EXHIBIT 4.4
PLATINUM UNDERWRITERS HOLDINGS, LTD.
AND
JPMORGAN CHASE BANK,
AS PURCHASE CONTRACT AGENT
FORM OF PURCHASE CONTRACT AGREEMENT
DATED AS OF , 2002
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions................................................1
SECTION 1.2 Compliance Certificates and Opinions......................15
SECTION 1.3 Form of Documents Delivered to Agent......................16
SECTION 1.4 Acts of Holders; Record Dates.............................16
SECTION 1.5 Notices...................................................18
SECTION 1.6 Notice to Holders; Waiver.................................19
SECTION 1.7 Effect of Headings and Table of Contents..................19
SECTION 1.8 Successors and Assigns....................................19
SECTION 1.9 Separability Clause.......................................19
SECTION 1.10 Benefits of Agreement....................................19
SECTION 1.11 Governing Law............................................20
SECTION 1.12 Legal Holidays...........................................20
SECTION 1.13 Counterparts.............................................20
SECTION 1.14 Inspection of Agreement..................................21
SECTION 1.15 Appointment of Financial Institution as Agent for the
Company................................................21
SECTION 1.16 No Waiver................................................21
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 Forms of Certificates Generally...........................21
SECTION 2.2 Form of Agent's Certificate of Authentication.............22
ARTICLE III
THE UNITS
SECTION 3.1 Title and Terms; Denominations............................23
SECTION 3.2 Rights and Obligations Evidenced by the Certificates......23
SECTION 3.3 Execution, Authentication, Delivery and Dating............24
SECTION 3.4 Temporary Certificates....................................25
SECTION 3.5 Registration; Registration of Transfer and Exchange.......25
SECTION 3.6 Book-Entry Interests......................................27
SECTION 3.7 Notices to Holders........................................28
SECTION 3.8 Appointment of Successor Clearing Agency..................28
SECTION 3.9 Definitive Certificates...................................28
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.......29
SECTION 3.11 Persons Deemed Owners....................................30
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SECTION 3.12 Cancellation.............................................30
SECTION 3.13 Establishment of Stripped Units..........................31
SECTION 3.14 Reestablishment of Normal Units..........................33
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination
Event..................................................34
SECTION 3.16 No Consent to Assumption.................................34
SECTION 3.17 CUSIP Numbers............................................35
ARTICLE IV
THE NOTES
SECTION 4.1 Payment of Interest; Rights to Interest Payments Preserved;
Notice.................................................35
SECTION 4.2 Notice and Voting.........................................36
SECTION 4.3 Tax Event Redemption......................................36
SECTION 4.4 Consent to Treatment for Tax Purposes.....................37
ARTICLE V
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 Purchase of Common Shares.................................37
SECTION 5.2 Contract Adjustment Payments..............................39
SECTION 5.3 Deferral of Contract Adjustment Payments..................45
SECTION 5.4 Payment of Purchase Price; Remarketing....................47
SECTION 5.5 Issuance of Common Shares.................................52
SECTION 5.6 Adjustment of Settlement Rate.............................53
SECTION 5.7 Notice of Adjustments and Certain Other Events............60
SECTION 5.8 Termination Event; Notice.................................61
SECTION 5.9 Early Settlement..........................................61
SECTION 5.10 Early Settlement Upon Cash Merger........................63
SECTION 5.11 Charges and Taxes........................................65
SECTION 5.12 No Fractional Shares.....................................65
ARTICLE VI
REMEDIES
SECTION 6.1 Unconditional Right of Holders to Receive Purchase Contract
Adjustment Payments and Purchase Common Shares.........66
SECTION 6.2 Restoration of Rights and Remedies........................66
SECTION 6.3 Rights and Remedies Cumulative............................66
SECTION 6.4 Delay or Omission Not Waiver..............................67
SECTION 6.5 Undertaking for Costs.....................................67
SECTION 6.6 Waiver of Stay or Extension Laws..........................67
ARTICLE VII
THE AGENT
SECTION 7.1 Certain Duties and Responsibilities.......................68
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SECTION 7.2 Notice of Default.........................................69
SECTION 7.3 Certain Rights of Agent...................................69
SECTION 7.4 Not Responsible for Recitals or Issuance of Units.........70
SECTION 7.5 May Hold Units............................................70
SECTION 7.6 Money Held in Custody.....................................70
SECTION 7.7 Compensation and Reimbursement............................70
SECTION 7.8 Corporate Agent Required; Eligibility.....................71
SECTION 7.9 Resignation and Removal; Appointment of Successor.........71
SECTION 7.10 Acceptance of Appointment by Successor...................73
SECTION 7.11 Merger, Conversion, Consolidation or Succession to
Business...............................................73
SECTION 7.12 Preservation of Information; Communications to Holders...74
SECTION 7.13 No Obligations of Agent..................................74
SECTION 7.14 Tax Compliance...........................................74
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 Supplemental Agreements Without Consent of Holders........75
SECTION 8.2 Supplemental Agreements with Consent of Holders...........75
SECTION 8.3 Execution of Supplemental Agreements......................77
SECTION 8.4 Effect of Supplemental Agreements.........................77
SECTION 8.5 Reference to Supplemental Agreements......................77
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions........................77
SECTION 9.2 Rights and Duties of Successor Corporation................78
SECTION 9.3 Opinion of Counsel Given to Agent.........................78
ARTICLE X
COVENANTS
SECTION 10.1 Performance Under Purchase Contracts.....................79
SECTION 10.2 Maintenance of Office or Agency..........................79
SECTION 10.3 Company to Reserve Common Shares.........................79
SECTION 10.4 Covenants as to Common Shares............................79
EXHIBITS
EXHIBIT A...Form of Normal Units Certificate
EXHIBIT B...Form of Stripped Units Certificate
EXHIBIT C...Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT D...Instruction to Purchase Contract Agent
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PURCHASE CONTRACT AGREEMENT, dated as of -, 2002, between Platinum
Underwriters Holdings, Ltd., a Bermuda corporation (the "Company"), and JPMorgan
Chase Bank, a
New York banking corporation, acting as purchase contract agent
and attorney-in-fact for the Holders of Units from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.
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 this Agreement 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
Units 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(a).
"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 agreement until a successor Agent shall have become such pursuant
to the applicable provisions of this Agreement, and thereafter "Agent"
shall mean such Person.
"Agent-purchased Treasury Consideration" has the meaning specified
in Section 5.4(b)(i).
"Agreement" means this agreement 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(c).
"Applicants" has the meaning specified in Section 7.12(b).
"Bankruptcy Code" means Title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the 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 either the Board of Directors of the
Company or the Executive Committee of such Board or any other committee of
such Board duly authorized to act generally or in any particular respect
for the Board hereunder.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or the 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, (ii) a copy of a unanimous written consent
of the Board of Directors or (iii) a certificate signed by the authorized
officer or officers to whom the Board of Directors has delegated its
authority, and in each case, delivered to the Agent.
2
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day that is not a Saturday, Sunday or day
on which banking institutions and trust companies in The City of
New York
or at a place of payment are authorized or required by law, regulation or
executive order to close.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated, whether voting or non-voting) corporate
stock or similar interests in other types of entities.
"Cash Merger" has the meaning set forth in Section 5.10(a).
"Cash Merger Date" means the date on which a Cash Merger is
consummated.
"Cash Settlement" has the meaning set forth in Section 5.4(a).
"Certificate" means a Normal Units Certificate or a
Stripped Units 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 Units 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 Units.
"Clearing Agency Participant" means a broker, dealer, bank, trust
company, clearing corporation, other financial institution or other Person
for whom from time to time the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1(c).
"Collateral" has the meaning specified in Section 2.1(a) of the
Pledge Agreement.
"Collateral Agent" means State Street Bank, a -, 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.
3
"Collateral Substitution" has the meaning specified in Section
3.13(a).
"Common Shares" means the Common Shares, par value $0.01 per share,
of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Company" shall mean such successor.
"Constituent Person" has the meaning specified in Section 5.6(b).
"Contract Adjustment Payments" means, in the case of Normal Units
and Stripped Units, the amount payable by the Company in respect of each
Purchase Contract constituting a part of such Unit, which amount shall be
equal to [ ]% per year of the Stated Amount, in each case computed (i) for
any full quarterly period on the basis of a 360-day year of twelve 30-day
months and (ii) for any period shorter than a full quarterly period, on
the basis of a 30-day month, and for periods of less than a month, on the
basis of the actual number of days elapsed per 30-day month, plus any
Deferred Contract Adjustment Payments accrued pursuant to Section 5.3.
"Corporate Trust Office" means the corporate trust office of the
Agent at which, at any particular time, its corporate trust business shall
be principally administered, which office at the date hereof is located at
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Institutional
Trust Services.
"Coupon Rate" means the percentage rate per annum at which each Note
will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Custodial Agent" means State Street Bank, a -, as Custodial Agent
under the Pledge Agreement until a successor Custodial Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement,
and thereafter "Custodial Agent" shall mean the Person who is then the
Custodial Agent thereunder.
"Default" means a default by the Company in any of its obligations
under this Agreement.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3(a).
"Depositary" means, initially, DTC, until another Clearing Agency
becomes its successor.
4
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section
5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(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(f).
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section
5.4(b)(ii).
"Fair Market Value" with respect to securities distributed in a
Spin-Off means (a) in the case of any Spin-Off that is effected
simultaneously with an Initial Public Offering of such securities, the
initial public offering price of those securities and (b) in the case of
any other Spin-Off, (i) the average of the Sale Price of those securities
over the first ten Trading Days after the effective date of such Spin-Off
or (ii) if the Sale Price is required to be defined without regard to the
price on any Trading Days, the Sale Price as of the effective date of such
Spin-Off.
"Global Certificate" means a Certificate that evidences all or part
of the Units and is registered in the name of a Depositary or a nominee
thereof.
"Holder" means the Person in whose name the Unit evidenced by a
Normal Units Certificate and/or a Stripped Units Certificate is registered
in the related Normal Units Register and/or the Stripped Units Register,
as the case may be.
"Indenture" means the Indenture, dated as of -, 2002, among Platinum
Underwriters Finance, Inc., the Company and the Trustee pursuant to which
the Notes are to be issued, as originally executed and delivered and as it
may from time to time be supplemented or amended by one or more indentures
supplemental thereto entered into pursuant to the applicable provisions
thereof and shall include the terms of a particular series established as
contemplated thereof.
5
"Initial Public Offering" with respect to a Spin-Off means the first
time securities of the same class or type as the securities being
distributed in such Spin-Off are bona fide offered to the public for cash.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice-President, the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant Secretary (or
other officer performing similar functions) of the Company and delivered
to the Agent.
"Last Failed Remarketing" has the meaning specified in Section
5.4(b)(ii).
"Merger Early Settlement" has the meaning specified in Section
5.10(a).
"Merger Early Settlement Amount" has the meaning specified in
Section 5.10(b).
"Merger Early Settlement Date" has the meaning specified in Section
5.10(a)(i).
"Non-electing Share" has the meaning specified in Section 5.6(b).
"Normal Unit" means the collective rights and obligations of a
Holder of a Normal Units Certificate in respect of a 1/40 undivided
beneficial interest in a Note or the appropriate Treasury Consideration,
as the case may be, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Normal Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Normal Units
specified on such certificate, substantially in the form of Exhibit A
hereto.
"Normal Units Register" and "Normal Units Registrar" have the
respective meanings specified in Section 3.5(a).
"Notes" means the -% Senior Notes due - 2007 of Platinum
Underwriters Finance, Inc. issued under the Indenture and
guaranteed by the Company.
"NYSE" has the meaning specified in Section 5.1(c).
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, the Chief Financial Officer, the President or any
Vice-President, and by the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary (or other officer performing similar
functions) of the Company and delivered to the Agent.
6
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an
Affiliate and who shall be reasonably acceptable to the Agent.
"Opt-out Treasury Consideration" has the meaning specified in
Section 5.4(b)(iv).
"Outstanding Units" means, as of the date of determination, all
Normal Units or Stripped Units evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Stripped Units and (B)
Normal Units for which the related Notes or the appropriate Treasury
Consideration, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Normal Units;
(ii) Normal Units and Stripped Units evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Normal Units and Stripped Units evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such Certificate in
respect of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Normal Units or Stripped Units
evidenced by such Certificate are valid obligations of the Company;
provided, that in determining whether the Holders of the requisite number
of the Normal Units or Stripped Units have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Normal
Units or Stripped Units owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Agent shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Normal Units or Stripped Units which a Responsible Officer of
the Agent knows to be so owned shall be so disregarded. Normal Units or
Stripped Units so owned which have been pledged in good faith may be
regarded as Outstanding Units if the pledgee establishes to the
satisfaction of the Agent the pledgee's right so to act with respect to
such Normal Units or Stripped Units and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each -, -, - and -, commencing -, 2002.
7
"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.
"Platinum Underwriters Finance" means Platinum Underwriters
Finance, Inc., a Delaware corporation.
"Pledge" means the pledge under the Pledge Agreement of the Notes,
the Treasury Securities or the appropriate Treasury Consideration, in each
case constituting a part of the Units, property, cash, securities,
financial assets and security entitlements of the Collateral Account (as
defined in the Pledge Agreement) and any proceeds of any of the foregoing.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Agent, on its own behalf and as
attorney-in-fact for the Holders from time to time of the Units.
"Pledged Notes" has the meaning set forth in Section 2.1(c) of the
Pledge Agreement.
"Pledged Treasury Consideration" has the meaning set forth in
Section 2.1(c) of the Pledge Agreement.
"Pledged Treasury Securities" has the meaning set forth in Section
2.1(c) of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Normal Units
Certificate or a Predecessor Stripped Units Certificate.
"Predecessor Normal Units Certificate" of any particular Normal
Units Certificate means every previous Normal Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the
Holder under the Normal Units evidenced thereby; and, for the purposes of
this definition, any Normal Units Certificate authenticated and delivered
under Section 3.10 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Normal Units Certificate shall be deemed to evidence the
same rights and obligations of the Company and the Holder as the
mutilated, destroyed, lost or stolen Normal Units Certificate.
"Predecessor Stripped Units Certificate" of any particular Stripped
Units Certificate means every previous Stripped Units Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Stripped Units evidenced thereby; and, for the
purposes of this definition, any Stripped Units Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Stripped Units
8
Certificate shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost or stolen
Stripped Units Certificate.
"Purchase Contract," when used with respect to any Unit, means the
contract forming a part of such Unit and obligating the Company to sell
and the Holder of such Unit to purchase Common Shares on the terms and
subject to the conditions set forth in Article Five.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1(a).
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quotation Agent" means each of _____________ and _____________ or
any of their respective successors or any other primary U.S. government
securities dealer in
New York City selected by the Company.
"Record Date" for the payment of a 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, the 15th
calendar day preceding such Payment Date.
"Redemption Amount" means, for each Note, the product of (i) the
principal amount of such Note and (ii) a fraction whose numerator is the
applicable Treasury Portfolio Purchase Price and whose denominator is the
applicable Tax Event Redemption Principal Amount.
"Redemption Price" means the redemption price per Note equal to the
Redemption Amount plus any interest on such Note accrued and unpaid as of
the interest Payment Date, if any, preceding the Tax Event Redemption
Date.
"Register" means the Normal Units Register and the Stripped
Units Register, as applicable.
"Registrar" means the Normal Units Registrar and the
Stripped Units Registrar, as applicable.
"Remarketing Agent" has the meaning specified in Section 5.4(b)(i).
"Remarketing Agreement" means the Remarketing Agreement to be
entered into by and among the Company, Platinum Underwriters Finance, the
Remarketing Agent and the Agent.
9
"Remarketing Date" means the third Business Day preceding -, 2005.
"Remarketing Fee" has the meaning specified in Section 5.4(b)(i).
"Remarketing Period" means each of (i) the three Business Day period
beginning on the Remarketing Date and ending after the two immediately
following Business Days; (ii) the three Business Day period immediately
preceding -, 2005; and (iii) the third Business Day immediately preceding
the Share Purchase Date.
"Remarketing Rate" means the percentage rate per year at which each
Note will bear interest on and following the Reset Date.
"Remarketing Value" means the sum of
(i) the value at the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of U.S. Treasury securities
that will pay, on or prior to the Share Purchase Date, an amount of
cash equal to the aggregate interest payments that are scheduled to
be payable on that date, on (1) the Notes which are included in
Normal Units and (2) the Separate Notes, in each case, which are
participating in the remarketing, assuming for that purpose, even if
not true, that the interest rate on the Notes is equal to the Coupon
Rate, and
(ii) the value at the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of U.S. Treasury securities
that will pay, on or prior to the Share Purchase Date, an amount of
cash equal to the aggregate Stated Amount of (1) such Notes that are
included in Normal Units and (2) the Separate Notes, in each case,
which are participating in the remarketing;
provided that for purposes of clauses (i) and (ii) above, the Remarketing
Value shall be calculated on the assumptions that (x) the U.S. Treasury
securities are highly liquid and mature on or within 35 days prior to the
Share Purchase Date, as determined in good faith by the Remarketing Agent
in a manner intended to minimize the cash value of the U.S. Treasury
securities, and (y) the U.S. Treasury securities are valued based on the
ask-side price of such U.S. Treasury securities at a time between 9:00
a.m. and 11:00 a.m.,
New York City time, selected by the Remarketing
Agent, on the Remarketing Date or any Subsequent Remarketing Date, as the
case may be, as determined on a third-day settlement basis by a reasonable
and customary means selected in good faith by the Remarketing Agent, plus
accrued interest to that date.
"Reorganization Event" has the meaning specified in Section 5.6(b).
10
"Reset Date" means the date following the Remarketing Date or a
subsequent Remarketing Date, as applicable, on which the trades in a
successful remarketing of the Notes, pursuant to the provisions of Section
5.4, settle.
"Responsible Officer" means, when used with respect to the Agent,
any officer within the Institutional Trust Services unit of the Agent (or
any successor unit or department of the Agent) located at the Corporate
Trust Office of the Agent who has direct responsibility for the
administration of this Agreement and, for the purposes of Section
7.1(b)(2), shall also include any officer of the Agent to whom any
corporate trust matter is referred because of such person's knowledge of
and familiarity with the particular subject.
"Sale Price" of any securities distributed in a Spin-Off on any
Trading Day means the closing sale price per share (or if no closing sale
price is reported, the average of the bid and ask prices or, if more than
one in either case, the average of the average bid and average ask prices)
on such Trading Day as reported in composite transactions for the
principal U.S. securities exchange on which such securities are traded or,
if such securities are not listed on a U.S. national or regional
securities exchange, as reported by the Nasdaq Stock Market, or if such
securities are not so reported, the last quoted bid price for such
securities 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 such securities on such date as determined
by a nationally recognized independent investment banking firm retained by
the Company for this purpose.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Securities Intermediary" means State Street Bank, a - corporation,
in its capacity as Securities Intermediary under the Pledge Agreement,
together with its successors in such capacity.
"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is in parity or subordinate in right of payment to the
Contract Adjustment Payments.
"Separate Notes" has the meaning set forth in the Pledge Agreement.
"Settlement Date" means any Early Settlement Date or Merger Early
Settlement Date or the Share Purchase Date.
"Settlement Rate" has the meaning specified in Section 5.1(a).
"Share Purchase Date" means -, 2005.
11
"Spin-Off" means a dividend or other distribution on the Common
Shares of shares of Capital Stock of any class or series, or similar
equity interests, of or relating to a subsidiary or other business unit of
the Company.
"Stated Amount" means, with respect to any one Normal Unit or
Stripped Unit, $25, and with respect to any one Note, $1,000.
"Stripped Unit" means the collective rights and obligations of a
Holder of a Stripped Units Certificate in respect of a 1/40 undivided
beneficial interest in a Treasury Security, subject to the Pledge thereof,
and the related Purchase Contract.
"Stripped Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Stripped
Units specified on such certificate, substantially in the form of Exhibit
B hereto.
"Stripped Units Register" and "Stripped Units Registrar" have the
respective meanings specified in Section 3.5(a).
"Subsequent Remarketing" has the meaning specified in Section
5.4(b)(ii).
"Subsequent Remarketing Date" means any date on which the
Remarketing Agent attempts a Subsequent Remarketing in accordance with
Section 5.4 hereof, such date in no event to be later than the three
Business Days immediately preceding the Share Purchase Date.
"Tax Event" means the receipt by the Company of an opinion of a
nationally recognized tax counsel experienced in such matters, which may
be ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, to the effect that there is more than an
insubstantial risk that interest payable by Platinum Underwriters Finance
on the Notes on the next Payment Date will not be deductible, in whole or
in part, by Platinum Underwriters Finance for United States federal income
tax purposes, as a result of (a) any amendment to, or change (including
any announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any amendment to or
change in an official interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or
regulatory authority or (c) any official interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the generally accepted position on _________, 2002, which
amendment, change or proposed change is effective or which interpretation
or pronouncement is announced on or after __________, 2002.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Notes, at the option of Platinum
Underwriters
12
Finance, in whole but not in part, on not less than 30 days nor more than
60 days' prior written notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"Tax Event Redemption Principal Amount" means (i) in the case of a
Tax Event Redemption Date occurring prior to a successful remarketing of
the Notes pursuant to Section 5.4 hereof, the aggregate principal amount
of Notes included in Normal Units outstanding on such date, and (ii) in
the case of a Tax Event Redemption Date occurring after either a
successful remarketing of the Notes pursuant to Section 5.4 hereof or the
Share Purchase Date, the aggregate principal amount of the Notes
outstanding on such date.
"Tax Event Redemption Treasury Consideration" means, with respect to
a Normal Unit and the U.S. Treasury securities in the Treasury Portfolio,
(A) a 1/40, or 2.5%, undivided beneficial ownership interest in a $1,000
principal or interest amount of a principal or interest strip in a U.S.
Treasury security included in such Treasury Portfolio which matures on or
prior to , 2005 and (B) for each scheduled interest Payment Date on the
Notes that occurs after the Tax Event Redemption Date and on or before the
Share Purchase Date a -% undivided beneficial ownership interest in a
$1,000 principal or interest of a principal or interest strip in a U.S.
Treasury security included in the Treasury Portfolio that matures on or
prior to that interest Payment Date.
"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 Share Purchase Date, a
judgment, decree or court order shall have been entered granting
relief under the Bankruptcy Code or any other similar federal or
state law, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of
the Company, and, unless such judgment, decree or order shall have
been entered within 60 days prior to the Share Purchase Date, such
decree or order shall have continued undischarged and unstayed for a
period of 60 days;
(ii) at any time on or prior to the Share Purchase Date, a
judgment, decree or court order for the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the winding up or liquidation of
its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the
Share Purchase
13
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 Share Purchase Date, the
Company shall file a petition for relief under the Bankruptcy Code
or any other similar federal or state law, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization or liquidation
under the Bankruptcy Code or any other similar federal or state law,
or shall consent to the filing of any such petition, or shall
consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they
become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1(a).
"TIA" means the Trust Indenture Act of 1939, and any statute
successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Trading Day" has the meaning specified in Section 5.1(c).
"Treasury Consideration" means the Agent-purchased Treasury
Consideration, the Opt-out Treasury Consideration or the Tax Event
Redemption Treasury Consideration.
"Treasury Portfolio" means: (i) if a Tax Event Redemption occurs
prior to a successful remarketing of the Notes pursuant to the provisions
of Section 5.4 hereof, a portfolio of (A) zero-coupon U.S. Treasury
securities consisting of principal or interest strips of U.S. Treasury
securities that mature on or prior to the Share Purchase Date in an
aggregate amount equal to the applicable Tax Event Redemption Principal
Amount and (B) with respect to each scheduled interest Payment Date on the
Notes that occurs after the Tax Event Redemption Date and on or before the
Share Purchase Date, interest or principal strips of U.S. Treasury
securities that mature on or prior to such interest Payment Date in an
aggregate amount equal to the aggregate interest payment that would be due
on the applicable Tax Event Redemption Principal Amount on such date if
the interest rate of the Notes were not reset on the Reset Date, and (ii)
solely for purposes of determining the Treasury Portfolio Purchase Price
in the case of a Tax Event Redemption Date occurring after either of a
successful remarketing of the Notes or the Share Purchase Date, a
portfolio of (A) zero-coupon U.S. Treasury securities consisting of
principal or interest strips of U.S. Treasury securities that mature on or
prior to -, 2007 in an aggregate amount equal to the applicable Tax Event
Redemption Principal Amount and (B) with respect to each scheduled
interest Payment Date on the Notes that occurs after the Tax Event
Redemption
14
Date and on or before -, 2007, interest or principal strips of U.S.
Treasury securities that mature on or prior to such interest Payment Date
in an aggregate amount equal to the aggregate interest payment that would
be due on the applicable Tax Event Redemption Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in
New York City to
the Quotation Agent on the third Business Day immediately preceding the
Tax Event Redemption Date for the purchase of the Treasury Portfolio for
settlement on the Tax Event Redemption Date.
"Treasury Security" means a zero-coupon U.S. Treasury security
(CUSIP Number -) maturing on -, 2005 that will pay $1,000 on such maturity
date.
"Trustee" means JPMorgan Chase Bank, a
New York banking corporation,
as trustee under the Indenture and the First Supplemental Indenture, or
any successor thereto.
"Underwriting Agreement" means the Underwriting Agreement relating
to the Units dated -, 2002 among the Company, Platinum Underwriters
Finance, Inc. and the underwriters named therein.
"Unit" means a Normal Unit or a Stripped Unit.
"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 Officers'
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:
(a) a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
15
(b) 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;
(c) 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
(d) a statement as to whether, in the opinion of such individual
based on his or her knowledge, such condition or covenant has been
complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT.
(a) 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.
(b) 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.
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 an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered
16
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 Units shall be proved by the Normal Units
Register or the Stripped Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu 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 Units 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 Units. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding Normal Units
and the Outstanding Stripped Units, as the case may be, on such record
date, and no other Holders, shall be entitled to take the relevant action
with respect to the Normal Units or the Stripped Units, as the case may
be, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite
number of Outstanding Units on such record date. Nothing in this paragraph
shall be construed to prevent the Company from setting a new record date
for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of
Outstanding Units 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 Units in the manner set forth in Section
1.6.
17
(f) 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 Units 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:
(a) 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,
mailed, first-class postage prepaid, telecopied or delivered by overnight
air courier guaranteeing next day delivery, addressed to and received by
the Agent at JPMorgan Chase Bank, Attention: Institutional Trust Services,
telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, or at any other address furnished in writing by
the Agent to the Holders and the Company; or
(b) 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,
mailed, first-class postage prepaid, telecopied or delivered by overnight
air courier guaranteeing at least second day delivery, addressed to and
received by the Company at Platinum Underwriters Holdings, Ltd. ?,
Attention: ?, telecopy: ?, or at any other address furnished in writing to
the Agent by the Company; or
(c) 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, mailed, first-class postage prepaid, telecopied or
delivered by overnight air courier guaranteeing next day delivery,
addressed to and received by the Collateral Agent at ?, Attention: ?,
telecopy: (212) ?, or at any other address furnished in writing by the
Collateral Agent to the Agent, the Company and the Holders; or
18
(d) the Trustee by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered, mailed,
first-class postage prepaid, telecopied or delivered by overnight air
courier guaranteeing next day delivery, addressed to and received by the
Trustee at JPMorgan Chase Bank, Attention: Institutional Trust Services,
telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, or at any other address furnished in writing by
the Trustee to the Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER.
(a) 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.
(b) 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.
19
SECTION 1.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Units, 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 Units evidenced by their Certificates by
their acceptance of delivery of such Certificates.
SECTION 1.11 GOVERNING LAW.
This Agreement and the Units shall be governed by and construed in
accordance with the laws of the State of
New York.
SECTION 1.12 LEGAL HOLIDAYS.
(a) In any case where any Payment Date shall not be a Business
Day, then (notwithstanding any other provision of this Agreement or the
Normal Units Certificates) payments on the Units shall not be made on such
date, but such payments shall be made on the next succeeding day which is
a Business Day with the same force and effect as if made on such Payment
Date, provided that no interest shall accrue or be payable by the Company
in respect of such payment for the period from and after any such Payment
Date, except that if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such
Payment Date.
(b) If any date on which Contract Adjustment Payments are to be
made on the Purchase Contracts is not a Business Day, then payment of the
Contract Adjustment Payments payable on that date will be made on the next
succeeding day which is a Business Day, and no interest or additional
payment will be paid in respect of the delay. However, if that Business
Day is in the next succeeding calendar year, the payment will be made on
the immediately preceding Business Day with the same force and effect as
if made on that Payment Date.
(c) In any case where the Share Purchase Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement
or the Certificates), the Purchase Contracts shall not be performed on
such date, but the Purchase Contracts shall be performed on the next
succeeding day which is a Business Day with the same force and effect as
if performed on the Share Purchase Date.
20
SECTION 1.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts by the
parties hereto, each of which, when so executed and delivered, shall be deemed
an original, but all such counterparts shall together constitute one and the
same instrument.
SECTION 1.14 INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
SECTION 1.15 APPOINTMENT OF FINANCIAL INSTITUTION AS AGENT FOR THE
COMPANY.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Agent and the
Holders, under this Agreement and the Purchase Contracts, by giving notice of
such appointment in the manner provided in Section 1.5 hereof. Any such
appointment shall not relieve the Company in any way from its obligation
hereunder.
SECTION 1.16 NO WAIVER.
No failure on the part of the Company, the Agent, the Collateral
Agent, the Securities Intermediary or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Company, the Agent, the Collateral
Agent, the Securities Intermediary or any of their respective agents of any
right, power or remedy hereunder preclude any further exercise thereof or the
exercise of any right, power or remedy. The remedies herein are cumulative and
are not exclusive of any remedies provided by law.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY.
(a) The Normal Units Certificates (including the form of Purchase
Contract forming part of the Normal Units evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends
or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange or quotation system on
which the Normal Units are listed or quoted for trading or any depositary
therefor, or as may, consistently herewith, be
21
determined by the officers of the Company executing such Normal Units
Certificates, as evidenced by their execution of the Normal Units
Certificates.
(b) The definitive Normal Units 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 Normal Units Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
(c) The Stripped Units Certificates (including the form of
Purchase Contracts forming part of the Stripped Units evidenced thereby)
shall be in substantially the form set forth in Exhibit B hereto, with
such letters, numbers or other marks of identification or designation and
such legends or endorsements printed, lithographed or engraved thereon as
may be required by the rules of any securities exchange or the quotation
system on which the Stripped Units may be listed or quoted for trading or
any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company executing such Stripped Units Certificates,
as evidenced by their execution of the Stripped Units Certificates.
(d) The definitive Stripped Units 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 Stripped Units Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
(e) 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 ON THE REVERSE
HEREOF) 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
Depositary Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) to the Company or
its agent.
22
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
(a) The form of the Agent's certificate of authentication of the
Normal Units shall be in substantially the form set forth on the form of
the Normal Units Certificates.
(b) The form of the Agent's certificate of authentication of the
Stripped Units shall be in substantially the form set forth on the form of
the Stripped Units Certificates.
ARTICLE III
THE UNITS
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS.
(a) The aggregate number of Normal Units and Stripped Units, if
any, evidenced by Certificates authenticated, executed on behalf of the
Holders and delivered hereunder is limited to 5,000,000 (5,750,000 if the
underwriters' option to purchase additional Normal Units pursuant to the
Underwriting Agreement is exercised in full), except for Certificates
authenticated, executed on behalf of the Holder 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, 5.9, 5.10 or
8.5.
(b) The Certificates shall be issuable only in registered form and
only in denominations of a single Unit and any integral multiple thereof.
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
(a) Each Normal Units Certificate shall evidence the number of
Normal Units specified therein, with each such Normal Unit representing
the ownership by the Holder thereof of a 1/40 undivided beneficial
interest in a Note or the appropriate Treasury Consideration, as the case
may be, subject to the Pledge of such interest in the Note or the Treasury
Consideration, as the case may be, by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, the Holder of each Normal Unit shall pledge, pursuant to
the Pledge Agreement, the interest in the Note or the Treasury
Consideration forming a part of such Normal Unit, to the Collateral Agent
and grant to the Collateral Agent a security interest in the right, title,
and interest of such Holder in such interest in the Note or Treasury
Consideration for the benefit of the Company, to secure the obligation of
such Holder under the related Purchase Contract to purchase the Common
Shares of the Company. Prior to the purchase of Common Shares under each
Purchase Contract, such Purchase Contract shall not entitle the Holder of
the related Normal Units Certificates to
23
any of the rights of a holder of Common Shares, including, without
limitation, the right to vote or receive any dividends or other payments
or to consent or to receive notice as a shareholder in respect of the
meetings of shareholders or for the election of directors of the Company
or for any other matter, or any other rights whatsoever as a shareholder
of the Company.
(b) Each Stripped Units Certificate shall evidence the number of
Stripped Units specified therein, with each such Stripped Unit
representing the ownership by the Holder thereof of a 1/40 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 Common
Shares under each Purchase Contract, such Purchase Contract shall not
entitle the Holder of the related Stripped Units Certificates to any of
the rights of a holder of Common Shares, including, without limitation,
the right to vote or receive any dividends or other payments or to consent
or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any
other matter, or any other rights whatsoever as a shareholder of the
Company.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) Subject to the provisions of Sections 3.13 and 3.14, 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.
(b) The Certificates shall be executed on behalf of the Company by
the Chief Executive Officer, the Chief Financial Officer, the President,
any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary (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.
(c) 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.
(d) 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 officer of the Agent, as such Holder's
attorney-in-fact.
24
Such signature by an authorized officer of the Agent shall be conclusive
evidence that the Holder of such Certificate has entered into the Purchase
Contract or Purchase Contracts evidenced by such Certificate.
(e) Each Certificate shall be dated the date of its
authentication.
(f) 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 officer 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.
(a) 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 Normal Units or Stripped Units, as the case may be,
are listed or quoted for trading or any depositary transfer, or as may,
consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
(b) 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 Normal Units or Stripped Units, as the case
may be, as the temporary Certificate or Certificates so surrendered. Until
so exchanged, the temporary Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Normal
Units or Stripped Units, as the case may be, evidenced thereby as
definitive Certificates.
25
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Agent shall keep at the Corporate Trust Office a register
(the "Normal Units Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of Normal Units Certificates and of transfers of Normal Units
Certificates (the Agent, in such capacity, the "Normal Units Registrar")
and a register (the "Stripped Units Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall provide for
the registration of the Stripped Units Certificates and transfers of
Stripped Units Certificates (the Agent, in such capacity, the "Stripped
Units Registrar").
(b) 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 one or more new
Certificates of like tenor and denominations, registered in the name of
the designated transferee or transferees, and evidencing a like number of
Normal Units or Stripped Units, as the case may be.
(c) At the option of the Holder, Certificates may be exchanged for
other Certificates, of like tenor and denominations and evidencing a like
number of Normal Units or Stripped Units, as the case may be, upon
surrender of the Certificates to be exchanged at the Corporate Trust
Office. Whenever any Certificates are so surrendered for exchange, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled to receive.
(d) All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number
of Normal Units or Stripped Units, as the case may be, and be entitled to
the same benefits and subject to the same obligations, under this
Agreement as the Normal Units or Stripped Units, as the case may be,
evidenced by the Certificate surrendered upon such registration of
transfer or exchange.
(e) Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Agent duly executed
by the Holder thereof or its attorney duly authorized in writing.
(f) 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
26
of Certificates, other than any exchanges pursuant to Sections 3.6, 3.9
and 8.5 not involving any transfer.
(g) 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 Share Purchase 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 Share Purchase Date has occurred, deliver the
Common Shares issuable in respect of the Purchase Contracts forming
a part of the Units evidenced by such Certificate,
(ii) in the case of Normal Units, if a Termination Event
shall have occurred prior to the Share Purchase Date, transfer the
Notes or the appropriate Treasury Consideration, as applicable,
relating to such Normal Units, or
(iii) in the case of Stripped Units, if a Termination
Event shall have occurred prior to the Share Purchase Date, transfer
the Treasury Securities relating to such Stripped Units,
in each case subject to the applicable conditions and in accordance with
the applicable provisions of Article V.
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 or a nominee or custodian thereof 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 a customary 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 and the Agent shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the payment
of Contract Adjustment Payments, if any, and receiving approvals, votes or
consents
27
hereunder) as the Holder of the Units 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 or any Certificate, 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 payments of Contract Adjustment
Payments 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 Units
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 Units, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Units.
SECTION 3.9 DEFINITIVE CERTIFICATES.
If
(i) a Clearing Agency notifies the Company that it is
unwilling or unable to continue its services as securities
depositary with respect to the Units 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
arrangements through the Clearing Agency with respect to the Units,
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,
28
then upon surrender of the Global Certificates representing the
Book-Entry Interests with respect to the Units 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.
(a) 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 Normal Units or Stripped Units, as the case may be, and bearing
a Certificate number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity at the cost of the Holder
as may be required by them to hold each of them and any agent of either of
them harmless, then, in the absence of notice to the Company or to a
Responsible Officer of 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 Normal Units
or Stripped Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
(c) 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 Share Purchase 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 Share Purchase Date has occurred, deliver the
Common Shares issuable in respect of the Purchase Contracts forming a part
of the Units evidenced by such Certificate, or (ii) if a Termination Event
shall have occurred prior to the Share Purchase Date, transfer the Notes,
the appropriate Treasury Consideration or the Treasury Securities, as the
case may be, evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Article V.
29
(d) 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.
(e) 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 Unit evidenced thereby, whether or not the destroyed, lost
or stolen Certificate (and the Units 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.
(f) 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.
(a) 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
on the Register as the owner of the Units evidenced thereby, for the
purpose of receiving quarterly payments on the Notes or Treasury
Consideration, receiving payment of Contract Adjustment Payments, if any,
and any Deferred Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any such
payments 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.
(b) 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 treating the Clearing Agency as
the sole Holder of such Global Certificate or from giving effect to any
written certification, proxy or other authorization furnished by any
Clearing Agency (or its nominee), as a Holder of such Global Certificate,
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 a Holder of such
Global Certificate.
30
SECTION 3.12 CANCELLATION.
(a) All Certificates surrendered (i) for delivery of Common Shares
on or after any Settlement Date; (ii) upon the transfer of Notes or
Treasury Consideration or Treasury Securities, as the case may be, after
the occurrence of a Termination Event or pursuant to an Early Settlement
or Merger Early Settlement, or a Collateral Substitution or an
establishment or re-establishment of a Normal Unit; or (iii) upon the
registration of a transfer or exchange of a Unit shall, if surrendered to
any Person other than the Agent, be delivered to the Agent and, if not
already cancelled, shall be promptly cancelled by it. The Company may at
any time deliver to the Agent for cancellation any Certificates previously
authenticated, executed on behalf of the Holder 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 then customary procedures.
(b) If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a cancellation of
such Certificate unless and until such Certificate is delivered to the
Agent cancelled or for cancellation.
SECTION 3.13 ESTABLISHMENT OF STRIPPED UNITS.
(a) A Holder may separate the Pledged Notes or Pledged Treasury
Consideration, as applicable, from the related Purchase Contracts in
respect of the Normal Units held by such Holder by substituting for such
Pledged Notes or Pledged Treasury Consideration, as the case may be,
Treasury Securities that will pay at the Share Purchase Date an amount
equal to the aggregate Stated Amount of such Normal Units (a "Collateral
Substitution"), at any time from and after the date of this Agreement and
on or prior to the second Business Day immediately preceding the Share
Purchase Date, by (i) depositing with the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the aggregate
Stated Amount of such Normal Units, and (ii) transferring the related
Normal Units to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Treasury Securities to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent to
release the Pledged Notes or Pledged Treasury Consideration, as the case
may be, underlying such Normal Units, whereupon the Agent shall promptly
give such instruction to the Collateral Agent, substantially in the form
of Exhibit C hereto. Notwithstanding the foregoing, a Holder may not
separate the Pledged Notes or Pledged Treasury Consideration from the
related
31
Purchase Contracts in respect of the Normal Units held by such Holder
during the periods beginning on the fourth Business Day prior to the first
day of any Remarketing Period and ending on the third Business Day after
the end of such Remarketing Period. Upon receipt of the Treasury
Securities described in clause (i) above and the instruction described in
clause (ii) above, in accordance with the terms of the Pledge Agreement,
the Collateral Agent will release to the Agent, on behalf of the Holder,
such Pledged Notes or Pledged Treasury Consideration from the Pledge, free
and clear of the Company's security interest therein, and upon receipt
thereof the Agent shall promptly:
(x) cancel the related Normal Units;
(y) transfer the Pledged Notes or Pledged Treasury
Consideration, as the case may be, to the Holder; and
(z) authenticate, execute on behalf of such Holder and
deliver a Stripped Units Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Normal Units.
(b) Holders who elect to separate the Pledged Notes or Pledged
Treasury Consideration, as the case may be, from the related Purchase
Contract and to substitute Treasury Securities for such Pledged Notes or
Pledged Treasury Consideration 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.
(c) Holders may make Collateral Substitutions (i) if Treasury
Securities are being substituted for Pledged Notes, only in integral
multiples of 40 Normal Units, or (ii) if the Collateral Substitutions
occur after a successful remarketing of the Notes pursuant to the
provisions of Section 5.4 or after a Tax Event Redemption, as the case may
be, only in integral multiples of Normal Units such that the Treasury
Securities to be deposited and the Treasury Consideration to be released
are in integral multiples of $1,000.
(d) In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry transfer of the
Normal Units or fails to deliver a Normal Units Certificate to the Agent
after depositing Treasury Securities with the Collateral Agent, the
Pledged Notes or Pledged Treasury Consideration, as the case may be,
constituting a part of such Normal Units, and any distributions on such
Pledged Notes or Pledged Treasury Consideration shall be held in the name
of the Agent or its nominee in trust for the benefit of such Holder, until
such Normal Units are so transferred or the Normal Units Certificate is so
delivered, as the case may be, or, with respect to a Normal Units
Certificate, such Holder provides evidence satisfactory to the Company and
the Agent that
32
such Normal Units Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.
(e) Except as described in this Section 3.13, for so long as the
Purchase Contract underlying a Normal Unit remains in effect, such Normal
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Normal Unit in respect of the Pledged
Note or the Pledged Treasury Consideration, as the case may be, and the
Purchase Contract comprising such Normal Unit may be acquired, and may be
transferred and exchanged, only as a Normal Unit.
SECTION 3.14 REESTABLISHMENT OF NORMAL UNITS.
(a) A Holder of Stripped Units may reestablish Normal Units at any
time from and after the date of this Agreement and on or prior to the
second Business Day immediately preceding the Share Purchase Date, by (i)
depositing with the Collateral Agent the Notes or the appropriate Treasury
Consideration (identified and calculated by reference to the Treasury
Consideration then comprising Normal Units), as the case may be, then
comprising such number of Normal Units as is equal to the number of such
Stripped Units and (ii) transferring such Stripped Units to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit
D hereto, stating that the Holder has transferred the relevant amount of
Notes or the appropriate Treasury Consideration, as the case may be, to
the Collateral Agent and requesting that the Agent instruct the Collateral
Agent to release the Pledged Treasury Securities underlying such Stripped
Unit, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit C hereto.
Notwithstanding the foregoing, a Holder may not reestablish Normal Units
during the periods beginning on the fourth Business Day prior to the first
day of any Remarketing Period and ending on the third Business Day after
the end of such Remarketing Period. Upon receipt of the Notes or the
appropriate Treasury Consideration, as the case may be, described in
clause (i) above and the instruction described in clause (ii) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent
will release to the Agent, on behalf of the Holder, such Pledged Treasury
Securities from the Pledge, free and clear of the Company's security
interest therein, and upon receipt thereof the Agent shall promptly:
(x) cancel the related Stripped Units;
(y) transfer the Pledged Treasury Securities to the
Holder; and
(z) authenticate, execute on behalf of such Holder and
deliver a Normal Units Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Stripped Units.
33
(b) Holders of Stripped Units may reestablish Normal Units (i) if
Notes are being substituted for the Pledged Treasury Securities, only in
integral multiples of 40 Stripped Units for 40 Normal Units or (ii) if the
reestablishment occurs after a successful remarketing of the Notes
pursuant to the provisions of Section 5.4 or after a Tax Event Redemption,
as the case may be, only in integral multiples of Stripped Units such that
the Treasury Consideration to be deposited and the Treasury Securities to
be released are in integral multiples of $1,000.
(c) Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Stripped Unit remains in effect, such
Stripped Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Stripped Unit in respect of
the Pledged Treasury Securities and Purchase Contract comprising such
Stripped Unit may be acquired, and may be transferred and exchanged, only
as a Stripped Unit.
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION
EVENT.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Notes or the appropriate Treasury Consideration or the Treasury
Securities, as the case may be, underlying the Normal Units and the Stripped
Units pursuant to the terms of the Pledge Agreement, the Agent shall request
transfer instructions with respect to such Notes or the appropriate Treasury
Consideration 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 Normal
Units Register or the Stripped Units Register, as the case may be. Upon
book-entry transfer of the Normal Units or Stripped Units or delivery of a
Normal Units Certificate or Stripped Units Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Notes, the appropriate
Treasury Consideration or the Treasury Securities underlying such Normal Units
or Stripped Units, as the case may be, to such Holder by book-entry transfer, or
other appropriate procedures, in accordance with such instructions. In the event
a Holder of Normal Units or Stripped Units fails to effect such transfer or
delivery, the Notes, the appropriate Treasury Consideration or the Treasury
Securities, as the case may be, underlying such Normal Units or Stripped Units,
as the case may be, and any distributions thereon, shall be held in the name of
the Agent or its nominee in trust for the benefit of such Holder, until such
Normal Units or Stripped Units are transferred or the Normal Units Certificate
or Stripped Units Certificate is surrendered or such Holder provides
satisfactory evidence that such Normal Units Certificate or Stripped Units
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Agent and the Company. In the case of the Treasury
Portfolio or any Treasury Securities, the Agent may dispose of the subject
securities for cash and pay the applicable portion of such cash to the Holders
in lieu of such Holders' Treasury Securities, where such Holder would otherwise
have been entitled to receive less than $1,000 of any such security.
34
SECTION 3.16 NO CONSENT TO ASSUMPTION.
Each Holder of a Unit, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption (i.e., affirmance),
under Section 365 of the Bankruptcy Code or otherwise, of the Purchase Contract
by the Company, any receiver, liquidator or person or entity performing similar
functions or its trustee in the event that the Company becomes the debtor under
the Bankruptcy Code or subject to other similar state or federal law providing
for reorganization or liquidation.
SECTION 3.17 CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Agent shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Agent of any changes in the "CUSIP" numbers.
ARTICLE IV
THE NOTES
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PAYMENTS
PRESERVED; NOTICE.
(a) A payment on any Note or Treasury Consideration, as the case
may be, which is paid on any Payment Date shall, subject to receipt
thereof by the Agent from the Collateral Agent as provided by the terms of
the Pledge Agreement, be paid to the Person in whose name the Normal Units
Certificate (or one or more Predecessor Normal Units Certificates) of
which such Note or the appropriate Treasury Consideration is a part is
registered at the close of business on the Record Date for such Payment
Date.
(b) Each Normal Units Certificate evidencing Notes delivered under
this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Normal Units Certificate shall carry the rights to
interest accrued and unpaid, and to accrue interest, which were carried by
the Notes underlying such other Normal Units Certificate.
(c) In the case of any Normal Unit with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, or with respect to which Merger Early Settlement of the
underlying Purchase Contract is effected on a Merger Early Settlement
Date, or with respect to which Cash Settlement is effected on the Business
Day immediately preceding
35
the Share Purchase 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, payments on the
Note or the appropriate Treasury Consideration, as the case may be,
underlying such Normal Unit otherwise payable on such Payment Date shall
be payable on such Payment Date notwithstanding such Early Settlement,
Merger Early Settlement, Cash Settlement or Collateral Substitution, as
the case may be, and such payments shall, subject to receipt thereof by
the Agent, be payable to the Person in whose name the Normal Units
Certificate (or one or more Predecessor Normal Unit Certificates) was
registered at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the
case of any Normal Unit with respect to which Early Settlement, Merger
Early Settlement or Cash Settlement of the underlying Purchase Contract is
effected, or with respect to which a Collateral Substitution has been
effected, payments on the related Notes or payments on the appropriate
Treasury Consideration that would otherwise be payable after the
applicable Settlement Date or after such Collateral Substitution, as the
case may be, shall not be payable hereunder to the Holder of such Normal
Unit; provided, that to the extent that such Holder continues to hold the
separated Notes that formerly comprised a part of such Holder's Normal
Units, such Holder shall be entitled to receive any payments on such
separated Notes.
SECTION 4.2 NOTICE AND VOTING.
Under and subject to the terms of the Pledge Agreement and this
Agreement, the Agent will be entitled to exercise the voting and any other
consensual rights pertaining to the Pledged Notes but only to the extent
instructed by the Holders as described below. Upon receipt of notice of any
meeting at which holders of Notes are entitled to vote or upon any solicitation
of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as
practicable thereafter, mail to the Holders of Normal Units 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 Notes entitled to vote) shall be entitled to instruct the Agent
as to the exercise of the voting rights pertaining to the Pledged Notes
underlying their Normal Units and (c) stating the manner in which such
instructions may be given. Upon the written request of any Holder of Normal
Units on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
request, the maximum number of Pledged Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a Normal Unit, the Agent shall abstain from voting the Pledged Note
underlying such Normal Unit. The Company hereby agrees, if applicable, to
solicit Holders of Normal Units to timely instruct the Agent in order to enable
the Agent to vote such Pledged Notes.
36
SECTION 4.3 TAX EVENT REDEMPTION.
Upon the occurrence of a Tax Event Redemption prior to the
successful remarketing of the Notes pursuant to the provisions of Section 5.4,
the Company may elect to instruct in writing the Collateral Agent to apply, and
upon such written instruction, the Collateral Agent shall apply, out of the
aggregate Redemption Price for the Notes that are components of Normal Units, an
amount equal to the Tax Event Redemption Principal Amount to purchase on behalf
of the Holders of Normal Units the Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Agent for payment to the
Holders of such Normal Units. The Treasury Portfolio will be substituted for the
Pledged Notes, and will be pledged to the Collateral Agent in accordance with
the terms of the Pledge Agreement to secure the obligation of each Holder of a
Normal Unit to purchase the Common Shares under the Purchase Contract
constituting a part of such Normal Unit. Following the occurrence of a Tax Event
Redemption prior to a successful remarketing of the Notes pursuant to the
provisions of Section 5.4, the Holders of Normal Units and the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Treasury Portfolio as the Holder of Normal Units and the Collateral Agent had in
respect of the Notes, as the case may be, subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein or in the Certificates to the Note shall be deemed to be a
reference to such Treasury Portfolio and any reference herein or in the
Certificates to interest on the Notes shall be deemed to be a reference to
corresponding distributions on the Treasury Portfolio. The Company may cause to
be made in any Normal Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Treasury Portfolio for Notes as collateral.
The Company shall cause notice of any Tax Event Redemption to be
mailed, at least 30 calendar days but not more than 60 calendar days before such
Tax Event Redemption Date, to each Holder of Notes to be redeemed at its
registered address.
Upon the occurrence of a Tax Event Redemption after the successful
remarketing of the Notes, the Redemption Price will be payable in cash to the
holders of the Notes.
SECTION 4.4 CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of a Normal Unit or a Stripped Unit, by its acceptance
thereof, covenants and agrees to treat itself as the owner, for federal, state
and local income and franchise tax purposes of (i) the related Notes or the
appropriate Treasury Consideration, in the case of the Normal Units, or (ii) the
Treasury Securities, in the case of the Stripped Units. Each Holder of a Normal
Unit, by its acceptance thereof, further covenants and agrees to treat the Notes
as indebtedness of the Company for federal, state and local income and franchise
tax purposes.
37
ARTICLE V
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 PURCHASE OF COMMON SHARES.
(a) Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9, or a Merger Early Settlement has
occurred in accordance with Section 5.10, obligate the Holder of the
related Unit to purchase, and the Company to sell, on the Share Purchase
Date at a price equal to $25 (the "Purchase Price"), a number of newly
issued Common Shares equal to the Settlement Rate unless, on or prior to
the Share Purchase Date, there shall have occurred a Termination Event
with respect to the Unit of which such Purchase Contract is a part. The
"Settlement Rate" is equal to,
(i) if the Applicable Market Value (as defined below) is
equal to or greater than $- (the "Threshold Appreciation Price"), -
Common Shares per Purchase Contract,
(ii) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $-, the number of
Common Shares per Purchase Contract equal to the Stated Amount of
the related Unit divided by the Applicable Market Value, and
(iii) if the Applicable Market Value is equal to or less than
$-, - Common Shares per Purchase Contract,
in each case subject to adjustment as provided in Section 5.6 (and in each
case rounded upward or downward to the nearest 1/10,000th of a share).
(b) No fractional Common Shares will be issued by the Company with
respect to the payment of Contract Adjustment Payments on the Share
Purchase Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Contract Adjustment Payments, the Holder will
be entitled to receive an amount in cash as provided in Section 5.12.
(c) The "Applicable Market Value" means the average of the Closing
Price per Common Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Share Purchase Date or,
in the event of a Cash Merger contemplated by Section 5.10, the Cash
Merger Date. The "Closing Price" of the Common 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 Common Shares on the
New
York Stock Exchange (the "NYSE") on such date or, if the Common 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 Common Shares are so listed, or if the Common
38
Shares are not so listed on a United States securities exchange, as
reported by The Nasdaq Stock Market, or, if the Common Shares are not so
reported, the last quoted bid price for the Common 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 Common 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 Common 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 Common Shares at the close of
business on such day.
(d) Each Holder of a Unit, by its acceptance thereof, irrevocably
authorizes the Agent to enter into and perform the related Purchase
Contract on its behalf as its attorney-in-fact (including the execution of
Certificates on behalf of such Holder), agrees to be bound by the terms
and provisions thereof, covenants and agrees to perform its obligations
under such Purchase Contract, consents to the provisions hereof,
irrevocably authorizes the Agent as its attorney-in-fact to enter into and
perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Notes, the
appropriate Treasury Consideration or the Treasury Securities pursuant to
the Pledge Agreement; provided that upon a Termination Event, the rights
of the Holder of such Unit under the Purchase Contract may be enforced
without regard to any other rights or obligations. Each Holder of a Unit,
by its acceptance thereof, further covenants and agrees, that, to the
extent and in the manner provided in Section 5.4 and the Pledge Agreement,
but subject to the terms thereof, payments in respect of the Pledged
Notes, the Pledged Treasury Consideration or the Pledged Treasury
Securities to be paid upon settlement of such Holder's obligations to
purchase Common Shares under the Purchase Contract, shall be paid on the
Share Purchase Date 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.
(e) 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 Certificate 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.
39
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS.
(a) Subject to Section 5.3 herein, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name a Certificate (or
one or more Predecessor Certificates) is registered on the Register at the
close of business on the Record Date next preceding such Payment Date in
such coin or currency of the United States as at the time of payment shall
be legal tender for payments. The Contract Adjustment Payments, if any,
will be payable at - or, at the option of the Company, by check mailed to
the address of the Person entitled thereto at such Person's address as it
appears on the Register or by wire transfer to the account designated by a
prior written notice by such Person.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Adjustment Payments (including any accrued
Deferred Contract Adjustment Payments), if any, shall cease.
(c) Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other
Certificate (including as a result of a Collateral Substitution or the
re-establishment of a Normal Unit) shall carry the rights to Contract
Adjustment Payments, if any, accrued and unpaid, and to accrue Contract
Adjustment Payments, if any, which were carried by the Purchase Contracts
underlying such other Certificates.
(d) Subject to Sections 5.4, 5.9 and 5.10, in the case of any Unit
with respect to which Early Settlement or Merger Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date or a
Merger Early Settlement Date, respectively, or in respect of which Cash
Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Share Purchase Date, or with respect to
which a Collateral Substitution or an establishment or re-establishment of
a Normal Unit pursuant to Section 3.14 is effected, in each case on a date
that is after any Record Date and on or prior to the next succeeding
Payment Date, Contract Adjustment Payments on the Purchase Contract
underlying such Unit otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement, Early
Settlement, Merger Early Settlement, Collateral Substitution or
establishment or re-establishment of Normal Units, and such Contract
Adjustment Payments shall, subject to receipt thereof by the Agent, be
paid to the Person in whose name the Certificate evidencing such Unit (or
one or more Predecessor Certificates) was registered at the close of
business on such Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Unit with respect
to which Early Settlement or Merger Early Settlement or Cash Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date
or Merger Early Settlement Date or on the Business Day immediately
preceding the Share Purchase Date, as the case may be, or with
40
respect to which a Collateral Substitution or an establishment or
re-establishment of a Normal Unit has been effected, Contract Adjustment
Payments, if any, that would otherwise be payable after the Early
Settlement Date, or Merger Early Settlement Date, Collateral Substitution
or such establishment or re-establishment with respect to such Purchase
Contract shall not be payable.
(e) The Company's obligations with respect to Contract Adjustment
Payments (including any accrued or Deferred Contract Adjustment Payments)
will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness.
(f) In the event (x) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject
to the provisions of Section 5.2(h) below, that (i) a default shall have
occurred and be continuing with respect to the payment of principal,
interest or any other monetary amounts due and payable on any Senior
Indebtedness and such default shall have continued beyond the period of
grace, if any, specified in the instrument evidencing such Senior
Indebtedness (and the Agent shall have received written notice thereof
from the Company or one or more holders of Senior Indebtedness or their
representative or representatives or the trustee or trustees under any
indenture pursuant to which any such Senior Indebtedness may have been
issued), or (ii) the maturity of any Senior Indebtedness shall have been
accelerated because of a default in respect of such Senior Indebtedness
(and the Agent shall have received written notice thereof from the Company
or one or more holders of Senior Indebtedness or their representative or
representatives or the trustee or trustees under any indenture pursuant to
which any such Senior Indebtedness may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of clause (x) above, payment in
full of all amounts due or to become due upon all Senior
Indebtedness and, in the case of subclauses (i) and (ii) of clause
(y) above, payment of all amounts due thereon, or provision shall be
made for such payment in money or money's worth, before the Holders
of any of the Units are entitled to receive any Contract Adjustment
Payments on the Purchase Contracts underlying the Securities;
(ii) any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property or
securities, to which the Holders of any of the Securities would be
entitled except for the provisions of Sections 5.2(e) through (q),
including any such payment or distribution which may be payable or
deliverable by reason of the payment
41
of any other indebtedness of the Company being subordinated to the
payment of such Contract Adjustment Payments on the Purchase
Contracts underlying the Securities, shall be paid or delivered by
the Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly
to the holders of such Senior Indebtedness or their representative
or representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Senior
Indebtedness held or represented by each, to the extent necessary to
make payment in full of all Senior Indebtedness remaining unpaid
after giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Senior Indebtedness,
before any payment or distribution is made of such Contract
Adjustment Payments to the Holders of such Securities; and
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of Contract Adjustment Payments on the
Purchase Contracts underlying the Securities, shall be received by
the Agent or the Holders of any of the Securities when such payment
or distribution is prohibited pursuant to Sections 5.2(e) through
(q), such payment or distribution shall be paid over to the holders
of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, ratably as aforesaid, for
application to the payment of all Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or distribution
(or provision therefor) to the holders of such Senior Indebtedness.
(g) For purposes of Sections 5.2(e) through (q), the words "cash,
property or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the Company or
any other Person provided for by a plan of reorganization or readjustment,
the payment of which is subordinated at least to the extent provided in
Sections 5.2(e) through (q) with respect to such Contract Adjustment
Payments on the Securities to the payment of all Senior Indebtedness which
may at the time be outstanding; PROVIDED that (i) the indebtedness or
guarantee of indebtedness, as the case may be, that constitutes Senior
Indebtedness is assumed by the Person, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of
42
the Senior Indebtedness are not, without the consent of each such holder
adversely affected thereby, altered by such reorganization or
readjustment.
(h) Any failure by the Company to make any payment on or perform
any other obligation under Senior Indebtedness, other than any
indebtedness incurred by the Company or assumed or guaranteed, directly or
indirectly, by the Company for money borrowed (or any deferral, renewal,
extension or refunding thereof) or any indebtedness or obligation as to
which the provisions of Sections 5.2(e) through (g) shall have been waived
by the Company in the instrument or instruments by which the Company
incurred, assumed, guaranteed or otherwise created such indebtedness or
obligation, shall not be deemed a default or event of default if (i) the
Company shall be disputing its obligation to make such payment or perform
such obligation and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which is in full force
and effect and is not subject to further review, including a judgment that
has become final by reason of the expiration of the time within which a
party may seek further appeal or review, and (B) in the event a judgment
that is subject to further review or appeal has been issued, the Company
shall in good faith be prosecuting an appeal or other proceeding for
review and a stay of execution shall have been obtained pending such
appeal or review.
(i) Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with
the holders of all obligations of the Company which by their express terms
are subordinated to Senior Indebtedness of the Company to the same extent
as payment of the Contract Adjustment Payments in respect of the Purchase
Contracts underlying the Securities is subordinated and which are entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until all
such Contract Adjustment Payments owing on the Securities shall be paid in
full, and as between the Company, its creditors other than holders of such
Senior Indebtedness and the Holders, no such payment or distribution made
to the holders of Senior Indebtedness by virtue of Sections 5.2(e) through
(q) that otherwise would have been made to the Holders shall be deemed to
be a payment by the Company on account of such Senior Indebtedness, it
being understood that the provisions of Sections 5.2(e) through (q) are
and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of Senior Indebtedness, on
the other hand.
(j) Nothing contained in Sections 5.2(e) through (q) or elsewhere
in this Agreement or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders such Contract Adjustment
Payments on the Securities as and
43
when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of Senior Indebtedness,
nor shall anything herein or therein prevent the Agent or any Holder from
exercising all remedies otherwise permitted by applicable law upon default
under this Agreement, subject to the rights, if any, under these Sections
5.2(e) through (q), of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the exercise of
any such remedy.
(k) Upon payment or distribution of assets of the Company referred
to in these Sections 5.2(e) through (q), the Agent and the Holders shall
be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up,
liquidation or reorganization proceeding affecting the affairs of the
Company is pending or upon a certificate of the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, liquidating trustee or
agent or other Person making any payment or distribution, delivered to the
Agent or to the Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to these Sections 5.2(e)
through (q).
(l) The Agent shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior
Indebtedness or a trustee or representative on behalf of any such holder
or holders. In the event that the Agent determines in good faith that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or
distribution pursuant to Sections 5.2(e) through (q), the Agent may
request such Person to furnish evidence to the reasonable satisfaction of
the Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person
under Sections 5.2(e) through (q), and, if such evidence is not furnished,
the Agent may defer payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
(m) Nothing contained in Sections 5.2(e) through (q) shall affect
the obligations of the Company to make, or prevent the Company from
making, payment of the Contract Adjustment Payments, except as otherwise
provided in these Sections 5.2(e) through (q).
(n) Each Holder of Securities, by his acceptance thereof,
authorizes and directs the Agent on his, her or its behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in Sections
44
5.2(e) through (q) and appoints the Agent his, her or its
attorney-in-fact, as the case may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Agent of
any fact known to the Company that would prohibit the making of any
payment of moneys to or by the Agent in respect of the Securities pursuant
to the provisions of this Section 5.2. Notwithstanding the provisions of
Sections 5.2(e) through (q) or any other provisions of this Agreement, the
Agent shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of moneys to or by the
Agent, or the taking of any other action by the Agent, unless and until
the Agent shall have received written notice thereof mailed or delivered
to a Responsible Officer of the Agent from the Company, any Holder, any
paying agent or the holder or representative of any Senior Indebtedness;
PROVIDED that if at least two Business Days prior to the date upon which
by the terms hereof any such moneys may become payable for any purpose,
the Agent shall not have received with respect to such moneys the notice
provided for in this Section 5.2, then, anything herein contained to the
contrary notwithstanding, the Agent shall have full power and authority to
receive such moneys and to apply the same to the purpose for which they
were received and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to or on or after
such date.
(p) The Agent in its individual capacity shall be entitled to all
the rights set forth in this Section 5.2 with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other
holder of Senior Indebtedness and nothing in this Agreement shall deprive
the Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in
any way be prejudiced or impaired by any act or failure to act on the part
of the Company or by any noncompliance by the Company with the terms,
provisions and covenants of this Agreement, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
(r) Nothing in this Section 5.2 shall apply to claims of, or
payments to, the Agent under or pursuant to Section 7.7 hereof.
With respect to the holders of Senior Indebtedness, (i) the duties and
obligations of the Agent shall be determined solely by the express provisions of
this Agreement; (ii) the Agent shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement;
(iii) no implied covenants or obligations shall be read into this Agreement
against the Agent; and (iv) the Agent shall not be deemed to be a fiduciary as
to such holders.
45
SECTION 5.3 DEFERRAL OF CONTRACT ADJUSTMENT PAYMENTS.
(a) The Company shall have the right, at any time prior to the
Share Purchase Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its
election to defer each such deferred Contract Adjustment Payment
(specifying the amount to be deferred) at least ten Business Days prior to
the earlier of (i) the next succeeding Payment Date or (ii) the date the
Company is required to give notice of the Record Date or Payment Date with
respect to payment of such Contract Adjustment Payments to the NYSE or
other applicable self-regulatory organization or to Holders of the Units,
but in any event not less than one Business Day prior to such Record Date.
Any Contract Adjustment Payments so deferred shall, to the extent
permitted by law, accrue additional Contract Adjustment Payments thereon
at the rate of -% per year (computed on the basis of a 360-day year of
twelve 30-day months), compounding on each succeeding Payment Date, until
paid in full (such deferred installments of Contract Adjustment Payments,
if any, together with the additional Contract Adjustment Payments, if any,
accrued thereon, being referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any,
shall be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section 5.3. No Contract Adjustment
Payments may be deferred to a date that is after the Settlement Date and
no such deferral period may end other than on a Payment Date. If the
Purchase Contracts are terminated upon the occurrence of a Termination
Event, the Holder's right to receive Contract Adjustment Payments, if any,
and Deferred Contract Adjustment Payments, will terminate.
(b) In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until a Payment
Date prior to the Share Purchase Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as
of the close of business on the Record Date immediately preceding such
Payment Date.
(c) In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Share
Purchase Date, each Holder will receive on the Share Purchase Date in lieu
of a cash payment a number of Common Shares (in addition to a number of
Common Shares equal to the Settlement Rate) equal to (A) the aggregate
amount of Deferred Contract Adjustment Payments payable to such Holder
(net of any required tax withholding on such Deferred Contract Adjustment
Payment, which shall be remitted to the appropriate taxing jurisdiction)
divided by (B) the Applicable Market Value.
(d) No fractional Common Shares will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the
Share
46
Purchase Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the
Holder will be entitled to receive an amount in cash as provided in
Section 5.12.
(e) In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of the
Company's Capital Stock other than:
(i) purchases, redemptions or acquisitions of shares of
Capital Stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a share
purchase or dividend reinvestment plan, or the satisfaction by the
Company of its obligations pursuant to any contract or security
outstanding on the date the Company exercises its right to defer the
payment of Contract Adjustment Payments;
(ii) as a result of a reclassification of the Company's
Capital Stock or the exchange or conversion of one class or series
of the Company's Capital Stock for another class or series of the
Company's Capital Stock;
(iii) the purchase of fractional interests of the Company's
Capital Stock pursuant to the conversion or exchange provisions of
such Capital Stock or the security being converted or exchanged;
(iv) dividends or distributions in the Company's Capital
Stock (or rights to acquire the Company's Capital Stock) or
repurchases, acquisitions or redemptions of the Company's Capital
Stock in exchange for or out of the net cash proceeds of the sale of
the Company's Capital Stock (or securities convertible into or
exchangeable for shares of the Company's Capital Stock); or
(v) redemptions, exchanges or repurchases of any rights
outstanding under a shareholder rights plan or the declaration or
payment thereunder of a dividend or distribution of or with respect
to rights in the future.
SECTION 5.4 PAYMENT OF PURCHASE PRICE; REMARKETING.
(a) Unless a Tax Event Redemption, successful remarketing of the
Notes pursuant to the provisions of this Section 5.4 or Termination Event
has occurred, or a Holder of a Unit has settled the underlying Purchase
Contract through an Early Settlement pursuant to Section 5.9 or a Merger
Early Settlement
47
pursuant to Section 5.10, each Holder of a Normal Unit may pay in cash
("Cash Settlement") the Purchase Price for the Common Shares to be
purchased pursuant to a Purchase Contract if such Holder notifies the
Agent by use of a notice in substantially the form of Exhibit E hereto of
its intention to make a Cash Settlement. Such notice shall be made on or
prior to 5:00 p.m.,
New York City time, on the seventh Business Day
immediately preceding the Share Purchase 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.
(i) A Holder of a Normal Unit who has so notified the Agent
of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m.,
New York
City time, on the Business Day immediately preceding the Share
Purchase 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 paid to the Company on
the Share Purchase Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge
Agreement.
(ii) If a Holder of a Normal Unit 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 Notes pursuant to the remarketing as
described in paragraph (b) below. If a Holder of a Normal Unit does
notify the Agent as provided in paragraph (a)(i) above of its
intention to pay the Purchase Price in cash, but fails to make such
payment as required by paragraph (a)(i) above, such failure shall
also constitute an event of default; however, the Notes of such a
Holder will not be remarketed but instead the Collateral Agent, for
the benefit of the Company, will exercise its rights as a secured
party with respect to such Notes, including but not limited to those
rights specified in subsection (b)(iii) below.
(b) (i) Unless a Tax Event Redemption has occurred, the Company
and Platinum Underwriters Finance shall engage a nationally recognized
investment bank (the "Remarketing Agent") pursuant to a Remarketing
Agreement to be mutually agreed on by the Company, Platinum Underwriters
Finance, the Agent and the Remarketing Agent, but providing for
remarketing procedures substantially as set forth below to sell the Notes
of Holders of Normal Units, other than Holders that have elected not to
participate in the remarketing pursuant to the procedures set forth in
clause (iv) below, and holders of Separate Notes that have elected to
participate in the remarketing pursuant to the procedures set forth in
Section 4.5(d) of the Pledge Agreement. On the seventh Business Day prior
to first day of each Remarketing Period, the Agent shall give
48
Holders of Normal Units and holders of Separate Notes notice of the
remarketing in a daily newspaper in the English language of general
circulation in The City of New York (which is expected to be THE WALL
STREET JOURNAL) including the specific U.S. Treasury security or
securities (including the CUSIP number and/or the principal terms of such
Treasury security or securities) described in clause (iv) below, that must
be delivered by Holders of Normal Units that elect not to participate in
the remarketing pursuant to clause (iv) below no later than 10:00 a.m.,
New York City time, on the fourth Business Day preceding the first day of
such Remarketing Period. The Company or the Agent, at the Company's
request, shall request not later than seven nor more than 15 calendar days
prior to any Remarketing Period, that the Clearing Agency notify the
Clearing Agency participants of such Remarketing Period. The Agent shall
notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the first day of such Remarketing Period, the Remarketing Agent
and the Collateral Agent of the aggregate number of Notes of Normal Unit
Holders to be remarketed. On the third Business Day preceding the first
day of such Remarketing Period, no later than by 10:00 a.m., New York City
time, pursuant to the terms of the Pledge Agreement, the Custodial Agent
will notify the Remarketing Agent of the aggregate number of Separate
Notes to be remarketed. No later than 10:00 a.m., New York City time, on
the Business Day immediately preceding the first day of such Remarketing
Period, the Collateral Agent and the Custodial Agent, pursuant to the
terms of the Pledge Agreement, will deliver for remarketing to the
Remarketing Agent all Notes to be remarketed. Upon receipt of such notice
from the Agent and the Custodial Agent and such Notes from the Collateral
Agent and the Custodial Agent, the Remarketing Agent will, on the
Remarketing Date, use its commercially reasonable best efforts to sell
such Notes on such date at an aggregate price equal to at least 100.25% of
the Remarketing Value. The Remarketing Agent will use the proceeds from a
successful remarketing to purchase the appropriate U.S. Treasury
securities (the "Agent-purchased Treasury Consideration") with the CUSIP
numbers, if any, selected by the Remarketing Agent, described in clauses
(i)(1) and (ii)(1) of the definition of Remarketing Value related to the
Notes of Holders of Normal Units that were remarketed. On or prior to the
third Business Day following the Remarketing Date or any Subsequent
Remarketing Date on which the Notes are successfully remarketed, the
Remarketing Agent shall deliver such Agent-purchased Treasury
Consideration to the Agent, which shall thereupon deliver such
Agent-purchased Treasury Consideration to the Collateral Agent. The
Collateral Agent, for the benefit of the Company, will thereupon apply
such Agent-purchased Treasury Consideration, in accordance with the Pledge
Agreement, to secure such Holders' obligations under the Purchase
Contracts. In the event of a successful remarketing pursuant to this
Section 5.4, the Remarketing Agent will deduct as a remarketing fee an
amount not exceeding 25 basis points (.25%) of the total proceeds from the
remarketing (the "Remarketing Fee"). The Remarketing Agent will remit (1)
the portion of the proceeds from the remarketing attributable to the
Separate Notes to the holders of Separate Notes that were remarketed and
(2) the
49
remaining portion of the proceeds, less those proceeds used to purchase
the Agent-purchased Treasury Consideration, to the Agent for the benefit
of the Holders of the Normal Units that were remarketed, all determined on
a pro rata basis, in each case, on or prior to the third Business Day
following the Remarketing Date or any Subsequent Remarketing Date on which
the Notes were successfully remarketed. Holders whose Notes are so
remarketed will not otherwise be responsible for the payment of any
Remarketing Fee in connection therewith.
(ii) If, in spite of using its commercially reasonable best
efforts, the Remarketing Agent cannot remarket the Notes included in
the remarketing at a price equal to at least 100.25% of the
Remarketing Value on the Remarketing Date, the Remarketing Agent
will attempt to establish a Remarketing Rate meeting these
requirements on each of the two immediately following Business Days.
If the Remarketing Agent cannot establish a Remarketing Rate meeting
these requirements on either of those days, the remarketing in such
period will be deemed to have failed (a "Failed Remarketing"). In
the event of a Failed Remarketing with respect to the first
Remarketing Period, the Remarketing Agent will undertake the
procedures set forth in clause (i) above in each of the three
Business Days in the second Remarketing Period. In the event of a
Failed Remarketing in the second Remarketing Period, the Remarketing
Agent will further attempt to establish such a Remarketing Rate on
the third Business Day immediately preceding the Share Purchase
Date. If, in spite of using its commercially reasonable best
efforts, the Remarketing Agent fails to remarket the Notes
underlying the Normal Units at a price equal to at least 100.25% of
the Remarketing Value in accordance with the terms of the Pledge
Agreement by 4:00 p.m., New York City time, on the third Business
Day immediately preceding the Share Purchase Date, the "Last Failed
Remarketing" will be deemed to have occurred. Each remarketing
attempt that takes place in accordance with this Section 5.4 after
the Remarketing Date is referred to herein as a "Subsequent
Remarketing." Within three Business Days following the date of a
Failed Remarketing or the Last Failed Remarketing, as the case may
be, the Remarketing Agent shall return any Notes delivered to it to
the Collateral Agent and the Custodial Agent, as applicable. The
Collateral Agent, for the benefit of the Company, may exercise its
rights as a secured party with respect to such Notes, including
those actions specified in (b) (iii) below; provided that if upon
the Last Failed Remarketing, the Collateral Agent exercises such
rights for the benefit of the Company with respect to such Notes,
any accumulated and unpaid interest on such Notes will become
payable by Platinum Underwriters Finance to the Agent for payment to
the Holders of the Normal Units to which such Notes relate. Such
payment will be made by Platinum Underwriters Finance on or prior to
11:00 a.m., New York City time, on the Share Purchase Date in lawful
money of the United
50
States by certified or cashier's check or wire transfer in
immediately available funds payable to or upon the order of the
Agent. The Company will cause a notice of any Failed Remarketing and
of the Last Failed Remarketing to be published on the fourth
Business Day following each Failed Remarketing and the Last Failed
Remarketing, as the case may be, in a daily newspaper in the English
language of general circulation in The City of New York, which shall
be THE WALL STREET JOURNAL, if such newspaper is then so published.
The company will also release this information by means of Bloomberg
and Reuters newswire.
(iii) With respect to any Notes which constitute part of
Normal Units which are subject to the Last 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 Section 5.4 (e) below, may, among other things,
(A) retain such Notes in full satisfaction of the Holders'
obligations under the Purchase Contracts or (B) sell such Notes in
one or more public or private sales or otherwise.
(iv) A Holder of Normal Units may elect not to participate in
the remarketing and retain the Notes underlying such Units by
notifying the Agent of such election and delivering the specific
U.S. Treasury security or securities (including the CUSIP number
and/or the principal terms of such security or securities)
identified by the Agent (as having been based solely on the
identification that the Remarketing Agent shall have advised the
Agent) that constitute the U.S. Treasury securities described in
clauses (i) and (ii) of the definition of Remarketing Value relating
to the retained Notes (as if only such Notes were being remarketed)
(the "Opt-out Treasury Consideration") to the Agent not later than
10:00 a.m., New York City time, on the fourth Business Day prior to
the beginning of any Remarketing Period. Upon receipt thereof by the
Agent, the Agent shall deliver such Opt-out Treasury Consideration
to the Collateral Agent, which will, for the benefit of the Company,
thereupon apply such Opt-out Treasury Consideration to secure such
Holder's obligations under the Purchase Contracts. On the Business
Day immediately preceding the first day of a Remarketing Period, the
Collateral Agent, pursuant to the terms of the Pledge Agreement,
will deliver the Pledged Notes of such Holder to the Agent. Within
three Business Days following the last day of such Remarketing
Period, (A) if the remarketing was successful, the Agent shall
distribute such Notes to the Holders thereof, and (B) if there was a
Failed Remarketing on such date, the Agent will deliver such Notes
to the Collateral Agent, which will, for the benefit of the Company,
thereupon apply such Notes to secure such Holders' obligations under
the Purchase Contract and return the Opt-out Treasury Consideration
delivered by such Holders to such Holders. A Holder that does not so
deliver the Opt-out Treasury Consideration or does
51
not so notify the agent of its election not to participate in the
remarketing pursuant to this clause (iv) shall be deemed to have
elected to participate in the remarketing.
(c) Upon the maturity of the Pledged Treasury Securities
underlying the Stripped Units and, in the event of a successful
remarketing or a Tax Event Redemption, the Pledged Treasury Consideration
underlying the Normal Units, on the Share Purchase Date, the Collateral
Agent shall remit to the Company an amount equal to the aggregate Purchase
Price applicable to such Units, as payment for the Common Shares issuable
upon settlement thereof without needing to receive any instructions from
the Holders of such Units. In the event the payments in respect of the
Pledged Treasury Securities or the Pledged Treasury Consideration
underlying a Unit is in excess of the Purchase Price of the Purchase
Contract being settled thereby, the Collateral Agent will distribute such
excess to the Agent for the benefit of the Holder of such Unit when
received.
(d) Any distribution to Holders of excess funds and interest
described in Section 5.4 (b) and (c) above shall be payable at the
Corporate Trust Office or, at the option of the Holder or the holder of
Separate Notes, as applicable, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Register or
by wire transfer to an account maintained in the United States specified
by the Holder or the holder of Separate Notes, as applicable.
(e) The obligations of each Holder to pay the Purchase Price are
non-recourse obligations and are payable solely out of the proceeds of any
Collateral pledged to secure the obligations of the Holders (except to the
extent paid by Cash Settlement, Early Settlement or Merger Early
Settlement) and in no event will Holders be liable for any deficiency
between such payments and the Purchase Price.
(f) Notwithstanding anything to the contrary herein, the Company
shall not be obligated to issue any Common Shares in respect of a Purchase
Contract or deliver any certificates therefor to the Holder of the related
Unit unless the Company shall have received payment in full of the
aggregate Purchase Price for the Common Shares to be purchased thereunder
by such Holder in the manner herein set forth.
SECTION 5.5 ISSUANCE OF COMMON SHARES.
Unless a Termination Event shall have occurred on or prior to the
Share Purchase Date or an Early Settlement or a Merger Early Settlement shall
have occurred, on the Share Purchase Date, upon the Company's receipt of payment
in full of the Purchase Price for the Common Shares purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Units, one or more certificates representing the
newly issued Common Shares, registered in the
52
name of the Agent (or its nominee) as custodian for the Holders (such
certificates for Common Shares, together with any dividends or distributions for
which both a record date and payment date for such dividend or distribution has
occurred after the Share Purchase 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 Share Purchase 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 Common Shares which such Holder is entitled to receive pursuant to the
provisions of this Article V (after taking into account all Units then held by
such Holder) together with cash in lieu of fractional shares as provided in
Section 5.12 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 Common 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 such Certificate or has
established to the satisfaction of the Company that such tax either has been
paid or is not payable.
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) STOCK DIVIDENDS. In case the Company shall pay or make a
dividend or other distribution on the Common Shares in Common
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 Common 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 Common Shares
and the total number of Common 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 Common 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 Common Shares. The Company will not pay any dividend
or make any distribution on Common Shares held in the treasury of
the Company.
53
(2) SHARE PURCHASE RIGHTS. In case the Company shall issue
rights, options or warrants to all holders of its Common Shares
(that are not available on an equivalent basis to Holders of the
Units upon settlement of the Purchase Contracts underlying such
Units) 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 Common Shares at a price per share less than the Current
Market Price per Common 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,
share purchase or similar 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 Common
Shares outstanding at the close of business on the date fixed for
such determination plus the number of Common Shares which the
aggregate of the offering price of the total number of Common Shares
so offered for subscription or purchase would purchase at such
Current Market Price per Common Share and the denominator of which
shall be the number of Common Shares outstanding at the close of
business on the date fixed for such determination plus the number of
Common 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 Common 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 Common Shares. The
Company shall not issue any such rights, options or warrants in
respect of Common Shares held in the treasury of the Company.
(3) STOCK SPLITS; REVERSE SPLITS. In case outstanding Common
Shares shall be subdivided or split into a greater number of Common
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 Common Shares shall each be combined
into a smaller number of Common 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) DEBT OR ASSET DISTRIBUTIONS. (i) In case the Company
shall, by dividend or otherwise, distribute to all holders of its
Common Shares
54
evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in paragraph (2) of
this Section, shares of capital stock of any class or series, or
similar equity interests, of or relating to a subsidiary or other
business unit in the case of a Spin-Off referred to in the next
paragraph, or 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 Common 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 Common Share and the denominator of which shall be such
Current Market Price per Common 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.
(ii) In the case of a Spin-Off, the Settlement Rate in effect
immediately before the close of business on the record date fixed
for determination of stockholders entitled to receive that
distribution will be increased by multiplying the Settlement Rate by
a fraction, the numerator of which is the Current Market Price per
Common Share plus the Fair Market Value of the portion of those
shares of Capital Stock or similar equity interests so distributed
applicable to one Common Share and the denominator of which is the
Current Market Price per Common Share. Any adjustment to the
settlement rate under this paragraph 4(ii) will occur on the date
that is the earlier of (1) the tenth Trading Day following the
effective date of the Spin-Off and (2) the date of the securities
being offered in the Initial Public Offering of the Spin-Off, if
that Initial Public Offering is effected simultaneously with the
Spin-Off.
(5) CASH DISTRIBUTIONS. In case the Company shall, (i) by
dividend or otherwise, distribute to all holders of its Common
Shares cash (excluding any cash that is distributed in a
Reorganization Event to which Section 5.6(b) applies or as part of a
distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (ii) the aggregate
amount of any other distributions to all holders of its Common
Shares made exclusively in cash (other than regular quarterly,
semi-annual or annual cash dividends) within the 12 months preceding
the
55
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 of the date or expiration of the tender or
exchange offer referred to below (as determined by the Board of
Directors, whose determination shall be conclusive and described in
a Board Resolution filed with the Agent) of consideration payable in
respect of any tender or exchange offer (other than consideration
payable in respect of any odd-lot tender offer) by the Company or
any of its subsidiaries for all or any portion of the Common 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 10% of the product of the
Current Market Price per Common Share on the date for the
determination of holders of Common Shares entitled to receive such
distribution times the number of Common 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
shareholders entitled to receive such distribution by a fraction (A)
the numerator of which shall be equal to the Current Market Price
per Common 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 Common Shares outstanding on such
date for determination and (B) the denominator of which shall be
equal to the Current Market Price per Common Share on such date for
determination.
(6) TENDER OFFERS. In case (i) a tender or exchange offer
made by the Company or any subsidiary of the Company for all or any
portion of the Common 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 filed with the Agent) that when 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 filed with the
Agent), as of the expiration of such tender or exchange offer (other
than consideration payable in respect of any odd-lot tender 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
56
the Common 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 Common Shares made
exclusively in cash (other than regular quarterly, semi-annual or
annual cash dividends) within the 12 months preceding the expiration
of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 10% of the product of the
Current Market Price per Common 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
Common Shares outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to
the opening of business on the day after the date of the Expiration
Time, the Settlement Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Settlement Rate
immediately prior to the close of business on the date of the
Expiration Time by a fraction (A) the numerator of which shall be
equal to (x) the product of (I) the Current Market Price per Common
Share on the date of the Expiration Time and (II) the number of
Common Shares outstanding (including any tendered shares) on the
Expiration Time less (y) 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 (B) the
denominator of which shall be equal to the product of (x) the
Current Market Price per Common Share as of the Expiration Time and
(y) the number of Common 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) RECLASSIFICATION. The reclassification of Common Shares
into securities including securities other than Common Shares (other
than any reclassification upon a Reorganization Event to which
Section 5.6(b) applies) shall be deemed to involve (i) a
distribution of such securities other than Common Shares to all
holders of Common Shares (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution"
and the "date fixed for such determination" within the meaning of
paragraph (4) of this Section), and (ii) a subdivision, split or
combination, as the case may be, of the number of Common Shares
outstanding immediately prior to such reclassification into the
number of Common
57
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) "CURRENT MARKET PRICE". The "Current Market Price" per
Common Share means (a) on any day the average of the Closing Price
per Common Share on each of the 20 consecutive Trading Days ending
on the earlier of the day in question and the day before the "ex
date" with respect to the issuance or distribution requiring such
computation, (b) in the case of any Spin-Off that is effected
simultaneously with an Initial Public Offering of the securities
being distributed in the Spin-Off, the Closing Price of the Common
Shares on the Trading Day on which the initial price of the
securities being distributed in the Spin-Off is determined, and (c)
in the case of any other Spin-Off, the average of the Closing Prices
per Common Share over the first 10 Trading Days after the effective
date of such Spin-Off. For purposes of this paragraph, the term "ex
date," when used with respect to any issuance or distribution, shall
mean the first date on which the Common Shares trades regular way on
such exchange or in such market without the right to receive such
issuance or distribution.
(9) CALCULATION OF ADJUSTMENTS. All adjustments to the
Settlement Rate shall be calculated to the nearest 1/10,000th of a
Common 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, that any adjustments which by reason of this subparagraph
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. If an adjustment is made to
the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 5.6(a), an adjustment shall also be
made to the Applicable Market Value solely to determine which of
clauses (i), (ii) or (iii) of the definition of Settlement Rate in
Section 5.1(a) will apply on the Share Purchase 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 5.6(a) and the
denominator of which shall be the Settlement Rate immediately before
such adjustment; provided, that if such adjustment to the Settlement
Rate is required to be made pursuant to the occurrence of any of the
events contemplated by paragraph (1), (2), (3), (4), (5), (7) or
(10) of this Section 5.6(a) during the period taken into
consideration for
58
determining the Applicable Market Value, appropriate and customary
adjustments shall be made to the Settlement Rate.
(10) INCREASE OF SETTLEMENT RATE. 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 Common Shares resulting
from any dividend or distribution of Capital 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
(1) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the Common Shares
outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Company or
another corporation),
(2) any sale, transfer, lease or conveyance to another
Person of the property of the Company as an entirety or
substantially as an entirety,
(3) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or
acquisition), or
(4) 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"),
each Common Share covered by each Purchase Contract forming part of a Unit
immediately prior to such Reorganization Event shall, after such Reorganization
Event, be converted for purposes of the Purchase Contract into the kind and
amount of securities, cash and other property receivable in 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 Share
Purchase Date per share of Common Stock) by a holder of Common Shares that (i)
is not a Person with which the Company consolidated or into which the Company
merged or which merged into the Company or to which such sale or transfer was
made, as the case may be (any such Person, a "Constituent Person"), or an
Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Shares held by Affiliates of the
Company and non-Affiliates, and (ii) 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
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(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each Common Share
held immediately prior to such Reorganization Event by a Person 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 Common Share by a
plurality of the Non-electing Shares). On the Share Purchase Date, the
Settlement Rate then in effect will be applied to the value on the Share
Purchase Date of such securities, cash or other property.
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 Holder of each Outstanding Unit 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 5.7 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 5.6 and prepare and transmit to the Agent an Officers'
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) as soon as practicable following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such occurrence, as
soon as practicable after becoming so aware), provide a written
notice to the Agent of the occurrence of such event and a statement
setting forth in reasonable detail 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 Units 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
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to the validity or value (or the kind or amount) of any Common 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 Common
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 5.8 TERMINATION EVENT; NOTICE.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of Holders
to receive accumulated Contract Adjustment Payments, if any, or any Deferred
Contract Adjustment Payments and obligations of Holders to purchase Common
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 Share Purchase Date, a Termination Event shall have occurred. Upon and after
the occurrence of a Termination Event, the Normal Units shall thereafter
represent the right to receive the Notes or the appropriate Treasury
Consideration, as the case may be, forming a part of such Normal Units, and the
Stripped Units shall thereafter represent the right to receive the Treasury
Securities forming a part of such Stripped Units, in each case 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 5.9 EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this
Section 5.9, Purchase Contracts underlying Units having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may, at the
option of the Holder thereof, be settled early ("Early Settlement") on or
prior to 10:00 a.m., New York City time, on the seventh Business Day
immediately preceding the Share Purchase Date. Holders of Stripped Units
may only effect Early Settlement of the related Purchase Contracts in
integral multiples of 40 Stripped Units, and if Treasury Consideration has
been substituted for the Notes as a component in the Normal Units due to a
successful remarketing or the occurrence of a Tax Event Redemption,
Purchase Contracts underlying such Normal Units may only be settled early
in integral multiples of Normal Units such that the Treasury Consideration
to be deposited and the Treasury Consideration to be released are in
integral multiples of $1,000. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts, the Holder of the
Certificate evidencing the related Units 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
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and accompanied by payment payable to the Company in immediately available
funds in an amount (the "Early Settlement Amount") equal to (A) the
product of (i) the Stated Amount of such Units multiplied by (ii) the
number of Purchase Contracts with respect to which the Holder has elected
to effect Early Settlement, plus (B) if such delivery is made with respect
to any Purchase Contracts during the period from the close of business on
any Record Date next preceding any Payment Date to the opening of business
on such Payment Date, an amount equal to the Contract Adjustment Payments,
if any, payable on such Payment Date with respect to such Purchase
Contracts; provided that no payment shall be required pursuant to clause
(B) of this sentence if the Company shall have elected to defer the
Contract Adjustment Payments which would otherwise be payable on such
Payment Date. Except as provided in the immediately preceding sentence and
subject to Section 5.2(d), no payment or adjustment shall be made upon
Early Settlement of any Purchase Contract on any Contract Adjustment
Payments accrued on such Purchase Contract or on account of any dividends
on the Common Shares issued upon such Early Settlement. If the foregoing
requirements are first satisfied with respect to Purchase Contracts
underlying any Unit 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 Unit 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 Units shall be the
next succeeding Business Day.
(b) Upon Early Settlement of any Purchase Contract by the Holder
of the related Units, the Company shall issue, and the Holder shall be
entitled to receive, - Common Shares on account of such Purchase Contract
(the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted
in the same manner and at the same time as the Settlement Rate is adjusted
pursuant to Section 5.6. As promptly as practicable after Early Settlement
of Purchase Contracts in accordance with the provisions of this Section
5.9, the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full number
of Common Shares issuable upon such Early Settlement together with payment
in lieu of any fraction of a share, as provided in Section 5.12.
(c) No later than the third Business Day after the applicable
Early Settlement Date the Company shall cause (i) the Common Shares
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Pledged Notes or Pledged Treasury
Consideration, in the case of Normal Units, or the related Pledged
Treasury Securities, in the case of Stripped Units, to be released from
the Pledge by the Collateral Agent and transferred, in each case, to the
Agent for delivery to the Holder thereof or the Holder's designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of Common Shares from the Company and the Pledged Notes,
Pledged
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Treasury Consideration or Pledged 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 Units, (i) transfer to the Holder the Pledged
Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as
the case may be, forming a part of such Units, and (ii) deliver to the
Holder a certificate or certificates for the full number of Common Shares
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.12.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Agent shall authenticate, execute on behalf of the Holder and deliver to
the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(f) If such a registration statement is so required, the Company
covenants and agrees to use its reasonable best efforts to (A) have in
effect a registration statement covering the shares of Common Stock to be
delivered in respect of the Purchase Contracts being settled and (B)
provide a prospectus in connection therewith, in each case in a form that
the Agent may use in connection with such Early Settlement.
SECTION 5.10 EARLY SETTLEMENT UPON CASH MERGER.
(a) In the event of a merger or consolidation of the Company of
the type described in clause (1) of Section 5.6(b) in which the Common
Shares outstanding immediately prior to such merger or consolidation are
exchanged for consideration consisting of at least 30% cash or cash
equivalents (any such event a "Cash Merger"), then the Company (or the
successor to the Company hereunder) shall be required to offer the Holder
of each Unit the right to settle the Purchase Contract underlying such
Unit prior to the Share Purchase Date ("Merger Early Settlement") as
provided herein. On or before the fifth Business Day after the
consummation of a Cash Merger, the Company or, at the request and expense
of the Company, the Agent, shall give all Holders notice of the occurrence
of the Cash Merger and of the right of Merger Early Settlement arising as
a result thereof. The Company shall also deliver a copy of such notice to
the Agent and the Collateral Agent.
Each such notice shall contain:
(i) the date, which shall be not less than 20 nor more than
30 calendar days after the date of such notice, on which the Merger
Early Settlement will be effected (the "Merger Early Settlement
Date");
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(ii) the date, which shall be on or one Business Day prior to
the Merger Early Settlement Date, by which the Merger Early
Settlement right must be exercised;
(iii) the Settlement Rate in effect as a result of such Cash
Merger and the kind and amount of securities, cash and other
property receivable by the Holder upon settlement of each Purchase
Contract pursuant to Section 5.6(b);
(iv) a statement to the effect that all or a portion of the
Purchase Price payable by the Holder to settle the Purchase Contract
will be offset against the amount of cash so receivable upon
exercise of Merger Early Settlement, as applicable; and
(v) the instructions a Holder must follow to exercise the
Merger Early Settlement right.
(b) To exercise a Merger Early Settlement right, a Holder shall
deliver to the Agent at the Corporate Trust Office on or before 5:00 p.m.,
New York City time, on the date specified in the notice the Certificate(s)
evidencing the Units with respect to which the Merger Early Settlement
right is being exercised duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early on the reverse thereof
duly completed and accompanied by payment payable to the Company in
immediately available funds in an amount equal to the Early Settlement
Amount less the amount of cash that otherwise would be deliverable by the
Company or its successor upon settlement of the Purchase Contract in lieu
of Common Shares pursuant to Section 5.6(b) and as described in the notice
to Holders (the "Merger Early Settlement Amount").
(c) On the Merger Early Settlement Date, the Company shall deliver
or cause to be delivered (i) the net cash, securities and other property
to be received by such exercising Holder, equal to the Settlement Rate as
adjusted pursuant to Section 5.6, in respect of the number of Purchase
Contracts for which such Merger Early Settlement right was exercised, and
(ii) the related Pledged Notes or Pledged Treasury Consideration, in the
case of Normal Units, or Pledged Treasury Securities, in the case of
Stripped Units, to be released from the Pledge by the Collateral Agent and
transferred, in each case, to the Agent for delivery to the Holder thereof
or its designee. In the event a Merger Early Settlement right shall be
exercised by a Holder in accordance with the terms hereof, all references
herein to Share Purchase Date shall be deemed to refer to such Merger
Early Settlement Date.
(d) Upon Merger Early Settlement of any Purchase Contracts, and
subject to receipt of such net cash, securities or other property from the
Company and the Pledged Notes, Pledged Treasury Consideration or Pledged
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent
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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 Units, (i) transfer to the Holder the
Pledged Notes, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, forming a part of such Units, and (ii)
deliver to the Holder such net cash, securities or other property issuable
upon such Merger Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.12.
(e) In the event that Merger Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Units evidenced
by a Certificate, upon such Merger Early Settlement the Company (or the
successor to the Company hereunder) shall execute and the Agent shall
authenticate, execute on behalf of the Holder and deliver to the Holder
thereof, at the expense of the Company, a Certificate evidencing the Units
as to which Merger Early Settlement was not effected.
SECTION 5.11 CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the Common Shares pursuant
to the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, that the Company shall not be required to pay any such tax
or taxes which may be payable in respect of any exchange of or substitution for
a Certificate evidencing a Unit or any issuance of a Common Share in a name
other than that of the registered Holder of a Certificate surrendered in respect
of the Units 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 Common Share certificates or Certificates unless and 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.
SECTION 5.12 NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional Common Shares
shall be issued or delivered upon settlement on the Share Purchase Date or upon
Early Settlement or Merger 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 Common 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 Common Share which would otherwise be
deliverable upon settlement of any Purchase Contracts on the applicable
Settlement Date or upon Early Settlement or Merger Early Settlement, the
Company, through the Agent, shall make a cash payment in respect of such
fractional shares 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
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sufficient funds to permit the Agent to make all cash payments required by this
Section 5.12 in a timely manner.
ARTICLE VI
REMEDIES
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PURCHASE
CONTRACT ADJUSTMENT PAYMENTS AND PURCHASE COMMON SHARES.
The Holder of any Unit shall have the right, which is
absolute and unconditional,
(a) subject to the right of the Company to defer payment thereof
pursuant to Section 5.3, and to the forfeiture of any Deferred Contract
Adjustment Payments upon Early Settlement pursuant to Section 5.9 or upon
Merger Early Settlement pursuant to Section 5.10 or upon the occurrence of
a Termination Event, to receive payment of each installment of the
Contract Adjustment Payments, if any, with respect to the Purchase
Contract constituting a part of such Unit on the respective Payment Date
for such Unit, and to institute suit for the enforcement of such right to
receive Contract Adjustment Payments, and
(b) to purchase Common Shares pursuant to the Purchase Contract
constituting a part of such Unit and to institute suit for the enforcement
of any such right to purchase Common Shares, 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 Section 3.10(f),
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
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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 a Unit, by
its acceptance of such Unit 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, 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 Units, or to any suit instituted by any Holder for the enforcement
of distributions on any Notes or Contract Adjustment Payments, if any, on any
Purchase Contract on or after the respective Payment Date therefor in respect of
any Unit held by such Holder, or for enforcement of the right to purchase Common
Shares under the Purchase Contract constituting part of any Unit held by such
Holder.
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, but will suffer and permit the execution of every such power as though no
such law had been enacted.
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ARTICLE VII
THE AGENT
SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) (1) The Agent undertakes to perform, with respect to the Units
and Separate Notes, 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 Units and
Separate Notes, 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 the mathematical calculations or
other facts stated therein).
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own grossly negligent action, its own
grossly negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph (b) shall not be construed to limit the
effect of paragraph (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 grossly negligent in ascertaining the
pertinent facts; and
(3) no provision of this Agreement shall require the Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of
this Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent. The Agent shall be entitled to all of
the rights, privileges, immunities and indemnities contained in this
Agreement with
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respect to any duties of the Agent under, or actions taken, omitted to be
taken or suffered by the Agent pursuant to the Pledge Agreement.
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 Units, as their
names and addresses appear in the applicable 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 fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably 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 Officers' 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 Officers' Certificate of the Company;
(d) the Agent may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(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
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books, records and premises of the Company, personally or by agent or
attorney; and
(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 of the Agent 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.
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF UNITS.
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 Units, or of the Pledge Agreement
or the Pledge. The Agent shall not be accountable for the use or application by
the Company of the Units or the proceeds therefrom or in respect of the Purchase
Contracts.
SECTION 7.5 MAY HOLD UNITS.
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 Units 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 Agent's 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.
SECTION 7.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time reasonable compensation
for all services rendered by it hereunder;
(b) 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,
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disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith; and
(c) to indemnify the Agent and any predecessor Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or
in connection with the acceptance or administration of its duties
hereunder, 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 Agent shall promptly notify the
Company of any third party claim which may give rise to the indemnity
hereunder and give the Company the opportunity to control the defense of
such claim with counsel reasonably satisfactory to the indemnified party,
and no such claim shall be settled without the written consent of the
Company, which consent shall not be unreasonably withheld.
For purposes of this Section 7.7, "Agent" shall include any
predecessor Agent; provided, however, that the negligence, bad faith or willful
misconduct of any Agent hereunder shall not affect the rights of any other Agent
hereunder.
The provisions of this Section 7.7 shall survive the termination of
this Agreement, the satisfaction or discharge of the Units and/or the Separate
Notes and/or the resignation or removal of the Agent.
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a 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, 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
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acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(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 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 Units delivered to the Agent and
the Company.
(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 Unit
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, (x) the Company by a Board Resolution may remove
the Agent, or (y) any Holder who has been a bona fide Holder of a Unit 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 reason,
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 Unit for at least six months may, on
behalf of itself and all others similarly
72
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.
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. 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 Person into which the Agent may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Agent, shall be the successor of the Agent hereunder, provided such Person 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 to
such Agent shall adopt such authentication and execution and deliver the
73
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Units.
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
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.
SECTION 7.13 NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligation 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 Unit thereunder. The Company agrees, and each
Holder of a Certificate, by such Holder's 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 V.
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 Units or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Units. 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 reasonable written direction
timely received from the Company with respect to the execution or
certification of any required documentation and the application of such
requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on
any such direction in accordance with the provisions of Section 7.1(a)(2).
(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.
74
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:
(a) 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
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b) or 5.10; or
(e) 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.
(a) 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 Units;
provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Unit affected thereby:
(1) change any Payment Date;
75
(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 Normal Units to substitute the Treasury
Securities for the Pledged Notes or Pledged Treasury Consideration
or the rights of holders of Stripped Units to substitute Notes or
appropriate Treasury Consideration for the Pledged Treasury
Securities) or otherwise materially adversely affect the Holder's
rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any Deferred
Contract Adjustment Payment, or change any place where, or the coin
or currency in which, any Contract Adjustment Payment is payable or
increase any amounts payable in respect of the Units or decrease any
other amounts receivable by Holders in respect of the Units;
(4) impair the right to institute suit for the enforcement
of any Purchase Contract, any Contract Adjustment Payment, if any,
or any Deferred Contract Adjustment Payment, if any;
(5) reduce the number of Common Shares to be purchased
pursuant to any Purchase Contract, increase the price to purchase
Common Shares upon settlement of any Purchase Contract, change the
Share Purchase Date or otherwise materially adversely affect the
Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would
adversely affect only the Normal Units or the Stripped Units, 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 or consent to 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; provided, however, that no such agreement, whether with or
without the consent of Holders, shall affect Section 3.16.
(b) 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.
76
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 shall enter into any such supplemental agreement which does not materially
adversely affect 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.
The Company covenants that, so long as any Units are outstanding, it
will not (a) merge with or into or consolidate with any other Person or (b)
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 entity, or the successor (if other than the Company)
shall be a Person, other than an individual, organized and existing under the
laws of Bermuda or the United States of America or a State thereof or the
District of Columbia and such Person shall expressly assume all the obligations
of the Company under the Purchase Contracts, the guarantees of the Notes, this
Agreement, the
77
Remarketing Agreement and the Pledge Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Agent and the Collateral
Agent, executed and delivered to the Agent and the Collateral Agent by such
Person, and (ii) the Company or such successor, 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 Purchase Contracts, under the
Remarketing Agreement or under the Pledge Agreement.
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
(a) In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
entity in accordance with Section 9.1, such successor entity 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 entity thereupon may
cause to be signed, and may issue either in its own name or in the name of
the Company, any or all of the Certificates evidencing Units 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, execution on behalf of the Holder
and delivery, and any Certificate evidencing Units which such successor
entity 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.
(b) 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 Units 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.
78
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 Units 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.
(a) 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 Common Shares upon settlement of the
Purchase Contracts on any Settlement Date 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 reestablishment of Normal Units and where notices and
demands to or upon the Company in respect of the Units 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.
(b) 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 Units 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 COMMON SHARES.
The Company shall at all times prior to the Share Purchase Date
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Shares the full number of Common Shares issuable against
tender of
79
payment in respect of all Purchase Contracts constituting a part of the Units
evidenced by Outstanding Certificates.
SECTION 10.4 COVENANTS AS TO COMMON SHARES.
The Company covenants that all Common Shares which may be issued
against tender of payment in respect of any Purchase Contract constituting a
part of the Outstanding Units will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable.
80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By: ___________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: ___________________________________
Name:
Title:
EXHIBIT A
FORM OF NORMAL UNITS CERTIFICATE
(FORM OF GLOBAL CERTIFICATE LEGEND)
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED ON THE REVERSE HEREOF) 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. ]
(Form of Face of Normal Units Certificate)
Platinum Underwriters Holdings, Ltd.
___% Adjustable Conversion Rate Equity Security Units
No._______________ CUSIP No.
Number of Normal Units __________
This Normal Units Certificate certifies that _____ is the registered
Holder of the number of Normal Units set forth above. Each Normal Unit
represents (i) either (a) a 1/40, or 2.5%, beneficial ownership interest of the
Holder in one % Senior Note due 2007 (the "Note") of Platinum Underwriters
Finance, Inc., a Delaware corporation, having a principal amount of $1,000,
subject to the Pledge of such Note by such Holder pursuant to the Pledge
Agreement, or (b) if the Note has been remarketed by the Remarketing Agent (or
if the Holder has elected not to have the Note remarketed or a Tax Event
Redemption has occurred), the appropriate Treasury Consideration, subject to the
Pledge of such Treasury Consideration by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Platinum Underwriters Holdings, Ltd., a Bermuda corporation (the
"Company"). All capitalized terms used herein which are defined in the
Purchase
Contract Agreement have the meaning set forth therein.
A-1
Pursuant to the Pledge Agreement, the interest in the Note or the
appropriate Treasury Consideration, as the case may be, constituting part of
each Normal Unit evidenced hereby has 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 part of such Normal Unit to purchase Common
Shares of the Company. Prior to the purchase of Common Shares under each
Purchase Contract, such Purchase Contracts shall not entitle the Holders of
Normal Units Certificates to any of the rights of a holder of Common 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 stockholder of the
Company.
The Pledge Agreement provides that all payments in respect of the
Pledged Notes or Pledged Treasury Consideration 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) quarterly cash distributions on Normal Units which include
Pledged Notes or Pledged Treasury Consideration and (B) any payments in respect
of the Notes or Treasury Consideration, as the case may be, that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 10:00 a.m., New York City time,
on the Business Day such payment is received by the Collateral Agent (provided
that in the event such payment is received by the Collateral Agent on a day that
is not a Business Day or after 9:00 a.m., New York City time, on a Business Day,
then such payment shall be made no later than 9:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments in respect of
any Pledged Notes or Pledged Treasury Consideration, as the case may be, to be
paid upon settlement of such Holder's obligations to purchase Common Shares
under the Purchase Contract, to the Company on the Share Purchase 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 Normal Units of
which such Pledged Notes or Pledged Treasury Consideration are a part under the
Purchase Contracts forming a part of such Normal Units. Quarterly distributions
on Normal Units which include Pledged Notes or Pledged Treasury Consideration
which are payable quarterly in arrears on -, -, -, and - each year, commencing
-, 2002 (a "Payment Date"), shall, subject to receipt thereof by the Agent from
the Collateral Agent, be paid to the Person in whose name this Normal Units
Certificate (or a Predecessor Normal Units 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
Normal Units Certificate to purchase, and the Company to sell, on -, 2005 (the
"Share Purchase Date"), at a price equal to $25 (the "Stated Amount"), a number
of Common Shares, $0.01 par value per share ("Common Shares"), of the Company,
equal to the Settlement Rate, unless on or prior to the Share Purchase Date
there shall have occurred a Termination Event or an Early Settlement or Merger
Early Settlement with respect to the Normal Units of which such Purchase
Contract is a part, all as provided in the
Purchase Contract Agreement, as
defined and more fully described on the reverse hereof. The
A-2
Purchase Price (as defined herein) for the Common Shares purchased pursuant to
each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on
the Share Purchase Date by application of payments received in respect of the
Pledged Notes or the Pledged Treasury Consideration pledged to secure the
obligations of the Holder under such Purchase Contract.
Payments on the Notes or the appropriate Treasury Consideration 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 Normal Units Register or by wire transfer to an
account specified by the Company.
The Company shall pay on each Payment Date in respect of each
Purchase Contract forming part of a Normal Unit evidenced hereby an amount (the
"Contract Adjustment Payments") equal to -% per year of the Stated Amount,
computed on the basis of a 360-day year of twelve 30-day months, subject to
deferral at the option of the Company as provided in the
Purchase Contract
Agreement and more fully described on the reverse hereof (provided that if on
any date on which Contract Adjustment Payments are to be made on the Purchase
Contracts is not a Business Day, then payment of the Contract Adjustment
Payments payable on that date will be made on the next succeeding day which is a
Business Day, and no interest or payment will be paid in respect of the delay,
except that if such next succeeding Business Day is in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day). Such Contract Adjustment Payments shall be payable to the Person in whose
name this Normal Units Certificate (or a Predecessor Normal Units Certificate)
is registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments 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
Normal Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Normal Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the
Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated: ____________
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By: __________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase
Contracts evidenced hereby)
By: JPMORGAN CHASE BANK,
not individually but solely as
Attorney-in-Fact of such Holder
By:_______________________________
Name:
Title:
A-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Normal Units Certificates referred to in the
within mentioned Purchase Contract Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
Dated:__________________ By:__________________________________
Authorized Officer
A-5
(Form of Reverse of Normal Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of -, 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase
Bank, as Purchase Contract Agent (including its successors thereunder, herein
called the "Agent"), to which Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company, and the Holders and of the terms upon which the Normal
Units Certificates are, and are to be, executed and delivered. All defined terms
used but not defined in this Certificate have the meanings ascribed to them in
the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on the Share
Purchase Date at a price equal to $25 (the "Purchase Price"), a number of Common
Shares of the Company equal to the Settlement Rate, unless, on or prior to the
Share Purchase Date, there shall have occurred a Termination Event or a Cash
Settlement, Early Settlement or Merger Early Settlement with respect to the Unit
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 $-
(the "Threshold Appreciation Price"), - Common Shares per Purchase Contract, (b)
if the Applicable Market Value is less than the Threshold Appreciation Price but
is greater than $-, the number of Common Shares per Purchase Contract equal to
the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Value is equal to or less than $-, - Common Shares per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional Common Shares will be issued upon
settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The "Applicable Market Value" means the average of the Closing Price
per Common Share on each of the 20 consecutive Trading Days ending on the third
Trading Day immediately preceding the Share Purchase Date or, in the event of a
Cash Merger, the Cash Merger Date.
The "Closing Price" of the Common Shares on any date of
determination means the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of the Common Shares on the New York
Stock Exchange (the "NYSE") on such date or, if the Common 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
Common Shares are so listed, or if the Common Shares are not so listed on a
United States national or regional securities exchange, as reported by The
Nasdaq Stock Market, or, if the Common Shares are not so reported, the last
quoted bid price for the Common 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 Common Shares on such date
as determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company.
A-6
A "Trading Day" means a day on which the Common 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) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Shares at the close of business on such day.
Each Purchase Contract evidenced hereby may be settled prior to the
Share Purchase Date through Cash Settlement, Early Settlement or Merger Early
Settlement, in accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Normal Units Certificate shall pay the Purchase Price for the
Common Shares purchased pursuant to each Purchase Contract evidenced hereby (i)
by effecting a Cash Settlement, an Early Settlement or Merger Early Settlement,
(ii) by application of payments received in respect of the Pledged Treasury
Consideration acquired from the proceeds of a remarketing of the related Pledged
Notes underlying the Normal Units represented by this Normal Units Certificate
as contemplated by Section 5.4 of the Purchase Contract Agreement or (iii) if
the Holder has elected not to participate in the remarketing, by application of
payments received in respect of the Pledged Opt-out Treasury Consideration
deposited by such Holder in respect of such Purchase Contract or (iv) if a Tax
Event Redemption has occurred prior to the successful remarketing of the Notes
as contemplated by Section 5.4 of the Purchase Contract Agreement, by
application of payments received in respect of the Pledged Treasury
Consideration purchased by the Collateral Agent on behalf of the Holder of this
Normal Units Certificate. If, as provided in the Purchase Contract Agreement,
upon the occurrence of a Last Failed Remarketing the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured creditor with respect
to the Pledged Notes related to this Normal Units Certificate, any accrued and
unpaid interest on such Pledged Notes will become payable by the Company to the
Holder of this Normal Units Certificate in the manner provided for in the
Purchase Contract Agreement.
The Company shall not be obligated to issue any Common 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 Common Shares to be purchased thereunder in the manner herein set
forth.
Under and subject to the terms of the Pledge Agreement and the
Purchase Contract Agreement, the Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Notes, but only to the
extent instructed by the Holders as described below. Upon receipt of notice of
any meeting at which holders of Notes are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Notes, the Agent
shall, as soon as practicable thereafter, mail to the Holders of Normal Units a
notice (a) containing such information as is contained in the notice or
solicitation, (b) stating that each such 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
A-7
the holders of Notes entitled to vote) shall be entitled to instruct the Agent
as to the exercise of the voting rights pertaining to the Pledged Notes
constituting a part of such Holder's Normal Units and (c) stating the manner in
which such instructions may be given. Upon the written request of any Holder of
Normal Units on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests the maximum number of Pledged Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Normal Unit, the Agent shall abstain from
voting the Pledged Note evidenced by such Normal Unit.
The Normal Units Certificates are issuable only in registered form
and only in denominations of a single Normal Unit and any integral multiple
thereof. The transfer of any Normal Units Certificate will be registered and
Normal Units Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Normal Units Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange of a Normal Units Certificate, but the
Company and the Agent may require payment 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 exchanges not
involving any transfer as provided for in the Purchase Contract Agreement. The
Holder of a Normal Unit may substitute for the Pledged Notes or Pledged Treasury
Consideration securing its obligations under the related Purchase Contract
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral Substitution,
the Unit for which such Pledged Treasury Securities secures the Holder's
obligation under the Purchase Contract shall be referred to as a "Stripped
Unit." A Holder that elects to substitute Treasury Securities for Pledged Notes
or Pledged Treasury Consideration, thereby creating Stripped Units, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying a Normal Unit remains in effect, such Normal Unit shall not
be separable into its constituent parts, and the rights and obligations of the
Holder of such Normal Units in respect of the Pledged Note or Pledged Treasury
Consideration and Purchase Contract comprising such Normal Unit may be acquired,
and may be transferred and exchanged, only as a Normal Unit.
A Holder of Stripped Units may reestablish Normal Units at any time
from and after the date of the Purchase Contract Agreement and on or prior to
the second Business Day immediately preceding the Share Purchase Date by
depositing with the Collateral Agent the Notes or the appropriate Treasury
Consideration in exchange for the release of the Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Normal Units
Certificate (or one or
A-8
more Predecessor Normal Units Certificates) evidencing such Purchase Contract is
registered on the Normal Units Register at the close of business on the Record
Date next preceding such Payment Date. The Contract Adjustment Payments, if any,
will be payable at the Corporate Trust Office or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Normal Units Register or by wire transfer to the
account designated by such Person in writing.
The Company shall have the right, at any time prior to the Share
Purchase Date, to defer the payment of any or all of the Contract Adjustment
Payments otherwise payable on any Payment Date, but only if the Company shall
give the Holders and the Agent written notice of its election to defer each such
Contract Adjustment Payments as provided in the Purchase Contract Agreement. Any
Contract Adjustment Payments so deferred shall, to the extent permitted by law,
accrue additional Contract Adjustment Payments thereon at the rate of -% per
year (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments, if any, accrued thereon, are referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a date that is
after the Share Purchase Date and no such deferral period may end other than on
a Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until a Payment Date
prior to the Share Purchase Date, then all Deferred Contract Adjustment
Payments, if any, shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment Date.
The Company's obligations with respect to Contract Adjustment
Payments (including any accrued or Deferred Contract Adjustment Payments) will
be Subordinated and junior in right of payment to the Company's obligations
under any Senior indebtedness.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Share Purchase
Date, the Holder of this Normal Units Certificate will receive on the Share
Purchase Date, in lieu of a cash payment, a number of Common Shares (in addition
to the number of Common Shares equal to the Settlement Rate) equal to (i) the
aggregate amount of Deferred Contract Adjustment Payments payable to the Holder
of this Normal Units Certificate divided by (ii) the Applicable Market Value.
In the event the Company exercises its option to defer the payment
of Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not, and will not permit any
subsidiary of the
A-9
Company to, declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of the Company's Capital Stock other than (i) purchases, redemptions or
acquisitions of shares of the Company's Capital Stock in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date the
Company exercises its rights to defer the Contract Adjustment Payments; (ii) as
a result of a reclassification of the Company's Capital Stock or the exchange or
conversion of one class or series of the Company's Capital Stock for another
class or series of the Company's Capital Stock; (iii) the purchase of fractional
interests in shares of any series of the Company's Capital Stock pursuant to the
conversion or exchange provisions of such Capital Stock or the security being
converted or exchanged; (iv) dividends or distributions in any series of the
Company's Capital Stock (or rights to acquire Capital Stock) or repurchases,
acquisitions or redemptions of the Company's Capital Stock in connection with
the issuance or exchange of any series of the Company's Capital Stock (or
securities convertible into or exchangeable for shares of the Company's Capital
Stock); or (v) redemptions, exchanges or repurchases of any rights outstanding
under a shareholder rights plan or the declaration or payment thereunder of a
dividend or distribution of or with respect to rights in the future.
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 accumulated Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payments and the obligations of the Holders to
purchase Common 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 Share Purchase 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 Normal Units Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Notes or
Pledged Treasury Consideration from the Pledge in accordance with the provisions
of the Pledge Agreement.
Upon registration of transfer of this Normal Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement, the Purchase Contracts evidenced hereby and the Pledge Agreement and
the transferor shall be released from the obligations under the Purchase
Contract Agreement, the Purchase Contracts evidenced by this Normal Units
Certificate and the Pledge Agreement. 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-10
The Holder of this Normal Units Certificate, by its acceptance
hereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contracts forming part of the Normal Units evidenced hereby on his
behalf as his attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform such Holder's 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 such
Holder's behalf as attorney-in-fact, and consents to the Pledge of the Notes or
the appropriate Treasury Consideration underlying this Normal Units 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 of
the Pledged Notes or the Pledged Treasury Consideration to be paid upon
settlement of such Holder's obligations to purchase Common Shares under the
Purchase Contract, shall be paid on the Share Purchase Date 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. The obligations of each Holder to pay the Purchase Price are
non-recourse obligations and except to the extent paid by Cash Settlement, Early
Settlement or Merger Early Settlement, are payable solely out of 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 such payments and the Purchase
Price. Notwithstanding anything to the contrary herein, the Company shall not be
obligated to issue any Common Shares in respect of a Purchase Contract or
deliver any certificates therefor to the Holder of the related Unit unless the
Company shall have received payment in full of the aggregate Purchase Price for
the Common Shares to be purchased thereunder by such Holder in the manner herein
set forth.
Each Holder of any Unit, and each Beneficial Owner thereof, by its
acceptance thereof or of its interest therein, further agrees to treat (i)
itself as the owner of the related Notes, Treasury Consideration or Treasury
Securities, as the case may be, and (ii) the Notes as indebtedness of Platinum
Underwriters Finance, Inc. in each case, for United States federal, state and
local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Normal Units
Certificate is registered as the owner of the Normal Units evidenced hereby
_______ quarterly payments of ____for the purpose of receiving quarterly
payments of interest on the Notes
A-11
or the Treasury Consideration, as the case may be, receiving payments of
Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent,
such Affiliates 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 Common Shares.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
A-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
--------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
--------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-13
ASSIGNMENT
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 Normal Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Normal Units Certificates on the books of Platinum Underwriters
Holdings, Ltd. with full power of substitution in the premises.
Dated: Signature:
----------------- ------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Normal Units Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
-------------------------------------------------
A-14
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for Common Shares
deliverable upon settlement on or after the Share Purchase Date of the Purchase
Contracts underlying the number of Normal Units evidenced by this Normal Units
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 REGISTERED HOLDER
the name of and delivered to a
Person other than the Holder, Please print name and address of
please (i) print such Person's Registered Holder:
name and address and (ii) provide
a guarantee of your signature:
------------------------------------ -----------------------------------
Name Name
------------------------------------ -----------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
A-15
ELECTION TO SETTLE EARLY
The undersigned Holder of this Normal Units 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 Normal Units evidenced by this Normal Units
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Normal Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for Common 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 Normal Units Certificate
representing any Normal Units evidenced hereby as to which Early Settlement of
the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Notes or Pledged Treasury Consideration deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If Common 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: Signature Guarantee:
--------------- -----------------
Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If Common Shares are to be REGISTERED HOLDER
registered in the name of and
delivered to and Pledged Notes or Please print name and address of
Pledged Treasury Consideration are Registered Holder:
to be transferred to a Person
other than the Holder, please
print such Person's name and
address:
------------------------------------ -----------------------------------
Name Name
------------------------------------ -----------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Notes or Pledged Treasury Consideration
transferable upon Early Settlement or a Termination Event:
A-16
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
STATED AMOUNT
AMOUNT OF AMOUNT OF OF THE GLOBAL
DECREASE IN INCREASE IN CERTIFICATE SIGNATURE OF
STATED AMOUNT STATED AMOUNT FOLLOWING AUTHORIZED
OF THE GLOBAL OF THE GLOBAL SUCH DECREASE SIGNATORY OF
DATE CERTIFICATE CERTIFICATE OR INCREASE AGENT
------------ -------------- ------------- -------------- -----------
A-17
EXHIBIT B
FORM OF STRIPPED UNITS CERTIFICATE
(FORM OF GLOBAL CERTIFICATE LEGEND)
[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.]
Form of Face of Stripped Units Certificate
No. CUSIP No.
Number of Stripped Units
This Stripped Units Certificate certifies that _________ is the
registered Holder of the number of Stripped Units set forth above. Each Stripped
Unit represents (i) a 1/40 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 platinum Underwriters
Holdings, Ltd., a Bermuda corporation (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 Security constituting
part of each Stripped Unit evidenced hereby has 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 part of such Stripped Unit to purchase
Common Shares of the Company. Prior to the purchase of Common Shares under each
Purchase Contract, such Purchase Contracts shall not entitle the Holders of
Normal Units Certificates to any of the rights of a holder of Common Shares,
including without limitation, the right to vote or
B-1
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 stockholder of the Company.
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on -, 2005 (the
"Share Purchase Date"), at a price equal to $25 (the "Stated Amount"), a number
of Common Shares, $0.01 par value per share ("Common Shares"), of the Company,
equal to the Settlement Rate, unless on or prior to the Share Purchase Date
there shall have occurred a Termination Event or an Early Settlement or Merger
Early Settlement with respect to the Stripped Units of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The Purchase Price (as defined herein)
for the Common Shares purchased pursuant to each Purchase Contract evidenced
hereby, if not paid earlier, shall be paid on the Share Purchase Date by
application of payments received in respect of the Pledged Treasury Securities
pledged to secure the obligations of the Holder under such Purchase Contract in
accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract forming part of a Stripped Unit evidenced hereby an amount
(the "Contract Adjustment Payments") equal to -% per year of the Stated Amount,
computed on the basis of a 360-day year of twelve 30-day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof (provided that if on
any date on which Contract Adjustment Payments are to be made on the Purchase
Contracts is not a Business Day, then payment of the Contract Adjustment
Payments payable on that date will be made on the next succeeding day which is a
Business Day, and no interest or payment will be paid in respect of the delay,
except that if such next succeeding Business Day is in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day). Such Contract Adjustment Payments shall be payable to the Person in whose
name this Stripped Units Certificate (or a Predecessor Stripped Units
Certificate) is registered at the close of business on the Record Date for such
Payment Date.
Contract Adjustment Payments 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
Normal Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Stripped Units 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.
Dated: ____________
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase
Contracts evidenced hereby)
By: JPMORGAN CHASE BANK, not individually
but solely as Attorney-in-Fact of
such Holder
By:_________________________________
Name:
Title:
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped Units Certificates referred to in the
within-mentioned Purchase Contract Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By:____________________________
Authorized Officer
B-4
(Form of Reverse of Stripped Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of -, 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase
Bank, as Purchase Contract Agent (including its successors thereunder, herein
called the "Agent"), to which the Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company and the Holders and of the terms upon which the Stripped
Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on the Share
Purchase Date at a price equal to $25 (the "Purchase Price"), a number of Common
Shares of the Company equal to the Settlement Rate, unless, on or prior to the
Share Purchase Date, there shall have occurred a Termination Event or a Cash
Settlement, an Early Settlement or Merger Early Settlement with respect to the
Unit 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 $- (the "Threshold Appreciation Price"), - Common Shares per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $-, the number of Common Shares per
Purchase Contract equal to the Stated Amount divided by the Applicable Market
Value and (c) if the Applicable Market Value is equal to or less than $-, -
Common Shares per Purchase Contract, in each case subject to adjustment as
provided in the Purchase Contract Agreement. No fractional Common Shares will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
The "Applicable Market Value" means the average of the Closing Price
per Common Share on each of the 20 consecutive Trading Days ending on the third
Trading Day immediately preceding the Share Purchase Date or in the event of a
Cash Merger, the Cash Merger Date.
The "Closing Price" of the Common Shares on any date of
determination means the closing sale price (or, if no sale closing price is
reported, the last reported sale price) of the Common Shares on the New York
Stock Exchange (the "NYSE") on such date or, if the Common 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
Common Shares are so listed, or if the Common Shares are not so listed on a
United States national or regional securities exchange, as reported by The
Nasdaq Stock Market, or, if the Common Shares are not so reported, the last
quoted bid price for the Common 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 Common Shares on such date
as determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company.
B-5
A "Trading Day" means a day on which the Common 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) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Shares at the close of business of such day.
Each Purchase Contract evidenced hereby may be settled prior to the
Share Purchase Date through Cash Settlement, Early Settlement or Merger Early
Settlement, in accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Stripped Units Certificate shall pay the Purchase Price for the
Common Shares purchased pursuant to each Purchase Contract evidenced hereby (i)
by effecting a Cash Settlement, an Early Settlement or Merger Early Settlement
or (ii) by application of payments received in respect of the Pledged Treasury
Securities underlying the Stripped Units represented by this Stripped Units
Certificate.
The Company shall not be obligated to issue any Common 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 Common Shares to be purchased thereunder in the manner herein set
forth.
The Stripped Units Certificates are issuable only in registered form
and only in denominations of a single Stripped Unit and any integral multiple
thereof. The transfer of any Stripped Units Certificate will be registered and
Stripped Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Stripped Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange of a Stripped Units
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 exchanges not involving any transfer as provided for in
the Purchase Contract Agreement. The Holder of a Stripped Unit may substitute
for the Pledged Treasury Securities securing its obligations under the related
Purchase Contract Notes or the appropriate Treasury Consideration in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement. From
and after such Collateral Substitution, the Unit for which such Pledged Notes or
Pledged Treasury Consideration secures the Holder's obligation under the
Purchase Contract shall be referred to as a "Normal Unit." A Holder that elects
to substitute Notes or the appropriate Treasury Consideration for Pledged
Treasury Securities, thereby reestablishing Normal Units, shall be responsible
for any fees or expenses payable in connection therewith. Except as provided in
the Purchase Contract Agreement, for so long as the Purchase Contract underlying
a Stripped Unit remains in effect, such Stripped Unit shall not be separable
B-6
into its constituent parts, and the rights and obligations of the Holder of such
Stripped Unit in respect of the Pledged Treasury Security and the Purchase
Contract comprising such Stripped Unit may be acquired, and may be transferred
and exchanged, only as a Stripped Unit.
A Holder of Normal Units may establish Stripped Units at any time
from and after the date of the Purchase Contract Agreement and on or prior to
the second Business Day immediately preceding the Share Purchase Date by
depositing with the Collateral Agent Treasury Securities in exchange for the
release of the Pledged Notes or the appropriate Pledged Treasury Consideration
in accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Stripped Units
Certificate (or one or more Predecessor Stripped Units Certificates) evidencing
such Purchase Contract is registered on the Stripped Units Register at the close
of business on the Record Date next preceding such Payment Date. Contract
Adjustment Payments, if any, will be payable at the Corporate Trust Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Stripped Units
Register or by wire transfer to the account designated by such Person in
writing.
The Company shall have the right, at any time prior to the Share
Purchase Date, to defer the payment of any or all of the Contract Adjustment
Payments otherwise payable on any Payment Date, but only if the Company shall
give the Holders and the Agent written notice of its election to defer each such
Contract Adjustment Payments as provided in the Purchase Contract Agreement. Any
Contract Adjustment Payments so deferred shall, to the extent permitted by law,
accrue additional Contract Adjustment Payments thereon at the rate of -% per
year (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments, if any, accrued thereon, are referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a date that is
after the Share Purchase Date and no such deferral period may end other than on
a Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until a Payment Date
prior to the Share Purchase Date, then all Deferred Contract Adjustment
Payments, if any, shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment Date.
B-7
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Share Purchase
Date, the Holder of this Stripped Units Certificate will receive on the Share
Purchase Date, in lieu of a cash payment, a number of Common Shares (in addition
to the number of Common Shares equal to the Settlement Rate) equal to (i) the
aggregate amount of Deferred Contract Adjustment Payments payable to the Holder
of this Stripped Units Certificate divided by (ii) the Applicable Market Value.
In the event the Company exercises its option to defer the payment
of Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not, and will not permit any
subsidiary of the Company to, declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of the Company's Capital Stock other than (i) purchases,
redemptions or acquisitions of shares of the Company's Capital Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or agents
or a stock purchase or dividend reinvestment plan, or the satisfaction by the
Company of its obligations pursuant to any contract or security outstanding on
the date the Company exercises its rights to defer the Contract Adjustment
Payments; (ii) as a result of a reclassification of the Company's Capital Stock
or the exchange or conversion of one class or series of the Company's Capital
Stock for another class or series of the Company's Capital Stock; (iii) the
purchase of fractional interests in shares of the Company's Capital Stock
pursuant to the conversion or exchange provisions of such Capital Stock or the
security being converted or exchanged; (iv) dividends or distributions in any
series of the Company's Capital Stock (or rights to acquire Capital Stock) or
repurchases, acquisitions or redemptions of the Company's Capital Stock in
connection with the issuance or exchange of any series of the Company's Capital
Stock (or securities convertible into or exchangeable for shares of the
Company's Capital Stock); or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
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 accumulated Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payments, and the obligations of the Holders to
purchase Common 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 Share Purchase 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 Stripped Units Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities from the Pledge in accordance with the provisions of the Pledge
Agreement.
B-8
Upon registration of transfer of this Stripped Units Certificate,
the transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement, the Purchase Contracts evidenced hereby and the Pledge Agreement and
the transferor shall be released from the obligations under the Purchase
Contract Agreement, the Purchase Contracts evidenced by this Stripped Units
Certificate and the Pledge Agreement. 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 Stripped Units Certificate, by its acceptance
hereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contracts forming part of the Stripped Units evidenced hereby on his
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform such Holder's 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 such
Holder's behalf as attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Stripped Units 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 of the Pledged Treasury
Securities, to be paid upon settlement of such Holder's obligations to purchase
Common Shares under the Purchase Contract, shall be paid on the Share Purchase
Date 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. The obligations of each Holder to pay the
Purchase Price are non-recourse obligations and except to the extent paid by
Early Settlement or Merger Early Settlement, are payable solely out of 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 such payments and
the Purchase Price.
Each Holder of any Unit, and each Beneficial Owner thereof, by its
acceptance thereof or of its interest therein, further agrees to treat (i)
itself as the owner of the related Notes, Treasury Consideration or Treasury
Securities, as the case may be, and (ii) the Notes as indebtedness of the
Platinum Underwriters Finance, Inc., in each case, for United States federal,
state and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Purchase Contracts.
B-9
The Purchase Contracts shall for all purposes be governed by and
deemed to be a contract under, 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 Stripped Units
Certificate is registered as the owner of the Stripped Units evidenced hereby
for the purpose of receiving any Contract Adjustment Payments, if any, and any
Deferred Contract Adjustment Payments performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent, such Affiliate, 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 Common Shares.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
B-10
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.
B-11
ASSIGNMENT
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 Stripped Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Stripped Units Certificates on the books of Platinum Underwriters
Holdings, Ltd. with full power of substitution in the premises.
Dated: Signature:
----------------- -------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon
the face of the within Stripped Units
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee:
--------------------------------------------------
B-12
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for Common Shares
deliverable upon settlement on or after the Share Purchase Date of the Purchase
Contracts underlying the number of Stripped Units evidenced by this Stripped
Units 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 REGISTERED HOLDER
the name of and delivered to a
Person other than the Holder, Please print name and address of
please (i) print such Person's Registered Holder:
name and address and (ii) provide
a guarantee of your signature:
------------------------------------ -----------------------------------
Name Name
------------------------------------ -----------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
B-13
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stripped Units 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 Stripped Units evidenced by this Stripped
Units Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Stripped Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for Common 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 Stripped Units Certificate
representing any Stripped Units evidenced hereby as to which Early Settlement of
the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement will
be transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated: Signature:
----------- ------------------------------
Signature Guarantee:
--------------------
Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If Common Shares are to be in REGISTERED HOLDER
the name of and delivered to
and Pledged Treasury Securities Please print name and address of
are to be transferred to a Person Registered Holder:
other than the Holder, please
print such Person's name and
address:
------------------------------------ -----------------------------------
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]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
STATED AMOUNT
AMOUNT OF AMOUNT OF OF THE GLOBAL
DECREASE IN INCREASE IN CERTIFICATE SIGNATURE OF
STATED AMOUNT STATED AMOUNT FOLLOWING AUTHORIZED
OF THE GLOBAL OF THE GLOBAL SUCH DECREASE OFFICER OF
DATE CERTIFICATE CERTIFICATE OR INCREASE AGENT
----------- --------------- ------------- ------------- -------------
B-15
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
-
-
-
▇▇▇▇▇▇▇▇▇: -
Re: Equity Security Units of Platinum Underwriters
HOLDINGS, LTD. (THE "COMPANY")
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of -, 2002, among the Company, you, as Collateral Agent,
Custodial Agent and Securities Intermediary, and us, as Purchase Contract Agent
and as attorney-in-fact for the holders of [Normal Units] [Stripped Units] from
time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$ _______ aggregate principal amount of Treasury
Securities (CUSIP No. _____)] [$_______ principal amount of Notes or the
appropriate Treasury Consideration, as the case may be,] in exchange for the
related [Pledged Notes or Pledged Treasury Consideration] [Pledged Treasury
Securities (CUSIP No. ____),] held by you in accordance with the Pledge
Agreement and has delivered to us a notice stating that the Holder has
transferred [Treasury Securities] [Notes or the appropriate Treasury
Consideration] to you, as Collateral Agent. We hereby instruct you, upon receipt
of such [Pledged Treasury Securities] [Pledged Notes or Pledged Treasury
Consideration], and upon the payment by such Holder of any applicable fees, to
release the [Notes or Treasury Consideration, as the case may be,] [Treasury
Securities] related to such [Normal Units] [Stripped Units] to us in accordance
with the Holder's instructions.
Date:
-----------------
JPMORGAN CHASE BANK, As Purchase Contract Agent
under the Purchase Contract Agreement, dated as of
-, 2002, between the Company and the Purchase
Contract Agent
By:
-----------------------------------
Name:
Title:
C-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or Treasury Consideration, as the case may be,] for
the [Pledged Notes or Pledged Treasury Consideration, as the case may be,]
[Pledged Treasury Securities]:
Name
Address
Social Security or other Taxpayer
Identification Number, if any
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services
Re: Equity Security Units of Platinum Underwriters
Holdings, Ltd. (The "Company")
-----------------------------------------------
The undersigned Holder hereby notifies you, as Purchase Contract
Agent under the Purchase Contract Agreement, dated as of -, 2002, between the
Company and you, that it has delivered to State Street Bank, as Collateral
Agent, Custodial Agent and Securities Intermediary [$_________ aggregate
principal amount of Treasury Securities] [$_________ principal amount of Notes
or the appropriate Treasury Consideration, as the case may be,] in exchange for
the related [Pledged Notes or Pledged Treasury Consideration, as the case may
be,] [Pledged Treasury Securities] held by the Collateral Agent, in accordance
with Section 4.1 of the Pledge Agreement, dated as of -, 2002, among you, the
Company and the Collateral Agent. The undersigned Holder has paid the Collateral
Agent all applicable fees relating to such exchange. The undersigned Holder
hereby instructs you to instruct the Collateral Agent to release to you on
behalf of the undersigned Holder the [Pledged Notes or Pledged Treasury
Consideration, as the case may be,] [Pledged Treasury Securities] related to
such [Normal Units] [Stripped Units].
Date:
By:
-------------------------------------
Signature Guarantee:
--------------------
Dated:
Please print name and address of Registered Holder:
Name Social Security or other Taxpayer
Identification Number, if any
Address