Exhibit 10.2
ACE LIMITED
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
------------------
PURCHASE CONTRACT AGREEMENT
------------------
Dated as of April 12, 2000
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS...................................................1
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS..........................9
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO AGENT..........................9
SECTION 1.4. ACTS OF HOLDERS; RECORD DATES................................10
SECTION 1.5. NOTICES......................................................11
SECTION 1.6. NOTICE TO HOLDERS; WAIVER....................................12
SECTION 1.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS.....................12
SECTION 1.8. SUCCESSORS AND ASSIGNS.......................................12
SECTION 1.9. SEPARABILITY CLAUSE..........................................12
SECTION 1.10. BENEFITS OF AGREEMENT........................................12
SECTION 1.11. GOVERNING LAW................................................12
SECTION 1.12. LEGAL HOLIDAYS...............................................13
SECTION 1.13. COUNTERPARTS.................................................13
SECTION 1.14. INSPECTION OF AGREEMENT......................................13
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY..............................13
SECTION 2.2. FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION................14
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS; DENOMINATIONS...............................14
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.........14
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING...............15
SECTION 3.4. TEMPORARY CERTIFICATES.......................................16
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE..........16
SECTION 3.6. BOOK-ENTRY INTERESTS.........................................18
SECTION 3.7. NOTICES TO HOLDERS...........................................18
SECTION 3.8. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.....................18
SECTION 3.9. DEFINITIVE CERTIFICATES......................................18
SECTION 3.10. MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES...........19
SECTION 3.11. PERSONS DEEMED OWNERS........................................20
SECTION 3.12. CANCELLATION.................................................20
SECTION 3.13. ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES............21
SECTION 3.14. ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES............22
SECTION 3.15. TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT..23
SECTION 3.16. CUSIP NUMBERS................................................23
ARTICLE IV
THE PREFERRED SHARES
SECTION 4.1. PAYMENT OF DIVIDEND; RIGHTS TO DIVIDENDS PRESERVED;
DIVIDEND RATE RESET; NOTICE..................................23
SECTION 4.2. NOTICE AND VOTING............................................24
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ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1. PURCHASE OF ORDINARY SHARES..................................25
SECTION 5.2. PAYMENT OF PURCHASE PRICE....................................26
SECTION 5.3. ISSUANCE OF ORDINARY SHARES..................................30
SECTION 5.4. ADJUSTMENT OF SETTLEMENT RATE................................30
SECTION 5.5. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS...............35
SECTION 5.6. TERMINATION EVENT; NOTICE....................................35
SECTION 5.7. EARLY SETTLEMENT.............................................36
SECTION 5.8. NO FRACTIONAL SHARES.........................................37
SECTION 5.9. CHARGES AND TAXES............................................37
ARTICLE VI
REMEDIES
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE ORDINARY SHARES...38
SECTION 6.2. RESTORATION OF RIGHTS AND REMEDIES...........................38
SECTION 6.3. RIGHTS AND REMEDIES CUMULATIVE...............................38
SECTION 6.4. DELAY OR OMISSION NOT WAIVER.................................38
SECTION 6.5. UNDERTAKING FOR COSTS........................................38
SECTION 6.6. WAIVER OF STAY OR EXTENSION LAWS.............................39
ARTICLE VII
THE AGENT
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES..........................39
SECTION 7.2. NOTICE OF DEFAULT............................................40
SECTION 7.3. CERTAIN RIGHTS OF AGENT......................................40
SECTION 7.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.......41
SECTION 7.5. MAY HOLD SECURITIES..........................................41
SECTION 7.6. MONEY HELD IN CUSTODY........................................41
SECTION 7.7. COMPENSATION AND REIMBURSEMENT...............................42
SECTION 7.8. CORPORATE AGENT REQUIRED; ELIGIBILITY........................42
SECTION 7.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR............42
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.......................44
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS..44
SECTION 7.12. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.......44
SECTION 7.13. NO OBLIGATIONS OF AGENT......................................45
SECTION 7.14. TAX COMPLIANCE...............................................45
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS...........45
SECTION 8.2. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS..............46
SECTION 8.3. EXECUTION OF SUPPLEMENTAL AGREEMENTS.........................47
SECTION 8.4. EFFECT OF SUPPLEMENTAL AGREEMENTS............................47
SECTION 8.5. REFERENCE TO SUPPLEMENTAL AGREEMENTS.........................47
ARTICLE IX
NSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY
PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.....................47
SECTION 9.2. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION...................48
SECTION 9.3. OPINION OF COUNSEL GIVEN TO AGENT............................48
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ARTICLE X
COVENANTS
SECTION 10.1. PERFORMANCE UNDER PURCHASE CONTRACTS.........................48
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY..............................48
SECTION 10.3. COMPANY TO RESERVE ORDINARY SHARES...........................49
SECTION 10.4. COVENANTS AS TO ORDINARY SHARES..............................49
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
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PURCHASE CONTRACT AGREEMENT, dated as of April 12, 2000, between
ACE Limited, a company duly organized and existing under the laws of the
Cayman Islands (the "Company"), and The Bank of New York, a New York
banking corporation, acting as purchase contract agent for the Holders of
Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms,
have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular; and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.1(d).
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Agent" shall mean such Person.
"Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Applicable Market Value" has the meaning specified in Section
5.1.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The
City of New York, whether or not published on days that are Legal Holidays,
and of general circulation in The City of New York. The Authorized
Newspaper for the purposes of the Reset Spread Announcement Date, is
currently anticipated to be The Wall Street Journal (NYC edition).
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected
on the books of the Clearing Agency or on the books of a Person maintaining
an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Board of Directors" means the board of directors of the Company
or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions and trust companies in The City of
New York are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.2(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth
PRIDES Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book-entry transfers and pledges of the
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
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"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Agent" means The Bank of New York, a New York banking
corporation, as Collateral Agent under the Pledge Agreement until a
successor Collateral Agent shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "Collateral
Agent" shall mean the Person who is then the Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in Section
3.13.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 21 West, New York, New York 10286, Attention:
Corporate Trust Administration.
"Current Market Price" has the meaning specified in Section
5.4(a)(8).
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"Dividend Rate" means the percentage rate per annum of the Stated
Amount of the Preferred Shares at which dividends thereon are payable, if
declared.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.7(a).
"Early Settlement Amount" has the meaning specified in Section
5.7(a).
"Early Settlement Date" has the meaning specified in Section
5.7(a).
"Early Settlement Rate" has the meaning specified in Section
5.7(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.4(a)(6).
"Failed Remarketing" has the meaning specified in Section 5.2(b).
3
"Global Certificate" means a Certificate that evidences all or
part of the Securities and is registered in the name of a Depositary or a
nominee thereof.
"Growth PRIDES" means the collective rights and obligations of a
holder of a Growth PRIDES Certificate in respect of a 1/20th undivided
beneficial interest in a Treasury Security, subject in each case to the
Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Growth
PRIDES specified on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person
in whose name the Security evidenced by an Income PRIDES Certificate and/or
a Growth PRIDES Certificate is registered in the related Income PRIDES
Register and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a
Holder of an Income PRIDES Certificate in respect of a Preferred Share,
subject to the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Income
PRIDES specified on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by the Chairman of the Board, the
Vice Chairman, the President, the Chief Financial Officer, the Chief
Administrative Officer, General Counsel, Secretary or any Vice President
(or other officer performing similar functions) of the Company and
delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chairman
of the Board, the Vice Chairman, the President, the Chief Financial
Officer, the Chief Administrative Officer, General Counsel, Secretary or
any Vice President (or other officer performing similar functions) of the
Company and delivered to the Agent.
"One-Month Treasury ▇▇▇▇" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having
a maturity comparable to the remaining term to the mandatory redemption
date of the Preferred Shares, as agreed upon by the Company and the Reset
Agent. The rate for the One-Month Treasury ▇▇▇▇ will be the bid side rate
displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date in the Telerate
system (or if the Telerate system is (a) no longer available on the third
Business Day immediately preceding the Purchase Contract Settlement Date or
(b) in the opinion of the Reset Agent (after consultation with the Company)
no longer an appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the opinion of the Reset
Agent (after consultation with the Company) is appropriate). If such rate
is not so displayed, the rate for the One-Month Treasury ▇▇▇▇ shall be, as
calculated by the Reset Agent, the yield to maturity for the One-Month
4
Treasury ▇▇▇▇, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30
A.M., New York City time, on the third Business Day immediately preceding
the Purchase Contract Settlement Date, of three leading United States
government securities dealers selected by the Reset Agent (after
consultation with the Company) (which may include the Reset Agent or an
Affiliate thereof).
"Ordinary Shares" means the ordinary shares, par value
US$0.041666667, of the Company.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an
Affiliate.
"Outstanding Securities," with respect to any Income PRIDES or
Growth PRIDES, means, as of the date of determination, all Income PRIDES or
Growth PRIDES evidenced by Certificates theretofore authenticated, executed
and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth
PRIDES and (B) Income PRIDES for which the Stated Amount of the
related Preferred Share has been theretofore deposited with the
Agent in trust for the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered to
the Agent for cancellation or deemed cancelled pursuant to the
provisions of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other
Certificates have been authenticated, executed on behalf of the
Holder and delivered pursuant to this Agreement, other than any
such Certificate in respect of which there shall have been
presented to the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose hands the
Income PRIDES or Growth PRIDES evidenced by such Certificate are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Income PRIDES or Growth PRIDES owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that,
in determining whether the Agent shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver,
only Income PRIDES or Growth PRIDES which a Responsible Officer of the
Agent actually knows to be so owned shall be so disregarded. Income PRIDES
or Growth PRIDES so owned which have been pledged in good faith may be
regarded as Outstanding Securities if the pledgee establishes to the
satisfaction of the Agent the pledgee's right so to act with respect to
such Income PRIDES or Growth PRIDES and that the pledgee is not the Company
or any Affiliate of the Company.
5
"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing May 16, 2000.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Permitted Investments" has the meaning set forth in Section 1.1
of the Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the
Preferred Shares or the Treasury Securities, in each case constituting a
part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the
date hereof, by and among the Company, the Collateral Agent and the Agent,
on its own behalf and as attorney-in-fact for the Holders from time to time
of the Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth
PRIDES Certificate means every previous Growth PRIDES Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Growth PRIDES evidenced thereby; and, for the
purposes of this definition, any Growth PRIDES Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Growth PRIDES Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as
the mutilated, destroyed, lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income
PRIDES Certificate means every previous Income PRIDES Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Income PRIDES evidenced thereby; and, for the
purposes of this definition, any Income PRIDES Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Income PRIDES Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as
the mutilated, destroyed, lost or stolen Income PRIDES Certificate.
"Preferred Shares" means the 8.25% Cumulative Redeemable Preferred
Shares, Series A, $1.00 par value per share, of the Company, having a
stated liquidation amount of $50 per share.
"Proceeds" has the meaning set forth in Section 1.1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means
the contract forming a part of such Security and obligating the Company to
sell and the Holder of such Security to purchase Ordinary Shares on the
terms and subject to the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Date" means May 16, 2003.
6
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.3.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.4(a)(6).
"Record Date" for the distribution payable on any Payment Date
means, as to any Global Certificate, the Business Day next preceding such
Payment Date, and as to any other Certificate, a day selected by the
Company which shall be more than one Business Day but less than 60 Business
Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth
PRIDES Registrar.
"Remarketing Agent" has the meaning specified in Section 5.2.
"Remarketing Agreement" means the Remarketing Agreement, dated
April 12, 2000, by and among the Company, the Remarketing Agent and the
Agent.
"Remarketing Fee" has the meaning specified in Section 5.2.
"Remarketing Underwriting Agreement" has the meaning specified in
the Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section
5.4(b).
"Reset Agent" means a nationally recognized investment banking
firm chosen by the Company to determine the Reset Rate. It is currently
anticipated that ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated will
act in such capacity.
"Reset Announcement Date" means the tenth (10th) Business Day
immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the dividend rate per annum (to be determined
by the Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the
rate of interest on the One-Month Treasury ▇▇▇▇ in effect on the third
Business Day immediately preceding the Purchase Contract Settlement Date,
that the Preferred Shares should bear in order for the Preferred Shares to
have an approximate market value of 100.5% of their aggregate liquidation
amount on the third Business Day immediately preceding the Purchase
Contract Settlement Date; provided, that the Company may limit such Reset
Spread to be no higher than 200 basis points (2%); and provided, further,
that in the event of a Failed Remarketing, the Reset Rate shall be the
dividend rate per annum in effect on the Business Day immediately preceding
the Purchase Contract Settlement Date.
"Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth (10th) Business Day immediately preceding the Purchase
Contract Settlement Date.
7
"Responsible Officer," when used with respect to the Agent, means
any officer of the Agent assigned by the Agent to administer its corporate
trust matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under any applicable system of bankruptcy laws, adjudicating the
Company to be insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of the Company or any other similar
applicable law, and, unless such judgment, decree or order shall have been
entered within 60 days prior to the Purchase Contract Settlement Date, such
decree or order shall have continued undischarged and unstayed for a period
of 60 days; or (ii) a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such
judgment, decree or order shall have been entered within 60 days prior to
the Purchase Contract Settlement Date, such judgment, decree or order shall
have continued undischarged and unstayed for a period of 60 days, or (iii)
at any time on or prior to the Purchase Contract Settlement Date, the
Company shall file a petition for relief under any applicable system of
bankruptcy laws, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking
reorganization or liquidation under such laws or any other similar
applicable law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"Threshold Depreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means a zero coupon U.S. Treasury security
(CUSIP Number 912833 FS4) with a principal amount at maturity equal to
$1,000 and maturing on May 15, 2003.
8
"Underwriting Agreement" means the Underwriting Agreement, dated
April 6, 2000, between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Banc of America Securities LLC and
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.
"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after the title
"vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officer's Certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that the individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual,
he or she has made such examination or investigation as is
necessary to enable such individual to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
9
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or
taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income
PRIDES Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make
or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Agreement to be given,
made or taken by Holders of Securities. If any record date is set pursuant
to this paragraph, the Holders of the Outstanding Income PRIDES and the
Outstanding Growth PRIDES, as the case may be, on such record date, and no
other Holders, shall be entitled to take the relevant action with respect
to the Income PRIDES or the Growth PRIDES, as the case may be, whether or
not such Holders remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
10
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite number of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided
that no such change shall be effective unless notice of the proposed new
Expiration Date is given to the Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the Company shall
be deemed to have initially designated the 180th day after such record date
as the Expiration Date with respect thereto, subject to its right to change
the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with:
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
to the Agent at The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration, or at any other address previously furnished in
writing by the Agent to the Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
to the Company at ACE Limited, The ACE Building, 30 Woodbourne
Avenue, ▇▇▇▇▇▇▇▇ ▇▇ 08, Bermuda, or at any other address
previously furnished in writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed, first-class
postage prepaid, addressed to the Collateral Agent at The Bank of
New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Administration, or at any other
address previously furnished in writing by the Collateral Agent to
the Agent, the Company and the Holders.
11
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it appears in the
applicable Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Agent shall constitute a sufficient notification for every purpose
hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this
Agreement. The Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all of the terms and conditions hereof and
of the Securities evidenced by their Certificates by their acceptance of
delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
12
Section 1.12. Legal Holidays.
In any case where any Purchase Contract Settlement Date shall not
be a Business Day, then (notwithstanding any other provision of this
Agreement, the Income PRIDES Certificates or the Growth PRIDES
Certificates), the Purchase Contracts shall not be performed on such date,
but the Purchase Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on the Purchase
Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by
the parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable
times during normal business hours at the Corporate Trust Office for
inspection by any Holder.
ARTICLE II
CERTIFICATE FORMS
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase
Contract forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange on which the Income PRIDES are
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Income PRIDES
Certificates, as evidenced by their execution of the Income PRIDES
Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers of the Company
executing such Income PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange on which the Growth PRIDES may be
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Growth PRIDES
Certificates, as evidenced by their execution of the Growth PRIDES
Certificates.
13
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers of the Company
executing such Growth PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART
FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE
IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the
Income PRIDES shall be in substantially the form set forth on the form of
the Income PRIDES Certificates.
The form of the Agent's certificate of authentication of the
Growth PRIDES shall be in substantially the form set forth on the form of
the Growth PRIDES Certificates.
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 6,000,000 (6,900,000 if the Underwriters' over-allotment option
pursuant to the Underwriting Agreement is exercised in full), except for
Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.7 or 8.5. Growth PRIDES will be
issued only in the manner described in Section 3.13 hereof.
The Certificates shall be issuable only in registered form and
only in denominations of a single Income PRIDES or Growth PRIDES and any
integral multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred
Share, subject to the Pledge of such Preferred Share by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Income PRIDES
14
shall pledge, pursuant to the Pledge Agreement, the Preferred Share forming
a part of such Income PRIDES, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest of
such Holder in such Preferred Share for the benefit of the Company, to
secure the obligation of the Holder under each Purchase Contract to
purchase the Ordinary Shares of the Company. Prior to the purchase of
Ordinary Shares under each Purchase Contract, the Purchase Contracts shall
not entitle the Holders of Income PRIDES Certificates to any of the rights
of a holder of Ordinary Shares, including, without limitation, the right to
vote or receive any dividends or other payments or to consent or to receive
notice as stockholders in respect of the meetings of stockholders or for
the election of directors of the Company or for any other matter, or any
other rights whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20th undivided beneficial interest
in a Treasury Security, subject to the Pledge of such interest in such
Treasury Security by such Holder pursuant to the Pledge Agreement, and the
rights and obligations of the Holder thereof and the Company under one
Purchase Contract. Prior to the purchase of Ordinary Shares under each
Purchase Contract, the Purchase Contracts shall not entitle the Holders of
Growth PRIDES Certificates to any of the rights of a holder of Ordinary
Shares, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election
of directors of the Company or for any other matter, or any other rights
whatsoever as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon
the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the
Company to the Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by the
Chairman of the Board, the Vice Chairman, the President, the Chief
Financial Officer, the Chief Administrative Officer, General Counsel,
Secretary or any Vice President (or other officer performing similar
functions) of the Company and delivered to the Agent. The signature of any
of these officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such
Certificates.
15
No Purchase Contract evidenced by a Certificate shall be valid
until such Certificate has been executed on behalf of the Holder by the
manual signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent
shall be conclusive evidence that the Holder of such Certificate has
entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holders, and deliver, in lieu of such definitive
Certificates, temporary Certificates which are in substantially the form
set forth in Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Income PRIDES
or Growth PRIDES are listed, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number
of Income PRIDES or Growth PRIDES, as the case may be, as the temporary
Certificate or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same benefits and
the same obligations with respect to the Income PRIDES or Growth PRIDES, as
the case may be, evidenced thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations
as it may prescribe, the Agent shall provide for the registration of Income
PRIDES Certificates and of transfers of Income PRIDES Certificates (the
Agent, in such capacity, the "Income PRIDES Registrar") and a register (the
"Growth PRIDES Register") in which, subject to such reasonable regulations
as it may prescribe, the Agent shall provide for the registration of the
Growth PRIDES Certificates and transfers of Growth PRIDES Certificates (the
Agent, in such capacity, the "Growth PRIDES Registrar").
16
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a like
number of Income PRIDES or Growth PRIDES, as the case may be, upon
surrender of the Certificates to be exchanged at the Corporate Trust
Office. Whenever any Certificates are so surrendered for exchange, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number
of Income PRIDES or Growth PRIDES, as the case may be, and be entitled to
the same benefits and subject to the same obligations, under this Agreement
as the Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent duly executed, by the Holder
thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of a Certificate, but the Company and the Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Certificates, other than any exchanges pursuant
to Sections 3.6 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i)
if the Purchase Contract Settlement Date has occurred, deliver the number
of Ordinary Shares issuable in respect of the Purchase Contracts forming a
part of the Securities evidenced by such Certificate, (ii) in the case of
Income PRIDES, if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the aggregate Stated Amount of
the Preferred Shares evidenced thereby, or (iii) in the case of Growth
PRIDES, if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Treasury Securities evidenced
thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
17
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form
of one or more, fully registered Global Certificates, to be delivered to
the Depositary by, or on behalf of, the Company. Such Global Certificate
shall initially be registered on the books and records of the Company in
the name of Cede & Co., the nominee of the Depositary, and no Beneficial
Owner will receive a definitive Certificate representing such Beneficial
Owner's interest in such Global Certificate, except as provided in Section
3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including receiving approvals, votes or
consents hereunder) as the Holder of the Securities and the sole holder of
the Global Certificate(s) and shall have no obligation to the Beneficial
Owners;
(c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. The Clearing Agency will make
book-entry transfers among Clearing Agency Participants and receive and
transmit dividends on the Preferred Shares to such Clearing Agency
Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's
agent shall give such notices and communications to the Holders and, with
respect to any Securities registered in the name of a Clearing Agency or
the nominee of a Clearing Agency, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in
its sole discretion, appoint a successor Clearing Agency with respect to
the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 3.8, (ii) the Company elects to terminate the
book-entry system through the Clearing Agency with respect to the
18
Securities, or (iii) there shall have occurred and be continuing a default
by the Company in respect of its obligations under one or more Purchase
Contracts, then upon surrender of the Global Certificates representing the
Book-Entry Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance
with the instructions of the Clearing Agency. The Company shall not be
liable for any delay in delivery of such instructions and may conclusively
rely on and shall be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Certificate at the cost of the Holder, evidencing the same
number of Income PRIDES or Growth PRIDES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity at the cost of the Holder
as may be required by them to hold each of them and any agent of any of
them harmless, then, in the absence of notice to the Company or the Agent
that such Certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new
Certificate, evidencing the same number of Income PRIDES or Growth PRIDES,
as the case may be, and bearing a Certificate number not contemporaneously
outstanding.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the
Holder, a Certificate on or after the Business Day immediately preceding
the earlier of the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the
Agent shall (i) if the Purchase Contract Settlement Date has occurred,
deliver the number of Ordinary Shares issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate,
or (ii) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Preferred Shares or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject to
the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder in
respect of the Security evidenced thereby, whether or not the destroyed,
lost or stolen Certificate (and the Securities evidenced thereby) shall be
at any time enforceable by anyone, and shall be entitled to all the
benefits and be subject to all the obligations of this Agreement equally
and proportionately with any and all other Certificates delivered
hereunder.
19
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the
Agent, may treat the Person in whose name such Certificate is registered as
the owner of the Income PRIDES or Growth PRIDES evidenced thereby, for the
purpose of receiving dividends on the Preferred Shares, if declared,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any dividends on the Preferred Shares shall be
overdue and notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or any
agent of the Company or the Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Clearing
Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of
beneficial interests in such Global Certificate, the operation of customary
practices governing the exercise of rights of such Clearing Agency (or its
nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of Ordinary Shares on or
after the Purchase Contract Settlement Date, upon the transfer of Preferred
Shares or Treasury Securities, as the case may be, after the occurrence of
a Termination Event or pursuant to an Early Settlement, or upon the
registration of a transfer or exchange of a Security, or a Collateral
Substitution or the re-establishment of an Income PRIDES shall, if
surrendered to any Person other than the Agent, be delivered to the Agent
and, if not already cancelled, shall be promptly cancelled by it. The
Company may at any time deliver to the Agent for cancellation any
Certificates previously authenticated, executed and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled
by the Agent. No Certificates shall be authenticated, executed on behalf of
the Holder and delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly permitted by
this Agreement. All cancelled Certificates held by the Agent shall be
disposed of by the Agent in accordance with its customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
20
Section 3.13. Establishment or Reestablishment of Growth PRIDES.
A Holder may separate the Preferred Shares from the related
Purchase Contracts in respect of an Income PRIDES by substituting for such
Preferred Shares, Treasury Securities in an aggregate principal amount at
maturity equal to the aggregate Stated Amount of such Preferred Shares (a
"Collateral Substitution"), at any time from and after the date of this
Agreement and on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date by (a) depositing with the Collateral
Agent Treasury Securities having an aggregate principal amount at maturity
equal to the aggregate Stated Amount of the Preferred Shares comprising
part of such Income PRIDES and (b) transferring the related Income PRIDES
to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Treasury Securities to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the
Preferred Shares underlying such Income PRIDES, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit C hereto. Upon receipt of the Treasury Securities
described in clause (a) above and the instruction described in clause (b)
above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder, Preferred Shares
having a corresponding aggregate Stated Amount of such Preferred Shares
from the Pledge, free and clear of the Company's security interest therein,
and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the related Preferred Shares to the
Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Preferred Shares from the
related Purchase Contract and to substitute Treasury Securities for such
Preferred Shares, shall be responsible for any fees or expenses payable to
the Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
Holders may make Collateral Substitutions only in integral
multiples of 20 Income PRIDES.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Income
PRIDES or fails to deliver an Income PRIDES Certificate to the Agent after
depositing Treasury Securities with the Collateral Agent, the Preferred
Shares constituting a part of such Income PRIDES, and any distributions on
such Preferred Share, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES are so
transferred or the Income PRIDES Certificate is so delivered, as the case
may be, or, with respect to an Income PRIDES Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that such
Income PRIDES Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Agent and the Company.
21
Except as described in this Section 3.13, for so long as the
Purchase Contract underlying an Income PRIDES remains in effect, such
Income PRIDES shall not be separable into its constituent parts, and the
rights and obligations of the Holder in respect of the Preferred Shares,
and Purchase Contract comprising such Income PRIDES may be acquired, and
may be transferred and exchanged, only as an Income PRIDES.
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES
at any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date by (a) depositing with the Collateral
Agent Preferred Shares having an aggregate Stated Amount equal to the
aggregate principal amount at maturity of the Pledged Treasury Securities
comprising part of the Growth PRIDES and (b) transferring the related
Growth PRIDES to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Preferred Shares, to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent to
release the Treasury Securities underlying such Growth PRIDES, whereupon
the Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the
Preferred Shares described in clause (a) above and the instruction
described in clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will effect the release of the Treasury
Securities having a corresponding aggregate principal amount at maturity
from the Pledge to the Agent free and clear of the Company's security
interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income
PRIDES in integral multiples of 20 Growth PRIDES for 20 Preferred Shares
only.
Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and Purchase Contract comprising such Growth PRIDES may be
acquired, and may be transferred and exchanged only as a Growth PRIDES.
22
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Shares or the Treasury Securities, as the case may
be, underlying the Income PRIDES and the Growth PRIDES pursuant to the
terms of the Pledge Agreement, the Agent shall request transfer
instructions with respect to such Preferred Shares or Treasury Securities,
as the case may be, from each Holder by written request mailed to such
Holder at its address as it appears in the Income PRIDES Register or the
Growth PRIDES Register, as the case may be. Upon book-entry transfer of the
Income PRIDES or Growth PRIDES or delivery of an Income PRIDES Certificate
or Growth PRIDES Certificate to the Agent with such transfer instructions,
the Agent shall transfer the Preferred Shares or Treasury Securities, as
the case may be, underlying such Income PRIDES or Growth PRIDES, as the
case may be, to such Holder by book-entry transfer, or other appropriate
procedures, in accordance with such instructions. In the event a Holder of
Income PRIDES or Growth PRIDES fails to effect such transfer or delivery,
the Preferred Shares or Treasury Securities, as the case may be, underlying
such Income PRIDES or Growth PRIDES, as the case may be, and any
distributions thereon, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Income PRIDES
or Growth PRIDES are transferred or the Income PRIDES Certificate or Growth
PRIDES Certificate is surrendered or such Holder provides satisfactory
evidence that such Income PRIDES Certificate or Growth PRIDES Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.
Section 3.16. CUSIP Numbers.
The Company in issuing the Securities may use CUSIP numbers (if
then generally in use), and, if so, the Agent shall use CUSIP numbers in
notices as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Agent of any change in the CUSIP numbers.
ARTICLE IV
THE PREFERRED SHARES
Section 4.1. Payment of Dividend; Rights to Dividends Preserved;
Dividend Rate Reset; Notice.
A distribution on any Preferred Share which is paid on any Payment
Date shall, subject to receipt thereof by the Agent from the Collateral
Agent as provided by the terms of the Pledge Agreement, be paid to the
Person in whose name the Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificates) of which such Preferred Share is a
part is registered at the close of business on the Record Date for such
Payment Date.
Each Income PRIDES Certificate evidencing Preferred Shares
delivered under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other Income PRIDES Certificate shall carry
the rights to accumulated and unpaid dividends, and to accumulate
dividends, which were carried by the Preferred Shares underlying such other
Income PRIDES Certificate.
23
In the case of any Income PRIDES with respect to which Cash
Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Purchase Contract Settlement Date pursuant to
prior notice, or with respect to which Early Settlement of the underlying
Purchase Contract is effected on an Early Settlement Date, or with respect
to which a Collateral Substitution is effected, in each case on a date that
is after any Record Date and on or prior to the next succeeding Payment
Date, dividends on the Preferred Shares underlying such Income PRIDES
otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such dividends shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate
(or one or more Predecessor Income PRIDES Certificates) was registered at
the close of business on the Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Income
PRIDES with respect to which Cash Settlement or Early Settlement of the
underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement
Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, dividends on the related Preferred Shares
that would otherwise be payable after the Purchase Contract Settlement Date
or Early Settlement Date shall not be payable hereunder to the Holder of
such Income PRIDES; provided, however, that to the extent that such Holder
continues to hold the separated Preferred Shares that formerly comprised a
part of such Holder's Income PRIDES, such Holder shall be entitled to
receive the dividends on such separated Preferred Shares.
The applicable Dividend Rate on the Preferred Shares on and after
the Purchase Contract Settlement Date will be reset on the third Business
Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (such Reset Rate to be in effect on and after the Purchase
Contract Settlement Date). On the Reset Announcement Date, the Reset Spread
and the One-Month Treasury ▇▇▇▇ to be used to determine the Reset Rate will
be announced by the Company. On the Business Day immediately following the
Reset Announcement Date, the Preferred Shares Holders will be notified of
such Reset Spread and the One-Month Treasury ▇▇▇▇ by the Company. Such
notice shall be sufficiently given to Holders of Preferred Shares if
published in an Authorized Newspaper in The City of New York.
Not less than 7 calendar days nor more than 15 calendar days prior
to the Reset Announcement Date, the Company will notify DTC or its nominee
(or any successor Clearing Agency or its nominee) by first-class mail,
postage prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Income PRIDES or Growth PRIDES, of such Reset
Announcement Date and the procedures to be followed by such Holders of
Income PRIDES who intend to settle their obligation under the Purchase
Contract with separate cash on the Purchase Contract Settlement Date.
24
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Preferred Shares pledged with the Collateral Agent but only to the
extent instructed by the Holders as described below. Upon receipt of notice
of any meeting at which holders of Preferred Shares are entitled to vote or
upon any solicitation of consents, waivers or proxies of holders of
Preferred Shares, the Agent shall, as soon as practicable thereafter, mail
to the Holders of Income PRIDES a notice (a) containing such information as
is contained in the notice or solicitation, (b) stating that each Holder on
the record date set by the Agent therefor (which, to the extent possible,
shall be the same date as the record date for determining the holders of
Preferred Shares entitled to vote) shall be entitled to instruct the Agent
as to the exercise of the voting rights pertaining to the Preferred Shares
underlying their Income PRIDES and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of
Income PRIDES on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of Preferred
Shares as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the
Agent shall abstain from voting the Preferred Share underlying such Income
PRIDES. The Company hereby agrees, if applicable, to solicit Holders of
Income PRIDES to timely instruct the Agent in order to enable the Agent to
vote such Preferred Shares.
ARTICLE V
THE PURCHASE CONTRACTS
Section 5.1. Purchase of Ordinary Shares.
Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.7 hereof, obligate the Holder of the
related Security to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of newly issued Ordinary Shares equal to the
Settlement Rate unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate"
is equal to (a) if the Applicable Market Value (as defined below) is equal
to or greater than $26.3281 (the "Threshold Appreciation Price"), 1.8991
Ordinary Shares per Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price, but is greater than $18.9563
(the "Threshold Depreciation Price"), the number of Ordinary Shares equal
to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Value is less than or equal to Threshold Depreciation
Price, 2.6376 Ordinary Shares per Purchase Contract, in each case subject
to adjustment as provided in Section 5.4 (and in each case rounded upward
or downward to the nearest 1/10,000th of a share). As provided in Section
5.8, no fractional Ordinary Shares will be issued upon settlement of
Purchase Contracts.
The "Applicable Market Value" means the average of the Closing
Prices per Ordinary Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" of the Ordinary Shares on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Ordinary Shares on the New
York Stock Exchange (the "NYSE") on such date or, if the Ordinary Shares
are not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Ordinary Shares are so listed, or if the Ordinary Shares are
not so listed on a United States national or regional securities exchange,
as reported by The Nasdaq Stock Market, or, if the Ordinary Shares are not
so reported, the last quoted bid price for the Ordinary Shares in the
25
over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market
value of the Ordinary Shares on such date as of 4:00 p.m., New York City
time, as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Ordinary Shares (A) are
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B)
have traded at least once on the national or regional securities exchange
or association or over-the-counter market that is the primary market for
the trading of the Ordinary Shares.
Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, irrevocably authorizes the Agent to enter into and
perform the related Purchase Contract on its behalf as its attorney-in-fact
(including the execution of Certificates on behalf of such Holder), agrees
to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, and consents to the
provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact
to enter into and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of
the Preferred Shares or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of the Holder
of such Security under the Purchase Contract may be enforced without regard
to any other rights or obligations. Each Holder of an Income PRIDES or a
Growth PRIDES, by its acceptance thereof, further covenants and agrees,
that, to the extent and in the manner provided in Section 5.2 and the
Pledge Agreement, but subject to the terms thereof, payments in respect of
the Stated Amount of the Preferred Shares or the Proceeds of the Treasury
Securities on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of
such transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor
shall be released from the obligations under this Agreement, the Purchase
Contracts underlying the Certificates so transferred and the Pledge
Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to
be bound by the provisions of this paragraph.
Section 5.2. Payment of Purchase Price.
(a) (i) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Agent in the manner described in
Section 5.7, each Holder of an Income PRIDES must notify the Agent by use
of a notice in substantially the form of Exhibit E hereto of its intention
to pay in cash ("Cash Settlement") the Purchase Price for the Ordinary
Shares to be purchased pursuant to a Purchase Contract. Such notice shall
be made on or prior to 5:00 p.m., New York City time, on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date. The Agent
shall promptly notify the Collateral Agent of the receipt of such a notice
from a Holder intending to make a Cash Settlement.
26
(ii) A Holder of an Income PRIDES who has so notified the Agent of
its intention to make a Cash Settlement is required to pay the Purchase
Price to the Collateral Agent prior to 11:00 a.m., New York City time, on
the Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check
or wire transfer, in each case in immediately available funds payable to or
upon the order of the Company. Any cash received by the Collateral Agent
will be invested promptly by the Collateral Agent in Permitted Investments
and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Collateral
Agent in respect of the investment earnings from the investment in such
Permitted Investments will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the Agent of
its intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute an event of default and the Holder
shall be deemed to have consented to the disposition of the pledged
Preferred Shares pursuant to the remarketing as described in paragraph (b)
below. If a Holder of an Income PRIDES does notify the Agent as provided in
paragraph (a)(i) above of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (a)(ii) above, such
failure shall also constitute a default; however, the Preferred Shares of
such a Holder will not be remarketed but instead the Collateral Agent, for
the benefit of the Company, will exercise its rights as a secured party
with respect to such Preferred Shares, including those rights specified in
paragraph (c) below.
(b) In order to dispose of the Preferred Shares of Income PRIDES
Holders who have not notified the Agent of their intention to effect a Cash
Settlement as provided in paragraph (a)(i) above, the Company shall engage
a nationally recognized investment bank (the "Remarketing Agent") pursuant
to the Remarketing Agreement to sell such Preferred Shares. In order to
facilitate the remarketing, the Agent shall notify, by 10:00 a.m., New York
City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Remarketing Agent of the aggregate number of
Preferred Shares to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing
such Preferred Shares to the Remarketing Agent. Upon receipt of such notice
from the Agent and such Preferred Shares from the Collateral Agent, the
Remarketing Agent will, on the third Business Day immediately preceding the
Purchase Contract Settlement Date, use its reasonable efforts to remarket
such Preferred Shares on such date at a price of approximately 100.5% (but
not less than 100%) of the aggregate stated liquidation amount of such
Preferred Shares, plus accumulated and unpaid distributions, if any,
thereon. After deducting as the remarketing fee ("Remarketing Fee") an
amount not exceeding 25 basis points (.25%) of the aggregate stated
liquidation amount of the remarketed Preferred Shares from any amount of
such proceeds in excess of the aggregate stated liquidation amount of the
remarketed Preferred Shares plus accumulated and unpaid dividends, if any,
27
then the Remarketing Agent will remit the entire amount of the proceeds
from such remarketing to the Collateral Agent. Such portion of the
proceeds, equal to the aggregate stated liquidation amount of such
Preferred Shares, will automatically be applied by the Collateral Agent, in
accordance with the Pledge Agreement to satisfy in full such Income PRIDES
holders' obligations to pay the Purchase Price for the Ordinary Shares
under the related Purchase Contracts on the Purchase Contract Settlement
Date. Any proceeds in excess of those required to pay the Purchase Price
and the Remarketing Fee will be remitted to the Agent for payment to the
Holders of the related Income PRIDES. Income PRIDES Holders whose Preferred
Shares are so remarketed will not otherwise be responsible for the payment
of any Remarketing Fee in connection therewith. If, in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the related
Preferred Shares of such Holders of Income PRIDES at a price not less then
100% of the aggregate stated liquidation amount of such Preferred Shares
plus accumulated and unpaid dividends, if any, the remarketing will be
deemed to have failed (a "Failed Remarketing") and in accordance with the
terms of the Pledge Agreement, the Collateral Agent for the benefit of the
Company will exercise its rights as a secured party with respect to such
Preferred Shares, including those actions specified in paragraph (c) below;
provided, that if upon a Failed Remarketing the Collateral Agent exercises
such rights for the benefit of the Company with respect to such Preferred
Shares, any accumulated and unpaid dividends on such Preferred Shares will
become payable by the Company to the Agent for payment to the Beneficial
Owner of the Income PRIDES to which such Preferred Shares relates. Such
payment will be made by the Company on or prior to 11 a.m., New York City
time, on the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer in
immediately available funds payable to or upon the order of the Agent. The
Company will cause a notice of such Failed Remarketing to be published on
the second Business Day immediately preceding the Purchase Contract
Settlement Date in an Authorized Newspaper in The City of New York.
(c) With respect to any Preferred Shares beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as
required in (a)(ii) above, or with respect to Preferred Shares which are
subject to a Failed Remarketing, the Collateral Agent for the benefit of
the Company reserves all of its rights as a secured party with respect
thereto and, subject to applicable law and paragraph (g) below, may, among
other things, (i) retain the Preferred Shares in full satisfaction of the
Holders obligations under the Purchase Contracts or (ii) sell the Preferred
Shares in one or more public or private sales.
(d) (i) Unless a Holder of Growth PRIDES settles the underlying
Purchase Contract through the early delivery of cash to the Agent in the
manner described in Section 5.7, each Holder of a Growth PRIDES must notify
the Agent by use of a notice in substantially the form of Exhibit E hereto
of its intention to pay in cash the Purchase Price for the Ordinary Shares
to be purchased pursuant to a Purchase Contract on or prior to 5:00 p.m.,
New York City time, on the second Business Day immediately preceding the
Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES who has so notified the Agent of
its intention to make a Cash Settlement in accordance with paragraph (d)(i)
above is required to pay the Purchase Price to the Collateral Agent prior
to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in specific Permitted Investments as
directed in writing by the Company and paid to the Company on the Purchase
Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any
funds received by the Collateral Agent in respect of the investment
earnings from the investment in such Permitted Investments will be
distributed to the Agent when received for payment to the Holder.
28
(iii) If a Holder of a Growth PRIDES notifies the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i)
above, but fails to make such payment as required by paragraph (d)(ii)
above, then upon the maturity of the Pledged Treasury Securities held by
the Collateral Agent on the Business Day immediately prior to the Purchase
Contract Settlement Date, the principal amount at maturity of the Treasury
Securities received by the Collateral Agent will be invested promptly in
specific overnight Permitted Investments as directed in writing by the
Company. On the Purchase Contract Settlement Date, an amount equal to the
Purchase Price will be remitted to the Company as payment thereof without
receiving any instructions from the Holder. In the event the sum of the
proceeds from the related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Agent for the benefit
of the Holder of the related Growth PRIDES when received.
(e) Any distribution to Holders of excess funds and interest
described above shall be payable at the office of the Agent in The City of
New York maintained for that purpose or, at the option of the Holder, by
check mailed to the address of the Person entitled thereto at such address
as it appears on the Register.
(f) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Collateral Agent in the manner
described herein, the Company shall not be obligated to issue any Ordinary
Shares in respect of a Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the Ordinary Shares to be purchased thereunder in the
manner herein set forth.
Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Preferred Shares or the Pledged Treasury Securities underlying the
relevant Security to be released from the Pledge by the Collateral Agent
free and clear of any security interest of the Company and transferred to
the Agent for delivery to the Holder thereof or its designee as soon as
practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate
procedures, in accordance with instructions provided by the Holder thereof,
transfer such Preferred Shares or such Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold
such Preferred Shares or such Treasury Securities, and any dividends or
distributions thereon, in the name of the Agent or its nominee in trust for
the benefit of such Holder).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement
or the proceeds of any Collateral Pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency between
the proceeds of Collateral disposition and the Purchase Price.
29
Section 5.3. Issuance of Ordinary Shares.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its receipt of
payment in full of the Purchase Price for the Ordinary Shares purchased by
the Holders pursuant to the foregoing provisions of this Article and
subject to Section 5.4(b), the Company shall issue and deposit with the
Agent, for the benefit of the Holders of the Outstanding Securities, one or
more certificates representing the newly issued Ordinary Shares registered
in the name of the Agent (or its nominee) as custodian for the Holders
(such certificates for Ordinary Shares, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date,
being hereinafter referred to as the "Purchase Contract Settlement Fund")
to which the Holders are entitled hereunder. Subject to the foregoing, upon
surrender of a Certificate to the Agent on or after the Purchase Contract
Settlement Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of
whole Ordinary Shares which such Holder is entitled to receive pursuant to
the provisions of this Article Five (after taking into account all
Securities then held by such Holder) together with cash in lieu of
fractional shares as provided in Section 5.8 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the
Certificate so surrendered shall forthwith be cancelled. Such shares shall
be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the
Agent. If any Ordinary Shares issued in respect of a Purchase Contract are
to be registered to a Person other than the Person in whose name the
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such
registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.4. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on the Ordinary Shares in Ordinary Shares, the
Settlement Rate, as in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the numerator shall be the
number of Ordinary Shares outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend
or other distribution, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number of
Ordinary Shares at the time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of Ordinary
Shares. The Company will not pay any dividend or make any distribution on
Ordinary Shares held in the treasury of the Company.
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(2) In case the Company shall issue rights, options or
warrants to all holders of its Ordinary Shares (not being available on an
equivalent basis to Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities) entitling them, for a period
expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, options or warrants, to
subscribe for or purchase Ordinary Shares at a price per share less than
the Current Market Price per Ordinary Share on the date fixed for the
determination of shareholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan), the
Settlement Rate in effect at the opening of business on the day following
the date fixed for such determination shall be increased by dividing such
Settlement Rate by a fraction, the numerator of which shall be the number
of Ordinary Shares outstanding at the close of business on the date fixed
for such determination plus the number of Ordinary Shares which the
aggregate of the offering price of the total number of Ordinary Shares so
offered for subscription or purchase would purchase at such Current Market
Price and the denominator of which shall be the number of Ordinary Shares
outstanding at the close of business on the date fixed for such
determination plus the number of Ordinary Shares so offered for
subscription or purchase, such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of
Ordinary Shares at any time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of Ordinary
Shares. The Company shall not issue any such rights, options or warrants in
respect of Ordinary Shares held in the treasury of the Company.
(3) In case outstanding Ordinary Shares shall be
subdivided or split into a greater number of Ordinary Shares, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding Ordinary
Shares shall each be combined into a smaller number of Ordinary Shares, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day
following the day upon which such subdivision, split or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Ordinary Shares evidences of its
indebtedness or assets (including securities, but excluding any rights or
warrants referred to in paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and any dividend or distribution
referred to in paragraph (1) of this Section), the Settlement Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the
date fixed for the determination of shareholders entitled to receive such
distribution by a fraction, the numerator of which shall be the Current
Market Price per Ordinary Share on the date fixed for such determination
less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution
filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one Ordinary Share and the
denominator of which shall be such Current Market Price per Ordinary Share,
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of this Section shall not
be applicable.
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(5) In case the Company shall, (I) by dividend or
otherwise, distribute to all holders of its Ordinary Shares cash (excluding
any cash that is distributed in a Reorganization Event to which Section
5.4(b) applies or as part of a distribution referred to in paragraph (4) of
this Section) in an aggregate amount that, combined together with (II) the
aggregate amount of any other distributions to all holders of its Ordinary
Shares made exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant
to this paragraph (5) or paragraph (6) of this Section has been made and
(III) the aggregate of any cash plus the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect of any
tender or exchange offer by the Company or any of its subsidiaries for all
or any portion of the Ordinary Shares concluded within the 12 months
preceding the date of payment of the distribution described in clause (I)
above and in respect of which no adjustment pursuant to this paragraph (5)
or paragraph (6) of this Section has been made, exceeds 5% of the product
of the Current Market Price per Ordinary Share on the date for the
determination of holders of Ordinary Shares entitled to receive such
distribution times the number of Ordinary Shares outstanding on such date,
then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so that
the same shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by
a fraction (i) the numerator of which shall be equal to the Current Market
Price per Ordinary Share on the date fixed for such determination less an
amount equal to the quotient of (x) the combined amount distributed or
payable in the transactions described in clauses (I), (II) and (III) above
and (y) the number of Ordinary Shares outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per Ordinary Share on such date for determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion of the
Ordinary Shares shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to shareholders
(based on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as
of the expiration of such tender or exchange offer, of consideration
payable in respect of any other tender or exchange offer, by the Company or
any subsidiary of the Company for all or any portion of the Ordinary Shares
expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made and (III) the
aggregate amount of any distributions to all holders of the Company's
Ordinary Shares made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this paragraph (6)
has been made, exceeds 5% of the product of the Current Market Price per
Ordinary Share as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender or exchange offer (as it may be
amended) times the number of Ordinary Shares outstanding (including any
tendered shares) on the Expiration Time, then, and in each such case,
32
immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a
fraction (i) the numerator of which shall be equal to (A) the product of
(I) the Current Market Price per Ordinary Share on the date of the
Expiration Time and (II) the number of Ordinary Shares outstanding
(including any tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the transactions
described in clauses (I), (II) and (III) above (assuming in the case of
clause (I) the acceptance, up to any maximum specified in the terms of the
tender or exchange offer, of Purchased Shares), and (ii) the denominator of
which shall be equal to the product of (A) the Current Market Price per
Ordinary Share as of the Expiration Time and (B) the number of Ordinary
Shares outstanding (including any tendered shares) as of the Expiration
Time less the number of all shares validly tendered and not withdrawn as of
the Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares").
(7) The reclassification of Ordinary Shares into
securities including securities other than Ordinary Shares (other than any
reclassification upon a Reorganization Event to which Section 5.4(b)
applies) shall be deemed to involve (a) a distribution of such securities
other than Ordinary Shares to all holders of Ordinary Shares (and the
effective date of such reclassification shall be deemed to be "the date
fixed for the determination of stockholders entitled to receive such
distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of Ordinary Shares
outstanding immediately prior to such reclassification into the number of
Ordinary Shares outstanding immediately thereafter (and the effective date
of such reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision, split or combination becomes effective" within the
meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per Ordinary Share on any
day means the average of the daily Closing Prices for the 5 consecutive
Trading Days selected by the Company commencing not more than 30 Trading
Days before, and ending not later than, the earlier of the day in question
and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph,
the term "ex date", when used with respect to any issuance or distribution,
shall mean the first date on which the Ordinary Shares trades regular way
on such exchange or in such market without the right to receive such
issuance or distribution.
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(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of an Ordinary Share (or if there is
not a nearest 1/10,000th of a share to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.4(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (a), (b) or
(c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction, the numerator of
which shall be the Settlement Rate immediately after such adjustment
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this
Section 5.4(a) and the denominator of which shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such
adjustment to the Settlement Rate is required to be made pursuant to the
occurrence of any of the events contemplated by paragraph (1), (2), (3), (4),
(5), (7) or (10) of this Section 5.4(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the
Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to
any holders of Ordinary Shares resulting from any dividend or distribution
of stock or issuance of rights or warrants to purchase or subscribe for
stock or from any event treated as such for income tax purposes or for any
other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with
or into another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the Ordinary Shares
outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Company or another
corporation), (ii) any sale, transfer, lease or conveyance to another
Person of the property of the Company as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or
(iv) any liquidation, dissolution or winding up of the Company other than
as a result of or after the occurrence of a Termination Event (any such
event, a "Reorganization Event"), the Settlement Rate will be adjusted to
provide that each Holder of Securities will receive on the Purchase
34
Contract Settlement Date with respect to each Purchase Contract forming a
part thereof, the kind and amount of securities, cash and other property
receivable upon such Reorganization Event (without any interest thereon,
and without any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement Date) by a
Holder of the number of Ordinary Shares issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event assuming such Holder of
Ordinary Shares is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to the
extent such Reorganization Event provides for different treatment of
Ordinary Shares held by Affiliates of the Company and non-affiliates and
such Holder failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event (provided that if the kind or amount of securities,
cash and other property receivable upon such Reorganization Event is not
the same for each Ordinary Share held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section the
kind and amount of securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the non-electing
shares). In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person which acquires the
assets of the Company or, in the event of a liquidation or dissolution of
the Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement supplemental
hereto providing that the Holders of each Outstanding Security shall have
the rights provided by this Section 5.6. Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive
Reorganization Events.
Section 5.5. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate in accordance
with Section 5.4 and prepare and transmit to the Agent an
Officer's Certificate setting forth the Settlement Rate, the
method of calculation thereof in reasonable detail, and the facts
requiring such adjustment and upon which such adjustment is based;
and
(ii) within 10 Business Days following the occurrence of
an event that requires an adjustment to the Settlement Rate
pursuant to Section 5.4 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware),
provide a written notice to the Holders of the Securities of the
occurrence of such event and a statement in reasonable detail
setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement
Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed in making the same. The Agent
shall not be accountable with respect to the validity or value (or the kind
or amount) of any Ordinary Shares, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase
Contract; and the Agent makes no representation with respect thereto. The
Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any Ordinary Shares pursuant to a Purchase Contract or
to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article.
Section 5.6. Termination Event; Notice.
35
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights and obligations of Holders to purchase Ordinary Shares, shall
immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Preferred
Shares, forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accordance with the
provisions of Section 4.3 of the Pledge Agreement. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Register.
Section 5.7. Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.7, at the option of the Holder thereof, Purchase Contracts
underlying Securities, having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof, may be settled early ("Early Settlement") in
the case of Income PRIDES on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date and in the case of Growth
PRIDES on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, in each case, as provided herein. In
order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed and
accompanied by payment (payable to the Company in immediately available
funds in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement plus
(ii) in the case of Income PRIDES Certificates, if such delivery is made
with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening
of business on such Payment Date, an amount equal to the sum of the
dividends on the related Preferred Shares payable on such Payment Date.
Except as provided in the immediately preceding sentence, no payment or
adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any dividends on the Ordinary Shares issued upon such Early
Settlement. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities at or prior to 5:00 p.m.,
New York City time, on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Securities and if such requirements
are first satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement Date" with
respect to such Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be
entitled to receive, 1.8991 Ordinary Shares on account of each Purchase
Contract as to which Early Settlement is effected (the "Early Settlement
Rate"). The Early Settlement Rate shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted. As promptly as
practicable after Early Settlement of Purchase Contracts in accordance with
the provisions of this Section 5.7, the Company shall issue and shall
deliver to the Agent at the Corporate Trust Office a certificate or
certificates for the full number of Ordinary Shares issuable upon such
Early Settlement together with payment in lieu of any fraction of a share,
as provided in Section 5.8.
36
(c) No later than the third Business Day after the applicable
Early Settlement Date the Company shall cause (i) the Ordinary Shares
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Preferred Shares, in the case of Income
PRIDES, or the related Treasury Securities, in the case of Growth PRIDES,
to be released from the Pledge by the Collateral Agent and transferred, in
each case to the Agent for delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of Ordinary Shares from the Company and the Preferred Shares, or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided
by the Holder thereof on the applicable form of Election to Settle Early on
the reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder the Preferred Shares or Treasury Securities, as the
case may be, forming a part of such Securities, and (ii) deliver to the
Holder a certificate or certificates for the full number of Ordinary Shares
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.8.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Agent shall authenticate, countersign and deliver to the Holder thereof, at
the expense of the Company, a Certificate evidencing the Securities as to
which Early Settlement was not effected.
Section 5.8. No Fractional Shares.
No fractional shares or scrip representing fractional Ordinary
Shares shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement of any Purchase
Contracts. If Certificates evidencing more than one Purchase Contract shall
be surrendered for settlement at one time by the same Holder, the number of
full Ordinary Shares which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional
Ordinary Share which would otherwise be deliverable upon settlement of any
Purchase Contracts on the Purchase Contract Settlement Date or upon Early
Settlement, the Company, through the Agent, shall make a cash payment in
respect of such fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company shall
provide the Agent from time to time with sufficient funds to permit the
Agent to make all cash payments required by this Section 5.8 in a timely
manner.
Section 5.9. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the Ordinary Shares
pursuant to the Purchase Contracts; provided, however, that the Company
shall not be required to pay any such tax or taxes which may be payable in
respect of any exchange of or substitution for a Certificate evidencing a
Security or any issuance of an Ordinary Share in a name other than that of
the registered Holder of a Certificate surrendered in respect of the
Securities evidenced thereby, other than in the name of the Agent, as
custodian for such Holder, and the Company shall not be required to issue
or deliver such share certificates or Certificates unless or until the
Person or Persons requesting the transfer or issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
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ARTICLE VI
REMEDIES
Section 6.1. Unconditional Right of Holders to Purchase Ordinary Shares.
The Holder of any Income PRIDES or Growth PRIDES shall have the
right, which is absolute and unconditional, to purchase Ordinary Shares
pursuant to the Purchase Contract constituting a part of such Security and
to institute suit for the enforcement of any such right to purchase
Ordinary Shares and payment and such rights shall not be impaired without
the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right
or remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of such Holder shall continue as though no such proceeding had
been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or
reserved to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver
of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income
PRIDES or Growth PRIDES, by its acceptance of such Income PRIDES or Growth
PRIDES shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Agent for any action taken, suffered
or omitted by it as Agent, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Agent, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% of the Outstanding Securities, or to any
suit instituted by any Holder for the enforcement of dividends on any
Preferred Shares, if declared, on or after the respective Payment Date
therefor in respect of any Security held by such Holder, or for enforcement
of the right to purchase Ordinary Shares under the Purchase Contracts
constituting part of any Security held by such Holder.
38
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Agent or
the Holders, but will suffer and permit the execution of every such power
as though no such law had been enacted.
ARTICLE VII
THE AGENT
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth
in this Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith, willful misconduct or negligence on
its part, the Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the case of any
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Agent, the Agent shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Agreement, but need not confirm or investigate the
accuracy of mathematical calculations stated therein.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent
failure to act, its own bad faith, or its own willful misconduct, except
that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if adequate indemnity is not
provided to it.
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(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of
this Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement
in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge,
the Agent shall transmit by mail to the Company and the Holders of
Securities, as their names and addresses appear in the Register, notice of
such default hereunder, unless such default shall have been cured or
waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Agent, in its discretion, may make reasonable further
inquiry or investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as it may see
fit, and, if the Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to examine the
books, records and premises of the Company, personally or by agent or
attorney;
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(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed
with due care by it hereunder;
(g) the rights, privileges, protections, immunities and benefits given
to the Agent, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Agent in each of its
capacities hereunder, and to each agent custodian and other Person employed
to act hereunder; and
(h) the Agent may request that the Company delivery an Officer's
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Agreement, which Officer's Certificate may be signed by any person
authorized to sign an Officer's Certificate, including any person specified
as so authorized in any such certificate previously delivered and not
superseded.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Company and the Agent assumes no
responsibility for their accuracy. The Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Securities,
or of the Pledge Agreement or the Pledge. The Agent shall not be
accountable for the use or application by the Company of the proceeds in
respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and
its Affiliates, in their individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if
it were not Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or
provided herein. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed
in writing with the Company.
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Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such compensation as
shall be agreed in writing between the Company and the Agent for all
services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to reimburse
the Agent upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Agent in accordance with any
provision of this Agreement (including the reasonable compensation and
the reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for, and to
hold it harmless against, any and all loss, liability, damage, claim
or expense, including taxes (other than taxes based on the income of
the Agent), incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance
or administration of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The provisions of this Section 7.7 shall survive the termination
of this Agreement.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or
being a member of a bank holding company having) a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority and having a Corporate Trust Office in the
Borough of Manhattan, The City of New York, if there be such a corporation
in the Borough of Manhattan, The City of New York, qualified and eligible
under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
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(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If
the instrument of acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving
of such notice of resignation, the resigning Agent may petition, at the
expense of the Company, any court of competent jurisdiction for the
appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and
the Company. If the instrument of acceptance by a successor Agent required
by Section 7.10 shall not have been delivered to the Agent within 30 days
after the giving of such notice or removal, the Agent being removed may
petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Agent.
(d) if at any time:
(1) the Agent fails to comply with Section 310(b) of the TIA, as
if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months; or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder; or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company by a Board Resolution may remove
the Agent, or (ii) any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Agent and shall comply with the applicable requirements of Section 7.10. If
no successor Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and
addresses appear in the applicable Register. Each notice shall include the
name of the successor Agent and the address of its Corporate Trust Office.
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Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of the
Company or the successor Agent, such retiring Agent shall, upon payment of
its charges, execute and deliver an instrument transferring to such
successor Agent all the rights, powers and trusts of the retiring Agent and
shall duly assign, transfer and deliver to such successor Agent all
property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Agent, shall be the successor of the Agent hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Certificates
shall have been authenticated and executed on behalf of the Holders, but
not delivered, by the Agent then in office, any successor by merger,
conversion or consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with
the same effect as if such successor Agent had itself authenticated and
executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in
its capacity as Registrar.
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(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Agent shall, mail to all the
Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability
under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance
thereof, shall be deemed to have agreed, that the Agent's execution of the
Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. 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.
(b) The Agent shall comply with any written direction received from
the Company with respect to the reasonable application of such requirements
to particular payments or Holders or in other particular circumstances, and
may for purposes of this Agreement rely on any such direction in accordance
with the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available,
on written request, to the Company or its authorized representative within
a reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at
any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for
any of the following purposes:
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(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.4(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters
or questions arising under this Agreement, provided such action shall
not adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter into an agreement
or agreements supplemental hereto for the purpose of modifying in any
manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities;
provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute the Treasury Securities for the
Pledged Preferred Shares or the rights of holders of Growth PRIDES to
substitute Preferred Shares for the Pledged Treasury Securities) or
otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(3) impair the right to institute suit for the enforcement of any
Purchase Contract;
(4) reduce the number of Ordinary Shares to be purchased pursuant
to any Purchase Contract, increase the price to purchase Ordinary
Shares upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date or otherwise adversely affect the Holder's
rights under any Purchase Contract; or
(5) reduce the percentage of the outstanding Purchase Contracts
the consent of whose Holders is required for any such supplemental
agreement;
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provided, that if any amendment or proposal referred to above would
adversely affect only the Income PRIDES or the Growth PRIDES, then only the
affected class of Holder as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or proposal, and
such amendment or proposal shall not be effective except with the consent
of Holders of not less than a majority of such class.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the
substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be
entitled to receive and (subject to Section 7.1) shall be fully protected
in relying upon, an Officer's Certificate and an Opinion of Counsel stating
that the execution of such supplemental agreement is authorized or
permitted by this Agreement. The Agent may, but shall not be obligated to,
enter into any such supplemental agreement which affects the Agent's own
rights, duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder
shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Agent, bear a notation in
form approved by the Agent as to any matter provided for in such
supplemental agreement. If the Company shall so determine, new Certificates
so modified as to conform, in the opinion of the Agent and the Company, to
any such supplemental agreement may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Agent in exchange for Outstanding Certificates.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
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The Company covenants that it will not merge or consolidate with
any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless (i) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall expressly assume all the
obligations of the Company under the Purchase Contracts, the Preferred
Shares, this Agreement and the Pledge Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Agent and the Collateral
Agent, executed and delivered to the Agent and the Collateral Agent by such
corporation, and (ii) the Company or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or
such sale, assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of the
Securities or under the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with the same effect as
if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or
in the name of ACE Limited any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and
any Certificate evidencing Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Agent for that
purpose. All the Certificates so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Certificates theretofore
or thereafter issued in accordance with the terms of this Agreement as
though all of such Certificates had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form (but not
in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, assignment, transfer, lease or conveyance, and any such
assumption, complies with the provisions of this Article and that all
conditions precedent to the consummation of any such consolidation, merger,
sale, assignment, transfer, lease or conveyance have been met.
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ARTICLE X
COVENANTS
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders
from time to time of the Securities that it will duly and punctually
perform its obligations under the Purchase Contracts in accordance with the
terms of the Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York an office or agency where Certificates may be presented or
surrendered for acquisition of Ordinary Shares upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or Early
Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer
or exchange, for a Collateral Substitution or re-establishment of an Income
PRIDES and where notices and demands to or upon the Company in respect of
the Securities and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Agent with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the
Company hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Agent of any
such designation or rescission and of any change in the location of any
such other office or agency. The Company hereby designates as the place of
payment for the Securities the Corporate Trust Office and appoints the
Agent at its Corporate Trust Office as paying agent in such city.
Section 10.3. Company to Reserve Ordinary Shares.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights,
out of its authorized but unissued Ordinary Shares the full number of
Ordinary Shares issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.
Section 10.4. Covenants as to Ordinary Shares.
The Company covenants that all Ordinary Shares which may be issued
against tender of payment in respect of any Purchase Contract constituting
a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
ACE LIMITED
By:____________________________
Name:
Title:
THE BANK OF NEW YORK
as Purchase Contract Agent
By:____________________________
Name:
Title:
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EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN
THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) to the Company or its agent for registration of transfer,
exchange or payment, and any Certificate issued is registered in the name
of Cede & Co., or such other name as requested by an authorized
representative of The Depository Trust Company, and any payment hereon is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
No. R-1 CUSIP No.: 004408 20 9
Initial Number of Income PRIDES: -6,000,000-
Income PRIDES Certificate
This Income PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Income PRIDES set forth above, subject
to increase or decrease in the equivalent aggregate principal amount set
forth on the schedule hereto. Each Income PRIDES represents (i) beneficial
ownership by the Holder of one share of 8.25% Cumulative Redeemable
Preferred Stock, Series A, US$1.00 par value per share (the "Preferred
Share"), of ACE Limited, a company duly organized and existing under the
laws of the Cayman Islands (the "Company"), having a stated liquidation
amount of US$50, subject to the Pledge of such Preferred Share by such
Holder pursuant to the Pledge Agreement and (ii) the rights and obligations
of the Holder under one Purchase Contract with the Company. All capitalized
terms used herein which are defined in the Purchase Contract Agreement have
the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Shares
constituting part of each Income PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion
of such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated
Amount of or cash dividends on, any Pledged Preferred Shares (as defined in
the Pledge Agreement) constituting part of the Income PRIDES received by
the Collateral Agent shall be paid by the Collateral Agent by wire transfer
in same day funds (i) in the case of (A) cash dividends with respect to
Pledged Preferred Shares, and (B) any payments of the Stated Amount with
respect to any Preferred Shares that have been released from the Pledge
pursuant to the Pledge Agreement, to the Agent to the account designated by
the Agent, no later than 2:00 p.m., New York City time, on the Business Day
A-1
such payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day that is not
a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day) and (ii) in the case of payments
of the Stated Amount of any Pledged Preferred Shares to the Company on the
Purchase Contract Settlement Date (as defined herein) in accordance with
the terms of the Pledge Agreement, in full satisfaction of the respective
obligations of the Holders of the Income PRIDES of which such Pledged
Preferred Shares are a part under the Purchase Contracts forming a part of
such Income PRIDES. Distributions on any Preferred Share forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 of each year, commencing May
16, 2000 (a "Payment Date"), shall, subject to receipt thereof by the Agent
from the Collateral Agent, be paid to the Person in whose name this Income
PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment
Date.
Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on May
16, 2003 (the "Purchase Contract Settlement Date"), at a price equal to $50
(the "Stated Amount"), a number of ordinary shares, US$0.041666667 par
value per share ("Ordinary Shares"), of the Company, equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement
Date there shall have occurred a Termination Event or an Early Settlement
with respect to the Income PRIDES of which such Purchase Contract is a
part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the "Purchase Price")
for the Ordinary Shares purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase
Contract Settlement Date by application of payment received in respect of
the Stated Amount of the Pledged Preferred Shares pledged to secure the
obligations under such Purchase Contract of the Holder of the Income PRIDES
of which such Purchase Contract is a part.
Dividends on the Preferred Shares will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by
check mailed to the address of the Person entitled thereto as such address
appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Agent by manual signature, this Income PRIDES Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
ACE LIMITED
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts
evidenced hereby)
By: THE BANK OF NEW YORK
not individually but solely as
Attorney-in-Fact of such Holder
By:___________________________________
Name:
Title:
Dated: April 12, 2000
A-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:___________________________________
Authorized Signatory
Dated: April 12, 2000
A-4
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of April 12, 2000 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and
The Bank of New York, a New York banking corporation, as Purchase Contract
Agent (including its successors thereunder, herein called the "Agent"), to
which Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price"), a number of Ordinary Shares of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is
a part. The "Settlement Rate" is equal to (a) if the Applicable Market
Value (as defined below) is equal to or greater than $26.3281 (the
"Threshold Appreciation Price"), 1.8991 Ordinary Shares per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $18.9563 (the "Threshold
Depreciation Price"), the number of Ordinary Shares per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Value is less than or equal to the Threshold
Depreciation Price, 2.6376 Ordinary Shares per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional Ordinary Shares will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of
the related Income PRIDES to purchase at the Purchase Price, and the
Company to sell, a number of newly issued Ordinary Shares equal to the
Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing
Price per Ordinary Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" of the Ordinary Shares on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Ordinary Shares on the New
York Stock Exchange (the "NYSE") on such date or, if the Ordinary Shares is
not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Ordinary Shares is so listed, or if the Ordinary Shares is not
so listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Ordinary Shares is not so
reported, the last quoted bid price for the Ordinary Shares in the
over-the-counter market as reported by the National Quotation Bureau or
A-5
similar organization, or, if such bid price is not available, the market
value of the Ordinary Shares on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by
the Company.
A "Trading Day" means a day on which the Ordinary Shares (A) is
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B)
has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Ordinary Shares.
In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Income PRIDES Certificate shall pay the Purchase Price
for the Ordinary Shares purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement, or an Early Settlement or
from the proceeds of a remarketing of the related Pledged Preferred Shares
of such holders. A Holder of Income PRIDES who does not elect, on or prior
to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, to make an effective Cash
Settlement or an Early Settlement, shall pay the Purchase Price for the
Ordinary Shares to be issued under the related Purchase Contract from the
Proceeds of the sale of the related Pledged Preferred Shares held by the
Collateral Agent. Such sale will be made by the Remarketing Agent pursuant
to the terms of the Remarketing Agreement and the Remarketing Underwriting
Agreement on the third Business Day immediately preceding the Purchase
Contract Settlement Date. If, as provided in the Purchase Contract
Agreement, upon the occurrence of a Failed Remarketing the Collateral
Agent, for the benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Preferred Shares related to this
Income PRIDES certificate, any accumulated and unpaid dividends on such
Pledged Preferred Shares will become payable by the Company to the holder
of this Income PRIDES Certificate in the manner provided for in the
Purchase Contract Agreement.
The Company shall not be obligated to issue any Ordinary Shares in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate
purchase price for the Ordinary Shares to be purchased thereunder in the
manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Income PRIDES Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Preferred Share (as defined in the Pledge
Agreement) from the Pledge. An Income PRIDES shall thereafter represent the
right to receive the Preferred Share in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.
A-6
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Pledged Preferred Shares. Upon receipt of notice of any meeting at
which holders of Preferred Shares are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Preferred
Shares, the Agent shall, as soon as practicable thereafter, mail to the
Income PRIDES holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Income
PRIDES holder on the record date set by the Agent therefor (which, to the
extent possible, shall be the same date as the record date for determining
the holders of Preferred Shares entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to
the Preferred Shares constituting a part of such holder's Income PRIDES and
(c) stating the manner in which such instructions may be given. Upon the
written request of the Income PRIDES Holders on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum
number of Preferred Shares as to which any particular voting instructions
are received. In the absence of specific instructions from the Holder of an
Income PRIDES, the Agent shall abstain from voting the Preferred Share
evidenced by such Income PRIDES.
The Income PRIDES Certificates are issuable only in registered
form and in denominations of a single Income PRIDES and any integral
multiple thereof. The transfer of any Income PRIDES Certificate will be
registered and Income PRIDES Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Income PRIDES Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A holder who elects to substitute a Treasury Security for Preferred Shares
thereby creating Growth PRIDES, shall be responsible for any fees or
expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying an Income PRIDES remains in effect, such Income PRIDES shall not
be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of the Preferred Share and
Purchase Contract constituting such Income PRIDES may be transferred and
exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Shares securing its obligation under
the related Purchase Contract Treasury Securities in an aggregate principal
amount at maturity equal to the aggregate Stated Amount of the Pledged
Preferred Shares in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral
Substitution, the Security for which such Pledged Treasury Securities
secures the Holder's obligation under the Purchase Contract shall be
referred to as a "Growth PRIDES." A Holder may make such Collateral
Substitution only in integral multiples of 20 Income PRIDES for 20 Growth
PRIDES. Such Collateral Substitution may cause the equivalent aggregate
principal amount of this Income PRIDES Certificate to be increased or
decreased; provided, however, the equivalent aggregate principal amount of
Income PRIDES Certificate shall not exceed $400,000,000. All such
adjustments to the equivalent aggregate principal amount of this Income
PRIDES Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
depositing with the Collateral Agent Preferred Shares having an aggregate
Stated Amount equal to the aggregate principal amount at maturity of the
Pledged Treasury Securities comprising part of the Growth PRIDES in
exchange for the release of such Pledged Treasury Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement.
Any such recreation may be effected only in integral multiples of 20 Growth
PRIDES for 20 Income PRIDES.
A-7
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Agent or the Company, if, on or prior to the Purchase Contract Settlement
Date, a Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Income PRIDES Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the Preferred Shares from the
Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof may be settled early ("Early Settlement") as
provided in the Purchase Contract Agreement. In order to exercise the right
to effect Early Settlement with respect to any Purchase Contracts evidenced
by this Income PRIDES Certificate, the Holder of this Income PRIDES
Certificate shall deliver this Income PRIDES Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available
funds payable to the order of the Company in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times
(B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (ii) if such delivery is made with
respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business
on such Payment Date, the dividends on the related Preferred Shares payable
on such Payment Date, if declared, with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Preferred Shares underlying such Securities shall
be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of Ordinary Shares on account
of each Purchase Contract forming part of an Income PRIDES as to which
Early Settlement is effected equal to the Early Settlement Rate. The Early
Settlement Rate shall initially be equal to 1.8991 Ordinary Shares and
shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate,
the transferee shall be bound (without the necessity of any other action on
the part of such transferee, except as may be required by the Agent
pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Income PRIDES Certificate. The Company
covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
A-8
The Holder of this Income PRIDES Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf
as his attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee,
agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents
to the provisions of the Purchase Contract Agreement, authorizes the Agent
to enter into and perform the Pledge Agreement on his behalf as its
attorney-in-fact, and consents to the Pledge of the underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the
terms thereof, payments in respect to the Stated Amount of the Pledged
Preferred Shares on the Purchase Contract Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles thereof.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Income PRIDES
Certificate is registered as the owner of the Income PRIDES evidenced
hereby for the purpose of receiving payments of dividends payable quarterly
on the Preferred Shares, if declared, performance of the Purchase Contracts
and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary,
and neither the Company, the Agent nor any such agent shall be affected by
notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of Ordinary Shares.
A copy of the Purchase Contract Agreement is available for
inspection at the designated office of the Agent.
A-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
---------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
_________________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
---------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books of ACE
Limited with full power of substitution in the premises.
Dated:________________ _____________________________
Signature
A-10
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Income PRIDES Certificates
in every particular, without
alteration or enlargement
or any change whatsoever.
Signature Guarantee:________________________
A-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for Ordinary
Shares deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Income
PRIDES evidenced by this Income PRIDES Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.
Dated:_________________ _____________________________________
Signature
Signature Guarantee:_________________
(if assigned to another person)
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the
Holder, please (i) print such
Person's name and address and
(ii) provide a guarantee of your
signature:
Please print name and address
of Registered Holder:
---------------------------- ------------------------------------
Name Name
---------------------------- ------------------------------------
Address Address
---------------------------- ------------------------------------
---------------------------- ------------------------------------
---------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
A-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Income PRIDES evidenced by this
Income PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Income PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for Ordinary Shares deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment
for any fractional share and any Income PRIDES Certificate representing any
Income PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Preferred Shares deliverable upon such Early Settlement will
be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:__________________ _____________________________
Signature
Signature Guarantee:_______________________________
A-13
Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:
If Ordinary Shares or Income PRIDES REGISTERED HOLDER
Certificates are to be registered
in the name of and delivered to and
Pledged Preferred Shares are to be
transferred to a Person other than
the Holder, please print such
Person's name and address:
Please print name and address
of Registered Holder:
---------------------------- ------------------------------------
Name Name
---------------------------- ------------------------------------
Address Address
---------------------------- ------------------------------------
---------------------------- ------------------------------------
---------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
Transfer Instructions for Pledged Preferred Shares Transferable Upon Early
Settlement or a Termination Event:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
A-12
TO BE ATTACHED TO GLOBAL CERTIFICATES
OUTSTANDING BALANCES
The following increases or decreases in this Global Certificate
have been made:
Equivalent
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
equivalent equivalent Certificate signatory of
Principal Amount Principal Amount following such Transfer Agent or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
------ ---------------- ---------------- ---------------- -----------------
A-15
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN
THE NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) to the Company or its agent for registration of transfer,
exchange or payment, and any Certificate issued is registered in the name
of Cede & Co., or such other name as requested by an authorized
representative of The Depository Trust Company, and any payment hereon is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
No. R-1 CUSIP No.: 004408 30 8
Initial Number of Growth PRIDES :- 0 -
Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Growth PRIDES set forth above, subject
to increase or decrease in the equivalent aggregate principal amount set
forth on the schedule hereto. Each Growth PRIDES represents (i) a 1/20th
undivided beneficial ownership interest in a Treasury Security, subject to
the Pledge of such interest in such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with ACE Limited, a company duly
organized and existing under the laws of the Cayman Islands (the
"Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Growth PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion
of such Growth PRIDES.
B-1
Each Purchase Contract evidenced hereby obligates the Holder of
this Growth PRIDES Certificate to purchase, and the Company, to sell, on
May 16, 2003 (the "Purchase Contract Settlement Date"), at a price equal to
$50 (the "Stated Amount"), a number of ordinary shares, US$0.041666667 par
value per share ("Ordinary Shares"), of the Company equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there
shall have occurred a Termination Event or an Early Settlement with respect
to the Growth PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price for the Ordinary Shares purchased
pursuant to each Purchase Contract evidenced hereby will be paid by
application of the Proceeds from the Treasury Securities pledged to secure
the obligations under such Purchase Contract in accordance with the terms
of the Pledge Agreement.
Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Agent by manual signature, this Growth PRIDES Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
ACE LIMITED
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase Contracts)
By: THE BANK OF NEW YORK,
not individually but solely as
Attorney-in-Fact of such Holder
By: ____________________________
Name:
Title:
Dated: April 12, 2000
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the
within-mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:__________________________________
Authorized Signatory
Dated: April 12, 2000
B-4
(Reverse of Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of April 12, 2000 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and
The Bank of New York, a New York banking corporation, as Purchase Contract
Agent (including its successors thereunder, herein called the "Agent"), to
which the Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company and the Holders and of the terms upon which the Growth
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of
this Growth PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price") a number of Ordinary Shares of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is
a part. The "Settlement Rate" is equal to (a) if the Applicable Market
Value (as defined below) is equal to or greater than $26.3281 (the
"Threshold Appreciation Price"), 1.8991 Ordinary Shares per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $18.9563 (the "Threshold
Depreciation Price"), the number of Ordinary Shares per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Value is less than or equal to the Threshold
Depreciation Price, 2.6376 Ordinary Shares per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional Ordinary Shares will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby which is settled through
Early Settlement shall obligate the Holder of the related Growth PRIDES to
purchase at the Purchase Price, and the Company to sell, a number of newly
issued Ordinary Shares equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing
Prices per Ordinary Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
B-5
The "Closing Price" of the Ordinary Shares on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Ordinary Shares on the New
York Stock Exchange (the "NYSE") on such date or, if the Ordinary Shares is
not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Ordinary Shares is so listed, or if the Ordinary Shares is not
so listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Ordinary Shares is not so
reported, the last quoted bid price for the Ordinary Shares in the
over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market
value of the Ordinary Shares on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by
the Company.
A "Trading Day" means a day on which the Ordinary Shares (A) is
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B)
has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Ordinary Shares.
In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Growth PRIDES Certificate shall pay the Purchase Price
for the Ordinary Shares purchased pursuant to each Purchase Contract
evidenced hereby by effecting either an Early Settlement of each such
Purchase Contract or by applying a principal amount at maturity of the
Pledged Treasury Securities underlying such Holder's Growth PRIDES equal to
the Stated Amount of such Purchase Contract to the purchase of the Ordinary
Shares.
The Company shall not be obligated to issue any Ordinary Shares in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate
purchase price for the Ordinary Shares to be purchased thereunder in the
manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Growth PRIDES Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Growth PRIDES from the Pledge. A Growth
PRIDES shall thereafter represent the right to receive the Treasury
Securities forming a part of such Growth PRIDES in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
B-6
The Growth PRIDES Certificates are issuable only in registered
form and only in denominations of a single Growth PRIDES and any integral
multiple thereof. The transfer of any Growth PRIDES Certificate will be
registered and Growth PRIDES Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Growth PRIDES Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A Holder who elects to substitute Preferred Shares for Pledged Treasury
Securities, thereby recreating Income PRIDES, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying a Growth PRIDES remains in effect, such Growth PRIDES shall not
be separable into its constituent parts, and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
the Purchase Contract constituting such Growth PRIDES may be transferred
and exchanged only as a Growth PRIDES. The Holder of a Growth PRIDES may
substitute for the Pledged Treasury Securities securing its obligation
under the related Purchase Contract Preferred Shares with a Stated Amount
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement. From and after such Collateral Substitution, the
Security for which such Preferred Shares secures the Holder's obligation
under the Purchase Contract shall be referred to as an "Income PRIDES." A
Holder may make such Collateral Substitution only in integral multiples of
20 Growth PRIDES for 20 Preferred Shares. Such Collateral Substitution may
cause the equivalent aggregate principal amount at maturity of this Growth
PRIDES Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Growth PRIDES
Certificate shall not exceed $400,000,000. All such adjustments to the
equivalent aggregate principal amount of this Growth PRIDES Certificate
shall be duly recorded by placing an appropriate notation on the Schedule
attached hereto.
A Holder of Income PRIDES may create or recreate a Growth PRIDES
by delivering to the Collateral Agent Treasury Securities in an aggregate
principal amount at maturity equal to the aggregate Stated Amount of the
Pledged Preferred Shares in exchange for the release of such Pledged
Preferred Shares in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Any such recreation of a Growth PRIDES
may be effected only in multiples of 20 Income PRIDES for 20 Growth PRIDES.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
Contract Adjustment Payments, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Agent or the Company, if, on or prior to the Purchase Contract Settlement
Date, a Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Growth PRIDES Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the Treasury Securities from the
Pledge in accordance with the provisions of the Pledge Agreement.
B-7
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof may be settled early ("Early Settlement") as
provided in the Purchase Contract Agreement. In order to exercise the right
to effect Early Settlement with respect to any Purchase Contracts evidenced
by this Growth PRIDES Certificate, the Holder of this Growth PRIDES
Certificate shall deliver this Growth PRIDES Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available
funds payable to the order of the Company in an amount (the "Early
Settlement Amount") equal to the product of (A) the Stated Amount times (B)
the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Treasury
Securities underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of Ordinary Shares on account of each Purchase Contract
forming part of a Growth PRIDES as to which Early Settlement is effected
equal to the Early Settlement Rate. The Early Settlement Rate shall
initially be equal to 1.8991 Ordinary Shares and shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as
provided in the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate,
the transferee shall be bound (without the necessity of any other action on
the part of such transferee, except as may be required by the Agent
pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Growth PRIDES Certificate. The Company
covenants and agrees, and the Holder, by his acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Growth PRIDES evidenced hereby on his behalf
as its attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee
in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on his
behalf as his attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Growth PRIDES Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and
in the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect to the
Stated Amount of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
B-8
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles thereof.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Growth PRIDES
Certificate is registered as the owner of the Growth PRIDES evidenced
hereby for the purpose of receiving payments of interest on the Treasury
Securities, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the
Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of Ordinary Shares.
A copy of the Purchase Contract Agreement is available for
inspection at the designated office of the Agent.
B-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
---------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
____________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto_______________________________________________________________
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________________________________________________________________
attorney to transfer said Growth PRIDES Certificates on the books of ACE
Limited with full power of substitution in the premises.
B-10
Dated: _________________ __________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face
of the within Growth PRIDES
Certificates in every particular,
without alteration or enlargement
or any change whatsoever.
Signature Guarantee:__________________
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for Ordinary
Shares deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Growth
PRIDES evidenced by this Growth PRIDES Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.
Dated:_______________________ ______________________________
Signature
Signature Guarantee:
If shares are to be registered in
the name of and delivered REGISTERED HOLDER
to a Person other than the
Holder, please print such Person's
name and address:
Please print name and
address of Registered
Holder:
_______________________________ ________________________________
Name Name
_______________________________ ________________________________
Address Address
_______________________________ ________________________________
_______________________________ ________________________________
_______________________________ ________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Growth PRIDES evidenced by this
Growth PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for Ordinary Shares deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment
for any fractional share and any Growth PRIDES Certificate representing any
Growth PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:______________________ ________________________________
Signature
Signature Guarantee: _________________________
B-13
Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:
If Ordinary Shares or Growth REGISTERED HOLDER
PRIDES Certificates are to
be registered in the name of and
delivered to and Pledged Treasury
Securities are to be transferred to
a Person other than the Holder, please
print such Person's name and address:
Please print name and
address of Registered
Holder:
___________________________________ __________________________________
Name Name
___________________________________ __________________________________
Address Address
___________________________________ __________________________________
___________________________________ __________________________________
___________________________________ __________________________________
Social Security or other
Taxpayer Identification
Number, if any __________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
___________________________________
___________________________________
___________________________________
B-14
TO BE ATTACHED TO GLOBAL CERTIFICATES
OUTSTANDING BALANCES
The following increases or decreases in this Global Certificate have been made:
Equivalent
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
equivalent equivalent Certificate signatory of
Principal Amount Principal Amount following such Transfer Agent or
of the Global of the Global decrease or Securities
Date Certificate Certificate increase Custodian
------ ---------------- ---------------- ---------------- -----------------
B-15
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: Corporate Trust Administration
Re: FELINE PRIDES of ACE Limited (the "Company"),
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of April 12, 2000, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from
time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate principal amount at maturity of
Treasury Securities] [$_______ Stated Amount of Preferred Shares] in
exchange for the [Pledged Preferred Shares] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has delivered to us
a notice stating that the Holder has transferred [Treasury Securities]
[Preferred Shares] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Preferred
Shares], and upon the payment by such Holder of any applicable fees, to
release the [Preferred Shares] [Treasury Securities] related to such
[Income PRIDES] [Growth PRIDES] to us in accordance with the Holder's
instructions.
Date:____________________ _______________________________
By:____________________________
Name:
Title:
Signature Guarantee:___________
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Shares] for the [Pledged Preferred Shares]
[Pledged Treasury Securities]:
C-1
----------------------------- ---------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
-----------------------------
Address
-----------------------------
-----------------------------
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: Corporate Trust Administration
Re: FELINE PRIDES of ACE Limited (the "Company"),
The undersigned Holder hereby notifies you that it has delivered
to The Bank of New York, as Collateral Agent, [$_______ aggregate principal
amount at maturity of Treasury Securities] [$_______ Stated Amount of
Preferred Shares] in exchange for the [Pledged Preferred Shares] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated April 12, 2000, among you, the
Company and the Collateral Agent. The undersigned Holder has paid the
Collateral Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Preferred
Shares] [Pledged Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES].
Date:____________________ _______________________________
By:____________________________
Signature Guarantee:____________
Dated:
Please print name and address of Registered Holder:
------------------------- __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------
-------------------------
-------------------------
D-1
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: Corporate Trust Administration
Re: FELINE PRIDES of ACE Limited (the "Company"),
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.3 of the Purchase Contract Agreement, dated as of
April 12, 2000 between the Company, yourselves, as Purchase Contract Agent
and as Attorney-in-Fact for the Holders of the Purchase Contracts, that
such Holder has elected to pay to the Collateral Agent, on or prior to
11:00 a.m. New York City time, on the Business Day immediately preceding
the Purchase Contract Settlement Date, (in lawful money of the United
States by [certified or cashiers check] [wire transfer] in immediately
available funds), $_________ as the Purchase Price for the Ordinary Shares
issuable to such Holder by the Company under the related Purchase Contract
on the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holders election to make such cash settlement with respect to the Purchase
Contracts related to such Holder's [Income PRIDES] [Growth PRIDES].
Date:____________________ ____________________________________
By:_________________________________
Signature Guarantee:________________
Dated:
Please print name and address of Registered Holder:
__________________________ ___________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------
-------------------------
-------------------------
E-1