Document:

Exhibit 10.11

 

STR HOLDINGS, INC.
 2009 Equity Incentive Plan

 

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

 

THIS AGREEMENT (the “Award Agreement”) is made effective as of October 1, 2012 (the “Date of Grant”) between STR Holdings, Inc., a Delaware corporation (with any successor, the “Company”), and Joseph Radziewicz (the “Participant”):

 

R  E  C  I  T  A  L  S:

 

WHEREAS, the Company has adopted the STR Holdings, Inc. 2009 Equity Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Award Agreement.  Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the option provided for herein to the Participant pursuant to the Plan and the terms set forth herein.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

 

1.             Grant of the Option.  The Company hereby grants to the Participant the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of one hundred thousand (100,000) Shares, subject to adjustment as set forth in the Plan.  The Option is intended to be a nonqualified stock option, and is not intended to be treated as an option that complies with Section 422 of the Internal Revenue Code of 1986, as amended.

 

2.             Option Price.  The purchase price of the Shares subject to the Option shall be $3.10 per Share (the “Option Price”), subject to adjustment as set forth in the Plan.

 

3.             Vesting  Subject to the Participant’s continued Service on each vesting date, the Option shall vest (subject to accelerated vesting set forth in Sections 4 or 5 below) on each anniversary of the Date of Grant as follows: (i) twenty five (25%) of the Shares shall vest on the first anniversary of the Date of Grant; (ii) twenty five (25%) of the Shares shall vest on the second anniversary of the Date of Grant; and (iii) fifty (50%) of the Shares shall vest on the third anniversary of the Date of Grant.

 

At any time, the portion of the Option which has become vested is hereinafter referred to as the “Vested Portion.”  The Vested Portion of the Option shall remain exercisable for the period set forth in Section 6.

 

4.             Change of Control.  Upon the occurrence of a Change of Control, any outstanding portion of the Option, to the extent not previously cancelled or forfeited, that is not (i) assumed by the Company (if it is the surviving company or corporation) or by the surviving company or corporation or its parent or (ii) substituted by the surviving company or corporation or its parent with a stock option with substantially the same terms as the Option, shall, to the extent unvested, immediately vest in full, so long as the Participant’s Service has not been

 

 

terminated before the commencement of the Change of Control Period (as hereinafter defined).  For purposes of this Section 4, (x) the Option shall not be considered assumed if following any such assumption (or proposed assumption) the shares of stock underlying the Option are not (or would not be) publicly traded on the New York Stock Exchange (“NYSE”), NASDAQ or another established securities market and (y) substitution of the Option with a stock option to purchase shares of stock which are not publicly traded on the NYSE, NASDAQ or another established securities market will result in a failure of the Option to be considered substituted with a stock option with substantially similar terms.

 

5.             Forfeiture.

 

(a)           If the Participant’s Service is terminated by the Participant for Good Reason or by the Company without Cause, the unvested portion of the Option, to the extent not previously cancelled or forfeited, that would have vested had the Participant been employed for an additional twelve (12) months from the date of termination of employment shall vest immediately upon such date of termination; provided however, in the event that the Participant’s Service is terminated by the Participant for Good Reason or by the Company without Cause, during the Change of Control Period (as hereinafter defined), the unvested portion of the Option to the extent not previously cancelled or forfeited, shall vest immediately upon such date of termination.  Thereafter, the Option shall, to the extent not then vested, be cancelled by the Company without consideration and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 6.

 

(b)           If the Participant’s Service is terminated for any reason other than pursuant to clause 5(a) above, the Option shall, to the extent not then vested, be cancelled by the Company without consideration and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 6.

 

6.             Exercise of Option.

 

(a)           Period of Exercise.  Subject to the provisions of the Plan and this Award Agreement, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the earliest to occur of:

 

(i)            the tenth anniversary of the Date of Grant;

 

(ii)           the date that is ninety (90) days following termination of the Participant’s Service for any reason other than death, Permanent Disability or Cause;

 

(iii)          the date that is one (1) year following termination of the Participant’s Service due to death or Permanent Disability;

 

(iv)          the date of termination of the Participant’s Service due to Cause.

 

(b)           Method of Exercise.

 

(i)            Subject to Section 4, the Vested Portion of the Option may be exercised by delivering to the Company at its principal office written notice of intent to so exercise; provided that the Option may be exercised with respect to whole Shares only.  Such notice shall specify the number of Shares for which the Option is being exercised and

 

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shall be accompanied by payment in full of the Option Price.  In the event the Option is being exercised by the Participant’s representative, the notice shall be accompanied by proof (satisfactory to the Committee) of the representative’s right to exercise the Option.  The payment of the Option Price may be made at the election of the Participant (A) in cash or its equivalent (e.g., by cashier’s check), (B) to the extent permitted by the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee, (C) partly in cash and, to the extent permitted by the Committee, partly in such Shares, (D) by reducing the number of Shares otherwise deliverable upon the exercise of the Option by the number of Shares having a Fair Market Value equal to the Option Price, or (E) if there is a public market for the Shares at such time, subject to such requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased.  The Committee may prescribe any other method of payment that it determines to be consistent with applicable law.  Neither the Participant nor the Participant’s representative shall have any rights to dividends or other rights of a stockholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan.

 

(ii)           Notwithstanding any other provision of the Plan or this Award Agreement to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the Shares under applicable securities or other laws, or under any ruling or regulation of any governmental body or national securities exchange that the Committee shall in its sole discretion determine to be necessary or advisable.

 

(iii)          Upon the Company’s determination that the Option has been validly exercised as to any of the Shares, the Company shall issue certificates in the Participant’s name for such Shares.  However, the Company shall not be liable to the Participant for damages relating to any delays in issuing the certificates to him, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves.

 

(iv)          In the event of the Participant’s death, the Vested Portion of the Option shall remain exercisable during the period set forth in Section 6 by the Participant’s executor or administrator, or the person or persons to whom the Participant’s rights under this Award Agreement shall pass by will or by the laws of descent and distribution as the case may be.  Any heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof.

 

7.             No Right to Continued Service.  The granting of the Option evidenced hereby and this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Service of the Participant and shall not lessen or affect any right that the Company or any Affiliate may have to terminate the Service of such Participant.

 

8.             Securities Laws/Legend on Certificates.  The issuance and delivery of Shares shall comply with all applicable requirements of law, including (without limitation) the

 

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Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.  If the Company deems it necessary to ensure that the issuance of securities under the Plan is not required to be registered under any applicable securities laws, each Participant to whom such security would be issued shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company may deem necessary which satisfies such requirements. The certificates representing the Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

9.             Transferability.  The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.  No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.  During the Participant’s lifetime, the Option is exercisable only by the Participant.

 

10.          Adjustment of Option.  Adjustments to the Option (or any of the Shares underlying the Option) shall be made in accordance with the terms of the Plan.

 

11.          Definitions.  For purposes of this Award Agreement:

 

“Cause” shall have the meaning set forth in the Participant’s employment agreement with the Company or any of its Subsidiaries, if applicable, and otherwise shall mean (i) the Participant’s failure or refusal to follow the reasonable instructions of the Participant’s supervisor  (or for the CEO, the Company’s Board of Directors)   (other than due to the Participant’s Permanent Disability), which failure or refusal is not cured within thirty (30) days following written notice; (ii) the Participant’s conviction of a felony or of a misdemeanor if such misdemeanor involves moral turpitude or misrepresentation, including  a plea of guilty or nolo contendere; (iii) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s or any of its Subsidiaries’ premises; (iv) the Participant’s commission of any act of fraud, embezzlement, misappropriation of funds, intentional misrepresentation, breach of fiduciary duty or other act of dishonesty materially detrimental  to the Company or any of its Subsidiaries; or (v) the Participant’s intentional wrongful act or gross negligence that has a materially detrimental effect on the Company or its Subsidiaries.

 

“Change of Control Period” shall mean the period commencing ninety (90) days prior to the execution of any definitive purchase and sale, merger or other acquisition agreement resulting in a Change of Control through the first anniversary following the closing of such Change of Control, or, in the case of any other type of Change of Control, the period of one (1) year beginning on the date of the occurrence of such Change of Control through the first anniversary thereof.

 

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“Good Reason” for termination by the Participant of the Participant’s Service shall have the meaning set forth in the Participant’s employment agreement with the Company or any of its Subsidiaries, if applicable, and otherwise shall mean the occurrence (without the Participant’s express written consent), of any one of the following acts by the Company, or failures by the Company to act.  As set forth below, subsection (i) contains the elements of Good Reason, and subsection (ii) sets forth certain terms and conditions applicable to termination by the Participant for Good Reason;

 

(i)                                     (A)          A material diminution in the nature or status of the Participant’s responsibilities from those in effect immediately prior to such diminution resulting from, among other things, (1) the assignment to the Participant of any duties inconsistent with the Participant’s duties and the Participant’s position, immediately prior to such assignment, or (2) during the Change of Control Period, the failure of the Company to ensure that the Participant maintains substantially the same duties and position during such period, with the Company and each other entity that may then be a direct or indirect parent of the Company owning directly or indirectly a majority of the outstanding capital stock of the Company, as the Participant was assigned or held immediately prior to the Change of Control Period;

 

(B)                               A material reduction by the Company, during the period of one (1) year immediately prior to the date of the Participant’s termination of Service, in either or both of (1) the Participant’s annual base salary; or (2) the target bonus percentage set forth in the Company’s management incentive plan, in each case as in effect on the date of this Award Agreement or as the same may be increased from time to time;

 

(C)                               The relocation of the Participant’s principal place of Service to a location more than fifty (50) miles from the Participant’s principal place of employment immediately prior to such relocation or the Company’s requiring the Participant to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Participant’s business travel obligations immediately prior thereto;

 

(D)                               The failure by the Company to pay to the Participant any portion of the Participant’s current compensation, or to pay to the Participant any portion of an installment of deferred compensation under any deferred compensation program of the Company, within thirty (30) days of the date such compensation is due;

 

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(E)                                The failure by the Company to continue in effect any material compensation plan in which the Participant participates immediately prior to such failure which is material to the Participant’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Participant’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Participant’s participation relative to other participants, as existed immediately prior to such failure;

 

(F)                                 The failure by the Company to continue to provide the Participant with benefits substantially similar to those enjoyed by the Participant under any of the Company’s benefit plans, including without limitation, life insurance, health and accident, or disability plans in which the Participant was participating immediately prior to such failure, the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Participant of any material fringe benefit enjoyed by the Participant immediately prior to such action, or the failure by the Company to provide the Participant with the number of paid vacation days to which the Participant is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of such failure; or

 

(G)                               Any material breach by the Company of the Participant’s employment agreement with the Company or any of its Subsidiaries.

 

(ii)                                  (A)          For purposes of this Award Agreement, any purported termination of the Participant’s Service which is not effected pursuant to a written notice of termination indicating the specific termination provision relied upon (e.g., Cause, death, etc.) and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for such a termination shall not be effective.

 

(B)                               The Participant’s right to terminate the Participant’s Service for Good Reason shall not be affected by the Participant’s incapacity due to physical or mental illness.

 

(C)                               For purposes of any determination regarding the existence of Good Reason, any claim by the Participant that Good Reason exists shall be presumed to be correct unless the Company

 

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establishes to the Board by clear and convincing evidence that Good Reason does not exist.

 

(D)                               Notwithstanding any provision of this definition of Good Reason to the contrary, none of the foregoing provisions of this definition of Good Reason shall constitute Good Reason unless (1) no later than ninety (90) days following the occurrence of any of the events set forth in subsection (i) of this definition of Good Reason above, the Participant provides written notice to the Company of such event containing a description thereof and stating the subsection of subsection (i) of this definition of Good Reason above under which such event constitutes Good Reason (the “Good Reason Notice”) and the Company shall not have cured such event within thirty (30) days following its receipt of such notice, and (2) no later than one hundred eighty (180) days, but no earlier than thirty (30) days, following the Company’s receipt of such Good Reason Notice, the Participant gives the Company written notice of the Participant’s intent to terminate Service due to the occurrence of the event constituting Good Reason described in such Good Reason Notice.

 

“Permanent Disability” shall have the meaning set forth in the Participant’s employment agreement with the Company or its Affiliates, if any, or if the Participant is not a party to an employment agreement with a definition of “Permanent Disability,” then “Permanent Disability” means any physical or mental disability rendering the Participant unable to perform his or her duties for a period of at least one hundred twenty (120) days out of any twelve (12) month period, as determined by a doctor approved by the Company.

 

“Share” means a share of common stock of the Company or such other class or kind of shares or other securities resulting from the application of Section 12.1 of the Plan.

 

12.          Withholding.  The Participant may be required to pay to the Company or any Affiliate and the Company shall have the right and is hereby authorized to withhold, any applicable withholding taxes in respect of the Option, its exercise or any payment or transfer under or with respect to the Option and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.

 

13.          Notices. Any notification required by the terms of this Award Agreement shall be given in writing and shall be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid.  A notice shall be addressed to the Company, Attention: Secretary, at its principal executive office and to the Participant at the address that he or she most recently provided to the Company.

 

14.          Entire Agreement.  This Award Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof.  They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.

 

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15.          Waiver.  No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.

 

16.          Successors and Assigns.  The provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate, whether or not any such person shall have become a party to this Award Agreement and agreed in writing to be joined herein and be bound by the terms hereof.

 

17.          Choice of Law; Jurisdiction; Waiver of Jury Trial.  THIS AWARD AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF DELAWARE WITHOUT REGARD TO CONFLICTS OF LAWS.

 

SUBJECT TO THE TERMS OF THIS AWARD AGREEMENT, THE PARTIES AGREE THAT ANY AND ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AWARD AGREEMENT SHALL BE LITIGATED IN THE FEDERAL OR STATE COURTS IN DELAWARE.  BY EXECUTING AND DELIVERING THIS AWARD AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR ITSELF, HIMSELF OR HERSELF AND IN RESPECT OF ITS, HIS OR HER PROPERTY WITH RESPECT TO SUCH ACTION.  EACH PARTY AGREES THAT VENUE WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

 

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AWARD AGREEMENT.

 

18.          Option Subject to Plan.  By entering into this Award Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan.  The Option is subject to the Plan.  The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference (subject to the limitation set forth in Section 19).  In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.  The Participant has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of the Plan and the Award Agreement.

 

19.          Amendment.  The Committee may amend or alter this Award Agreement and the Option granted hereunder at any time; provided that, subject to Articles 11, 12 and 13 of the Plan, no such amendment or alteration shall be made without the consent of the Participant if such action would materially diminish any of the rights of the Participant under this Award Agreement or with respect to the Option.

 

20.          Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

 

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21.          Signature in Counterparts.  This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.

 

	
 
    	
STR HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Robert   S. Yorgensen
    
	
 
    	
 
    	
Title:
    	
President   and Chief Executive Officer
    

 

 

	
Agreed   and acknowledged as
   of the date first above written:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Joseph RadziewiczExhibit 4.1

 

DEPOSIT AGREEMENT

 

among

 

MAGNUM HUNTER RESOURCES CORPORATION,

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

 

as Depositary

 

and

 

THE HOLDERS FROM TIME TO TIME OF
 THE DEPOSITARY RECEIPTS DESCRIBED HEREIN

 

Dated as of November 2, 2012

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    	
DEFINED TERMS
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
FORM OF RECEIPTS, DEPOSIT OF SERIES E   PREFERRED STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER, REDEMPTION AND   CONVERSION OF RECEIPTS
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
Form and Transfer of Receipts
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.2
    	
Deposit of Series E Preferred Stock;   Execution and Delivery of Receipts in Respect Thereof
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.3
    	
Registration of Transfer of Receipts
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.4
    	
Split-ups and Combinations of Receipts;   Surrender of Receipts, No Withdrawal of Series E Preferred Stock
    	
5
    
	
 
    	
 
    	
 
    
	
Section 2.5
    	
Limitations on Execution and   Delivery, Transfer, Surrender and Exchange of Receipts
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.6
    	
Lost Receipts, etc.
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.7
    	
Cancellation and Destruction of   Surrendered Receipts
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.8
    	
Receipts Issuable in Global   Registered Form
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.9
    	
Redemption of Series E Preferred   Stock
    	
7
    
	
 
    	
 
    	
 
    
	
Section 2.10
    	
Conversion at Option of Holder
    	
9
    
	
 
    	
 
    	
 
    
	
Section 2.11
    	
Conversion Upon Change of Ownership   or Control
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS,   THE CORPORATION AND THE DEPOSITARY
    	
11
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
Filing Proofs, Certificates and Other   Information
    	
11
    
	
 
    	
 
    	
 
    
	
Section 3.2
    	
Payment of Taxes or Other   Governmental Charges
    	
11
    
	
 
    	
 
    	
 
    
	
Section 3.3
    	
Warranty as to Series E Preferred   Stock
    	
12
    
	
 
    	
 
    	
 
    
	
Section 3.4
    	
Warranty as to Receipts
    	
12
    
	
 
    	
 
    	
 
    
	
Section 3.5
    	
Corporate Existence and Authority of   the Depositary
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
THE DEPOSITED SECURITIES; NOTICES
    	
12
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Cash Distributions
    	
12
    
	
 
    	
 
    	
 
    
	
Section 4.2
    	
Distributions Other than Cash
    	
13
    
	
 
    	
 
    	
 
    
	
Section 4.3
    	
Subscription Rights, Preferences or   Privileges
    	
13
    
	
 
    	
 
    	
 
    
	
Section 4.4
    	
Notice of Dividends, etc.; Fixing   Record Date for Holders of Receipts
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.5
    	
Voting Rights
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.6
    	
Changes Affecting Deposited   Securities and Reclassifications, Recapitalizations, etc.
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.7
    	
Delivery of Reports
    	
15
    
	
 
    	
 
    	
 
    
	
Section 4.8
    	
Lists of Receipt Holders
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
THE DEPOSITARY, THE DEPOSITARY’S AGENTS, THE   REGISTRAR AND THE CORPORATION
    	
15
    

 

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TABLE OF CONTENTS

(continued)

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Maintenance of Offices, Agencies and   Transfer Books by the Depositary; Registrar
    	
15
    
	
 
    	
 
    	
 
    
	
Section 5.2
    	
Prevention of or Delay in Performance   by the Depositary, the Depositary’s Agents, the Registrar or the Corporation
    	
16
    
	
 
    	
 
    	
 
    
	
Section 5.3
    	
Obligations of the Depositary, the   Depositary’s Agents, the Registrar and the Corporation
    	
16
    
	
 
    	
 
    	
 
    
	
Section 5.4
    	
Resignation and Removal of the   Depositary; Appointment of Successor Depositary
    	
17
    
	
 
    	
 
    	
 
    
	
Section 5.5
    	
Corporate Notices and Reports
    	
17
    
	
 
    	
 
    	
 
    
	
Section 5.6
    	
Indemnification
    	
18
    
	
 
    	
 
    	
 
    
	
Section 5.7
    	
Fees, Charges and Expenses
    	
18
    
	
 
    	
 
    	
 
    
	
Section 5.8
    	
Tax Compliance
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
AMENDMENT AND TERMINATION
    	
19
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Amendment
    	
19
    
	
 
    	
 
    	
 
    
	
Section 6.2
    	
Termination
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
MISCELLANEOUS
    	
20
    
	
 
    	
 
    	
 
    
	
Section 7.1
    	
Counterparts
    	
20
    
	
 
    	
 
    	
 
    
	
Section 7.2
    	
Exclusive Benefit of Parties
    	
20
    
	
 
    	
 
    	
 
    
	
Section 7.3
    	
Invalidity of Provisions
    	
20
    
	
 
    	
 
    	
 
    
	
Section 7.4
    	
Notices
    	
20
    
	
 
    	
 
    	
 
    
	
Section 7.5
    	
Depositary’s Agents
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.6
    	
Appointment of Registrar, Dividend   Disbursing Agent, Redemption Agent and Conversion Agent in Respect of the   Series E Preferred Stock
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.7
    	
Governing Law
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.8
    	
Inspection of Deposit Agreement
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.9
    	
Headings
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.10
    	
Confidentiality
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.11
    	
Further Assurances
    	
22
    
	
 
    	
 
    	
 
    
	
Section 7.12
    	
Holders of Receipts Are Parties
    	
22
    

 

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DEPOSIT AGREEMENT

 

DEPOSIT AGREEMENT, dated as of November 2, 2012, among MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation, AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability trust company, as Depositary, and the holders from time to time of the Receipts described herein.

 

W  I  T  N  E  S  S  E  T  H :

 

WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of shares of Series E Preferred Stock of the Corporation from time to time with the Depositary for the purposes set forth in this Deposit Agreement, for the issuance hereunder of Depositary Shares representing a fractional interest in the Series E Preferred Stock so deposited and for the execution and delivery of Receipts evidencing Depositary Shares;

 

WHEREAS, the Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement; and

 

WHEREAS, the terms and conditions of the Series E Preferred Stock, including the redemption and conversion provisions thereof, are set forth in the Certificate of Designations.

 

NOW, THEREFORE, in consideration of the promises contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINED TERMS

 

Section 1.1           Definitions.

 

The following definitions shall for all purposes, unless otherwise indicated, apply to the respective terms used in this Deposit Agreement:

 

“Alternative Conversion Consideration” shall have the meaning set forth in the Certificate of Designations.

 

“Business Day” shall have the meaning set forth in the Certificate of Designations.

 

“Call Date” shall have the meaning set forth in the Certificate of Designations, which date shall also be the date fixed for redemption of the Depositary Shares and Receipts representing fractional interests in any deposited shares of Series E Preferred Stock redeemed pursuant to the Certificate of Designations.

 

“Certificate of Designations” shall mean the Certificate of Designations of Rights and Preferences filed with the Secretary of State of the State of Delaware establishing the Series E Preferred Stock as a series of preferred stock of the Corporation.

 

“Change of Ownership or Control” shall have the meaning set forth in the Certificate of Designations.

 

“Change of Ownership or Control Conversion Date” shall have the meaning set forth in the Certificate of Designations.

 

“Change of Ownership or Control Conversion Right” shall have the meaning set forth in the Certificate of Designations.

 

“Common Share Price” shall have the meaning set forth in the Certificate of Designations.

 

 

“Common Shares” shall mean the common stock, par value $0.01 per share, of the Corporation.

 

“Conversion Agent” shall mean American Stock Transfer & Trust Company, LLC and any successor as Depositary hereunder.

 

“Conversion Consideration” shall have the meaning set forth in the Certificate of Designations.

 

“Conversion Date” shall have the meaning set forth in the Certificate of Designations, which date shall also be the date on which a conversion of the Depositary Shares and Receipts representing fractional interests in any deposited shares of Series E Preferred Stock converted pursuant to the Certificate of Designations is effective as further described in Section 2.10.

 

“Conversion Price” shall have the meaning set forth in the Certificate of Designations.

 

“Conversion Ratio” shall have the meaning set forth in the Certificate of Designations.

 

“Conversion Shares” shall have the meaning set forth in the Certificate of Designations.

 

“Corporation” shall mean Magnum Hunter Resources Corporation, a Delaware corporation, and its successors.

 

“Deposit Agreement” shall mean this Deposit Agreement, as amended or supplemented from time to time.

 

“Depositary” shall mean American Stock Transfer & Trust Company, LLC and any successor as Depositary hereunder.

 

“Depositary Shares” shall mean the depositary shares, each representing 1/1,000th of a share of the Series E Preferred Stock, evidenced by a Receipt.

 

“Depositary’s Agent” shall mean an agent appointed by the Depositary pursuant to Section 7.5.

 

“Depositary’s Office” shall mean the principal office of the Depositary in 6201 15th Avenue, Brooklyn, New York 11219, at which at any particular time its depositary receipt business shall be administered.

 

“Dividend Rate” shall have the meaning set forth in the Certificate of Designations.

 

“DTC” shall mean the Depository Trust Company.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Exchange Event” shall mean with respect to any Global Registered Receipt:

 

(1)                                 (A) the Global Receipt Depository which is the Holder of such Global Registered Receipt or Receipts notifies the Corporation that it is no longer willing or able to properly discharge its responsibilities under any Letter of Representations or that it is no longer eligible or in good standing under the Exchange Act, and (B) the Corporation has not appointed a qualified successor Global Receipt Depository within 90 calendar days after the Corporation received such notice, or

 

(2)                                 the Corporation in its sole discretion notifies the Depositary in writing that the Receipts or portion thereof issued or issuable in the form of one or more Global Registered Receipts shall no longer be represented by such Global Registered Receipt or Receipts.

 

“Global Receipt Depository” shall mean, with respect to any Receipt issued hereunder, DTC or such other entity designated as Global Receipt Depository by the Corporation in or pursuant to this Deposit Agreement, which

 

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entity must be, to the extent required by any applicable law or regulation, a clearing agency registered under the Exchange Act.

 

“Global Registered Receipt” means a global registered Receipt registered in the name of a nominee of DTC.

 

“Letter of Representations” means any applicable agreement among the Corporation, the Depositary and a Global Receipt Depository with respect to such Global Receipt Depository’s rights and obligations with respect to any Global Registered Receipts, as the same may be amended, supplemented, restated or otherwise modified from time to time and any successor agreement thereto.

 

“Notice of Conversion” has the meaning set forth in the Certificate of Designations and as used herein shall refer to written notice from a Holder of Receipts.

 

“Officer’s Certificate” shall mean a certificate in substantially the form set forth as Exhibit B hereto, which is signed by an officer of the Corporation and which attaches, as an annex thereto, the Certificate of Designations describing the terms and conditions of the Series E Preferred Stock to be issued by the Corporation and deposited with the Depositary from time to time in accordance with the terms hereof.

 

“Receipt” shall mean one of the depositary receipts issued hereunder, substantially in the form set forth as Exhibit A hereto, whether in definitive or temporary form, and evidencing the number of Depositary Shares with respect to the Series E Preferred Stock held of record by the Record Holder of such Depositary Shares.

 

“Record Holder” or “Holder” as applied to a Receipt shall mean the person in whose name such Receipt is registered on the books of the Depositary maintained for such purpose.

 

“Redemption Price” shall mean the redemption price set forth in Section 5 of the Certificate of Designations, plus the amounts indicated in Section 5(c) of the Certificate of Designations, payable in the event of a redemption of shares of Series E Preferred Stock.

 

“Registrar” shall mean the Depositary or such other successor bank or trust company which shall be appointed by the Corporation to register ownership and transfers of Receipts as herein provided, and if a successor Registrar shall be so appointed, references herein to “the books” of or maintained by the Depository shall be deemed, as applicable, to refer as well to the register maintained by such Registrar for such purpose.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Series E Preferred Stock” shall mean the shares of the Corporation’s 8% Series E Cumulative Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $25,000 per share plus accrued and unpaid dividends thereon, designated in the Certificate of Designations.

 

“Stock Purchase Agreement” shall mean the Stock Purchase Agreement, dated as of October 24, 2012, among Viking International Resources Co., Inc., its stockholders, Triad Hunter, LLC and, solely for the limited purposes set forth therein, the Corporation.

 

“Trading Price” has the meaning set forth in the Certificate of Designations.

 

“Underwriting Agreement” shall mean an Underwriting Agreement to be entered into in November 2012 between the Corporation and MLV & Co. LLC, Barclays Capital Inc., UBS Securities LLC and such other underwriters as may be specified therein.

 

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ARTICLE II

 

FORM OF RECEIPTS, DEPOSIT OF SERIES E PREFERRED STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER, REDEMPTION AND CONVERSION OF RECEIPTS

 

Section 2.1           Form and Transfer of Receipts.

 

The definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided.  Pending the preparation of definitive Receipts, the Depositary, upon the written order of the Corporation or any holder of Series E Preferred Stock, delivered in compliance with Section 2.2, shall execute and deliver temporary Receipts which may be printed, lithographed, typewritten or otherwise substantially of the tenor of the definitive Receipts in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine, as evidenced by their execution of such Receipts.  If temporary Receipts are issued, the Corporation and the Depositary will cause definitive Receipts to be prepared without unreasonable delay.  After the preparation of definitive Receipts, the temporary Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at an office described in the penultimate paragraph of Section 2.2, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Receipts, the Depositary and the Corporation shall execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts.  Such exchange shall be made at the Corporation’s expense and without any charge to the Holder therefor.  Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement, and with respect to the Series E Preferred Stock, as definitive Receipts.

 

Receipts shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary and by the Corporation by the manual or facsimile signature of a duly authorized officer of the Corporation.  No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed manually or by facsimile signature of a duly authorized officer of the Depositary or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by manual or facsimile signature of a duly authorized officer of the Depositary, and, in either case, by manual or facsimile signature of a duly authorized officer of the Corporation.  The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided.

 

Receipts shall be in denominations of any number of whole Depositary Shares.

 

Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary and approved by the Corporation or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Depositary Shares or the Receipts may be listed for trading or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject.

 

Title to Depositary Shares evidenced by a Receipt which is properly endorsed or accompanied by a properly executed instrument of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until transfer of any particular Receipt shall be registered on the books of the Depositary as provided in Section 2.3, the Depositary may, notwithstanding any notice to the contrary, treat the Record Holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distributions of dividends or other distributions or payments with respect to the deposited Series E Preferred Stock, to exercise any redemption, voting or conversion rights, to receive any notice provided for in this Deposit Agreement and for all other purposes.

 

The Corporation shall cause to be provided to the Depositary an opinion of counsel on each date of issuance of Depositary Shares, which opinion shall state that: (1) with respect to Depositary Shares to be delivered pursuant to the Underwriting Agreement, such Depositary Shares have been registered under the Securities Act, and, with respect to Depositary Shares delivered pursuant to the Stock Purchase Agreement, such Depositary Shares are being issued in a transaction exempt from registration under the Securities Act; and (2) when the Depositary Shares

 

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are issued and delivered against payment therefor as provided in the Underwriting Agreement or the Stock Purchase Agreement, as applicable, such Depositary Shares will be duly and validly issued, fully paid and non-assessable.  The Corporation shall cause to be provided to the Depositary an opinion of counsel to the same effect, as applicable, in connection with any subsequent deposit of shares of Series E Preferred Stock and issuance of Depositary Shares.

 

Section 2.2           Deposit of Series E Preferred Stock; Execution and Delivery of Receipts in Respect Thereof.

 

Subject to the terms and conditions of this Deposit Agreement, the Corporation may from time to time (including in connection with the closing of the transactions contemplated by the Underwriting Agreement and the Stock Purchase Agreement) deposit shares of Series E Preferred Stock under this Deposit Agreement by delivery to the Depositary of a certificate or certificates for such shares of Series E Preferred Stock to be deposited, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with (i) all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement including an executed Officer’s Certificate and (ii) a written order of the Corporation directing the Depositary to execute and deliver to, upon the written request of, the person or persons stated in the Corporation’s order a Receipt or Receipts for the number of Depositary Shares representing such deposited Series E Preferred Stock.

 

The Series E Preferred Stock that is deposited shall be held by the Depositary at the Depositary’s Office or at such other place or places as the Depositary shall determine.  The Depositary shall not lend any Series E Preferred Stock deposited hereunder.

 

Upon receipt by the Depositary of a certificate or certificates for Series E Preferred Stock deposited in accordance with the provisions of this Section, together with the other documents required as above specified, and upon recordation of the Series E Preferred Stock on the books of the Corporation (or its duly appointed transfer agent) in the name of the Depositary or its nominee, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to, upon the written request of, the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this Section, a Receipt or Receipts for the number of Depositary Shares representing, in the aggregate, the number of shares of Series E Preferred Stock so deposited and registered in such name or names as may be requested by such person or persons.  The Depositary shall execute and deliver such Receipt or Receipts at the Depositary’s Office or such other offices, if any, as the Depositary may designate.  Delivery at other offices shall be at the risk and expense of the person requesting such delivery.  Each such Receipt shall be countersigned by a duly authorized officer of the Corporation.

 

Section 2.3           Registration of Transfer of Receipts.

 

Subject to the terms and conditions of this Deposit Agreement, the Depositary shall register on its books from time to time transfers of Receipts upon any surrender thereof by the Holder in person or by duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer.  Thereupon, the Depositary shall execute a new Receipt or Receipts evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered and deliver such new Receipt or Receipts to or upon the order of the person entitled thereto.  Each such Receipt shall be countersigned by a duly authorized officer of the Corporation.

 

The Depositary shall not be required to transfer or exchange for another Receipt any Receipt called or being called for redemption in whole or in part except as provided in Section 2.9.

 

Section 2.4           Split-ups and Combinations of Receipts; Surrender of Receipts, No Withdrawal of Series E Preferred Stock.

 

Upon surrender of a Receipt or Receipts at the Depositary’s Office or at such other offices as it may designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute a new Receipt or Receipts in the authorized denomination or denominations requested, evidencing the aggregate number of Depositary Shares evidenced by the

 

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Receipt or Receipts surrendered, and shall deliver such new Receipt or Receipts to or upon the order of the Holder of the Receipt or Receipts so surrendered; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share.  Each such Receipt shall be countersigned by a duly authorized officer of the Corporation.

 

A Holder of a Receipt or Receipts may not withdraw the shares of Series E Preferred Stock represented by the Depositary Shares or any money or other property, if any, represented thereby.

 

Section 2.5           Limitations on Execution and Delivery, Transfer, Surrender and Exchange of Receipts.

 

As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, any of the Depositary’s Agents or the Corporation may require payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Corporation shall have made such payment, the reimbursement to it) of any charges or expenses payable by the Holder of a Receipt pursuant to Section 5.7, may require the production of evidence satisfactory to it as to the identity and genuineness of any signature (which evidence may include a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association), and may also require compliance with such regulations, if any, as the Depositary or the Corporation may establish consistent with the provisions of this Deposit Agreement and/or applicable law.

 

The deposit of shares of Series E Preferred Stock may be refused, the delivery of Receipts against shares of Series E Preferred Stock may be suspended, the registration of transfer of Receipts may be refused and the registration of transfer, surrender or exchange of outstanding Receipts may be suspended (i) during any period when the register of stockholders of the Corporation is closed or (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary’s Agents or the Corporation at any time or from time to time because of any requirement of law or of any government or governmental body or commission or under any provision of this Deposit Agreement.

 

Section 2.6           Lost Receipts, etc.

 

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, upon (i) the filing by the Holder thereof with the Depositary of evidence reasonably satisfactory to the Depositary of such destruction or loss or theft of such Receipt, of the authenticity thereof and of his or her ownership thereof, (ii) the Holder thereof furnishing the Depositary with an affidavit and an indemnity or bond reasonably satisfactory to the Depositary and (iii) the payment of any reasonable expense (including reasonable fees, charges and expenses of the Depositary).  Applicants for substitute receipts shall also comply with such other reasonable regulations and pay such other reasonable charges as the Depositary may prescribe and as required by Section 8-405 of the Uniform Commercial Code (Replacement of Lost, Destroyed, or Wrongfully Taken Security Certificate) in effect in the State of New York.  Each such Receipt shall be countersigned by a duly authorized officer of the Corporation.

 

Section 2.7           Cancellation and Destruction of Surrendered Receipts.

 

All Receipts surrendered to the Depositary or any Depositary’s Agent shall be cancelled by the Depositary.  Except as prohibited by applicable law or regulation, the Depositary is authorized and directed to destroy all Receipts so cancelled.

 

Section 2.8           Receipts Issuable in Global Registered Form.

 

If the Corporation shall determine in a writing delivered to the Depositary that the Receipts are to be issued in whole or in part in the form of one or more Global Registered Receipts, then the Depositary shall, in accordance with the other provisions of this Deposit Agreement, execute and deliver one or more Global Registered Receipts evidencing the Receipts of such series, which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Receipts to be represented by such Global Registered Receipt or Receipts,

 

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(ii) shall be registered in the name of the Global Receipt Depository therefor or its nominee.  Each such Global Registered Receipt shall be countersigned by a duly authorized officer of the Corporation.

 

Notwithstanding any other provision of this Deposit Agreement to the contrary, unless otherwise provided in the Global Registered Receipt, a Global Registered Receipt may only be transferred in whole and only by the applicable Global Receipt Depository for such Global Registered Receipt to a nominee of such Global Receipt Depository, or by a nominee of such Global Receipt Depository to such Global Receipt Depository or another nominee of such Global Receipt Depository, or by such Global Receipt Depository or any such nominee to a successor Global Receipt Depository for such Global Registered Receipt selected or approved by the Corporation or to a nominee of such successor Global Receipt Depository.  Except as provided below, owners solely of beneficial interests in a Global Registered Receipt shall not be entitled to receive physical delivery of the Receipts represented by such Global Registered Receipt.  Neither any such beneficial owner nor any direct or indirect participant of a Global Receipt Depository shall have any rights under this Deposit Agreement with respect to any Global Registered Receipt held on their behalf by a Global Receipt Depository and such Global Receipt Depository may be treated by the Corporation, the Depositary and any director, officer, employee or agent of the Corporation or the Depositary as the holder of such Global Registered Receipt for all purposes whatsoever.  Unless and until definitive Receipts are delivered to the owners of the beneficial interests in a Global Registered Receipt, (1) the applicable Global Receipt Depository will make book-entry transfers among its participants and receive and transmit all payments and distributions in respect of the Global Registered Receipts to such participants, in each case, in accordance with its applicable procedures and arrangements, and (2) whenever any notice, payment or other communication to the holders of Global Registered Receipts is required under this Deposit Agreement, the Corporation and the Depositary shall give all such notices, payments and communications specified herein to be given to such holders to the applicable Global Receipt Depository.

 

If an Exchange Event has occurred with respect to any Global Registered Receipt, then, in any such event, the Depositary shall, upon receipt of a written order from the Corporation for the execution and delivery of individual definitive registered Receipts in exchange for such Global Registered Receipt, execute and deliver individual definitive registered Receipts, in authorized denominations and of like tenor and terms in an aggregate principal amount equal to the principal amount of the Global Registered Receipt in exchange for such Global Registered Receipt.

 

Definitive registered Receipts issued in exchange for a Global Registered Receipt pursuant to this Section shall be registered in such names and in such authorized denominations as the Global Receipt Depository for such Global Registered Receipt, pursuant to instructions from its participants, shall instruct the Depositary in writing.  The Depositary shall deliver such Receipts to the persons in whose names such Receipts are so registered.

 

Notwithstanding anything to the contrary in this Deposit Agreement, should the Corporation determine that the Receipts should be issued as a Global Registered Receipt, the parties hereto shall comply with the terms of any Letter of Representations.

 

Section 2.9           Redemption of Series E Preferred Stock.

 

Whenever the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) shall be permitted and shall elect to redeem shares of Series E Preferred Stock in accordance with the terms of the Certificate of Designations, it shall (unless otherwise agreed to in writing with the Depositary) give or cause to be given to the Depositary, not less than thirty (30) nor more than sixty (60) days prior to the Call Date, notice of the date of such proposed redemption of deposited shares of Series E Preferred Stock and of the number of such shares held by the Depositary to be so redeemed and the Redemption Price, which notice shall be accompanied by a certificate from the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) stating that such redemption of deposited shares of Series E Preferred Stock is in accordance with the provisions of the Certificate of Designations.  On the Call Date, provided that the Corporation shall then have paid or caused to be paid in full to the Depositary the Redemption Price of the deposited shares of Series E Preferred Stock to be redeemed, the Depositary shall redeem the number of Depositary Shares representing such Series E Preferred Stock.

 

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Notice of redemption by the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) of shares of Series E Preferred Stock and the proposed simultaneous redemption of the number of Depositary Shares representing the shares of Series E Preferred Stock to be redeemed shall be (1) mailed by first-class mail, postage prepaid, at the respective last addresses as they appear on the records of the Depositary, or (2) transmitted by such other method approved by the Depositary, in its reasonable discretion, in either case not less than thirty (30) nor more than sixty (60) days prior to the Call Date, to the Record Holders of the Receipts evidencing the Depositary Shares to be so redeemed; but neither the failure to mail or transmit any such notice of redemption of Depositary Shares to one or more such Holders nor any defect in any notice of redemption of Depositary Shares to one or more such Holders shall affect the sufficiency of the proceedings for redemption as to the other Holders.  Each such notice shall be prepared by the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) and shall state: (i) the Call Date; (ii) the number of Depositary Shares to be redeemed and, if less than all the Depositary Shares held by any such Holder are to be redeemed, the number of such Depositary Shares held by such Holder to be so redeemed (or the method of determining such number); (iii) the Redemption Price; (iv) the place or places where Receipts evidencing such Depositary Shares are to be surrendered for payment of the Redemption Price; (v) that dividend rights on the Depositary Shares to be redeemed will cease to accrue on the Call Date (unless the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control), shall fail to make available an amount of cash necessary to effect such redemption); and (vi) any other information required by law or by the applicable rules of any national securities exchange upon which the Depositary Shares may be listed or admitted for trading.  In case less than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed shall be selected from Depositary Shares not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Corporation in its sole discretion to be fair and equitable.  For the avoidance of doubt, the Depositary shall give or cause to be given the notice of redemption, as described in the foregoing paragraph, to the Record Holders of the Receipts evidencing the Depositary Shares to be redeemed.

 

Notice having been mailed or transmitted by the Depositary as aforesaid, from and after the Call Date (unless the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) shall have failed to provide the funds necessary to redeem the shares of Series E Preferred Stock evidenced by the Depositary Shares called for redemption):  (i) dividends on the shares of Series E Preferred Stock so called for redemption shall cease to accrue from and after the Call Date, (ii) the Depositary Shares being redeemed from such proceeds shall no longer be deemed to be outstanding and (iii) all rights of the Holders of Receipts evidencing such Depositary Shares (except the right to receive the Redemption Price, without interest thereon ) shall, to the extent of such Depositary Shares, cease and terminate, and (iv) upon surrender in accordance with such redemption notice of the Receipts evidencing any such Depositary Shares called for redemption (properly endorsed or assigned for transfer, if the Depositary or applicable law shall so require), such Depositary Shares shall be redeemed by the Depositary at a redemption price per Depositary Share equal to 1/1,000th of the Redemption Price per share of Series E Preferred Stock so redeemed plus all money and other property, if any, represented by such Depositary Shares.  Subject to applicable escheat laws, any funds deposited by the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) with the Depositary for the redemption of Depositary Shares which remains unclaimed by the Holders thereof at the end of six (6) months from the Call Date will be returned to the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control), after which reversion the Holders of such Depositary Shares shall look only to the general funds of the Corporation (or, if applicable, an acquiring entity in the event of a Change of Ownership or Control) for the payment of such Redemption Price.

 

If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the Holder of such Receipt upon its surrender to the Depositary, together with the redemption payment, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption; provided, however, that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share.  Rather, the Corporation, at its election, shall cause the Depositary to pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the redemption price per Depositary Share, or round up to the next whole Depositary Share.

 

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Section 2.10    Conversion at Option of Holder.

 

Subject to the terms and conditions of this Deposit Agreement and the Certificate of Designations, Receipts may be surrendered at any time by the Holders thereof by delivering a Notice of Conversion to the Depositary instructing it to convert the specified number of shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipts into Common Shares by applying the Conversion Ratio in accordance with the Certificate of Designations.  No fractional Common Shares or scrip representing fractional Common Shares shall be issued upon conversion; rather, the Corporation, at its election, shall cause the Depositary to pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Trading Price on the Conversion Date or round up to the next whole Common Share.

 

A Holder of a Receipt shall surrender such Receipt at the Depositary’s Office or such other office as the Depositary may from time to time designate for such purpose, together with the Notice of Conversion thereof duly completed and executed and a proper assignment of such Receipt to the Corporation or in blank to the Depositary or its agent, thereby instructing the Depositary to cause the conversion of the number of shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt specified in such Notice of Conversion into Conversion Shares in accordance with the terms of the Certificate of Designations.  If required, the Holder must also pay any stock transfer, documentary, stamp or similar taxes not payable by the Corporation pursuant to the Certificate of Designations or Section 3.2 and Section 5.7.  The Conversion Date on which conversion of the Receipts will be deemed to have been effected will be the Trading Day that the Notice of Conversion, completed and executed, is received during regular business hours by the Depositary; provided that, if applicable, the Receipts being surrendered are received by the Depositary within two (2) Trading Days after the Depositary’s receipt of the Notice of Conversion.  In all other cases, the Conversion Date shall be the first Trading Day on which the foregoing requirements with respect to delivery of the Receipts being converted and of the Notice of Conversion to the Depositary have been satisfied.

 

Upon receipt by the Depositary of a Receipt, together with a Notice of Conversion supplied by the holder of such Receipt and instructing the Depositary to convert a specified number of shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt, the Depositary is hereby authorized and instructed to, and shall, as promptly as practicable, (a) give written notice to the transfer agent for the Series E Preferred Stock (if other than the Depositary) of the number of shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt surrendered for conversion and the number of Conversion Shares to be delivered upon conversion of such shares of Series E Preferred Stock and the amount of immediately available funds (if so elected by the Corporation), if any, to be delivered to the holder of such Receipts in payment of any fractional Common Shares otherwise issuable, (b) cancel such Receipt or, if a Registrar for Receipts (other than the Depositary) shall have been appointed, cause such Registrar to cancel such Receipt and (c) deliver to the transfer agent for the Series E Preferred Stock (if other than the Depositary) or any other authorized agent of the Corporation (as specified in writing by the Corporation) certificates for the Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt, which certificates shall thereupon be canceled by the Depositary or such other transfer agent or authorized agent.

 

As promptly as practicable thereafter and not later than five (5) Trading Days after the applicable Conversion Date, (a) the Corporation shall cause to be furnished to the Depositary a certificate or certificates evidencing the Conversion Shares, and, if the Corporation so elects, such amount of immediately available funds, if any, in lieu of receiving fractional shares as specified in a written notice from the Corporation and (b) the Depositary is hereby authorized and instructed to, and shall, deliver at the Depositary’s Office, (i) a certificate or certificates evidencing the Conversion Shares into which the Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt have been converted and which have been provided by the Corporation and (ii) if applicable, cash in lieu of Common Shares which has been provided by the Corporation.  Alternatively, such Conversion Shares and cash in lieu of Common Shares may be delivered by the Depositary electronically through the facilities of DTC.

 

In the event that optional conversion is elected by a Holder of a surrendered Receipt with respect to less than all Depositary Shares evidenced by such Receipt, upon such optional conversion the Depositary shall authenticate, countersign and deliver to such Holder thereof, at the expense of the Corporation, a new Receipt evidencing the Depositary Shares as to which such optional conversion was not elected.

 

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Delivery of Conversion Shares and other property following a conversion pursuant to this Section 2.10 may be made by the delivery of certificates and which, if required by law in the judgment of the Corporation, shall be accompanied by proper instruments of transfer.  If such delivery is to be made otherwise than at the Depositary’s Office, such delivery shall be made, as hereinafter provided, without unreasonable delay, at the risk of any Holder surrendering Receipts, and for the account of such Holder, to such place designated in writing by such Holder.

 

Section 2.11    Conversion Upon Change of Ownership or Control.

 

Within fifteen (15) days following the occurrence of a Change of Ownership or Control, the Corporation (or, if applicable, the acquiring entity) shall (unless otherwise agreed to in writing by the Depositary) give or cause to be given to the Depositary a notice of the occurrence of the Change of Ownership or Control, describing the resulting Change of Ownership or Control Conversion Right.  Such notice shall, in addition, be (1) mailed by first class mail, postage prepaid, at the respective last addresses as they appear on the records of the Depositary, or (2) transmitted by such other method approved by the Depositary, in its reasonable discretion, in either case within fifteen (15) days following the occurrence of a Change of Ownership of Control, to the Record Holders of the Receipts evidencing the Depositary Shares; but neither the failure to mail or transmit any such notice to one or more such Holders nor any defect in any such notice to one or more such Holders shall affect the sufficiency of any proceedings for conversion of Depositary Shares pursuant to this Section 2.11 as to the other Holders.  Each such notice shall be prepared by the Corporation (or, if applicable, the acquiring entity) and at a minimum, shall state: (i) the events constituting the Change of Ownership or Control; (ii) the date of the Change of Ownership or Control; (iii) the method and period for calculating the Common Share Price; (iv) the Change of Ownership or Control Conversion Date; (v) that if, prior to the Change of Ownership or Control Conversion Date, the Corporation has provided or provides notice of its election to redeem all or any portion of the Series E Preferred Shares, the Holder will not be able to convert Depositary Shares and such Depositary Shares shall be redeemed on the related Call Date, even if they have already been tendered for conversion pursuant to the Change of Ownership or Control Conversion Right; (vi) if applicable, the type and amount of Alternative Conversion Consideration entitled to be received per Depositary Share; (vii) the name and address of the paying agent and the Conversion Agent; (viii) any information required by law or by the applicable rules of any exchange or national securities market upon which the Receipts or Depositary Shares may be listed or admitted for trading; and (ix) the procedures that the Holders must follow to exercise the Change of Ownership or Control Conversion Right.

 

In order to exercise the Change of Ownership or Control Conversion Right, a Holder shall be required to surrender, on or before the close of business on the Change of Ownership or Control Conversion Date, such Holder’s Receipts at the Depositary’s Office or such other office as the Depositary may from time to time designate for such purpose, together with a notice of conversion thereof duly completed and executed and a proper assignment of such Receipts to the Corporation or in blank to the Depositary or its agent, thereby instructing the Depositary to cause the conversion of the number of deposited shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipts specified in such notice of conversion into Conversion Consideration in accordance with the terms of the Certificate of Designations.  Notwithstanding the foregoing, if the Depositary Shares are held in global form, such notice shall comply with applicable procedures of DTC.  If required, the Holder must also pay any stock transfer, documentary, stamp or similar taxes not payable by the Corporation pursuant to the Certificate of Designations or Section 3.2 and Section 5.7.

 

Depositary Shares as to which the Change of Ownership or Control Conversion Right has been properly exercised shall be converted into the applicable Conversion Consideration (on a per Depositary Share basis) in accordance with the Change of Ownership or Control Conversion Right on the Change of Ownership or Control Conversion Date, unless, prior to the Change of Ownership or Control Conversion Date, the Corporation has provided or provides notice of its election to redeem such Depositary Shares pursuant to Section 2.9.  If the Corporation elects to redeem such Depositary Shares that would otherwise be converted into the applicable Conversion Consideration on the Change of Ownership or Control Conversion Date, such Depositary Shares shall not be so converted and the Holders shall be entitled to receive the Redemption Price on the Call Date.

 

Upon receipt by the Depositary of a Receipt, together with a notice of conversion supplied by the Holder of such Receipt and instructing the Depositary to convert a specified number of shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt pursuant to the Holder’s exercise of the Change of Ownership or Control Conversion Right, the Depositary is hereby authorized and instructed to, and shall, as

 

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promptly as practicable, (a) give written notice to the transfer agent for the Series E Preferred Stock (if other than the Depositary) of the number of shares of Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt surrendered for conversion and the Conversion Consideration to be delivered upon conversion of such shares of Series E Preferred Stock, (b) cancel such Receipt or, if a Registrar for Receipts (other than the Depositary) shall have been appointed, cause such Registrar to cancel such Receipt, and (c) deliver to the transfer agent for the Series E Preferred Stock (if other than the Depositary) or any other authorized agent of the Corporation (as specified in writing by the Corporation) certificates for the Series E Preferred Stock represented by Depositary Shares as evidenced by such Receipt, which certificates shall thereupon be canceled the Depositary or such other transfer agent or authorized agent.

 

As promptly as practicable thereafter and no later than ten (10) Business Days following the Change of Ownership or Control Conversion Date, the Corporation (or the acquiring entity) shall cause to be furnished to the Depositary the applicable Conversion Consideration (on a per Depositary Share basis) for delivery to the Holders that properly exercised their Change of Control Conversion Right at the Depositary’s Office or electronically through the facilities of DTC.

 

In the event that conversion pursuant to the Change of Ownership or Control Conversion Right is elected by a Holder with respect to less than all Depositary Shares as evidenced by a surrendered Receipt, upon such conversion the Depositary shall authenticate, countersign and deliver to such Holder thereof, at the expense of the Corporation, a new Receipt evidencing the Depositary Shares as to which such conversion was not elected.

 

Delivery of Conversion Consideration following a conversion pursuant to this Section 2.11 may, to the extent applicable, be made by the delivery of certificates and which, if required by law in the judgment of the Corporation, shall be accompanied by proper instruments of transfer.  If such delivery is to be made otherwise than at the Depositary’s Office, such delivery shall be made, as hereinafter provided, without unreasonable delay, at the risk of any Holder surrendering Receipts, and for the account of such Holder, to such place designated in writing by such Holder.

 

ARTICLE III

 

CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS,
 THE CORPORATION AND THE DEPOSITARY

 

Section 3.1           Filing Proofs, Certificates and Other Information.

 

Any Holder of a Receipt may be required from time to time to file such proof of residence, or other matters or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Corporation may reasonably deem necessary or proper.  The Depositary or the Corporation may withhold the delivery, or delay the registration of transfer or redemption, of any Receipt or the conversion of the shares of Series E Preferred Stock represented by the Depositary Shares and evidenced by a Receipt or the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof until such proof or other information is filed or such certificates are executed or such representations and warranties are made.

 

Section 3.2           Payment of Taxes or Other Governmental Charges.

 

Holders of Receipts shall be obligated to make payments to the Depositary of certain taxes, charges and expenses, as provided in Section 5.7.  Registration of transfer of any Receipt or any conversion of deposited shares of Series E Preferred Stock represented by the Depositary Shares evidenced by such Receipt may be refused until any such payment due is made, and any dividends, interest payments or other distributions may be withheld or any part of or all the deposited shares of Series E Preferred Stock or other property represented by the Depositary Shares evidenced by such Receipt and not theretofore sold may be sold for the account of the Holder thereof (after attempting by reasonable means to notify such Holder prior to such sale), and such dividends, interest payments or other distributions or the proceeds of any such sale may be applied to any payment of such taxes, charges or expenses, the Holder of such Receipt remaining liable for any deficiency.

 

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Section 3.3           Warranty as to Series E Preferred Stock.

 

The Corporation hereby represents and warrants that the Series E Preferred Stock, when issued and delivered against payment therefor in accordance with the Certificate of Designations, and with the Underwriting Agreement or the Stock Purchase Agreement, as the case may be, will be duly authorized, validly issued, fully paid and nonassessable.  Such representation and warranty shall survive the deposit of shares of Series E Preferred Stock and the issuance of the related Receipts.

 

Section 3.4           Warranty as to Receipts.

 

The Corporation hereby represents and warrants that the Receipts, when issued against payment therefor in accordance with this Deposit Agreement and the Underwriting Agreement or Stock Purchase Agreement, as the case may be, will be entitled to the rights hereunder, and the benefits of this Deposit Agreement and will represent legal and valid interests in the deposited shares of Series E Preferred Stock.  Such representation and warranty shall survive the deposit of the shares of Series E Preferred Stock and the issuance of the Receipts.

 

Section 3.5           Corporate Existence and Authority of the Depositary.

 

The Depositary hereby represents and warrants that it (i) has been duly incorporated and is validly existing as a limited liability trust company in good standing under the laws of the jurisdiction of its formation; (ii) has full corporate power and authority and possesses all governmental or other franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted; (iii) has been duly qualified as a foreign entity 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, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and (iv) is a bank or trust company having its principal office in the United States of America and having a combined capital and surplus, along with its affiliates, of at least $50,000,000.  The Depositary hereby agrees to promptly inform the Corporation in the event that any of the statements in the foregoing sentence cease to be true in all material respects.

 

This Deposit Agreement has been duly authorized, executed and delivered by the Depositary and constitutes a legal, valid and binding obligation of the Depositary, enforceable against the Depositary in accordance with its terms.  The Depositary hereby agrees to perform its obligations under this Deposit Agreement with the diligent care of a professional provider of such services, in a timely manner and in conformance with all applicable laws, rules and regulations.

 

ARTICLE IV

 

THE DEPOSITED SECURITIES; NOTICES

 

Section 4.1           Cash Distributions.

 

Whenever the Depositary shall receive any cash dividend or other cash distribution on the deposited shares of Series E Preferred Stock, including any cash received upon redemption of any deposited shares of Series E Preferred Stock pursuant to Section 2.9, the Depositary shall, subject to Section 3.1 and Section 3.2, distribute to Record Holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of such dividend or distribution as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such Holders; provided, however, that in case the Corporation or the Depositary shall be required to withhold and shall withhold from any cash dividend or other cash distribution in respect of the deposited shares of Series E Preferred Stock an amount on account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly.  The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any Holder of Receipts a fraction of one cent, and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to Record Holders of Receipts then outstanding.  Each Holder of a Receipt shall provide

 

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the Depositary with its certified tax identification number on a properly completed Form W-8 or W-9, as may be applicable.  Each Holder of a Receipt acknowledges that, in the event of non-compliance with the preceding sentence, the Internal Revenue Code of 1986, as amended, may require withholding by the Depositary of a portion of any of the distributions to be made hereunder.

 

Section 4.2           Distributions Other than Cash.

 

Whenever the Depositary shall receive any distribution other than cash upon the deposited shares of Series E Preferred Stock, the Depositary shall, subject to Section 3.1 and Section 3.2, distribute to Record Holders of Receipts on the record date fixed pursuant to Section 4.4 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by such Receipts held by such Holders, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution.  If in the reasonable opinion of the Depositary, after consultation with the Corporation, such distribution cannot be made proportionately among such Record Holders, or if for any other reason (including any requirement that the Corporation or the Depositary withhold an amount on account of taxes) the Depositary reasonably deems, after consultation with the Corporation, such distribution not to be feasible, the Depositary may, with the prior written approval of the Corporation, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, in a commercially reasonable manner.  The net proceeds of any such sale shall, subject to Section 3.1 and Section 3.2, be distributed or made available for distribution, as the case may be, by the Depositary to Record Holders of Receipts as provided by Section 4.1 in the case of a distribution received in cash.  The Corporation shall not make any distribution of such securities to the Depositary and the Depositary shall not make any distribution of such securities to the Holders of Receipts unless the Corporation shall have provided an opinion of counsel stating that such distribution of securities has been registered under the Securities Act or to the effect that such distribution of securities to the Holders is exempt from registration under the Securities Act.

 

Section 4.3           Subscription Rights, Preferences or Privileges.

 

If the Corporation shall at any time offer or cause to be offered to the persons in whose names the Series E Preferred Stock is recorded on the books of the Corporation any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the Record Holders of Receipts in such manner as the Corporation shall direct and the Depositary shall agree, either by the issue to such Record Holders of warrants representing such rights, preferences or privileges or by such other method as may be approved by the Corporation in its discretion with the acknowledgement of the Depositary; provided, however, that (i) if at the time of issue or offer of any such rights, preferences or privileges the Corporation determines that it is not lawful or (after consultation with the Depositary) not feasible to make such rights, preferences or privileges available to Holders of Receipts by the issue of warrants or otherwise, or (ii) if and to the extent so instructed by Holders of Receipts who do not desire to exercise such rights, preferences or privileges, then the Corporation, in its discretion (with acknowledgement of the Depositary, in any case where the Corporation has determined that it is not feasible to make such rights, preferences or privileges available), may, if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges at public or private sale, at such place or places and upon such terms as it may deem proper.  The net proceeds of any such sale shall, subject to Section 3.1 and Section 3.2, be distributed by the Depositary to the Record Holders of Receipts entitled thereto as provided by Section 4.1 in the case of a distribution received in cash.

 

The Corporation shall notify the Depositary whether registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for Holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, and the Corporation agrees with the Depositary that it will file promptly a registration statement pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such Holders to exercise such rights, preferences or privileges.  In no event shall the Depositary make available to the Holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such registration statement shall have become effective, or the Corporation shall have

 

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provided to the Depositary an opinion of counsel to the effect that the offer and sale of such securities to the Holders are exempt from registration under the Securities Act.

 

If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to Holders of Receipts, the Corporation will use its reasonable best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such Holders to exercise such rights, preferences or privileges.

 

Section 4.4           Notice of Dividends, etc.; Fixing Record Date for Holders of Receipts.

 

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or if rights, preferences or privileges shall at any time be offered, with respect to the deposited Series E Preferred Stock, or whenever the Depositary shall receive notice of (i) any meeting at which holders of the Series E Preferred Stock are entitled to vote or of which holders of the Series E Preferred Stock are entitled to notice, or (ii) any election on the part of the Corporation to redeem any shares of such Series E Preferred Stock or whenever the Depositary and the Corporation shall decide it is appropriate, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Corporation with respect to or otherwise in accordance with the terms of the Series E Preferred Stock) for the determination of the Holders of Receipts who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, or who shall be entitled to notice of such meeting, whose Depositary Shares are to be so redeemed or for any other appropriate reasons.

 

Section 4.5           Voting Rights.

 

Subject to the provisions of the Certificate of Designations, upon receipt of notice of any meeting at which the holders of the Series E Preferred Stock are entitled to vote or of the solicitation of a written consent of the holders of the Series E Preferred Stock, the Depositary shall, as soon as practicable thereafter, mail or transmit by such other method approved by the Depositary, in its reasonable discretion, to the Record Holders of Receipts a notice prepared by the Corporation which shall contain (i) such information as is contained in such notice of meeting or solicitation of written consent, and (ii) a statement that the Holders may, subject to any applicable restrictions, instruct the Depositary as to the exercise of the voting or written consent rights pertaining to the amount of Series E Preferred Stock represented by their respective Depositary Shares (including an express indication that instructions may be given to the Depositary to give a discretionary proxy to a person designated by the Corporation) and (iii) a brief statement as to the manner in which such instructions may be given.  Upon the written request of the Holders of Receipts on the relevant record date, the Depositary shall use its best efforts to vote or cause to be voted, or to consent in writing, in accordance with the instructions set forth in such requests, the maximum number of whole shares of Series E Preferred Stock represented by the Depositary Shares evidenced by all Receipts as to which any particular voting or written consent instructions are received.  The Corporation hereby agrees to take all reasonable action which may be deemed necessary by the Depositary in order to enable the Depositary to vote such Series E Preferred Stock, cause such Series E Preferred Stock to be voted or provide written consent with respect to such Series E Preferred Stock.  In the absence of specific instructions from Holders of Receipts, the Depositary will vote the Series E Preferred Stock, or provide written consent with respect to the Series E Preferred Stock, represented by the Depositary Shares evidenced by the Receipts of such Holders proportionately with votes cast or written consents provided pursuant to instructions received from the other Holders.

 

Section 4.6           Changes Affecting Deposited Securities and Reclassifications, Recapitalizations, etc.

 

Upon any change in par or stated value, split-up, combination or any other reclassification of the Series E Preferred Stock, subject to the provisions of the Certificate of Designations, or upon any recapitalization, reorganization, merger or consolidation affecting the Corporation or to which it is a party, the Corporation may, in its discretion and with the acknowledgement of the Depositary, (i) make such adjustments as are certified by the Corporation in the fraction of an interest represented by one Depositary Share in one share of Series E Preferred Stock, or in the Dividend Rate, the liquidation preference set forth in Section 4 of the Certificate of Designations, the redemption price set forth in Section 5 of the Certificate of Designations, the Conversion Price, the Conversion

 

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Ratio or any other amount provided for the in Certificate of Designations, in each case in accordance with applicable provisions of the Certificate of Designations or as may be necessary fully to reflect the effects of such change in par or stated value, split-up, combination or other reclassification of the Series E Preferred Stock, or of such recapitalization, reorganization, merger or consolidation and (ii) treat any securities which shall be received by the Depositary in exchange for or upon conversion of or in respect of the Series E Preferred Stock as new deposited securities so received in exchange for or upon conversion or in respect of such Series E Preferred Stock.  In any such case, the Depositary may, in its discretion and with the written approval of the Corporation, execute and deliver additional Receipts or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities.  Anything to the contrary herein notwithstanding, Holders of Receipts shall have the right from and after the effective date of any such change in par or stated value, split-up, combination or other reclassification of the Series E Preferred Stock or any such recapitalization, reorganization, merger or consolidation to surrender such Receipts to the Depositary with instructions to convert, exchange or surrender the Series E Preferred Stock represented thereby only into or for, as the case may be, the kind and amount of shares and other securities and property and cash into which the Series E Preferred Stock represented by such Receipts might have been converted or for which such Series E Preferred Stock might have been exchanged or surrendered immediately prior to the effective date of such transaction.

 

Section 4.7           Delivery of Reports.

 

The Depositary shall furnish to Holders of Receipts any reports and communications received from the Corporation which are received by the Depositary and which the Corporation is required to furnish to the holders of the Series E Preferred Stock.  In addition, the Depositary will make available for inspection by Receipt Holders at the Depositary’s Office, and at such other places as it may from time to time deem advisable, any reports and communications received from the Corporation which are received by the Depositary.

 

Section 4.8           Lists of Receipt Holders.

 

Reasonably promptly, upon request from time to time by the Corporation, the Depositary shall furnish to it a list, as of the most recent practicable date, of the names, addresses and holdings of Depositary Shares of all registered Holders of Receipts.

 

ARTICLE V

 

THE DEPOSITARY, THE DEPOSITARY’S
 AGENTS, THE REGISTRAR AND THE CORPORATION

 

Section 5.1           Maintenance of Offices, Agencies and Transfer Books by the Depositary; Registrar.

 

Upon execution of this Deposit Agreement, the Depositary shall maintain at the Depositary’s Office facilities for the execution and delivery, registration and registration of transfer, surrender and exchange of, and redemption and conversion of Receipts, and at the offices of the Depositary’s Agents, if any, facilities for any of the foregoing services, all in accordance with the provisions of this Deposit Agreement.

 

The Depositary shall keep books at the Depositary’s Office for the registration and registration of transfer of Receipts, which books during normal business hours shall be open for inspection by the Record Holders of Receipts; provided that any such Holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person’s interest as an owner of Depositary Shares evidenced by the Receipts.

 

The Depositary may close such books, at any time or from time to time, when deemed expedient by it, as determined in its reasonable judgment, in connection with the performance of its duties hereunder.

 

The Depositary may, with the approval of the Corporation, appoint a Registrar for registration of the Receipts or the Depositary Shares evidenced thereby.  If the Receipts or the Depositary Shares evidenced thereby or the Series E Preferred Stock represented by such Depositary Shares shall be listed on one or more national securities

 

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exchanges, the Depositary will appoint a Registrar (acceptable to the Corporation) for registration of the Receipts or Depositary Shares in accordance with any requirements of such exchange.  Such Registrar (which may be the Depositary if so permitted by the requirements of any such exchange) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Corporation.  If the Receipts or Depositary Shares are listed on one or more other securities exchanges, the Depositary will, at the request of the Corporation, arrange such facilities for the delivery, registration, registration of transfer, surrender and exchange of the Receipts, or Depositary Shares as may be required by law or applicable securities exchange regulation.

 

Section 5.2           Prevention of or Delay in Performance by the Depositary, the Depositary’s Agents, the Registrar or the Corporation.

 

None of the Depositary, any Depositary’s Agent, any Registrar or the Corporation shall incur any liability to any Holder of a Receipt if by reason of any provision of any present or future law, or regulation thereunder, of the United States of America or of any other governmental authority or, in the case of the Depositary, the Depositary’s Agent or the Registrar, by reason of any provision, present or future, of the Corporation’s Certificate of Incorporation, as amended (including the Certificate of Designations) or by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, the Depositary’s Agent, the Registrar or the Corporation shall be prevented or forbidden from, or subjected to any penalty on account of, doing or performing any act or thing which the terms of this Deposit Agreement provide shall be done or performed.  None of the Depositary, any Depositary’s Agent, any Registrar or the Corporation shall incur liability to any Holder of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which the terms of this Deposit Agreement shall provide shall or may be done or performed, or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement except as otherwise explicitly set forth in this Deposit Agreement.

 

Section 5.3           Obligations of the Depositary, the Depositary’s Agents, the Registrar and the Corporation.

 

None of the Depositary, any Depositary’s Agent, any Registrar or the Corporation assumes any obligation or shall be subject to any liability under this Deposit Agreement to Holders of Receipts other than for its gross negligence, intentional misconduct, bad faith or fraud.

 

None of the Depositary, any Depositary’s Agent, any Registrar or the Corporation shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of the Series E Preferred Stock, the Depositary Shares or the Receipts which in its reasonable opinion may involve it in expense or liability unless indemnity reasonably satisfactory to it against all reasonable out-of-pocket expenses and liability be furnished as incurred.

 

None of the Depositary, any Depositary’s Agent, any Registrar or the Corporation shall be liable for any action or any failure to act by it in good faith reliance upon the written advice of legal counsel or accountants, or information from any person presenting Series E Preferred Stock for deposit, any Holder of a Receipt or any other person believed by it in good faith to be competent to give such information.  The Depositary, any Depositary’s Agent, any Registrar and the Corporation may each rely and shall each be protected in acting upon or omitting to act upon any written notice, request, direction or other document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties.

 

The Depositary shall not be responsible for any failure to carry out any instruction to vote or provide written consent with respect to any of the shares of Series E Preferred Stock or for the manner or effect of any such vote or written consent made, as long as any such action or non-action is not taken in bad faith.

 

The Depositary, its parent, affiliates or subsidiaries, the Depositary’s Agents, and the Registrar may own, buy, sell and deal in any class of securities of the Corporation and its affiliates and in Receipts or Depositary Shares or become pecuniarily interested in any transaction in which the Corporation or its affiliates may be interested or contract with or lend money to or otherwise act as fully or as freely as if it were not the Depositary, parent, affiliate or subsidiary or Depositary’s Agent or Registrar hereunder.  The Depositary may also act as trustee, transfer agent or registrar of any of the securities of the Corporation and its affiliates.

 

16

 

The Depositary shall not be under any liability for interest on any monies at any time received by it pursuant to any of the provisions of this Deposit Agreement or of the Receipts, the Depositary Shares or the Series E Preferred Stock nor shall it be obligated to segregate such monies from other monies held by it, except as required by law.  The Depositary shall not be responsible for advancing funds on behalf of the Corporation and shall have no duty or obligation to make any payments if it has not timely received sufficient funds to make timely payments.

 

In the event the Depositary, in its reasonable judgment, believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Depositary hereunder, or in the administration of any of the provisions of this Deposit Agreement, the Depositary shall deem it necessary or desirable that a matter be proved or established prior to taking, omitting or suffering to take any action hereunder, the Depositary may, in its sole discretion upon written notice to the Corporation, refrain from taking any action and shall be fully protected and shall not be liable in any way to the Corporation, any Holders of Receipts or any other person or entity for refraining from taking such action, unless the Depositary receives written instructions or a certificate signed by an authorized representative of the Corporation which eliminates such ambiguity or uncertainty to the satisfaction of the Depositary or which proves or establishes the applicable matter to the satisfaction of the Depositary.

 

Section 5.4    Resignation and Removal of the Depositary; Appointment of Successor Depositary.

 

The Depositary may at any time resign as Depositary hereunder by delivering notice of its election to do so to the Corporation, such resignation to take effect upon the appointment of a successor Depositary and its acceptance of such appointment as hereinafter provided.

 

The Depositary may at any time be removed by the Corporation by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor Depositary hereunder and its acceptance of such appointment as hereinafter provided.

 

In case at any time the Depositary acting hereunder shall resign or be removed, the Corporation shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor Depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus, along with its affiliates, of at least $50,000,000.  If no successor Depositary shall have been so appointed and have accepted appointment within 60 days after delivery of such notice, the resigning or removed Depositary may petition any court of competent jurisdiction for the appointment of a successor Depositary.  Every successor Depositary shall execute and deliver to its predecessor and to the Corporation an instrument in writing accepting its appointment hereunder, and thereupon such successor Depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Corporation, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the deposited shares of Series E Preferred Stock and any moneys or property held hereunder to such successor, and shall deliver to such successor a list of the Record Holders of all outstanding Receipts and such records, books and other information in its possession relating thereto.  Any successor Depositary shall promptly mail or transmit by such other method approved by such successor Depositary, in its reasonable discretion, notice of its appointment to the Record Holders of Receipts.

 

Any entity into or with which the Depositary may be merged, consolidated or converted shall be the successor of the Depositary without the execution or filing of any document or any further act, and notice thereof shall not be required hereunder.  Such successor Depositary may authenticate the Receipts in the name of the predecessor Depositary or in its own name as successor Depositary.

 

Section 5.5    Corporate Notices and Reports.

 

The Corporation agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the Record Holders of Receipts, in each case at the addresses recorded in the Depositary’s books, copies of all notices and reports (including, without limitation, financial statements) required by law, by the rules of any national securities exchange upon which the Depositary Shares or the Receipts are listed or by the Corporation’s

 

17

 

Certificate of Incorporation, as amended (including the Certificate of Designations), to be furnished to the Record Holders of Receipts.  Such transmission will be at the Corporation’s expense and the Corporation will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request.  In addition, the Depositary will transmit to the Record Holders of Receipts at the Corporation’s expense such other documents as may be requested by the Corporation.  Notwithstanding the foregoing, the Corporation shall have no obligation to transmit any such documents that are actually filed by the Corporation on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system of the Securities and Exchange Commission, unless specifically requested by a Holder in writing.

 

Section 5.6    Indemnification.

 

The Depositary will indemnify the Corporation and hold it harmless from any loss, liability or expense actually incurred (including the reasonable costs and expenses of defending itself) which may arise out of acts performed or omitted by the Depositary, including when such Depositary acts as Registrar, or the Depositary’s Agents in connection with this Deposit Agreement due to its or their gross negligence, intentional misconduct, bad faith or fraud.  The indemnification obligations of the Depositary set forth in this Section 5.6 shall survive any termination of this Deposit Agreement and any succession of any Depositary, Registrar or Depositary’s Agent, in accordance with Section 5.4.

 

Notwithstanding Section 5.3 to the contrary, the Corporation shall indemnify the Depositary, any Depositary’s Agent and any Registrar against, and hold each of them harmless from, any loss, liability or reasonable out-of-pocket expense (including the reasonable costs and expenses of defending itself) which may arise solely from third-party claims based directly on acts performed or omitted in connection with this Deposit Agreement and the Receipts by the Depositary, any Registrar or any of their respective agents (including any Depositary’s Agent) and any transactions or documents contemplated hereby, except for any liability arising out of gross negligence, intentional misconduct, bad faith or fraud on the respective parts of any such person or persons.  For the avoidance of doubt, such indemnity shall not cover any consequential, indirect, partial, special and incidental damages.  The obligations of the Corporation set forth in this Section 5.6 shall survive any succession of any Depositary, Registrar or Depositary’s Agent, in accordance with Section 5.4.

 

Promptly following becoming aware of circumstances that might give rise to a claim for indemnification under this Deposit Agreement, a party seeking indemnification hereunder (the “Indemnified Party”) shall notify the other party (the “Indemnifying Party”) of the relevant claim; provided that failure to so notify shall not affect the Indemnified Party’s right to indemnification hereunder, except to the extent the Indemnifying Party is materially prejudiced thereby.  The Indemnifying Party shall, at its own expense, be entitled to control and direct the investigation and defense of any claim, and shall have the right to settle any such claim without the consent of the Indemnified Party; provided that such settlement (i) fully releases the Indemnified Party from any liability and provides no admission of wrongdoing, and (ii) does not subject the Indemnified Party to any additional obligation, whether financial or otherwise.  In the event that any such settlement does not meet the requirements of (i) and (ii) above, then the Indemnified Party must consent to such settlement in writing, which consent shall not be unreasonably withheld, conditioned or delayed.  The Indemnified Party shall provide reasonable assistance to the Indemnifying Party in connection with the Indemnifying Party’s defense of a claim and may participate in the defense of a claim with counsel of its own choosing at its own cost and expense, unless the Indemnifying Party specifically authorizes the retaining of such counsel.

 

Section 5.7    Fees, Charges and Expenses.

 

The Corporation agrees promptly to pay the Depositary the compensation to be agreed upon with the Corporation for all services rendered by the Depositary hereunder and to reimburse the Depositary for its reasonable out-of-pocket expenses (including reasonable counsel fees and expenses) actually incurred by the Depositary without gross negligence, willful misconduct, bad faith or fraud on its part (or on the part of any agent or Depositary Agent) in connection with the services rendered by it (or such agent or Depositary Agent) hereunder.  Unless otherwise provided herein, the Corporation shall pay all charges of the Depositary in connection with the deposit of shares of Series E Preferred Stock and the initial issuance of Depositary Shares in connection with the closing of the transactions contemplated by the Stock Purchase Agreement and the Underwriting Agreement, any subsequent transaction involving the issuance of shares of Series E Preferred Stock to be represented by Depositary Shares and

 

18

 

any redemption, conversion or exchange of the deposited shares of Series E Preferred Stock at the option of the Corporation or at the request of a Holder of Receipts.  The Corporation shall pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements.  All other transfer and other taxes and governmental charges shall be at the expense of Holders of Receipts.  If, at the request of a Holder of Receipts, the Depositary incurs charges or expenses for which the Corporation is not otherwise liable hereunder, such Holder will be liable for such charges and expenses; provided, however, that the Depositary may, at its sole option, require a Holder of a Receipt to prepay the Depositary any charge or expense the Depositary has been asked to incur at the request of such Holder of Receipts.  The Depositary shall present its statement for charges and expenses to the Corporation at such intervals as the Corporation and the Depositary may agree.

 

Section 5.8    Tax Compliance.

 

The Depositary, on its own behalf and on behalf of the Corporation, 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 Depositary Shares or (ii) the issuance, delivery, holding, transfer, conversion, redemption or exercise of rights under the Receipts or the Depositary Shares.  Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent.

 

The Depositary shall comply with any direction received from the Corporation with respect to the application of such requirements to particular payments or holders or in other particular circumstances, and may for purposes of this Deposit Agreement rely on any such direction in accordance with the provisions of Section 5.3 hereof.

 

The Depositary shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available on request to the Corporation or to its authorized representatives.

 

ARTICLE VI

 

AMENDMENT AND TERMINATION

 

Section 6.1    Amendment.

 

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Corporation and the Depositary in any respect which they may deem necessary or desirable; provided, however, that no such amendment which shall materially and adversely alter the rights of the Holders of Receipts shall be effective against the Holders of Receipts unless such amendment shall have been approved by the Holders of Receipts representing in the aggregate at least a two-thirds majority of the Depositary Shares then outstanding.  Every Holder of an outstanding Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby.  In no event shall any amendment impair the right, subject to the provisions of Section 2.5 and Section 2.6 and Article III, of any owner of Depositary Shares to surrender any Receipt evidencing such Depositary Shares to the Depositary with instructions to deliver to the Holder the deposited shares of Series E Preferred Stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law or the rules and regulations of any governmental body, agency or commission, or applicable securities exchange.

 

Section 6.2    Termination.

 

This Deposit Agreement may be terminated by the Corporation or the Depositary only if (i) all outstanding Depositary Shares issued hereunder have been redeemed pursuant to Section 2.9 or converted pursuant to Section 2.10 or Section 2.11, (ii) there shall have been made a final distribution in respect of the Series E Preferred Stock in connection with any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation and such distribution shall have been distributed to the Holders of Receipts representing Depositary Shares pursuant

 

19

 

to Section 4.1 or Section 4.2, as applicable, or (iii) upon the consent of the Holders of Receipts representing in the aggregate not less than two-thirds of the Depositary Shares outstanding.

 

Upon the termination of this Deposit Agreement, the Corporation shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary’s Agent and any Registrar under Section 5.6 and Section 5.7; provided, however, that Section 5.3 and Section 5.6 shall survive the termination of this Deposit Agreement.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.1    Counterparts.

 

This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.  A signature to this Deposit Agreement transmitted electronically shall have the same authority, effect and enforceability as an original signature.

 

Section 7.2    Exclusive Benefit of Parties.

 

This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever.

 

Section 7.3    Invalidity of Provisions.

 

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

 

Section 7.4    Notices.

 

Any and all notices to be given to the Corporation hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or overnight delivery service, or by telegram or facsimile transmission or electronic mail, confirmed by letter, addressed to the Corporation at:

 

Magnum Hunter Resources Corporation

777 Post Oak Boulevard, Suite 650

Houston, Texas  77056

Attention:  Corporate Secretary

 

or at any other addresses of which the Corporation shall have notified the Depositary in writing, but in any event with a copy, which shall not constitute notice, to the attention of the General Counsel, at the same address.

 

Any and all notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or overnight delivery service, or by telegram or facsimile transmission or electronic mail confirmed by letter, addressed to the Depositary at:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attention:  Michael Nespoli, Senior Vice President

Facsimile No.:  718 921 8217

 

20

 

Email:  IPODepartment@amstock.com

 

or at any other addresses of which the Depositary shall have notified the Corporation in writing.

 

Except as otherwise provided herein, any and all notices to be given to any Record Holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, facsimile transmission or confirmed by letter, addressed to such Record Holder at the address of such Record Holder as it appears on the books of the Depositary, or if such Holder shall have timely filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address designated in such request.  Delivery of a notice sent by mail or by facsimile transmission as provided in the previous sentence shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a facsimile transmission) is deposited, postage prepaid, in a post office letter box; provided, that the Depositary or the Corporation may, however, act upon any facsimile transmission received by it from the other or from any Holder of a Receipt, notwithstanding that such facsimile transmission shall not subsequently be confirmed by letter or as aforesaid.

 

Section 7.5    Depositary’s Agents.

 

The Depositary may from time to time appoint Depositary’s Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary’s Agents and vary or terminate the appointment of such Depositary’s Agents.  The Depositary will promptly notify the Corporation of any such action.

 

Section 7.6    Appointment of Registrar, Dividend Disbursing Agent, Redemption Agent and Conversion Agent in Respect of the Series E Preferred Stock.

 

The Corporation hereby also appoints the Depositary as Registrar, dividend disbursing agent, redemption agent and Conversion Agent in respect of the Receipts, and the Depositary hereby accepts such appointments.

 

Section 7.7    Governing Law.

 

This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable conflicts of law principles.

 

Section 7.8    Inspection of Deposit Agreement.

 

Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary’s Agents and shall be made available for inspection during business hours upon reasonable notice to the Depositary by any Holder of a Receipt.

 

Section 7.9    Headings.

 

The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or the Receipts or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts.

 

Section 7.10 Confidentiality.

 

The Depositary agrees that all books, records, information and data pertaining to the business of the Corporation, including, inter alia, personal, non-public Holder information, which are exchanged or received pursuant to the negotiation or the carrying out of this Deposit Agreement, shall remain confidential, and shall not be voluntarily disclosed to any other person by the Depositary, except as may be required by law or legal process.

 

21

 

Section 7.11 Further Assurances

 

From time-to-time and after the date hereof, the Corporation agrees that it will perform, acknowledge and deliver or cause to be performed, acknowledged and delivered all such further and other acts, documents, instruments and assurances as may be reasonably required by the Depositary for the carrying out or performing by the Depositary of the provisions of this Deposit Agreement.

 

Section 7.12 Holders of Receipts Are Parties.

 

The Holders of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof.  Each Holder of Receipts shall become a party hereto upon acceptance by such Holder of Receipts of delivery of one or more Receipts issued in accordance with the terms hereof.

 

[Remainder of page intentionally left blank; signature page follows.]

 

22

 

The undersigned has executed this Deposit Agreement as of the date first set forth above.

 

 

	
 
    	
MAGNUM   HUNTER RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul M. Johnston
    
	
 
    	
 
    	
Paul   M. Johnston
    
	
 
    	
 
    	
Senior   Vice President & General Counsel
    

 

[Signature Page to Deposit Agreement]

 

 

The undersigned has executed this Deposit Agreement as of the date first set forth above.

 

 

	
 
    	
AMERICAN   STOCK TRANSFER & TRUST COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paula Caroppoli
    
	
 
    	
Name:   
    	
Paula   Caroppoli
    
	
 
    	
Title:
    	
Senior   Vice President
    
					

 

[Signature Page to Deposit Agreement]

 

 

EXHIBIT A

 

FORM OF RECEIPT

 

[FORM OF FACE OF RECEIPT]

 

[IF RESTRICTED SECURITIES ARE ISSUED:  THE DEPOSITARY SHARES REPRESENTED BY THIS RECEIPT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT” ), OR ANY STATE SECURITIES LAWS. NEITHER THE DEPOSITARY RECEIPTS NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THE DEPOSITARY SHARES REPRESENTED BY THIS RECEIPT PRIOR TO THE DATE AFTER THE ORIGINAL ISSUE DATE HEREOF ON WHICH THE DEPOSITARY SHARES MAY BE RESOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO MAGNUM HUNTER RESOURCES CORPORATION (THE “CORPORATION”) OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE CORPORATION’S AND THE DEPOSITARY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS RECEIPT IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE DEPOSITARY. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]

 

[IF GLOBAL RECEIPT IS ISSUED:  UNLESS THIS RECEIPT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO MAGNUM HUNTER RESOURCES CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

	
Certificate   Number:
    	
Number of Depositary   Shares:
    

 

DEPOSITARY RECEIPT FOR DEPOSITARY SHARES,
 EACH REPRESENTING 1/1,000th OF ONE SHARE

OF

8% SERIES E CUMULATIVE CONVERTIBLE PREFERRED STOCK

OF

MAGNUM HUNTER RESOURCES CORPORATION

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

CUSIP 55973B 409

 

SEE REVERSE FOR CERTAIN DEFINITIONS

 

A-1

 

Dividend Payment Dates:  On the last day of calendar day of each month, beginning [·], 2012, when and as declared by the Board of Directors.

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Depositary (the “Depositary”), hereby certifies that [                                       ] [Cede & Co.] is the registered owner of [·] [                                       ] depositary shares (“Depositary Shares”), each Depositary Share representing 1/1,000th of one share of 8% Series E Cumulative Convertible Preferred Stock, liquidation preference $25,000 per share plus accrued and unpaid dividends thereon, par value $0.01 per share (the “Series E Preferred Stock”), of Magnum Hunter Resources Corporation, a Delaware corporation (the “Corporation”), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement, dated as of November 2, 2012 (the “Deposit Agreement”), among the Corporation, the Depositary and the Holders from time to time of the Depositary Receipts.  By accepting this Depositary Receipt, the Holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement.  This Depositary Receipt shall not be valid or obligatory for any purpose or entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized officer or, if executed in facsimile by the Depositary, countersigned by a Registrar in respect of the Depositary Receipts by the manual or facsimile signature of a duly authorized officer thereof, and by the manual or facsimile signature of a duly authorized officer of the Corporation.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
MAGNUM   HUNTER RESOURCES CORPORATION
    	
 
    	
AMERICAN   STOCK TRANSFER & TRUST COMPANY, LLC, as Depositary
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
 
    	
Authorized   Officer
    
	
Title:
    	
 
    	
 
    
					

 

A-2

 

[FORM OF REVERSE OF RECEIPT]

 

MAGNUM HUNTER RESOURCES CORPORATION

 

MAGNUM HUNTER RESOURCES CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH RECEIPTHOLDER WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A COPY OR SUMMARY OF THE CERTIFICATE OF DESIGNATIONS OF 8% SERIES E CUMULATIVE CONVERTIBLE PREFERRED STOCK OF MAGNUM HUNTER RESOURCES CORPORATION.  ANY SUCH REQUEST IS TO BE ADDRESSED TO THE DEPOSITARY NAMED ON THE FACE OF THIS RECEIPT OR TO THE CORPORATION.

 

EXPLANATION OF ABBREVIATIONS

 

The following abbreviations when used in the form of ownership on the face of this certificate shall be construed as though they were written out in full according to applicable laws or regulations.  Abbreviations in addition to those appearing below may be used.

 

	
Abbreviation
    	
 
    	
Equivalent Word
    	
 
    	
Abbreviation
    	
 
    	
Equivalent Word
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JT   TEN
    	
 
    	
As   joint tenants, with right of survivorship and not as tenants in common
    	
 
    	
TEN   BY ENT
    	
 
    	
As   tenants by the entireties
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TEN   IN COM
    	
 
    	
As   tenants in common
    	
 
    	
UNIF   GIFT MIN ACT
    	
 
    	
Uniform   Gifts to Minors Act
    

 

	
Abbreviation
    	
 
    	
Equivalent Word
    	
 
    	
Abbreviation
    	
 
    	
Equivalent Word
    	
 
    	
Abbreviation
    	
 
    	
Equivalent Word
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ADM
    	
 
    	
Administrator(s),   Administratrix
    	
 
    	
EX
    	
 
    	
Executor(s),   Executrix
    	
 
    	
PL
    	
 
    	
Public   Law
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AGMT
    	
 
    	
Agreement
    	
 
    	
FBO
    	
 
    	
For   the benefit of
    	
 
    	
TR
    	
 
    	
(As)   trustee(s), for, of
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ART
    	
 
    	
Article
    	
 
    	
FDN
    	
 
    	
Foundation
    	
 
    	
U
    	
 
    	
Under
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CH
    	
 
    	
Chapter
    	
 
    	
GDN
    	
 
    	
Guardian(s)
    	
 
    	
UA
    	
 
    	
Under   Agreement
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CUST
    	
 
    	
Custodian   for
    	
 
    	
GDNSHP
    	
 
    	
Guardianship
    	
 
    	
UW
    	
 
    	
Under   will of, Of will of, Under last will & testament
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
DEC
    	
 
    	
Declaration
    	
 
    	
MIN
    	
 
    	
Minor(s)
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
EST
    	
 
    	
Estate,   of Estate of
    	
 
    	
PAR
    	
 
    	
Paragraph
    	
 
    	
 
    	
 
    	
 
    

 

A-3

 

For value received, ____________________ hereby sell(s), assign(s) and transfer(s) unto ________________________________ 

INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _________________________________ 

PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE 

 

 

 

 

 

____________________________ Depositary Shares represented by the within Receipt, and do(es) hereby irrevocably constitute and appoint ______________________ as Attorney to transfer the said Depositary Shares on the books of the within named Depositary with full power of substitution in the premises.

 

Dated:

 

NOTICE: The signature to the assignment must correspond with the name as written upon the face of this Receipt in every particular, without alteration or enlargement or any change whatsoever.

 

SIGNATURE GUARANTEED

 

NOTICE: If applicable, the signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations, and credit unions with membership in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

 

A-4

 

EXHIBIT B

 

OFFICER’S CERTIFICATE

 

I, [name], [title] of Magnum Hunter Resources Corporation (the “Corporation”), hereby certify that pursuant to the terms of the Certificate of Designations (the “Certificate of Designations”) of Rights and Preferences of 8% Series E Cumulative Convertible Preferred Stock (the “Series E Preferred Stock”), filed with the Secretary of State of the State of Delaware on November [·], 2012 and effective on November [·], 2012, and pursuant to resolutions adopted by Board of Directors of the Corporation on October 5, 2012, the Corporation has established the Series E Preferred Stock which the Corporation desires to deposit with the Depositary for the purpose of being subject to the terms and conditions of the Deposit Agreement (the “Deposit Agreement”), dated November 2, 2012, by and among the Corporation, American Stock Transfer & Trust Company, LLC, as Depositary, and the Holders of Receipts issued thereunder from time to time.  In connection therewith, the Board of Directors of the Corporation or a duly authorized committee thereof has authorized the terms and conditions with respect to the Series E Preferred Stock as described in the Certificate of Designations attached as Annex A hereto.  Any terms of the Series E Preferred Stock that are not so described in the Certificate of Designations and any terms of the Receipts representing such Series E Preferred Stock that are not described in the Deposit Agreement are described below:

 

Aggregate Number of shares of Series E Preferred Stock issued on the day hereof: [·]

 

CUSIP Number for Receipt: [·]

 

Denomination of Depositary Share per share of Series E Preferred Stock (if different than 1/1,000th ownership interest in a share of Series E Preferred Stock): [·]

 

Redemption Provisions (if different than as set forth in the Deposit Agreement): [·]

 

Conversion Provisions (if different than as set forth in the Deposit Agreement): [·]

 

Depositary: American Stock Transfer & Trust Company, LLC

 

All capitalized terms used but not defined herein shall have such meaning as ascribed thereto in the Deposit Agreement.

 

This certificate is dated:

 

 

	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

B-1

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