Suite 1020 Chicago, Illinois 60602 Re: Notes of The St. Paul Companies, Inc. (the "Company") The undersigned hereby notifies you in accordance with Section 4.6(c) of the Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement"), among the Company, yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent, and JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate Units and Treasury Units from time to time, that the undersigned elects to deliver $ ___________ aggregate principal amount of Notes for delivery to the Remarketing Agent on the Business Day immediately preceding the [Initial Remarketing Date] [Secondary Remarketing Date] [Final Remarketing Date] for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned will, upon request of the Remarketing Agent, execute and deliver any additional documents deemed by the Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Notes tendered hereby. The undersigned hereby instructs you, upon receipt of the Proceeds of such remarketing from the Remarketing Agent to deliver such Proceeds to the undersigned in accordance with the instructions indicated herein under "A. Payment Instructions". The undersigned hereby instructs you, in the event of Failed [Initial] [Secondary] [Final] Remarketing, upon receipt of the Notes tendered herewith from the Remarketing Agent, to be delivered to the person(s) and the address(es) indicated herein under "B. Delivery Instructions." 1 With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Notes tendered hereby and that the undersigned is the record owner of any Notes tendered herewith in physical form or a participant in The Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered herewith by book-entry transfer to your account at DTC and (ii) agrees to be bound by the terms and conditions of Section 4.6(c) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date:_____________ __________________________________ By:_______________________________ Name: Title: Signature Guarantee:______________ _____________________________________________________________ Name Social Security or other Taxpayer Identification Number, if any ________________ Address ___________________________ ___________________________ _____________________________________________________________ 2 A. PAYMENT INSTRUCTIONS _______________________________________________________________________ Proceeds of the remarketing should be paid by check in the name of the person(s) set forth below and mailed to the address set forth below. _______________________________________________________________________ Name(s) _______________________________________________________________________ (Please Print) Address (Please Print) _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ (Zip Code) _______________________________________________________________________ (Tax Identification or Social Security Number) _______________________________________________________________________ 3 B. DELIVERY INSTRUCTIONS _______________________________________________________________________ In the event of a failed remarketing, Notes which are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below. Name(s) _______________________________________________________________________ (Please Print) Address (Please Print) _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ (Zip Code) _______________________________________________________________________ (Tax Identification or Social Security Number) In the event of a failed remarketing, Notes which are in book-entry form should be credited to the account at The Depository Trust Company set forth below. __________________ DTC Account Number Name of Account Party:_________________________________ 4 EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING BNY Midwest Trust Company, 2 North LaSalle Street Suite 1020 Chicago, Illinois 60602 Re: Notes of The St. Paul Companies, Inc. (the "Company") The undersigned hereby notifies you in accordance with Section 4.6(c) of the Pledge Agreement, dated as of July 31, 2002 (the "Pledge Agreement") among the Company, yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent and JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate Units and Treasury Units from time to time, that the undersigned elects to withdraw the $_____ aggregate principal amount of Notes delivered to the Custodial Agent on __________, 2005 for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned hereby instructs you to return such Notes to the undersigned in accordance with the undersigned's instructions. With this notice, the undersigned hereby agrees to be bound by the terms and conditions of Section 4.6(c) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date:_____________ __________________________________ By:_______________________________ Name: Title: Signature Guarantee:_____________ __________________________________ __________________________________ Name Social Security or other Taxpayer Identification Number, if any ___________________________ Address __________________________________ __________________________________ 1 -----END PRIVACY-ENHANCED MESSAGE-----