Document:

Exhibit 10.6

 

SPONSOR WARRANTS
PURCHASE AGREEMENT

 

THIS SPONSOR WARRANTS
PURCHASE AGREEMENT, dated as of April 20, 2016 (as it may from time to time be amended and including all exhibits referenced herein,
this “Agreement”), is entered into by and between Matlin & Partners Acquisition Corporation, a Delaware
corporation (the “Company”), and Matlin & Partners Acquisition Sponsor LLC, a Delaware limited liability
company (the “Purchaser”).

 

The Company intends
to consummate a public offering of the Company’s units (the “Public Offering”), each unit consisting of
one share of the Company’s Class A common stock, par value $0.0001 per share (a “Share”), and one warrant.
Each warrant entitles the holder to purchase one-half of one Share at an exercise price of $5.75 per half Share. The Purchaser
has agreed to purchase an aggregate of 13,500,000 warrants (or up to 15,000,000 warrants if the over-allotment option in connection
with the Public Offering is exercised in full) (the “Sponsor Warrants”), each Sponsor Warrant entitling the
holder to purchase one Share at an exercise price of $5.75 per half Share.

 

NOW THEREFORE, in
consideration of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:

 

AGREEMENT

 

Section 1. Authorization, Purchase
and Sale; Terms of the Sponsor Warrants.

 

A. Authorization
of the Sponsor Warrants. The Company has duly authorized the issuance and sale of the Sponsor Warrants to the Purchaser.

 

B. Purchase
and Sale of the Sponsor Warrants.

 

(i) As payment in full
for the 13,500,000 Sponsor Warrants being purchased under this Agreement, Purchaser shall pay $6,750,000 (the “Purchase
Price”), by wire transfer of immediately available funds or by such other method as may be reasonably acceptable to the
Company, to the trust account (the “Trust Account”) at a financial institution to be chosen by the Company,
maintained by Continental Stock Transfer & Trust Company, LLC, acting as trustee, or into an escrow account maintained by Ellenoff
Grossman & Schole LLP (“EG&S”), counsel for the Company, at least one (1) business day prior
to the date of effectiveness of the registration statement to be filed in connection with the Public Offering (the “Registration
Statement”).

 

(ii) In the event that
the over-allotment option is exercised in full or in part, Purchaser shall purchase up to an additional 1,500,000 Sponsor Warrants
(the “Additional Sponsor Warrants”), in the same proportion as the amount of the over-allotment option that
is exercised, and simultaneously with such purchase of Additional Sponsor Warrants, as payment in full for the Additional Sponsor
Warrants being purchased hereunder, and at least one (1) business day prior to the closing of all or any portion of the over-allotment
option, Purchaser shall pay $0.50 per Additional Sponsor Warrant, up to an aggregate amount of $7,500,000, by wire transfer of
immediately available funds or by such other method as may be reasonably acceptable to the Company, to the Trust Account.

 

(iii) The closing of
the purchase and sale of the Sponsor Warrants shall take place simultaneously with the closing of the Public Offering (the “Initial
Closing Date”). The closing of the purchase and sale of the Additional Sponsor Warrants, if applicable, shall take place
simultaneously with the closing of all or any portion of the over-allotment option (such closing date, together with the Initial
Closing Date, each, a “Closing Date”). The closing of the purchase and sale of each of the Sponsor Warrants
and the Additional Sponsor Warrants shall take place at the offices of EG&S, 1345 Avenue of the Americas, New York, New York,
10105, or such other place as may be agreed upon by the parties hereto.

 

C. Terms
of the Sponsor Warrants.

 

(i) The Sponsor
Warrants shall have their terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent, in connection
with the Public Offering (a “Warrant Agreement”).

 

     

     

    

  

(ii) At or prior
to the time of the Initial Closing Date, the Company and the Purchaser shall enter into a registration rights agreement (the “Registration
Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser relating to
the Sponsor Warrants and the Shares underlying the Sponsor Warrants.

 

Section 2. Representations
and Warranties of the Company.  As a material inducement to the Purchaser to enter into this Agreement and purchase the
Sponsor Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive
the Closing Dates) that:

 

A. Organization
and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be
expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement and
the Warrant Agreement.

 

B. Authorization;
No Breach.

 

(i) The execution,
delivery and performance of this Agreement and the Sponsor Warrants have been duly authorized by the Company as of the Closing
Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms. Upon
issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Sponsor Warrants
will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Dates.

 

(ii) The execution
and delivery by the Company of this Agreement and the Sponsor Warrants, the issuance and sale of the Sponsor Warrants, the issuance
of the Shares upon exercise of the Sponsor Warrants and the fulfillment of, and compliance with, the respective terms hereof and
thereof by the Company, do not and will not as of the Closing Dates (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest,
charge or encumbrance upon the Company’s capital stock or assets under, (d) result in a violation of, or (e) require
any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative
or governmental body or agency pursuant to the certificate of incorporation or the bylaws of the Company (in effect on the date
hereof or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or regulation
to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings
required after the date hereof under federal or state securities laws.

 

C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Shares
issuable upon exercise of the Sponsor Warrants will be duly and validly issued, fully paid and nonassessable. Upon issuance in
accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will have good title to the
Sponsor Warrants and the Shares issuable upon exercise of such Sponsor Warrants, free and clear of all liens, claims and encumbrances
of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer
restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of
the Purchaser.

 

D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.

 

Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell
the Sponsor Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties
shall survive the Closing Dates) that:

 

A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.

  

     

     

    

  

B. Authorization;
No Breach.

 

(i) This Agreement
constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).

 

(ii) The execution
and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser does
not and shall not as of the Closing Dates conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.

 

C. Investment
Representations.

 

(i) The Purchaser
is acquiring the Sponsor Warrants and, upon exercise of the Sponsor Warrants, the Shares issuable upon such exercise (collectively,
the “Securities”), for the Purchaser’s own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.

 

 (ii) The Purchaser
is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D.

 

(iii) The Purchaser
understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy
of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.

 

(iv) The Purchaser
did not enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act of 1933, as amended (the “Securities Act”).

 

(v) The Purchaser
has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity
to ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities
involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to the acquisition of the Securities.

 

(vi) The Purchaser
understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(vii) The Purchaser
understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold
in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither
the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder. In this regard, the Purchaser understands that the
Securities and Exchange Commission has taken the position that promoters or affiliates of a blank check company and their transferees,
both before and after an initial business combination, are deemed to be “underwriters” under the Securities Act when
reselling the securities of a blank check company. Based on that position, Rule 144 adopted pursuant to the Securities Act
would not be available for resale transactions of the Securities despite technical compliance with the certain requirements of
such Rule, and the Securities can be resold only through a registered offering or in reliance upon another exemption from the registration
requirements of the Securities Act.

 

     

     

    

  

(viii) The Purchaser
has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an
investment in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated
hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies
and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities.
The Purchaser can afford a complete loss of its investments in the Securities.

 

Section 4.
Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Sponsor
Warrants are subject to the fulfillment, on or before the Closing Dates, of each of the following conditions:

 

A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at
and as of the Closing Dates as though then made.

 

B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing Dates.

 

C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.

 

D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Purchaser.

 

Section 5.
Conditions of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are
subject to the fulfillment, on or before the Closing Dates, of each of the following conditions:

 

A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at
and as of the Closing Dates as though then made.

 

B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before the Closing Dates.

 

C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.

 

D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Company.

 

Section 6.
Termination. This Agreement may be terminated at any time after September 30, 2016 upon the election by either the Company
or a Purchaser entitled to purchase a majority of the Sponsor Warrants upon written notice to the other parties if the closing
of the Public Offering does not occur prior to such date.

 

Section 7.
Survival of Representations and Warranties. All of the representations and warranties contained herein shall survive the
Closing Dates.

 

Section 8.
Definitions. Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the
registration statement on Form S-1 the Company plans to file with the Securities and Exchange Commission, under the Securities
Act.

 

     

     

    

  

Section 9.
Miscellaneous.

 

A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement,
other than assignments by the Purchaser to affiliates thereof.

 

B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

 

C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement.

 

D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.

 

E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall
be construed in accordance with the internal laws of the State of Delaware.

 

F. Amendments.
This letter agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed
by all parties hereto.

 

[Signature page
follows]

 

     

     

    

  

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement to be effective as of the date first set forth above.

 

	 	COMPANY:	 
	 	 	 
	 	Matlin & Partners Acquisition Corporation 	 
	 	 	 	 
	 	By:	 /s/ Peter H. Schoels	 
	 	Name: 	Peter H. Schoels	 
	 	Title:	President	 

 

	 	PURCHASER:	 
	 	 	 	 
	 	Matlin & Partners
    Acquisition Sponsor LLC
	 	 	 	 
	 	By:	/s/ David J. Matlin	 
	 	Name:	 David J. Matlin	 
	 	Title:	 Managing MemberExhibit

This Replacement Capital Covenant, dated as of February 15, 2017 (this “Replacement Capital Covenant”), is made by The Hartford Financial Services Group, Inc., a Delaware corporation (together with its successors and assigns, the “Corporation”), in favor of and for the benefit of each Covered Debtholder (as defined below).
 
R E C I T A L S
 
 
		
	A.
	WHEREAS, the Corporation previously issued its 8.125% Debentures due 2068 the “Debentures due 2068” and entered into the Replacement Capital Covenant, dated as of June 6, 2008, as amended on the date hereof (the “Old Replacement Capital Covenant”), in connection with the Debentures due 2068;

		
	B.
	WHEREAS, the Corporation’s 6.1% Senior Notes due 2041 (the “Senior Notes”), issued under the Senior Indenture, dated as of March 9, 2004 (the “Base Indenture”), between the Corporation and The Bank of New York Trust Company, N.A. (as successor to JPMorgan Chase Bank), as trustee, as amended by all indentures supplemental thereto (the Base Indenture as so amended and supplemented, the “Senior Indenture”), became the Covered Debt under the Old Replacement Capital Covenant, effective as of the date hereof;

 
		
	C.
	WHEREAS, on the date hereof, the Corporation issued $500,000,000 principal amount of its Income Capital Obligation Notes due 2067 (the “Debentures”) under the Junior Subordinated Indenture, dated as of February 12, 2007 (the “Junior Subordinated Indenture”) between the Corporation and Wilmington Trust Company, as successor to LaSalle Bank National Association, as trustee (the “Subordinated Trustee”).

		
	D.
	WHEREAS, the Corporation deems the Debentures to be Qualifying Replacement Securities in accordance with the definition thereof under the Old Replacement Capital Covenant as of the date hereof and is entering into this Replacement Capital Covenant in favor of and for the benefit of each Covered Debtholder hereunder;

		
	E.
	WHEREAS, the Corporation is entering into and disclosing the content of this Replacement Capital Covenant in the manner provided for below with the intent that the covenants provided for in this Replacement Capital Covenant be enforceable by each Covered Debtholder hereunder and that the Corporation be estopped from disregarding the covenants in this Replacement Capital Covenant, in each case to the fullest extent permitted by applicable law; and

 
		
	F.
	WHEREAS, the Corporation acknowledges that reliance by each Covered Debtholder upon the covenants in this Replacement Capital Covenant is reasonable and foreseeable by the Corporation and that, were the Corporation to disregard its covenants in this Replacement Capital Covenant, each Covered Debtholder would have sustained an injury as a result of its reliance on such covenants;

    

NOW, THEREFORE, the Corporation hereby covenants and agrees as follows in favor of and for the benefit of each Covered Debtholder:

     SECTION 1.   Definitions.  Capitalized terms used in this Replacement Capital Covenant (including the introduction to this instrument and the Recitals) have the meanings set forth in Schedule I hereto.
 
SECTION 2.   Limitations on Repayment, Redemption and Purchase of Debentures.  Subject to Section 5, the Corporation hereby promises and covenants to and for the benefit of each Covered Debtholder that the Corporation shall not repay, redeem or purchase (for the avoidance of doubt, any reference in this Replacement Capital Covenant to any repayment of the Corporation’s securities will be deemed to include a reference to the defeasance of the Corporation’s obligations under such securities) and will cause its Subsidiaries not to, repay, redeem or purchase, as applicable, all or any part of the Debentures prior to the Termination Date except to the extent that the principal amount repaid or the applicable redemption or purchase price does not exceed the sum of the following amounts:
 
(a)        200% of the aggregate amount of (i) net cash proceeds received by the Corporation and its Subsidiaries since the Measurement Date from the sale of Common Stock, Rights to acquire Common Stock and Mandatorily Convertible Preferred Stock to Persons other than the Corporation and its Subsidiaries and (ii) the Market Value of any Common Stock that the Corporation or its Subsidiaries have issued to Persons other than the Corporation or its Subsidiaries since the Measurement Date in connection with the conversion or exchange of any convertible or exchangeable securities, other than securities for which the Corporation or any of its Subsidiaries has received equity credit from any NRSRO; plus
 
(b)        200% of the aggregate amount of net cash proceeds received by the Corporation and its Subsidiaries since the Measurement Date from the sale of securities included in clause (a) of the definition of Qualifying Capital Securities to Persons other than the Corporation and its Subsidiaries; plus
 
(c)        100% of the aggregate amount of net cash proceeds received by the Corporation and its Subsidiaries since the Measurement Date from the sale of securities included in clause (b) of the definition of Qualifying Capital Securities to Persons other than the Corporation and its Subsidiaries;

provided that the limitations in this Section 2 shall not restrict (i) the repayment, redemption or other purchase of any Debentures that the Corporation shall have previously defeased in accordance with this Replacement Capital Covenant or (ii) the exchange of the Debentures for consideration that consists solely of an aggregate principal amount or liquidation preference (or, in the case of Common Stock, Market Value) of Replacement Capital Securities not to exceed 100% (or, in the case of Common Stock, not to exceed 50%) of the aggregate principal amount 

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of Debentures that are exchanged plus an amount in cash equal to accrued but unpaid Distributions thereon, other than any deferred Distributions.

SECTION 3.   Covered Debt.
 
(a)        The Corporation represents and warrants that the Initial Covered Debt is Eligible Debt.
 
(b)        On or during the 30-day period immediately preceding any Redesignation Date with respect to the Covered Debt then in effect, the Corporation shall identify the series of Eligible Debt that will become the Covered Debt on and after such Redesignation Date in accordance with the following procedures:
 
(i)         the Corporation shall identify each series of its then outstanding unsecured, long-term indebtedness for money borrowed that is Eligible Debt;
 
(ii)        the Corporation shall designate one of such series to be the series of Eligible Debt that will become the Covered Debt on and after such Redesignation Date, but if (and only if) the Corporation fails to designate a series of Eligible Debt as the Covered Debt by the close of business on such Redesignation Date, the Eligible Debt that will become the Covered Debt will be determined in accordance with the following procedures:
 
(A)       if only one series of the Corporation’s then outstanding unsecured, long-term indebtedness for money borrowed is Eligible Debt, such series shall become the Covered Debt commencing on the related Redesignation Date;
 
(B)       if the Corporation has more than one outstanding series of unsecured, long-term indebtedness for money borrowed that is Eligible Debt, then the series that has the latest occurring final maturity date as of the date the procedures in subclause (ii) of clause (b) of Section 3 are applied shall become the Covered Debt on the related Redesignation Date;
 
(iii)       the series of outstanding long-term indebtedness for money borrowed that is determined to be Covered Debt pursuant to subclause (ii) of clause (b) of Section 3 shall be the Covered Debt for purposes of this Replacement Capital Covenant for the period commencing on the related Redesignation Date and continuing to, but not including, the Redesignation Date as of which a new series of outstanding unsecured, long-term indebtedness for money borrowed is next determined to be the Covered Debt pursuant to the procedures set forth in clause (b) of Section 3; and
 
(iv)       in connection with such identification of a new series of Covered Debt, the Corporation shall, as provided for in clause (d) of Section 3, deliver a 

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notice and file with the Commission a Current Report on Form 8-K (or any successor form) under the Exchange Act including or incorporating by reference this Replacement Capital Covenant as an exhibit within the time frame provided for in clause (d) of Section 3.
 
(c)        Automatic Redesignation Event.  Upon the occurrence of an Automatic Redesignation Event, the then existing Covered Debt shall automatically cease to be the Covered Debt and the Exchange Debt shall automatically become the Covered Debt.
 
(d)       Notice.  In order to give effect to the intent of the Corporation described in Recital E, the Corporation covenants that:
 
(i)         simultaneously with the execution of this Replacement Capital Covenant or as soon as practicable after the date hereof, it shall (A) give notice to the Holders of the Initial Covered Debt, in the manner provided in the indenture relating to the Initial Covered Debt, of this Replacement Capital Covenant and the rights granted to such Holders hereunder and (B) file a copy of this Replacement Capital Covenant with the Commission as an exhibit to a Current Report on Form 8-K (or any successor form) under the Exchange Act;
 
(ii)        so long as the Corporation is a reporting company under the Exchange Act, the Corporation shall include in each Annual Report filed with the Commission on Form 10-K (or any successor form) under the Exchange Act a description of the covenant set forth in Section 2 and identify the series of long-term indebtedness for borrowed money that is Covered Debt as of the date such Annual Report on Form 10-K (or any successor form) is filed with the Commission;
 
(iii)       if a series of the Corporation’s long-term indebtedness for money borrowed (A) becomes Covered Debt or (B) ceases to be Covered Debt, the Corporation shall give notice of such occurrence within 30 days to the holders of such long-term indebtedness for money borrowed in the manner provided for in the indenture, fiscal agency agreement or other instrument under which such long-term indebtedness for money borrowed was issued and report such change (x) except if such series becomes or ceases to be Covered Debt as a result of an Automatic Redesignation Event pursuant to clause (c) of Section 3, in a Current Report on Form 8-K (or any successor form) including or incorporating by reference this Replacement Capital Covenant, and (y) in the Corporation’s next Quarterly Report on Form 10-Q (or any successor form) or Annual Report on Form 10-K (or any successor form), as applicable;
 
(iv)       if, and only if, the Corporation ceases to be a reporting company under the Exchange Act, the Corporation shall (A) post on its website (or any other similar electronic platform generally available to the public) the information otherwise required to be included in Exchange Act filings pursuant to clause (ii) 

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of this clause (d) of Section 3 and (B) cause a notice of the execution of this Replacement Capital Covenant to be posted on the Bloomberg screen for the Covered Debt or any successor Bloomberg screen and each similar third-party vendor’s screen that the Corporation reasonably believes is appropriate (each, an “Investor Screen”) and cause a hyperlink to a definitive copy of this Replacement Capital Covenant to be included on the Investor Screen for each series of Covered Debt, in each case to the extent permitted by Bloomberg or such similar third-party vendor, as the case may be; and
 
(v)        promptly upon the request of any Holder of Covered Debt, the Corporation will provide such Holder with an executed copy of this Replacement Capital Covenant.
 
(e)        The Corporation agrees that, if at any time the Covered Debt is held by a trust (for example, where the Covered Debt is part of an issuance of trust preferred securities), a holder of the securities issued by such trust may enforce (including by instituting legal proceedings) this Replacement Capital Covenant directly against the Corporation as though such holder owned Covered Debt directly, and such holder shall be deemed to be a holder of the Covered Debt for purposes of this Replacement Capital Covenant for so long as the indebtedness held by such trust remains Covered Debt hereunder.
 
SECTION 4.   Termination, Amendment and Waiver.
 
(a)        The obligations of the Corporation pursuant to this Replacement Capital Covenant shall remain in full force and effect until the earliest date (the “Termination Date”) to occur of:
 
(i)         February 12, 2047 or, if earlier, the date on which (A) the Debentures are no longer outstanding and (B) the Corporation’s obligations under this Replacement Capital Covenant have been fulfilled or, pursuant to Section 5, are no longer applicable;
 
(ii)        the date, if any, on which the Holders of a majority of the then-outstanding principal amount of the then-effective series of Covered Debt consent or agree to the termination of this Replacement Capital Covenant and the obligations of the Corporation hereunder;
 
(iii)       the date on which the Corporation ceases to have any series of outstanding Eligible Debt:
 
(iv)       the date on which the Debentures are accelerated as a result of an event of default under the Junior Subordinated Indenture;
 

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(v)        the occurrence of a Rating Agency Event or Change in Control Event;
 
(vi)       the date on which S&P no longer assigns the Corporation a solicited rating on senior debt issued or guaranteed by the Corporation; and
 
(vii)      the date on which the termination of this Replacement Capital Covenant would have no effect on the equity credit provided by S&P with respect to the Debentures.
 
From and after the Termination Date, the obligations of the Corporation pursuant to this Replacement Capital Covenant shall be of no further force and effect.
 
(b)        This Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed by the Corporation after obtaining the consent of the Holders of a majority of the then-outstanding principal amount of the then-effective series of Covered Debt; provided that this Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed only by the Corporation (and without the consent of the Holders of the then-effective series of Covered Debt) if any of the following apply:
 
(i)         the sole effect of such amendment or supplement is either (A) to impose additional restrictions on the ability of (1) the Corporation to redeem or  purchase the Debentures, or (2) any Subsidiary to purchase the Debentures or (B) to impose additional restrictions on or to eliminate certain of, the types of securities qualifying as Qualifying Capital Securities and in each case an officer of the Corporation has delivered to the Holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument under which such Covered Debt was issued a written certificate to that effect;
 
(ii)        such amendment or supplement extends the date specified in subclause (i) of clause (a) of Section 4; or
 
(iii)       such amendment or supplement is not materially adverse to the Holders of the then-effective series of Covered Debt and an officer of the Corporation has delivered to the Holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate stating that, in his or her determination, such amendment or supplement is not materially adverse to the Holders of the then-effective series of Covered Debt; or
 
(iv)       such amendment eliminates Common Stock, Rights to acquire Common Stock or Mandatorily Convertible Preferred Stock as a security or securities covered by clause (a) of Section 2, if, in the case of this clause, after the 

6

date of this Replacement Capital Covenant, an accounting standard or interpretive guidance of an existing accounting standard, issued by an organization or regulator that has responsibility for establishing or interpreting accounting standards in the United States or other appropriate jurisdiction, as applicable, followed by the Corporation becomes effective or applicable to the Corporation such that there is more than an insubstantial risk that the failure to eliminate Common Stock, Rights to acquire Common Stock or Mandatorily Convertible Preferred Stock as a security or securities covered by clause (a) of Section 2 would result in a reduction in the Corporation’s fully diluted earnings per share as calculated in accordance with generally accepted accounting principles (“EPS”), or the Corporation otherwise has been advised in writing by a nationally recognized independent accounting firm that there is more than an insubstantial risk that the failure to eliminate such securities as a security or securities covered by clause (a) of Section 2 would result in a reduction of the Corporation’s fully diluted EPS.
 
For purposes of subclause (iii) of clause (b) of Section 4, an amendment or supplement that adds new types of securities qualifying as Replacement Capital Securities, or modifies the requirements of securities qualifying as Replacement Capital Securities, will not be deemed materially adverse to the Holders of the then-effective series of Covered Debt if, following such amendment or supplement, this Replacement Capital Covenant would constitute a Qualifying Replacement Capital Covenant.
 
(c)        For purposes of clauses (a) and (b) of Section 4, the Holders whose consent or agreement is required to terminate, amend or supplement this Replacement Capital Covenant or the obligations of the Corporation under this Replacement Capital Covenant shall be the Holders of the then-effective series of Covered Debt as of a record date established by the Corporation that is not more than 30 days prior to the date on which the Corporation proposes that such termination, amendment or supplement becomes effective.
 
SECTION 5.   Limitation on Applicability of this Replacement Capital Covenant.  The promises and covenants contained in this Replacement Capital Covenant shall not apply and be of no force and effect upon the occurrence of one or more of the following events:
 
(a)        S&P upgrades the Corporation’s corporate credit rating to A or above;
 
(b)        the Debentures are redeemed by the Corporation due to a Tax Event;
 
(c)        if after proper notice of redemption for the Debentures has been given to the holders of the Debentures, a Market Disruption Event occurs and prevents the Corporation from raising proceeds in accordance with Section 2 to redeem the Debentures subject to such redemption; provided that if during the pendency of such Market Disruption Event the Corporation repurchases or redeems the Debentures or a Subsidiary purchases the Debentures (in a manner that, but for the existence of the 

7

Market Disruption Event, would not have been permitted by this Replacement Capital Covenant) then, at such time as the Market Disruption Event shall cease to exist, the Corporation promises and covenants to issue Replacement Capital Securities to raise proceeds, in accordance with Section 2, in an amount sufficient to repurchase or redeem the Debentures; or
 
(d)       if the Corporation repurchases or redeems or a Subsidiary purchases up to 10% of the outstanding principal amount of the Debentures in any one-year period, to such repurchase, redemption or purchase; provided that no more than 25% of the outstanding principal amount of the Debentures shall be so repurchased, redeemed or purchased in any ten-year period, and that this Replacement Capital Covenant shall continue to apply to any Debentures repurchased, redeemed or purchased in excess of such thresholds; provided, further, that any Debentures the Corporation or any of its Subsidiaries acquires or holds as a result of the acquisition, consolidation or merger of any Person by or into the Corporation or any of its Subsidiaries, or the acquisition of all or substantially all assets of any Person by the Corporation or any of its Subsidiaries, shall be deemed not to be or have been repurchased, redeemed or purchased by the Corporation or any of its Subsidiaries for purposes of this clause (d) of Section 5, and shall not be counted in determining whether such thresholds have been met.
 
SECTION 6. Ability to Redeem the Debentures. The Corporation hereby covenants not to redeem the Debentures in whole or in part on or prior to the date that is five years following the issue date of the Debentures (for the avoidance of doubt, the obligations of the Corporation in this Section 6 shall not apply in the case of a redemption due to a Tax Event pursuant to Section 5).

SECTION 7.   Miscellaneous.
 
(a)        THIS REPLACEMENT CAPITAL COVENANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
 
(b)        This Replacement Capital Covenant shall be binding upon the Corporation and its successors and assigns (provided that, in the event the Corporation sells, conveys, transfers or otherwise disposes of all or substantially all its assets to any Person and (i) such person assumes all the obligations of the Corporation under the indenture governing the then applicable Covered Debt and the Junior Subordinated Indenture, (ii) such Person assumes all the obligations of the Corporation under the Replacement Capital Covenant and (iii) the Corporation is released from its obligations under the indenture governing the then applicable Covered Debt and the Junior Subordinated Indenture, the Corporation shall be released from all its obligations hereunder), and shall inure to the benefit of the Covered Debtholders as they exist from time-to-time (it being understood and agreed by the Corporation that any Person who is a Covered Debtholder at the time such Person acquires, holds or sells Covered Debt shall retain its status as a Covered Debtholder for so long as the series of long-term 

8

indebtedness for borrowed money such Person then owns is Covered Debt and, if such Person initiates an action, claim or proceeding to enforce its rights under this Replacement Capital Covenant after the Corporation has violated its covenants in Section 2 and before the series of long-term indebtedness for money borrowed held by such Person is no longer Covered Debt, such Person’s rights under this Replacement Capital Covenant shall not terminate by reason of such series of long-term indebtedness for money borrowed no longer being Covered Debt).  Other than the Covered Debtholders as provided in the previous sentence and clause (e) of Section 3, no other Person shall have any rights under this Replacement Capital Covenant or be deemed a third-party beneficiary of this Replacement Capital Covenant.  In particular, no holder of the Debentures is a third-party beneficiary of this Replacement Capital Covenant, it being understood that such holders may have rights under the Senior Indenture.
 
All demands, notices, requests and other communications to the Corporation under this Replacement Capital Covenant shall be deemed to have been duly given and made if in writing and (i) if served by personal delivery upon the Corporation, on the day so delivered (or, if such day is not a Business Day, the next succeeding Business Day) or (ii) if delivered by registered post or certified mail, return receipt requested, or sent to the Corporation by a national or international courier service, on the date of receipt by the Corporation (or, if such date of receipt is not a Business Day, the next succeeding Business Day), and in each case to the Corporation at the address set forth below, or at such other address as the Corporation may thereafter notify to Covered Debtholders or post on its website (or any other similar electronic platform generally available to the public) as the address for notices under this Replacement Capital Covenant:
The Hartford Financial Services Group, Inc. 
One Hartford Plaza 
Hartford, Connecticut 06155 
Attention: General Counsel 

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IN WITNESS WHEREOF, the Corporation has caused this Replacement Capital Covenant to be executed by its duly authorized officer, as of the day and year first above written. 

	
					
	 
	 
	 
	 
	 

	 
	THE HARTFORD FINANCIAL SERVICES GROUP, INC.
	 

	 
	By:
	/s/ Robert W. Paiano
	 

	 
	 
	Name:
	Robert W. Paiano
	 

	 
	 
	Title:
	Senior Vice President and Treasurer
	 

	 

 

[SIGNATURE PAGE TO REPLACEMENT CAPITAL COVENANT]

    

Schedule I
 
DEFINITIONS
 
 
         “Automatic Redesignation Event” means the consummation of an exchange offer pursuant to which a majority in principal amount of the then existing series of Covered Debt is exchanged for a new series of Eligible Debt; provided that the Corporation shall have included in a document filed with the Commission a statement that upon consummation of such exchange offer, the Exchange Debt shall become the Covered Debt and the then existing series of Covered Debt shall cease to be Covered Debt.

“Base Indenture” has the meaning specified in Recital B.
 
“Business Day” means each day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed, and, on or after February 15, 2017, a day that is not a London Banking Day. A “London Banking Day” is any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
 
“Change in Control Event” means:
 
(a)                               the direct or indirect sale, transfer, conveyance or other disposition (other than by way of amalgamation, merger or consolidation), in one or a series of related transactions, of all or substantially all of the Corporation’s properties or assets and the properties or assets of the Corporation’s subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than a wholly owned subsidiary of the Corporation.
 
(b)                              the consummation of any transaction (including, without limitation, any amalgamation, merger or consolidation) the result of which is that any “person” becomes the beneficial owner, directly or indirectly, of more than 50% of the Corporation’s Voting Stock, measured by voting power rather than the number of shares, or
 
(c)                               the first day on which a majority of the members of the Corporation’s board of directors are not Continuing Directors.  “Continuing Directors” are those directors who (i) were members of the board of directors on the first date that any of the Debentures were issued or (ii) were elected or appointed to the Corporation’s board of directors with the approval of a majority of the Continuing Directors who were members of the board of directors at the time of such election or appointment (either by specific vote or by approval of our 

I-1

proxy statement in which such members were named as a nominee for election as a director, without objection to such nomination).
 
“Commission” means the United States Securities and Exchange Commission or any successor agency.

         “Common Stock” means any equity securities of the Corporation (including equity securities held as treasury shares) or rights to acquire equity securities of the Corporation that have no preference in the payment of dividends or amounts payable upon the liquidation, dissolution or winding up of the Corporation (including a security that tracks the performance of, or relates to the results of, a business, unit or division of the Corporation), and any securities that have no preference in the payment of dividends or amounts payable upon liquidation, dissolution or winding up and are issued in exchange therefor in connection with a merger, consolidation, binding share exchange, business combination, recapitalization or other similar event.
 
“Corporation” has the meaning specified in the introduction to this instrument.
 
“Covered Debt” means (a) at the date of this Replacement Capital Covenant and continuing to, but not including, the first Redesignation Date, the Initial Covered Debt and (b) thereafter, commencing with each Redesignation Date or upon an Automatic Redesignation Event and continuing to, but not including, the next succeeding Redesignation Date or upon an Automatic Redesignation Date, the Eligible Debt identified pursuant to clause (b) of Section 3 as the Covered Debt for such period or the applicable Exchange Debt, as the case may be.
 
“Covered Debtholder” at any time means each Person to the extent that such Person at such time holds (whether as a Holder or a beneficial owner holding through a participant in a clearing agency) long-term indebtedness for money borrowed of the Corporation during the period that such long-term indebtedness for money borrowed is Covered Debt, provided that, except as provided in clause (b) of Section 7, a Person who has sold all of its right, title and interest in Covered Debt shall cease to be a Covered Debtholder at the time of such sale if, at such time, the Corporation has not breached or repudiated, or threatened to breach or repudiate, its obligations hereunder.

“Debenture” has the meaning specified in Recital C.

“Debentures due 2068” has the meaning specified in Recital B.
 
        “Distributions” means, as to a security or combination of securities, dividends, interest or other income distributions to the holders or beneficial owners thereof that are not Subsidiaries of the Corporation.
 
“Eligible Debt” means, at any time in respect of any issuer, each series of outstanding unsecured long-term indebtedness for money borrowed of such issuer that (a) ranks senior to the Debentures, (b) has an outstanding principal amount of not less than $100,000,000, and (c) was 

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issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents, or was issued in exchange for Eligible Debt or other securities that were issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents.  For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term indebtedness for money borrowed that is separate from each other series of such indebtedness.
 
“EPS” has the meaning specified in subclause (iv) of clause (b) of Section 4.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
 “Exchange Debt” means, at any time, the series of Eligible Debt for which the then existing series of Covered Debt is exchanged pursuant to an Automatic Redesignation Event.
 
“Holder” means, as to the Covered Debt then in effect, each holder of such Covered Debt as reflected on the securities register maintained by or on behalf of the Corporation with respect to such Covered Debt and each beneficial owner holding through a participant in a clearing agency.
 
“Initial Covered Debt” means the Corporation’s 4.300% Senior Notes due 2043.
 
“Investor Screen” has the meaning specified in subclause (iv) of clause (d) of Section 3.
 
“Junior Subordinated Indenture” has the meaning specified in Recital C. 
 
“Mandatorily Convertible Preferred Stock” means preferred stock with (a) no prepayment obligation on the part of the issuer thereof, whether at the election of the holders or otherwise, and (b) a requirement that the preferred stock convert into Common Stock within approximately three years from the date of its issuance at a conversion ratio within a range established at the time of issuance of such preferred stock, subject to customary anti-dilution provisions.

 “Market Disruption Event” means the occurrence or existence of any of the following events or sets of circumstances:
 
(a)                               any suspension or material disruption of trading or settlement of one of the exchanges (and/or their electronic trading platform) on which Replacement Capital Securities are listed; or
 

I-3

(b)                              any change in political conditions, any outbreak or escalation of hostilities, terrorist attacks or crisis such that the issuance by the Corporation of its Replacement Capital Securities is deemed to be impracticable.
 
“Market Value” means, on any date, the closing sale price per share of Common Stock (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by The New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Common Stock is traded or quoted; if the Common Stock is not either listed or quoted on any U.S. securities exchange on the relevant date, the Market Value will be the average of the mid-point of the bid and ask prices for the Common Stock on the relevant date submitted by at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.
 
“Measurement Date” means, with respect to any redemption, repurchase or purchase of Debentures, the date that is 550 days prior to the date of such redemption, repurchase or purchase.

“NRSRO” means a nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act, or any successor provision.
 
“Old Replacement Capital Covenant” has the meaning specified in Recital A.

     “Person” means any individual, corporation, partnership, joint venture, trust, limited liability company, corporation or other entity, unincorporated organization or government or any agency or political subdivision thereof.
         “Qualifying Capital Securities” means:
 
(a)                               any instrument that achieves high equity credit from S&P under the relevant guidelines at the time of repurchase, redemption or purchase of the Debentures; or
 
(b)                              any instrument that (i) includes the same deferral features and ranking as the Debentures and matures no earlier than February 12, 2047, or (ii) would have achieved at least the same equity credit from S&P as the Debentures at the time of issuance of the Debentures.
 
“Qualifying Replacement Capital Covenant” means (a) a replacement capital covenant that is substantially similar to this Replacement Capital Covenant or (b) a replacement capital covenant, as identified by the Corporation’s Board of Directors, or a duly authorized committee thereof, acting in good faith and in its reasonable discretion and reasonably construing the definitions and other terms of this Replacement Capital Covenant that restricts the related issuer from repaying, redeeming or purchasing, and its Subsidiaries from purchasing, identified 

I-4

securities except to the extent of the applicable percentage of the net proceeds from the issuance of specified replacement capital securities that have terms and provisions at the time of redemption, repayment or purchase that are as or more equity-like than the securities then being repaid, redeemed or purchased after the Measurement Date applicable to such redemption, repayment or purchase date without regard to the term of such replacement capital covenant.

“Rating Agency Event” means the determination by the Corporation of a change in the hybrid ratings methodology employed by S&P, which change results in a lower equity credit (including up to a lesser amount) to the Corporation than the equity credit assigned by S&P to the Debentures on the date hereof, or a shortening of the length of time the Debentures are assigned such equity credit as compared to the length of time they would have been assigned such equity credit on the date hereof.
 
“Redesignation Date” means, as to the Covered Debt in effect at any time, the earliest of (a) the date that is two years prior to the final maturity date of such Covered Debt or (b) if the Corporation elects to redeem or defease, or the Corporation or a Subsidiary elects to purchase, such Covered Debt either in whole or in part with the consequence that after giving effect to such redemption, defeasance, or purchase, the outstanding principal amount of such Covered Debt is less than $100,000,000, the applicable redemption, defeasance or purchase date; provided that with respect to clause (a) above, if the Corporation has no series of long-term indebtedness for money borrowed that is Eligible Debt other than the Covered Debt at the date that is two years prior to the final maturity date of the Covered Debt, then the Redesignation Date shall be such subsequent date on which the Corporation issues long-term indebtedness for money borrowed that is Eligible Debt.
 
“Replacement Capital Covenant” has the meaning specified in the introduction to this instrument.
 
“Replacement Capital Securities” means Common Stock, Rights to acquire Common Stock, Mandatorily Convertible Preferred Stock and Qualifying Capital Securities.

“Rights to acquire Common Stock” includes any right to acquire Common Stock, including any right to acquire Common Stock pursuant to a stock purchase plan or other plans to the extent cash proceeds are received by the Corporation.
 
 “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor thereto.

“Senior Indenture” has the meaning specified in Recital B.

“Senior Notes” has the meaning specified in Recital B.

“Subordinated Trustee” has the meaning Specified in Recital C.

 “Subsidiary” means, at any time, any Person the shares of stock or other ownership

I-5

interests of which having ordinary voting power to elect a majority of the board of directors or other managers of such Person are at the time owned, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by another Person. 

 “Tax Event” means the receipt by the Corporation of an opinion of counsel experienced in such matters to the effect that, as a result of any:
 
(a)                               amendment to or change in the laws or regulations of the United States or any political subdivision or taxing authority of or in the United States that is enacted or effective on or after the date hereof;
 
(b)                              proposed change in those laws or regulations that is announced after the date hereof;
 
(c)                               official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced on or after the date hereof; or
 
(d)                             threatened challenge asserted in connection with an audit of the Corporation, or a threatened challenge asserted in writing against any taxpayer that has raised capital through the issuance of securities that are substantially similar to the Debentures;
 
there is more than an insubstantial increase in the risk that interest payable by the Corporation on the Debentures is not, or will not be, deductible by the Corporation, in whole or in part, for United States federal income tax purposes.
 
“Termination Date” has the meaning specified in clause (a) of Section 4.
 
“Voting Stock” means, with respect to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
 

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