Exhibit 4.2
FISCAL AGENCY AGREEMENT
between
RAM HOLDINGS LTD.
and
THE BANK OF NEW YORK,
as Fiscal Agent
dated as of March 26, 2004
regarding
$40,000,000 6.875% Senior Notes due April 1, 2024
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...................................................... 1
SECTION 1.1. Definitions............................................... 1
SECTION 1.2. Rules of Construction..................................... 9
ARTICLE II THE NOTES....................................................... 9
SECTION 2.1. Form...................................................... 9
SECTION 2.2. Execution and Authentication.............................. 10
SECTION 2.3. Registrar, Paying Agent, Depository and Custodian......... 10
SECTION 2.4. Payment on Notes.......................................... 11
SECTION 2.5. Noteholder Lists.......................................... 12
SECTION 2.6. Replacement Notes......................................... 12
SECTION 2.7. Outstanding Notes......................................... 12
SECTION 2.8. Treasury Notes............................................ 13
SECTION 2.9. Cancellation.............................................. 13
SECTION 2.10. Person Deemed Owner....................................... 13
SECTION 2.11. CUSIP Numbers............................................. 13
SECTION 2.12. Payments Free and Clear of Taxes.......................... 14
ARTICLE III TRANSFER, EXCHANGE AND REDEMPTION; TRANSFER RESTRICTIONS....... 15
SECTION 3.1. Transfer and Exchange..................................... 15
SECTION 3.2. Optional Redemption....................................... 20
SECTION 3.3. ERISA Restrictions........................................ 22
ARTICLE IV COVENANTS....................................................... 23
SECTION 4.1. Payment of Principal and Interest......................... 23
SECTION 4.2. Rule 144A and Other Information........................... 23
SECTION 4.3. Limitation on Liens....................................... 23
ARTICLE V EVENTS OF DEFAULT................................................ 23
ARTICLE VI REMEDIES........................................................ 25
SECTION 6.1. Acceleration.............................................. 25
SECTION 6.2. Other Remedies............................................ 25
SECTION 6.3. Rescission................................................ 25
SECTION 6.4. No Waivers or Election of Remedies, Expenses, Etc......... 26
ARTICLE VII FISCAL AGENT................................................... 26
SECTION 7.1. Duties of Fiscal Agent.................................... 26
SECTION 7.2. Rights of Fiscal Agent.................................... 26
SECTION 7.3. Individual Rights of Fiscal Agent......................... 28
SECTION 7.4. Fiscal Agent's Disclaimer................................. 28
SECTION 7.5. Compensation and Indemnity................................ 28
SECTION 7.6. Replacement of Fiscal Agent............................... 29
SECTION 7.7. Successor Fiscal Agent, Agent by Merger, Etc.............. 29
SECTION 7.8. Eligibility............................................... 30
ARTICLE VIII AMENDMENTS, SUPPLEMENTS AND WAIVERS........................... 30
SECTION 8.1. Without Consent of Noteholders............................ 30
SECTION 8.2. With Consent of Noteholders............................... 30
SECTION 8.3. Revocation and Effect of Consents......................... 31
SECTION 8.4. Notation on or Exchange of Notes.......................... 32
SECTION 8.5. Fiscal Agent to Sign Amendments Etc....................... 32
ARTICLE IX MEETING OF NOTEHOLDERS.......................................... 32
SECTION 9.1. Purposes for Which Meetings May Be Called................. 32
SECTION 9.2. Call, Notice and Place of Meetings........................ 32
SECTION 9.3. Persons Entitled to Vote at Meetings...................... 33
SECTION 9.4. Quorum.................................................... 33
SECTION 9.5. Action by Written Consent................................. 33
SECTION 9.6. Determination of Voting Rights; Conduct and Adjournment
of Meetings............................................... 33
SECTION 9.7. Counting Votes and Recording Action of Meetings........... 34
ARTICLE X MISCELLANEOUS.................................................... 34
SECTION 10.1. Notices................................................... 34
SECTION 10.2. Tax Information........................................... 35
SECTION 10.3. Governing Law; Jury Trial................................. 35
SECTION 10.4. No Recourse Against Others................................ 36
SECTION 10.5. Duplicate Originals; Counterparts......................... 36
SECTION 10.6. Headings and Table of Contents............................ 36
SECTION 10.7. Successor and Assigns..................................... 36
SECTION 10.8. Separability.............................................. 36
SECTION 10.9. Legal Holidays............................................ 36
SECTION 10.10. Force Majeure............................................. 36
FISCAL AGENCY AGREEMENT dated as of March 26, 2004, between RAM HOLDINGS
LTD., a limited liability company organized under the laws of Bermuda (the
"Company"), and THE BANK OF NEW YORK, a New York banking corporation, as Fiscal
Agent (together with any permitted successor Fiscal Agent hereunder, the "Fiscal
Agent").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of the Company's 6.875% unsecured
senior notes due 2024 (the "Notes"):
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
In this Agreement, unless the context otherwise requires:
"Agent" means any Registrar, Paying Agent, Co-Registrar or Custodian.
"Agreement" means this Agreement, as amended or supplemented from time to
time.
"Authenticating Agent" means the Fiscal Agent, in its capacity as
Authenticating Agent.
"Authorized Officer" means any officer or assistant officer of the Fiscal
Agent assigned by the Fiscal Agent to administer the transactions contemplated
hereby.
"Backstop Facility" means a credit agreement or other contractual
arrangement which provides (i) for advances thereunder if one or more parties to
a Soft Capital Facility shall fail to make an advance under such Soft Capital
Facility and (ii) that recourse for the obligations incurred thereunder are
limited to the collateral securing such Soft Capital Facility.
"Beneficial Holder" means each participant in the Depository that holds an
interest in a Note, as indicated in the Participant List.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions are authorized or required by law or executive
order to close in New York, New York or in ▇▇▇▇▇▇▇▇, Bermuda.
"Closing Date" means March 26, 2004.
"Code" means the United States Internal Revenue Code of 1986, as amended
from time to time. Any reference to a particular section of the Code shall
include any successor Code section.
"Company Order" means any request, instruction, order or directive signed
by an authorized signatory of the Company.
"Contingent Capital Facility" means a facility which provides a pool of
capital which may be drawn upon by the Company or any Subsidiary at its option
in connection with the purchase of either Debt or preferred stock issued by the
Company or any Subsidiary.
"Consolidated Net Worth" means the combined shareholders' equity of the
Guarantor, the Company and its Subsidiaries as determined in accordance with
U.S. GAAP.
"Co-Registrar" has the meaning set forth in Section 2.3(a).
"Custodian" has the meaning set forth in Section 2.1(b).
"Debt" of any Person means, all obligations of such Person for borrowed
money (including obligations of such Person evidenced by bonds, debentures,
notes or similar instruments).
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means the rate of interest that is 2% per annum above the
Stated Rate.
"Definitive Note" has the meaning set forth in Section 2.1(a).
"Depository" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.3 as the Depository
with respect to the Global Notes, until a successor shall have been appointed
and becomes such pursuant to the applicable provisions of this Agreement, and,
thereafter, "Depository" shall mean such successor.
"DTC" means The Depository Trust Company.
"Event of Default" has the meaning set forth in Article V.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Existing Credit Agreements" means the Credit Agreement, dated as of May
11, 1999, among RAM Re, various banks and Norddeutsche Landesbank Girozentrale,
New York Branch, as Agent, as amended, restated or replaced from time to time.
"Global Note" has the meaning set forth in Section 2.1(a).
"Guarantor" means RAM Holdings II Ltd., as guarantor pursuant to the
Guaranty.
2
"Guaranty" means the guaranty by Holdings II in favor of the Holders, dated
as of March 26, 2004.
"Guaranty Event of Default" has the meaning set forth in the Guaranty.
"Holdings II" means RAM Holdings II Ltd., a limited liability company
organized under the laws of Bermuda.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Interest Payment Date" means each April 1st and October 1st, commencing
October 1, 2004.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, or on
such asset, and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
related to such asset.
"Liquidity Facility" means unsecured lines of credit that provide any
Subsidiary with liquidity to pay claims in respect of financial guaranty
insurance policies or to meet other operating short-term cash short-falls that
may occur in the ordinary course of business.
"Make-Whole Amount" has the meaning set forth in Section 3.2(a).
"material" means material in relation to the business, operations, affairs,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries, taken as a whole, or (b) the ability of the
Company to perform its obligations under the Transaction Documents, or (c) the
validity or enforceability of the Transaction Documents.
"Maturity Date" means April 1, 2024.
"Notes" has the meaning set forth in the second paragraph hereof.
"Officer" means any of the Chairman, President, Chief Executive Officer,
Chief Financial Officer, Managing Director Finance or Senior Vice President of
the Company.
"Officer's Certificate" means a certificate signed by an Officer.
"Opinion of Counsel" means a written opinion from the general counsel of
the Company.
3
"Outstanding Notes" means, at any given point in time, the Notes
outstanding at such time as determined in accordance with Section 2.7.
"Participant List" means the list furnished by the Depository showing
participants that have a beneficial interest in the Notes evidenced by any
Global Note held by the Depository and the amount of such interest. If DTC is
the Depository, then the Participant List shall be the DTC Security Position
Listing Report furnished by DTC showing DTC participants that have a beneficial
interest in the Notes evidenced by any Global Note held by DTC and the amount of
such interest.
"Paying Agent" has the meaning set forth in Section 2.3(b).
"Payment Date" means an Interest Payment Date, Maturity Date or Redemption
Date, as the context requires.
"Permitted Liens" means:
(i) Liens for taxes, assessments or other governmental charges that are
not yet due and payable or the payment of which are being contested in
good faith and by appropriate proceedings and adequate reserves with
respect thereto are maintained on the books of the Company;
(ii) Liens to secure statutory obligations (including obligations under
workers compensation, unemployment insurance and other social welfare
legislation), incurred in the ordinary course of business and not in
connection with the borrowing of money;
(iii) easements, rights-of-way, restrictions and similar encumbrances
incurred in the ordinary course of business and subleases, leases, and
statutory liens of landlords which are not material in amount and do
not detract from the value of the properties of the Company or
interfere with the ordinary conduct of business of the Company;
(iv) Liens in respect of property or assets of the Company imposed by law,
which are incurred in the ordinary course of business, such as
carriers, warehousemen's and mechanics' Liens, Liens on insurance
license security deposits and other similar Liens arising in the
ordinary course of business and not in connection with borrowing money
and (a) which do not in the aggregate materially detract from the
value of the properties of the Company, taken as a whole, or (b) which
are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of
the property or assets subject to such Lien;
(v) Liens on assets in any trust established for the benefit of
reinsurance cedents;
4
(vi) Liens on cash and securities incurred as part of the management of the
investment portfolios of the Company and its Subsidiaries in the
ordinary course of business;
(vii) Liens arising in the ordinary course of business on operating
accounts (including any related securities accounts) maintained by the
Company or any of its Subsidiaries in the ordinary course of business;
(viii) Liens incurred pursuant to security arrangements in connection with
insurance and reinsurance polices;
(ix) Attachments, judgments and other similar Liens, provided that the
execution or enforcement of such Lien is stayed, contested in good
faith and bonded;
(x) Liens existing on the Closing Date;
(xi) Liens securing Debt of the Company or any Subsidiary under the
Existing Credit Agreements, any Soft Capital Facility and any Backstop
Facility;
(xii) Liens securing Debt under Contingent Capital Facilities;
(xiii) Liens securing Liquidity Facilities in an aggregate amount not in
excess of the greater of $60,000,000 and 30% of Consolidated Net
Worth;
(xiv) Liens securing other credit facilities entered into by the Company or
any of its Subsidiaries from time to time in order solely to provide
support for a specified transaction or transactions in which
obligations are insured or reinsured by the Company or any of its
Subsidiaries under an insurance policy or contract selling or
providing protection, provided that such Liens in respect of each such
transaction are limited to the interests of the Company or such
Subsidiary in connection with such transaction;
(xv) Liens incurred after the Closing Date given to secure the payment of
the purchase price incurred in connection with the acquisition,
construction or improvement of property useful and intended to be used
in carrying on the business of the Company, including Liens existing
on such property at the time of acquisition or construction thereof
(or created within 180 days after such acquisition), provided that (a)
the Lien shall attach solely to the property acquired, purchased,
constructed or improved; (b) at the time of acquisition, construction
or improvement of such property, the aggregate amount remaining unpaid
on all Debt secured by Liens on such property, whether or not assumed
by the Company or a
5
Subsidiary, shall not exceed the cost of such acquisition,
construction or improvement; and (c) at the time of such incurrence
and after giving effect thereto, no Default or Event of Default would
exist;
(xvi) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company, or any Lien
existing on any property acquired by the Company at the time such
property is so acquired (whether or not the Debt secured thereby shall
have been assumed), provided that (a) no such Lien shall have been
created or assumed in contemplation of such consolidation or merger or
such acquisition of property, (b) each such Lien shall extend solely
to the item or items of property so acquired and, if required by the
terms of the instrument originally creating such Lien, other property
which is an improvement to or is acquired for specific use in
connection with such acquired property, and (c) at the time of such
incurrence and after giving effect thereto, no Default or Event of
Default would exist;
(xvii) in addition to the Liens permitted by the preceding subparagraphs
(i) through (xvi), Liens securing Debt of the Company, provided that
the aggregate principal amount of Debt secured by Liens pursuant to
this clause shall not exceed the greater of $30,000,000 and 10% of
Consolidated Net Worth; and
(xviii) any extension, renewal or replacement of any Lien permitted by the
foregoing, provided, that no additional property (other than a
substitution of like property) shall be encumbered thereby unless such
additional Lien on such property would have been permitted in
connection with the original creation, incurrence or assumption of
such Lien.
"Permitted Corporate Transaction" means the consolidation, amalgamation or
merger by the Company with any other Person or the conveyance, transfer or lease
by the Company of substantially all of the assets of the Company in a single
transaction or series of transactions to any other Person; provided that:
(i) the successor formed by such consolidation or amalgamation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety (the "Successor Corporation"), shall be a solvent
corporation, partnership or trust organized and existing under the
laws of the United States of America, any State thereof, the District
of Columbia or Bermuda;
(ii) if the Company is not the Successor Corporation, such Successor
Corporation shall have executed and delivered to each Holder its
6
assumption of the due and punctual performance and observance of each
covenant and condition of this Agreement and the Notes; provided,
however, to the extent that the Successor Corporation is legally bound
under Bermuda law to assume the obligations under this Agreement and
the Notes pursuant to an amalgamation, such assumption shall not be
required; and
(iii) immediately after giving effect to such transaction no Default or
Event of Default would exist.
"Permitted Holdings II Transaction" means the consolidation or merger or
amalgamation by the Guarantor with any other corporation or the conveyance,
transfer or lease by the Guarantor of substantially all assets of the Guarantor,
as the case may be, in a single transaction or series of transactions to any
other Person; provided that:
(i) the successor formed by such consolidation or amalgamation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Guarantor as
an entirety, as the case may be (the "Successor Guarantor"), shall be
a solvent corporation organized and existing under the laws of the
United States of America, any State thereof, the District of Columbia
or Bermuda;
(ii) if the Guarantor is not the Successor Guarantor, such Successor
Guarantor shall have executed and delivered to each Holder its
assumption of the due and punctual performance and observance of each
covenant and condition of the Guaranty; provided, however, to the
extent that the Successor Guarantor is legally bound under Bermuda law
to assume the obligations under the Guaranty pursuant to an
amalgamation, such assumption shall not be required; and
(iii) immediately after giving effect to such transaction no default under
the Guaranty or Guaranty Event of Default would exist.
"Person" means any individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization or a government or
agency or political subdivision thereof.
"Plan" has the meaning set forth in Section 3.3.
"Purchase Agreement" has the meaning set forth in Section 2.1(a).
"Purchaser" means the Purchaser named in the Purchase Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act.
7
"RAM Re" means RAM Reinsurance Company Ltd., a Subsidiary of the Company.
"Record Date" means with respect to an Interest Payment Date, the March 15
or September 15 next preceding such Interest Payment Date.
"Redemption Date" has the meaning set forth in Section 3.2(a).
"Registrar" has the meaning set forth in Section 2.3(a).
"Register" means the register of the Notes maintained pursuant to Section
2.3.
"Responsible Officer" means any named executive officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Note" means any Note that bears or is required to bear the
legend set forth in Section 3.1.
"Rule 144A" has the meaning set forth in Section 2.1(a).
"Rule 144A Information" has the meaning set forth in Section 4.2.
"Securities Act" means the United States Securities Act of 1933, as amended
from time to time.
"Significant Subsidiary" means each Subsidiary of the Company in which (i)
the Company has a direct or indirect equity ownership interest in the shares of
capital stock of such Subsidiary, and (ii) the Company's direct and indirect
equity interests in and advances to such Subsidiary constitute 25% or more of
the total assets of the Company and its Subsidiaries on a combined basis.
"Soft Capital Facility" means credit agreements and other contractual
arrangements which (i) are similar to the Existing Credit Agreements, (ii)
contractually transfer a portion of the risk of loss under insured obligations
from the Company and its Subsidiaries to a third party, and (iii) provide that
recourse for any advance made thereunder is limited to the premiums, collateral
and proceeds of collateral securing the insured obligations in respect of which
such advance shall have been made.
"Stated Rate" means a rate of interest equal to 6.875% per annum.
"Subsidiary" means, as to any Person, any corporation, association, or
other business entity in which at least a majority of the outstanding voting
securities shall be beneficially owned, directly or indirectly, by such Person.
The term "Subsidiary" shall mean a Subsidiary of the Company.
"U.S. GAAP" means those generally accepted accounting principles as in
effect from time to time in the United States. U.S. GAAP currently requires that
the
8
Company's financial statements be presented on a combined rather than
consolidated basis.
SECTION 1.2. Rules of Construction. In this Agreement, unless the context
otherwise requires:
(i) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement and the forms of Note included as
exhibits hereto as a whole, and not any particular Article, Section or
other subdivision;
(ii) words in the singular include the plural, and words in the plural
include the singular;
(iii) provisions apply to successive events and transactions; and
(iv) any reference to a party includes its permitted successors from
time to time.
ARTICLE II
THE NOTES
SECTION 2.1. Form. (a) The Notes are being offered and sold by the Company,
pursuant to a Note Purchase Agreement, dated March 23, 2004 (the "Purchase
Agreement"), between the Company and the Purchaser, which Notes will be in fully
registered form without coupons. The Notes may be represented by registered
notes in global form ("Global Notes") or notes in certificated form registered
in the name of an individual purchaser or its nominee ("Definitive Notes"). The
Definitive Notes shall be substantially in the form attached as Exhibit A
hereto. The Global Note shall be substantially in the form attached as Exhibit
B. Any applicable legends for the Notes shall be provided in Exhibit A and
Exhibit B, as applicable.
(b) Each Note sold by the Purchaser in an initial resale to a QIB in
reliance on Rule 144A ("Rule 144A") under the Securities Act shall be
represented by one or more permanent Global Notes, with such legends applicable
to such form of Note as are applicable to Global Notes included thereon. Each
such Global Note shall be deposited with a Person (which may be the Fiscal
Agent) appointed by the Company to act as custodian for the Depository (the
"Custodian") and registered in the name of the Depository or nominee thereof.
(c) Each Global Note shall represent such of the Outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of Outstanding Notes from time to time endorsed thereon and that the
aggregate amount of Outstanding Notes represented thereby may, from time to
time, be increased or reduced to reflect transfers or exchanges. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the amount
of Outstanding Notes represented thereby shall be made by the Fiscal Agent or
the Custodian, at the direction of the Fiscal Agent, in such manner and upon
instructions given by the Holder thereof. Payment of
9
any interest on any Global Note shall be made to the Holder thereof as of the
close of business on the relevant Record Date.
(d) The Notes may have notations, legends or endorsements required by law,
securities exchange rule or usage. Each Note shall be dated the date of its
authentication.
(e) The Notes shall be issuable in minimum denominations of $100,000 and
any amount in excess thereof that is an integral multiple of $1,000.
SECTION 2.2. Execution and Authentication. (a) Any two Officers shall sign
the Notes on behalf of the Company by manual or facsimile signature.
(b) If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note shall nevertheless be valid.
(c) A Note shall not be valid until authenticated by the manual signature
of an Authorized Officer of the Fiscal Agent. The Fiscal Agent's signature shall
be conclusive evidence that the Note has been authenticated under this
Agreement.
(d) The Fiscal Agent shall authenticate the Notes for original issue in the
aggregate principal amount of $40,000,000 upon a written order of the Company
signed by any two Officers. The aggregate principal amount of Outstanding Notes
at any time may not exceed the sum of (i) $40,000,000, and (ii) the principal
amount of lost, destroyed or stolen Notes for which replacement Notes are issued
pursuant to Section 2.6.
(e) The Fiscal Agent is hereby appointed as the Authenticating Agent to
authenticate Notes. The Authenticating Agent may authenticate Notes whenever the
Fiscal Agent may do so, other than upon original issuance or pursuant to Section
2.6. Each reference in this Agreement to authentication by the Fiscal Agent
includes authentication by such agent. The Authenticating Agent has the same
rights as an Agent to deal with the Company.
SECTION 2.3. Registrar, Paying Agent, Depository and Custodian. (a) The
Company shall appoint itself or another Person to maintain an office or agency
where Notes may be presented for registration of transfer or exchange (the
Company or such other Person being referred to, in such capacity, as the
"Registrar"); provided, however, that the Company shall at all times maintain an
office of the Registrar in the Borough of Manhattan, The City of New York. As
set forth in Article IV hereof, the Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-Registrars (each, a "Co-Registrar") and may act as Co-Registrar. The Company
initially appoints the Fiscal Agent to act as Registrar.
(b) The Company shall appoint itself or another Person to maintain an
office or agency where Notes may be presented for payment (the Company or such
other Person being referred to, in such capacity, as the "Paying Agent"). The
term "Paying Agent" includes any additional paying agent. The Company initially
appoints the Fiscal Agent to act as Paying Agent.
10
(c) The Company shall appoint one or more other Persons to act as
depository (the "Depository") with respect to any Global Notes. The Company
initially appoints DTC to act as Depository with respect to the Global Notes. As
set forth in Section 3.1(d), the Company may, in certain circumstances, appoint
a successor Depository or determine that the Notes issued in the form of Global
Notes shall no longer be represented by such Global Notes.
(d) The Company shall appoint itself or one or more other Persons to act as
Custodian with respect to any Global Note. The Company initially appoints the
Fiscal Agent to act as Custodian with respect to the Global Notes.
(e) The Company shall notify the Fiscal Agent of the name and address of
the Depository and of any Agent not a party to this Agreement, and shall give
the Fiscal Agent at least 30 days' notice prior to changing the Depository or
any such Agent.
SECTION 2.4. Payment on Notes. (a) The Company shall use its best efforts
to provide to the Paying Agent, in immediately available funds on or prior to
10:00 a.m., New York time, on each Interest Payment Date or the applicable
Maturity Date or Redemption Date, such amount, in U.S. dollars, as is necessary
to make such payment as is due, and the Company hereby authorizes and directs
the Paying Agent from funds so provided to it to make or cause to be made
payment of the principal of and interest on, and Make-Whole Amount with respect
to, the Notes in the manner, at the times and for the purposes set forth herein
and in the text of the Notes; provided that any payment of interest on the Notes
may be made on the Payment Date by check mailed to the Noteholders as of the
close of business on the relevant Record Date. Payments of interest on or
principal of, and any Make-Whole Amount with respect to, the Notes may be made,
in the case of a Noteholder of at least $5,000,000 aggregate principal amount of
Notes, by electronic funds transfer providing immediately available funds on the
Payment Date to an account maintained by the payee with a bank if such
Noteholder so elects by giving written notice to the Paying Agent, not less than
15 days prior to the date on which such payments are scheduled to be made, of
such election and of the account to which payment is to be made. Unless such
designation is revoked not less than 15 days prior to a Payment Date, any such
designation made by such Noteholder with respect to such Notes shall remain in
effect with respect to any future payments with respect to the Notes payable to
such Noteholder. The Company shall pay any reasonable administrative costs in
connection with making any such payments. Any monies held in respect of the
Notes remaining unclaimed at the end of two years after such amounts shall have
become payable (whether at the Maturity Date, Redemption Date or otherwise) and
monies sufficient therefor shall have been duly made available for payment
shall, together with any interest made available for payment thereon, be repaid
to the Company upon written request and upon such repayment all liability of the
Fiscal Agent with respect thereto shall cease, without, however, limiting in any
way any obligation the Company may have to pay principal of and interest on the
Notes and any Make-Whole Amount.
(b) Interest will continue to accrue at (i) the Stated Rate on any unpaid
principal, and (ii) to the extent permitted by applicable law, the Default Rate
on any
11
payment of interest which is not punctually paid or duly provided for on the
applicable Interest Payment Date, in each case to, but not including, the date
of actual payment.
(c) The Company shall require each Paying Agent other than the Fiscal Agent
to agree in writing that the Paying Agent will hold in trust for the benefit of
Noteholders or the Fiscal Agent all money held by the Paying Agent for the
payment of principal of or interest on, or the Make-Whole Amount with respect
to, the Notes, and will notify the Fiscal Agent of any failure by the Company to
make any such payment. Until any such failure has been remedied, the Fiscal
Agent may require a Paying Agent to pay all money held by it to the Fiscal
Agent. In the event the Company wishes to terminate the Fiscal Agent's
appointment as Paying Agent, the Company shall provide 30 days' prior written
notice to the Fiscal Agent that the Fiscal Agent's appointment to act as Paying
Agent is so terminated and the Fiscal Agent may rely on such notice. The Company
at any time may require a Paying Agent to pay all money held by the Paying Agent
to the Fiscal Agent. Upon doing so the Paying Agent shall have no further
liability for the money so paid.
SECTION 2.5. Noteholder Lists. The Fiscal Agent shall preserve, in as
current a form as is reasonably practicable, a list of names and addresses of
Noteholders. If the Fiscal Agent is not the Registrar, the Company shall cause
the Registrar to furnish to the Fiscal Agent not less than five Business Days
prior to each Interest Payment Date and at such other times as the Fiscal Agent
may request in writing a list of the names and addresses of Noteholders in such
form and as of such date as the Fiscal Agent may reasonably require.
SECTION 2.6. Replacement Notes. If any Note shall be mutilated, destroyed,
lost or stolen, the Company shall, upon the written request of the Holder of
such Note, issue and execute, and the Fiscal Agent shall authenticate and make
available for delivery, in replacement thereof, a replacement Note payable to
such Noteholder and in the same principal amount as the Note so mutilated,
destroyed, lost or stolen. If the Note being replaced has become mutilated, the
Noteholder shall surrender such Note to the Fiscal Agent to save harmless the
Company and the Fiscal Agent. If the Note has been destroyed, lost or stolen,
the Holder of such Note shall furnish to the Company and the Fiscal Agent (i)
satisfactory evidence of such Noteholder's ownership of such Note, (ii)
satisfactory evidence of the destruction, loss or theft of such Note, and (iii)
such security or indemnity as may be required by the Company and the Fiscal
Agent to save harmless the Company and the Fiscal Agent. Upon the issuance of a
replacement Note pursuant to this Section, the Noteholder requesting such
replacement Note shall pay to the Fiscal Agent a sum sufficient to cover any
transfer tax or governmental charge payable in connection with the issuance of
such replacement Note. Any Note issued pursuant to this Section shall be
registered with the Registrar.
Every replacement Note shall be an obligation of the Company.
SECTION 2.7. Outstanding Notes. (a) The Notes deemed to be outstanding at
any time are only those Notes authenticated by the Fiscal Agent (or an
authenticating agent appointed pursuant to Section 2.2) except for those
cancelled by the Fiscal Agent,
12
those delivered to the Fiscal Agent for cancellation, those reductions in the
interests in a Global Note effected by the Fiscal Agent hereunder, and those
described in this Section as not outstanding.
(b) A Note does not cease to be outstanding because the Company holds the
Note.
(c) If a Note is replaced pursuant to Section 2.6, it ceases to be
outstanding unless the Fiscal Agent receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
(d) Notes are not outstanding which have been called for redemption in
accordance with Section 4.2 or which otherwise have become payable at the
Maturity Date and, in each case, monies sufficient to pay the principal thereof,
any interest thereon and the Make-Whole Amount with respect thereto have been
paid.
SECTION 2.8. Treasury Notes. In determining whether the Noteholders of the
required principal amount of Outstanding Notes have concurred in any direction,
waiver or consent, Notes owned by the Company or any subsidiary or affiliate of
the Company shall be disregarded, except that for the purposes of determining
whether the Fiscal Agent shall be protected in relying on any such direction,
waiver or consent, only Notes which an Authorized Officer of the Fiscal Agent
actually knows are so owned by the Company or any subsidiary or affiliate of the
Company shall be so disregarded.
SECTION 2.9. Cancellation. The Company at any time may deliver Notes to the
Fiscal Agent for cancellation. The Registrar and Paying Agent shall promptly
forward to the Fiscal Agent any Notes surrendered to them for registration of
transfer, exchange or payment. The Fiscal Agent shall cancel all Notes
surrendered for registration of transfer, exchange, payment or cancellation and
shall dispose of such cancelled Notes in accordance with its customary
procedures. The Company may not issue new Notes to replace Notes that it has
paid or delivered to the Fiscal Agent for cancellation.
SECTION 2.10. Person Deemed Owner. Prior to due presentment for
registration of transfer, the Company, the Fiscal Agent, the Authenticating
Agent, if any, and any Agent may treat the Person in whose name a Note is
registered on the Registrar's books as the owner of such Note for the purpose of
receiving payment of principal of, interest on, and the Make-Whole Amount with
respect to, such Note and for all other purposes whatsoever, and neither the
Company, the Fiscal Agent, the Authenticating Agent, nor any other Agent shall
be affected by notice to the contrary.
SECTION 2.11. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Fiscal Agent may use
"CUSIP" numbers in notices to Noteholders; provided, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption.
The Company will promptly notify the Fiscal Agent in writing of any change in
the CUSIP numbers.
13
SECTION 2.12. Payments Free and Clear of Taxes. The Company will make all
payments of principal, interest and any other amounts on, or in respect of, the
Notes without withholding or deduction at source for, or on account of, any
present or future taxes, fees, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of Bermuda or any other
jurisdiction in which the Company is organized or any other jurisdiction from
which or through which a payment is made by the Company (a "taxing
jurisdiction") or any political subdivision or taxing authority thereof or
therein, unless such taxes, fees, duties, assessments or governmental charges
are required to be withheld or deducted by (a) the laws (or any regulations or
rulings promulgated thereunder) of a taxing jurisdiction or any political
subdivision or taxing authority thereof or therein, or (b) an official position
regarding the application, administration, interpretation or enforcement of any
such laws, regulations or rulings (including, without limitation, a holding by a
court of competent jurisdiction or by a taxing authority in a taxing
jurisdiction or any political subdivision thereof). If a withholding or
deduction at source is required, the Company will, subject to certain
limitations and exceptions described below, pay to the Noteholder such
additional amounts as may be necessary so that every net payment of principal,
interest or any other amount made to such Noteholder, after the withholding or
deduction, will not be less than the amount provided for in such Note and
pursuant to the terms of this Agreement to be then due and payable. The Company
will not be required to pay any additional amounts for or on account of:
(i) any tax, fee, duty, assessment or governmental charge of whatever
nature which would not have been imposed but for the fact that such
holder (A) was a resident, domiciliary or national of, or engaged in
business or maintained a permanent establishment or was physically
present in, the relevant taxing jurisdiction or any political
subdivision thereof or otherwise had some connection with the relevant
taxing jurisdiction other than by reason of the mere ownership of, or
receipt of payment under, or enforcement of claims under such Note,
(B) presented such Note for payment in the relevant taxing
jurisdiction or any political subdivision thereof, unless such Note
could not have been presented for payment elsewhere without incurring
taxes, or (C) presented such Note for payment more than 30 days after
the date on which the payment in respect of such Note became due and
payable or provided for, whichever is later, except to the extent that
the holder would have been entitled to such additional amounts if it
had presented such Note for payment on any day within that 30-day
period;
(ii) any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure by the holder or the beneficial
owner of such Note to comply with any reasonable request by the
Company addressed to the holder within 90 days of such request (such
request to include any relevant form required to provide the following
information or
14
declaration in English) (A) to provide information concerning the
nationality, residence or identity of the holder or such beneficial
owner, or (B) to make any declaration or other similar claim or
satisfy any information or reporting requirement, which is required or
imposed by statute, treaty, regulation or administrative practice of
the relevant taxing jurisdiction or any political subdivision thereof
as a precondition to exemption from all or part of such tax,
assessment or other governmental charge;
(iv) any withholding or deduction required to be made pursuant to any EU
Directive on the taxation of savings implementing the conclusions of
ECOFIN Council meetings of 26-27 November 2000 or 3 June 2003 or any
law implementing or complying with, or introduced in order to conform
to, such EU Directive; or
(v) any combination of items (i), (ii), (iii) and (iv).
In addition, the Company will not pay additional amounts with respect to any
payment of principal, interest or any other amounts on, any such Note to any
Holder who is a fiduciary or partnership or other than the sole beneficial owner
of such Note to the extent such payment would be required by the laws of the
relevant taxing jurisdiction (or any political subdivision or relevant taxing
authority thereof or therein) to be included in the income for tax purposes of a
beneficiary or partner or settlor with respect to such fiduciary or a member of
such partnership or a beneficial owner who would not have been entitled to such
additional amounts had it been the Holder of the Note.
ARTICLE III
TRANSFER, EXCHANGE AND REDEMPTION; TRANSFER RESTRICTIONS
SECTION 3.1. Transfer and Exchange. (a) When Definitive Notes are presented
to the Registrar with a request to register the transfer of such Definitive
Notes or to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Definitive Notes surrendered
for registration of transfer or exchange (A) shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, duly executed by the Noteholder thereof or its
attorney, duly authorized in writing, and (B) in the case of definitive
Restricted Notes only, shall be accompanied by the following additional
information and documents, as applicable:
(i) if such definitive Restricted Note is being exchanged,
without transfer, a certification from such Noteholder to that effect
(in substantially the form of Exhibit C hereto); or
15
(ii) if such definitive Restricted Note is being transferred to a
QIB in accordance with Rule 144A or pursuant to an exemption from
registration in accordance with Rule 144(k) under the Securities Act,
certifications from the transferor and the transferee to that effect
(in substantially the form of Exhibit C hereto).
To permit registrations of transfers and exchanges, the Company shall execute
and the Fiscal Agent (or an authenticating agent appointed pursuant to Section
2.2) shall authenticate and make available for delivery definitive Notes at the
Registrar's request, and upon written direction of the Company. No service
charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or
other governmental charge payable in connection with any registration of
transfer or exchange. All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Agreement, as the Notes
surrendered upon such registration of transfer or exchange.
(b) Except as permitted by this Section 4.1(b), each certificate evidencing
the Global Notes and each of the Definitive Notes (and all securities issued in
exchange therefor or substitution thereof) shall bear a legend in substantially
the following form:
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF RAM HOLDINGS LTD. THAT
THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)
TO RAM HOLDINGS LTD. OR (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE, TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER", AS DEFINED IN RULE 144A (TOGETHER WITH ANY SUCCESSOR PROVISION THERETO,
AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE 144A") UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN A TRANSACTION IN
ACCORDANCE WITH RULE 144A, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAW OF
THE STATES OF THE UNITED STATES, SUBJECT IN EACH CASE TO ANY REQUIREMENT OF LAWS
THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF ANY SUCH ACCOUNT OR
ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL. ANY RESALE OR OTHER
TRANSFER OF THIS NOTE WHICH IS PROPOSED TO BE MADE PURSUANT TO CLAUSE (B) ABOVE
SHALL REQUIRE THAT THE TRANSFEROR AND THE TRANSFEREE COMPLETE THE CERTIFICATE OF
TRANSFER APPEARING ON THE REVERSE OF THIS NOTE AND DELIVER SUCH CERTIFICATE OF
TRANSFER TO THE FISCAL AGENT UNDER THE FISCAL AGENCY AGREEMENT DATED AS OF MARCH
26, 2004 (THE "FISCAL AGENT").
BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT IT IS ITS INTENT AND IT UNDERSTANDS
IT IS THE INTENT OF RAM HOLDINGS LTD., FOR PURPOSES OF UNITED STATES FEDERAL,
STATE AND LOCAL INCOME TAXES, THAT THE NOTES BE TREATED AS INDEBTEDNESS
16
OF RAM HOLDINGS LTD., AGREES TO SUCH TREATMENT AND AGREES TO TAKE NO ACTION
INCONSISTENT WITH SUCH TREATMENT.
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE ACT, AND MAY NOT BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM AND IN ACCORDANCE WITH THE FISCAL AGENCY
AGREEMENT DATED AS OF MARCH 26, 2004, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE PRINCIPAL CORPORATE TRUST OFFICE OF THE FISCAL AGENT. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY
RULE 144A THEREUNDER.
BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT SUCH HOLDER IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF PERSONS WHO
ARE QUALIFIED INSTITUTIONAL BUYERS.
Upon any request for registration of transfer of a Restricted Note (including
any Restricted Notes represented by a Global Note) made subsequent to the date
which is two years (or such period as may be required by Rule 144(k) under the
Securities Act, or any successor rule or regulation) after the later of (i) the
date of original issuance of the Notes, and (ii) the last date on which the
Company or an affiliate of the Company within the meaning of Rule 144 under the
Securities Act was the Noteholder of such Restricted Note and with respect to
which a certification substantially in the form of Exhibit C hereto is furnished
by the transferor, (a) in the case of any Definitive Restricted Note, the
Registrar shall permit the Noteholder thereof to exchange such Restricted Note
for Definitive Notes that do not bear the legend set forth above and such
request shall be effective to rescind any restriction on the further transfer of
such Note, and (b) any such Restricted Notes represented by a Global Note shall
not be subject to any restriction on transfer set forth above; and in each such
case, such Notes (whether in definitive or global form) shall no longer
constitute "Restricted Notes" for purposes of this Agreement. The Registrar (at
the direction of the Company) and the Company shall be entitled (but not
obligated) to require such additional certificates, opinions of counsel and
information as it may reasonably deem necessary to demonstrate that any sale or
other transfer of a Restricted Note is made in compliance with the applicable
restrictions set forth above and with applicable securities laws. The Company
shall give the Registrar written direction as to the additional information
which is necessary to evidence such compliance.
(c) Notwithstanding any other provisions of this Agreement or the Notes, a
Global Note shall not be exchanged in whole or in part for a Note registered in
the name of any Person other than the Depository or a nominee thereof, provided
that a Global Note may be exchanged for Notes registered in the names of any
Person designated by
17
the Depository in the event that (i) the Depository has notified the Company
that it is unwilling or unable to continue as Depository for such Global Note
and the Company has not appointed a successor Depository within 60 days of
receiving such notice, or such Depository has ceased to be a "clearing agency"
registered under the Exchange Act, (ii) an Event of Default has occurred and is
continuing, (iii) the exchange is pursuant to a request made in accordance with
Section 3.1(f), or (iv) the Company, at its sole discretion, determines that the
Notes issued in the form of Global Notes shall no longer be represented by such
Global Notes. Any Global Note exchanged pursuant to clause (i) or (iv) above
shall be so exchanged in whole and not in part and any Global Note exchanged
pursuant to clause (ii) or (iii) above may be exchanged in whole or from time to
time in part as directed by the Depository. Any Note issued in exchange for a
Global Note or any portion thereof shall be a Global Note, provided that any
such Note so issued that is registered in the name of a Person other than the
Depository or a nominee thereof shall not be a Global Note.
(d) If at any time the Depository for the Notes notifies the Company that
it is unwilling or unable to continue as Depository for the Notes, the Company
may within 60 days of receiving such notice appoint a successor Depository with
respect to the Notes.
(e) If in accordance with Section 3.1(c), the Notes will no longer be
represented by Global Notes, the Company will execute, and the Fiscal Agent,
upon receipt of an Officer's Certificate for the authentication and delivery of
Definitive Notes by the Company, will authenticate and make available for
delivery, Notes in definitive form in an aggregate principal amount equal to the
principal amount of the Notes in global form, in exchange for such Notes in
global form. If a Definitive Note is issued in exchange for any portion of a
Global Note after the close of business at the office or agency where such
exchange occurs on any Record Date and before the opening of business at such
office or agency on the next succeeding Interest Payment Date, interest will not
be payable on such Interest Payment Date in respect of such Definitive Note, but
will be payable on such Interest Payment Date only to the Noteholder to whom
interest in respect of such portion of such Global Note is payable in accordance
with the provisions of this Agreement. Definitive Notes issued in exchange for a
Global Note pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Fiscal
Agent. Upon execution and authentication, the Fiscal Agent shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered.
(f) Any Person having a beneficial interest in Global Notes may upon
request exchange its interest in the Global Notes for a Definitive Note at any
time by giving at least 60 days' prior written notice to the Fiscal Agent in
accordance with the Depository's customary procedures; provided that such notice
requirement will not apply in the case of a transfer of a beneficial interest in
any Global Note to a transferee required to hold its interest in definitive
form. Upon receipt by the Registrar and the Fiscal Agent of (i) written or
electronic instructions from the Depository or its nominee on behalf of any
Person having a beneficial interest in Global Notes, identifying such Person as
a beneficial holder and specifying the amount of such Person's interest, (ii) a
written order
18
of such Person requesting issuance of a Definitive Note and containing
registration instructions, and (iii) in the case of Restricted Notes only, a
certification from such Person in substantially the form of Exhibit C hereto,
the Fiscal Agent or the Custodian, at the direction of the Fiscal Agent, will
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Custodian, the aggregate principal amount of the
Global Notes to be reduced and, following such reduction, the Company will
execute and, upon receipt of an authentication order in the form of an Officer's
Certificate, the Fiscal Agent will authenticate and make available for delivery
to such Person, as the case may be, a Definitive Note.
(g) A Definitive Note may be exchanged by the Noteholder at any time for a
beneficial interest in Global Notes or transferred by the Noteholder at any time
in accordance with Rule 144A to a QIB or to another Person permitted and wishing
to hold the Global Note upon satisfaction of the requirements set forth below.
Upon receipt by the Registrar and the Fiscal Agent of a Definitive Note, duly
endorsed or accompanied by appropriate instruments of exchange or transfer, as
the case may be, in form satisfactory to the Registrar, together with (a) the
applicable certification(s), substantially in the form of Exhibit C hereto, that
such Definitive Note is either being exchanged for a beneficial interest in
Global Notes or being transferred to a QIB in accordance with Rule 144A and (b)
written instructions from the Noteholder surrendering such Definitive Note for a
beneficial interest in Global Notes or so transferring Notes, directing the
Fiscal Agent to make, or to direct the Custodian to make, an endorsement on the
Global Note to reflect an increase in the aggregate principal amount of the
Notes represented by the Global Note, the Fiscal Agent shall cancel such
Definitive Note and cause, or direct the Custodian to cause, in accordance with
the standing instructions and procedures existing between the Depository and the
Custodian, the aggregate principal amount of Global Notes to be increased
accordingly.
(h) At such time as all interests in a Global Note have either been
exchanged for Definitive Notes or cancelled, such Global Note shall be cancelled
by the Fiscal Agent in accordance with the standing procedures and instructions
existing between the Depository and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is exchanged for Definitive Notes
or cancelled, the principal amount of Notes represented by such Global Note
shall, in accordance with the standing procedures and instructions existing
between the Depository and the Custodian, be reduced and an endorsement shall be
made on such Global Note, by the Fiscal Agent or the Custodian, at the direction
of the Fiscal Agent, to reflect such reduction.
(i) Notwithstanding anything in this Agreement to the contrary, (i) all
transfers and exchanges of the Notes may be made only in accordance with the
procedures set forth in this Agreement (including the restrictions on transfer);
(ii) all Notes, whether issued in definitive or global form, shall be registered
as to principal and interest with the Registrar; (iii) the registration of
transfer of a Note may be effected only by the surrender of the old Note and
either the reissuance by the Company of the old Note to the new Noteholder or
the issuance by the Company of a new Note to the new Noteholder; and (iv) the
transfer and exchange of a beneficial interest in a Global Note
19
may only be effected through the Depository in accordance with the procedures
promulgated by the Depository.
SECTION 3.2. Optional Redemption. (a) The Notes are subject to optional
redemption, in whole or in part, at the option of the Company at any time or
from time to time, with at least 45 days' advance notice to the Fiscal Agent and
at least 30 days' advance notice to the relevant Noteholder, at a redemption
price equal to the sum of (i) accrued interest to the date of the redemption
(the "Redemption Date"), (ii) principal and (iii) the Make-Whole Amount (as
defined below), if any. The term "Make-Whole Amount" means with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Remaining Scheduled Payments with respect to the Called Principal of such Note,
over the amount of such Called Principal, provided that the Make-Whole Amount
may in no event be less than zero. For the purposes of the Company's
determination of the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means the principal of the Note that is to be
prepaid pursuant to a notice provided under this Section 3.2(a).
"Discounted Value" means, with respect to the Called Principal of a
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Note
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal of a
Note, 0.375% plus the yield to maturity implied by (i) the yield reported,
as of 10:00 A.M. (New York City time) on the second Business Day preceding
the Settlement Date with respect to such Called Principal, on the display
designated as "PX-1" on the Bloomberg Financial Market Screen (or such
other display as may replace "PX-1" on the Bloomberg Financial Market
Screen) for the 7.500% 11/15/24 U.S. Treasury (CUSIP 912810 ES 3), or (ii)
if such yield is not reported as of such time or the yield reported as of
such time is not ascertainable, the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yield has been so
reported as of the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. Such
implied yield will be determined, if necessary, by (a) converting U.S.
Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly on a straight
line basis between (1) the actively traded U.S. Treasury security with the
maturity closest to and greater than the Remaining Average Life and (2) the
actively traded U.S. Treasury security with the maturity closest to and
less than the Remaining Average Life.
20
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of a Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to this Section
3.2(a).
"Settlement Date" means, with respect to the Called Principal of a
Note, the date on which such Called Principal is to be prepaid pursuant to
this Section 3.2(a).
(b) In the case of any partial redemption of Notes, the Notes to be
redeemed shall be in an amount not less than 5% of the aggregate principal
amount of the Notes then outstanding and selected by the Fiscal Agent not more
than 30 days prior to the date of such redemption, from the Outstanding Notes
not previously called for redemption, by such method as the Fiscal Agent shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of registered Notes of a denomination larger than $100,000.
(c) Notices to redeem Notes shall be given to Noteholders in writing
mailed, first-class postage prepaid, to each Holder of registered Notes, or
portions thereof, so to be redeemed, at his address as it appears in the
Register. Such notice will be given once not less than 30 days and not more than
60 days prior to the date fixed for redemption. If by reason of the suspension
of regular mail service, or by reason of any other cause, it shall be
impracticable to give notice to the Noteholders in the manner prescribed herein,
then such notification in lieu thereof as shall be made by the Company or by the
Fiscal Agent on behalf of and at the instruction of the Company shall constitute
sufficient provision of such notice, if such notification shall, so far as may
be practicable, approximate the terms and conditions of the mailed notice in
lieu of which it is given. Neither the failure to give notice nor any defect in
any notice given to any particular Holder of a Note shall affect the sufficiency
of any notice with respect to other Notes. Notices to redeem Notes shall
identify the Notes to be redeemed (including CUSIP numbers) and specify the date
fixed for redemption, the aggregate principal amount of the Notes to be redeemed
on such date, the redemption price, the place or places of payment,
21
that payment will be made upon presentation and surrender of the Notes to be
redeemed (or portion thereof in the case of a partial redemption), that interest
accrued to the date fixed for redemption (unless the date of redemption is an
Interest Payment Date) will be paid as specified in said notice and that on and
after said date interest thereon will cease to accrue if the Notes are so
redeemed. In addition, in the case of a partial redemption, the Redemption
Notice shall specify the Notes called for redemption and the aggregate principal
amount of the Notes to remain outstanding after the redemption.
(d) If notice of redemption has been given in the manner set forth in
Section 3.2(c) hereof, the Notes so to be redeemed shall be payable in full or
in part, as applicable, on the date specified in such notice and upon
presentation and surrender of the Notes at the place or places specified in such
notice, the Notes shall be paid and redeemed by the Company at the places and in
the manner and currency herein specified and at the redemption price, together
with accrued interest (unless the Redemption Date is an Interest Payment Date)
to the Redemption Date. From and after the Redemption Date, if monies for the
redemption of Notes called for redemption shall have been made available at the
principal office of the Fiscal Agent for redemption on the Redemption Date, the
Notes called for redemption shall cease to bear interest, and the only right of
the Noteholders with respect to such Notes or portion thereof being redeemed
shall be to receive payment of the redemption price together with accrued
interest (unless the Redemption Date is an Interest Payment Date) to the
Redemption Date as aforesaid. If monies for the redemption of the Notes are not
made available for payment until after the Redemption Date, the Notes called for
redemption shall not cease to bear interest until such monies have been so made
available.
(e) Any Note which is to be redeemed only in part shall be surrendered
with, if the Company or the Fiscal Agent so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Fiscal Agent duly executed by, the Noteholder thereof or his attorney duly
authorized in writing, and the Company shall execute, and the Fiscal Agent shall
authenticate and deliver to the Holder of such Note without service charge, a
new registered Note or Notes, of any authorized denomination as requested by
such Noteholder, and as permitted by Section 2.1, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Note
so surrendered.
SECTION 3.3. ERISA Restrictions. No employee benefit plan within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the prohibited transaction provisions of the Code, as
to which the Company is a party in interest or a disqualified person (each a
"Plan"), and no Person acting on behalf of a Plan, may acquire any Note or
interest therein, unless such acquisition is exempt under one or more of
Prohibited Transaction Exemptions 84-14, 90-1, 91-38, 95-60 or 96-23 (or any
amendment thereof) or another applicable exemption from the prohibited
transaction provisions under ERISA and the Code. The purchase by any Person of a
Note constitutes a representation by such Person to the Company and the Fiscal
Agent that such Person either (i) is not a Plan, or (ii) is a Plan, and may
acquire such Note under an applicable exemption from the prohibited transactions
provisions under ERISA and the Code. The restrictions on purchases of the Notes
set forth in this
22
Section are in addition to those set forth in Section 4.1 hereof and under
applicable law. The Fiscal Agent shall have no responsibility nor any liability
whatsoever for determining or monitoring compliance with this Section.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Principal and Interest. The Company will duly and
punctually pay or cause to be paid the principal of and interest on the Notes in
accordance with, and subject to, the terms of such Notes and this Agreement.
SECTION 4.2. Rule 144A and Other Information. Any time at which the Company
is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Noteholder, the Company shall deliver (or the Company shall deliver to the
Fiscal Agent who shall deliver) to each such Noteholder or to a prospective
purchaser of such Note designated by such Noteholder, a copy of: (i) the audited
financial statements of the Company at the end of each fiscal year, (ii) the
unaudited financial statements of the Company at the end of each fiscal quarter,
(iii) the statutory-basis financial statements of RAM Re at the end of each
fiscal year and fiscal quarter, as prepared in accordance with the standards set
forth by the Bermuda Monetary Authority, and (iv) the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act ("Rule 144A
Information") to permit compliance with Rule 144A in connection with resales of
the Notes.
SECTION 4.3. Limitation on Liens. The Company and any Significant
Subsidiary may not issue, assume, incur or guarantee any indebtedness for
borrowed money secured by a lien, directly or indirectly, upon any shares of the
voting stock of any Significant Subsidiary which shares are owned by the Company
or any Significant Subsidiary without effectively providing that the Notes (and
if the Company so elects, any other indebtedness of the Company ranking on a
parity with the Notes) shall be secured equally and ratably with, or prior to,
any such secured indebtedness so long as such indebtedness remains outstanding.
This Section shall not apply to Permitted Liens or to any mortgage, pledge, lien
or other encumbrance upon any shares of voting stock of any Person existing at
the time such Person becomes a Significant Subsidiary and any extensions,
renewals or replacements thereof.
ARTICLE V
EVENTS OF DEFAULT
Events of Default. An "Event of Default" shall exist if any of the
following conditions or events shall occur and be continuing:
(a) the Company fails to pay any principal or Make-Whole Amount when
due;
23
(b) the Company fails to pay interest when due, subject to a five
Business Day grace period;
(c) the Company defaults in the performance or compliance with any
other term, covenant or warranty and such default is not remedied within 60
days after the Company receives written notice of such default;
(d) the Company merges, amalgamates or consolidates with any other
Person or transfers or leases substantially all of its assets to any
Person, other than in a Permitted Corporate Transaction; provided that the
provisions of this clause (d) shall not be applicable to: (i) the direct or
indirect conveyance, transfer or lease of all or any portion of the stock,
assets or liabilities of any Subsidiary to the Company or to any other
wholly owned Subsidiary of the Company; or (ii) any recapitalization or
highly leveraged transaction or a change of control of the Company, unless
such transaction or change of control is structured to include a merger or
consolidation by the Company or conveyance, transfer or lease of the
Company' assets substantially as an entirety;
(e) a Guaranty Event of Default shall have occurred and be continuing;
(f) there shall occur an event of default, as defined in any
instrument evidencing Debt in excess of the greater of $20,000,000 or 5% of
Consolidated Net Worth for money borrowed by the Company or a Significant
Subsidiary, if such event of default shall result in the acceleration of
such Debt prior to its express maturity unless such Debt is discharged or
such acceleration is cured, waived, rescinded or annulled within 10 days
after written notice thereof shall have been given by registered or
certified mail to the Company by the holders of at least 25% in aggregate
principal amount of the Notes which notice shall state that it is a "Notice
of Default";
(g) the Company or any Significant Subsidiary (i) is not generally
paying or is unable to pay its debts as they become due, (ii) files or
consents to the filing of a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency or similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv) consents
to the appointment of a custodian, receiver, or trustee with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for any of the foregoing; or
(h) bankruptcy, reorganization, arrangement or insolvency proceedings
are instituted against the Company or any Significant Subsidiary which are
approved by the court or are not dismissed, discharged or stayed within 90
days or the appointment of a receiver for the Company or any Significant
Subsidiary which is not dismissed, discharged or stayed within 90 days.
24
ARTICLE VI
REMEDIES
SECTION 6.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Article V (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
Holder or Holders of more than 50% in aggregate principal amount of the Notes at
the time outstanding may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be immediately
due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of Article V
has occurred and is continuing with respect to any Note, any holder or holders
of Notes at the time outstanding affected by such Event of Default may at any
time, at its or their option, by notice or notices to the Company, declare all
the Notes held by such holder or holders to be immediately due and payable.
(d) Upon any Note's becoming due and payable under this Section 6.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus all accrued and unpaid
interest thereon shall all be immediately due and payable, in each and every
case without presentment, demand, protest or further notice, all of which are
hereby waived.
SECTION 6.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 6.1, the Holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such Holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
SECTION 6.3. Rescission. At any time after any Notes have been declared due
and payable pursuant to clause (b) or (c) of Section 6.1, the required Holders,
by written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on, and all
principal of, any Notes that are due and payable and are unpaid other than by
reason of such declaration, and all interest on such overdue principal and (to
the extent permitted by applicable law) any overdue interest in respect of the
Notes at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Article IX, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto
25
or to any Notes. No rescission and annulment under this Section 6.3 will extend
to or affect any subsequent Event of Default or Default or impair any right
consequent thereon.
SECTION 6.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any Holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such Holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any Holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.
ARTICLE VII
FISCAL AGENT
SECTION 7.1. Duties of Fiscal Agent. (a) The Fiscal Agent acts under this
Agreement solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with the Noteholders, except that all
funds held by the Fiscal Agent for the payment of the Make-Whole Amount with
respect to, or principal of or interest on, and any other amounts with respect
to, the Notes shall be held in trust but need not be segregated from other
funds, except as required by law, and shall be applied as set forth herein and
in the Notes. The Fiscal Agent need perform only those duties that are
specifically set forth in this Agreement and no others.
(b) In the absence of gross negligence or willful misconduct on its part,
the Fiscal Agent may conclusively rely, as to the truth of the statement and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Fiscal Agent and conforming to the requirements of this
Agreement. However, in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the Fiscal
Agent, the Fiscal Agent shall examine the certificates and opinion to determine
whether or not they conform to the requirements of this Agreement, as to form
and the subject matter of the content but need not verify the accuracy of the
contents thereof.
(c) The Fiscal Agent shall not be liable for any error of judgment made in
good faith by an Authorized Officer, unless it is proven that the Fiscal Agent
was negligent in ascertaining the pertinent facts.
(d) No provisions of this Agreement shall require the Fiscal Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 7.2. Rights of Fiscal Agent. (a) In the absence of negligence or
willful misconduct, the Fiscal Agent may conclusively rely and shall be
protected in acting or refraining from acting upon any document reasonably
believed by it to be genuine and to
26
have been signed or presented by the proper Person. The Fiscal Agent need not
investigate any fact or matter stated in the document.
(b) Before the Fiscal Agent acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel, in either case as is reasonably
acceptable to the Fiscal Agent. The Fiscal Agent shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officer's
Certificate or Opinion of Counsel.
(c) The Fiscal Agent shall not be liable for any action it takes or omits
to take in good faith without negligence which (i) is taken pursuant to any
Company Order addressed and delivered to the Fiscal Agent, or (ii) the Fiscal
Agent otherwise believes to be authorized or within its rights or powers.
(d) The Fiscal Agent may consult with counsel reasonably acceptable to the
Fiscal Agent, which may be counsel to the Company, and the advice of such
counsel as to matters of law shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by it hereunder
in good faith without negligence and in accordance with the advice or opinion of
such counsel.
(e) The Fiscal Agent shall not be bound and shall have no duty to ascertain
or inquire as to the performance or observance of any covenants, conditions or
agreements on the part of the Company under this Agreement; but the Fiscal Agent
may require of the Company full information and advice as to the performance of
the covenants, conditions and agreements aforesaid.
(f) The Fiscal Agent shall not be required to give any bond or surety in
respect of the execution of its trusts and powers or in respect of this
Agreement.
(g) Money held by the Fiscal Agent hereunder need not be segregated from
other funds except to the extent required by law. The Fiscal Agent shall be
under no liability to the Company for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company.
(h) In no event shall the Fiscal Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits) even if the Fiscal Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.
(i) The Fiscal Agent may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Fiscal Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(j) The rights, privileges, protections, immunities and benefits given to
the Fiscal Agent, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Fiscal Agent in each of its
capacities hereunder, and each agent, custodian and other Person employed to act
hereunder.
27
(k) The Fiscal Agent may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Agreement,
which Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.3. Individual Rights of Fiscal Agent. The Fiscal Agent in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company with the same rights the Fiscal Agent would
have if it were not Fiscal Agent. Any Agent may do the same with like rights.
SECTION 7.4. Fiscal Agent's Disclaimer. The Fiscal Agent makes no
representation as to the validity or adequacy of this Agreement or the Notes,
shall not be accountable for the Company's use of the proceeds from the sale of
the Notes or the use or application of any money received by any Paying Agent
other than the Fiscal Agent, and shall not be responsible for any statement in
the Notes other than the Fiscal Agent's certificate of authentication.
SECTION 7.5. Compensation and Indemnity. (a) The Company shall from time to
time pay to the Fiscal Agent compensation for its services as agreed in writing
by the Company from time to time. The Fiscal Agent's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Fiscal Agent, within 45 days after receiving request
therefor, for all reasonable out-of-pocket disbursements, fees and expenses
incurred by the Fiscal Agent in connection with the performance of its duties
under the agreement, including, without limitation, those incurred in connection
with the enforcement of any remedy hereunder or the interpretation of any
provision hereunder. Such expenses may include the reasonable compensation and
out-of-pocket expenses of the Fiscal Agent's agents and counsel.
(b) The Company shall indemnify the Fiscal Agent for, and hold it harmless
against, any and all loss, damage, claims or liability or reasonable expenses,
including taxes (other than taxes based on the income of the Fiscal Agent)
incurred by it in connection with its accepting appointment or acting as Fiscal
Agent, Paying Agent, Authenticating Agent and Registrar under this Agreement.
The Fiscal Agent shall promptly notify the Company of any claim for which the
Fiscal Agent may seek indemnity, including reasonable costs and expenses of
defending itself against any claim for liability arising from the exercise or
performance of any of its powers or duties hereunder. The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.
(c) Notwithstanding any of the foregoing, the Company need not reimburse
any expense or indemnify against any loss or liability incurred by the Fiscal
Agent in connection with the Fiscal Agent's negligence or willful misconduct.
(d) The Fiscal Agent shall have a lien prior to the Notes as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Fiscal Agent
28
pursuant to this Section 7.5, except with respect to funds held in trust for the
benefit of the Noteholders with respect to payments on such Notes.
(e) The provisions of this Section shall survive the resignation or removal
of the Fiscal Agent and the termination of this Agreement.
SECTION 7.6. Replacement of Fiscal Agent. (a) A resignation or removal of
the Fiscal Agent and appointment of a successor Fiscal Agent shall become
effective only upon the successor Fiscal Agent's acceptance of appointment as
provided in this Section.
(b) The Fiscal Agent may resign at any time by giving 60 days' prior
written notice thereof to the Company. Either the Company or the Holders of a
majority in principal amount of the Outstanding Notes may remove the Fiscal
Agent at any time by giving written notice thereof (i) to the Fiscal Agent and
(ii) in the case where removal is at the election of the Holders of a majority
in principal aggregate amount of the Notes, to the Company.
(c) If the Fiscal Agent resigns or is removed or if a vacancy exists in the
office of Fiscal Agent for any reason, the Company shall promptly appoint a
successor Fiscal Agent. Within six months after the successor Fiscal Agent takes
office, the Holders of a majority in principal amount of the Outstanding Notes
may appoint a successor Fiscal Agent to replace the successor Fiscal Agent
appointed by the Company.
(d) If a successor Fiscal Agent does not take office within 60 days after
the retiring Fiscal Agent resigns or is removed, the retiring Fiscal Agent, the
Company or the Holders of at least 10% in principal amount of the Outstanding
Notes may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Fiscal Agent.
(e) If the Fiscal Agent fails to comply with Section 7.8, any Noteholder or
Beneficial Holder may petition any court of competent jurisdiction for the
removal of the Fiscal Agent and the appointment of a successor Fiscal Agent.
(f) A successor Fiscal Agent shall deliver a written acceptance of its
appointment to the retiring Fiscal Agent and to the Company. Thereupon, the
retiring Fiscal Agent shall transfer all property held by it as Fiscal Agent to
the successor Fiscal Agent, the resignation or removal of the retiring Fiscal
Agent shall become effective, and the successor Fiscal Agent shall have all the
rights, powers and duties of the Fiscal Agent under this Agreement. The
successor Fiscal Agent shall mail a notice of its succession to Noteholders.
SECTION 7.7. Successor Fiscal Agent, Agent by Merger, Etc. If the Fiscal
Agent or any Agent consolidates with, merges or converts into, or transfers all
or substantially all of its fiscal agency or corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Fiscal Agent or Agent, as the case maybe.
29
SECTION 7.8. Eligibility. The Fiscal Agent shall have a combined capital
and surplus of at least $100 million as set forth in its most recent annual
financial statements.
ARTICLE VIII
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.1. Without Consent of Noteholders. Subject to Section 8.2, the
Company and the Fiscal Agent may amend, supplement or modify this Agreement or
the Notes without the consent of any Noteholder for the purpose of:
(i) adding to the covenants of the Company for the benefit of the
Noteholders; or
(ii) surrendering any right or power conferred on the Company; or
(iii) securing the Notes; or
(iv) evidencing the succession of another entity to the Company and
the assumption by any such successor of the covenants and obligations of
the Company herein and in the Notes as permitted by this Agreement and the
Notes; or
(v) modifying the restrictions on, and procedures for, resale and
other transfers of the Notes to the extent required by any change in
applicable law or regulation, or the interpretation thereof, or in the
practices relating to the resale or transfer of restricted securities
generally; or
(vi) accommodating the issuance, if any, of the Notes in book-entry or
certificated form and matters related thereto that do not adversely affect
the interests of any Noteholder in any material respect; or
(vii) curing any ambiguity or correcting or supplementing any
defective provision herein or in the Notes in a manner that does not
adversely affect the interests of any Noteholder in any material respect;
or
(viii) effecting any amendment that the Company and the Fiscal Agent
may determine is necessary or desirable and which shall not adversely
affect the interests of any Noteholder in any material respect.
SECTION 8.2. With Consent of Noteholders. (a) Except as otherwise provided
herein, the Company and the Fiscal Agent may amend, supplement or modify this
Agreement or the Notes (i) with the written consent of the Holders of at least a
majority in aggregate principal amount of the Outstanding Notes or (ii) upon the
adoption of a resolution, at meetings of Noteholders held pursuant to Article IX
at which, in each case, a quorum is present, by the Holders of not less than a
majority in principal amount of the Outstanding Notes. In addition, the Holders
of a majority in aggregate principal amount of the Outstanding Notes may waive
compliance by the Company with any provision of
30
this Agreement or the Notes, either by written consent or by affirmative vote at
meetings of Noteholders as described above. Without the written consent or
affirmative vote of each Noteholder affected, no amendment, supplement,
modification or waiver under this Section may:
(i) change the Maturity Date of, or the dates for payment of interest
on, any Note; or
(ii) reduce the Make-Whole Amount with respect to, principal amount
of, or interest rate on, any Note; or
(iii) change the place or currency or payment of principal of,
interest on, or Make-Whole Amount with respect to, any Note; or
(iv) change the Company's obligations under Section 4.2 hereof; or
(v) reduce the percentage in principal amount of Notes the consent of
whose Noteholders is required to amend, supplement or modify this Agreement
or the Notes or to make, take or give any request, demand, authorization,
direction, notice, consent, waiver (including waiver of future compliance
or past failure to perform) or other action provided thereby to be made,
taken or given; or
(vi) reduce the percentage of aggregate principal amount of
Outstanding Notes that constitutes the quorum at any meeting of Noteholders
at which a resolution is adopted.
(b) It shall not be necessary for the consent of the Noteholders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof. The Company may establish, by delivery of an Officer's Certificate to
the Fiscal Agent, a record date for determining Noteholders of record entitled
to give any consent or waiver.
(c) After an amendment or supplement under this Section becomes effective,
the Fiscal Agent shall mail to Noteholders a notice prepared by the Company
briefly describing the amendment or supplement. Any failure of the Fiscal Agent
to mail each such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any supplemental agreement.
SECTION 8.3. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a written consent to it by a Noteholder
is a continuing consent by the Noteholder and every subsequent Holder of a Note
or portion of a Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the written consent as to such
Note or portion of a Note if an Authorized Officer of the Fiscal Agent receives
the written notice or revocation before the date the amendment, supplement or
waiver becomes effective. An amendment, supplement or waiver becomes effective
in accordance with its terms and thereafter binds every Noteholder.
Notwithstanding the foregoing, if a record date has been established
31
for the purpose of determining Noteholders entitled to consent, such written
notice of revocation must be signed by the Noteholder of record as of the record
date or his duly appointed proxy.
SECTION 8.4. Notation on or Exchange of Notes. The Fiscal Agent may place
an appropriate notation relating to an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue,
and the Fiscal Agent shall authenticate, new Notes that reflect the amendment,
supplement or waiver.
SECTION 8.5. Fiscal Agent to Sign Amendments Etc. In executing, or
accepting the additional obligations created by, any supplemental agreement
permitted by this Article or the modifications thereby of the obligations
created by this Agreement, the Fiscal Agent shall be entitled to receive, and
(subject to Section 8.1) shall be fully protected in relying upon, an Opinion of
Counsel and an Officer's Certificate stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement and that all
conditions precedent to the execution and delivery of such supplemental
agreement have been satisfied. The Fiscal Agent shall sign any amendment or
supplement authorized pursuant to this Article if the amendment or supplement
does not adversely affect the rights of the Fiscal Agent. If the amendment or
supplement does adversely affect the Fiscal Agent's rights, the Fiscal Agent
may, but need not, sign it.
ARTICLE IX
MEETING OF NOTEHOLDERS
SECTION 9.1. Purposes for Which Meetings May Be Called. A meeting of
Noteholders may be called at any time and from time to time pursuant to this
Article to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be made,
given or taken by Noteholders.
SECTION 9.2. Call, Notice and Place of Meetings. The Company may at any
time, and at the written request and direction of the Holders of at least 25%
of-the aggregate principal amount of the Outstanding Notes at any time, the
Fiscal Agent shall on behalf of such Noteholders, call a meeting of Noteholders
for any purpose specified in Section 9.1 hereof. Each such meeting shall be held
at such time and at such place in New York, New York or Bermuda as the Company
or the Noteholders calling such meeting shall determine. Notice of any such
meeting of Noteholders, setting forth the time and the place of such meeting
and, in general terms, the action proposed to be taken at such meeting, shall be
given by the Company to the Fiscal Agent and the Noteholders, or by the Fiscal
Agent (on behalf and at the direction of the Noteholders calling the meeting) to
the Company and the Noteholders, not less that 30 nor more than 60 days prior to
the date fixed for the meeting. If the Fiscal Agent shall not have given notice
of any meeting as directed by the requisite Noteholders within 21 days after
receiving such direction, such Noteholders may call a meeting of the Noteholders
generally by giving written notice thereof to the Company, the Fiscal Agent and
the Noteholders in the manner described above.
32
SECTION 9.3. Persons Entitled to Vote at Meetings. To be entitled to vote
at any meeting of Noteholders, a Person shall be (i) a Noteholder, or (ii) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more of the Notes. The only Persons who shall be entitled to be present
or to speak at any meeting of Noteholders shall be the Persons entitled to vote
at such meeting and their counsel, any representatives of the Fiscal Agent and
its counsel, and any representatives of the Company and its counsel.
SECTION 9.4. Quorum. At any meeting of the Noteholders, a majority in
aggregate principal amount of the Outstanding Notes shall constitute a quorum.
In the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Noteholders, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 9.2, except that such
notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Any action taken at any meeting
of Noteholders duly held in accordance with this Section, if taken by the
Holders of any aggregate principal amount of the Outstanding Notes required for
such action by this Agreement, shall be binding on all the Noteholders whether
or not present or represented at the meeting.
SECTION 9.5. Action by Written Consent. Any action required or permitted to
be taken by the Noteholders may be effected by consent in writing by such
Noteholders.
SECTION 9.6. Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any other provisions of this Agreement, the
Company may make such reasonable regulations as it may deem advisable for any
meeting of Noteholders in regard to proof of the holding of the Notes and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without other proof.
(b) The Company shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Noteholders, in which case the Noteholders calling the meeting shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled to
vote a majority in principal amount of the Outstanding Notes represented at the
meeting.
(c) At any meeting each Noteholder or proxy therefor shall be entitled to
one vote for each $1,000 principal amount of the Notes held or represented by
such
33
Noteholder; provided that no vote shall be cast or counted at any meeting in
respect of any Note ruled by the chairman of the meeting to be not outstanding
or otherwise not entitled to vote. The chairman of the meeting shall have no
right to vote, except as a Noteholder or proxy.
(d) Any meeting of Noteholders duly called pursuant to Section 9.2 at which
a quorum is present may be adjourned from time to time by Persons entitled to
vote a majority in principal amount of the Outstanding Notes represented at the
meeting, and such meeting may be held as so adjourned without further notice.
SECTION 9.7. Counting Votes and Recording Action of Meetings. The vote upon
any resolution submitted to any meeting of Noteholders shall be by written
ballots on which shall be subscribed the signatures of the Noteholders or their
representatives by proxy and the principal amounts and serial numbers, if
applicable, of the Notes held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record, at least in triplicate, of the proceedings
of each meeting of Noteholders shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken at such meeting and affidavits
by one or more Persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in
Section 9.2 and, if applicable, Section 10.4 hereof. Each copy shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to each of the Company and the
Fiscal Agent, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be presumptive evidence of the
matters therein stated.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. (a) Any notice or communication to the Company or
the Fiscal Agent by the other shall be duly given if in writing and delivered in
person or mailed by first class mail addressed as follows:
If to the Company:
RAM Holdings Ltd.
RAM Re House
46 ▇▇▇▇ Street
▇▇▇▇▇▇▇▇ ▇▇ 12
Bermuda
34
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Copy to: General Counsel
If to the Fiscal Agent:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10286
Attention: Corporate Trust Administration
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) The Company or the Fiscal Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(c) Any notice or communication to a Noteholder shall be mailed by
first-class mail to its address as shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders. If the
Company mails a notice or communication to Noteholders, it shall mail a copy to
the Fiscal Agent and each Agent at the same time.
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed it is duly given, whether or not the addressee
receives it.
SECTION 10.2. Tax Information. The Fiscal Agent will comply with all
withholding requirements under United States federal law. The Fiscal Agent will
request, and each Noteholder will provide to the Fiscal Agent, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to the Noteholder, and any representations and forms as will reasonably
be requested by the Fiscal Agent to assist it in determining the extent of, and
in fulfilling, its withholding obligations. The Fiscal Agent will file required
forms with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Noteholder, will remit amounts withheld with respect
to the Noteholder to applicable jurisdictions. The Fiscal Agent will furnish or
make available, within a reasonable time after the end of each calendar year, to
each Noteholder, such information as the Fiscal Agent is required by law to
provide to the Noteholders to enable them to prepare their federal income tax
returns.
SECTION 10.3. Governing Law; Jury Trial. This Agreement and the Notes shall
be governed by and construed in accordance with the laws of the State of New
York, without regard to the conflicts of laws principles thereof. The Company
and the Fiscal Agent hereby agree that in connection with any legal proceeding
arising out of or relating to this Agreement, the Notes or the transaction
contemplated hereby, they will
35
enter into discussions to determine in good faith whether a waiver of trial by
jury is in their mutual interest.
SECTION 10.4. No Recourse Against Others. No director, officer, employee,
member or policyholder, as such, of the Company shall have any liability for any
obligation of the Company under the Notes or this Agreement or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Noteholder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the Notes.
SECTION 10.5. Duplicate Originals; Counterparts. The parties may sign any
number of copies of this Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Agreement. This Agreement may be signed in any number of
counterparts, each of which may be signed separately and all of which taken
together shall constitute one signed copy.
SECTION 10.6. 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 10.7. Successor and Assigns. All covenants and agreements in this
Agreement by the Company shall bind its successor and assigns, whether so
expressed or not.
SECTION 10.8. Separability. In case any provision of this Agreement or the
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 10.9. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or
a day on which banking institutions are not required to be open either in New
York, New York or in ▇▇▇▇▇▇▇▇, Bermuda. If a payment date is a Legal Holiday at
a place of payment, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest on the amount payable on such
payment date shall accrue for the intervening period.
SECTION 10.10. Force Majeure. In no event shall the Fiscal Agent be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities or communications services; it being understood that
the Fiscal Agent shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
RAM HOLDINGS LTD.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE BANK OF NEW YORK,
as Fiscal Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
37
EXHIBIT A - FORM OF DEFINITIVE NOTE
(FACE OF NOTE)
CUSIP No. 751302 AA 8 $0
RAM HOLDINGS LTD.
6.875 % SENIOR NOTE DUE 2024
RAM HOLDINGS LTD., a limited liability company organized under the laws of
Bermuda, promises to pay to _______________ or registered assigns, the principal
sum of $_______________ on April 1, 2024.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
This Note shall not be valid until authenticated by the manual signature of
the Fiscal Agent (as defined on the reverse hereof) or the Authenticating Agent.
IN WITNESS WHEREOF, RAM HOLDINGS LTD., has caused this Note to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto or imprinted hereon.
Dated: March 26, 2004 RAM HOLDINGS LTD.
Authenticated:
By:
------------------------------------
THE BANK OF NEW YORK, Name:
as Fiscal Agent ----------------------------------
Title:
---------------------------------
By: By:
--------------------------------- ------------------------------------
Authorized Signatory Name:
----------------------------------
Title.
---------------------------------
A-1
(REVERSE OF NOTE)
RAM HOLDINGS LTD.
6.875% Note due April 1, 2024
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF RAM HOLDINGS LTD. THAT
THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)
TO RAM HOLDINGS LTD. OR (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE, TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER", AS DEFINED IN RULE 144A (TOGETHER WITH ANY SUCCESSOR PROVISION THERETO,
AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE 144A") UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN A TRANSACTION IN
ACCORDANCE WITH RULE 144A, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAW OF
THE STATES OF THE UNITED STATES, SUBJECT IN EACH CASE TO ANY REQUIREMENT OF LAWS
THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF ANY SUCH ACCOUNT OR
ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL. ANY RESALE OR OTHER
TRANSFER OF THIS NOTE WHICH IS PROPOSED TO BE MADE PURSUANT TO CLAUSE (B) ABOVE
SHALL REQUIRE THAT THE TRANSFEROR AND THE TRANSFEREE COMPLETE THE CERTIFICATE OF
TRANSFER APPEARING ON THE REVERSE OF THIS NOTE AND DELIVER SUCH CERTIFICATE OF
TRANSFER TO THE FISCAL AGENT UNDER THE FISCAL AGENCY AGREEMENT DATED AS OF MARCH
26, 2004 (THE "FISCAL AGENT").
BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT IT IS ITS INTENT AND IT UNDERSTANDS
IT IS THE INTENT OF RAM HOLDINGS LTD., FOR PURPOSES OF UNITED STATES FEDERAL,
STATE AND LOCAL INCOME TAXES, THAT THE NOTES BE TREATED AS INDEBTEDNESS OF RAM
HOLDINGS LTD., AGREES TO SUCH TREATMENT AND AGREES TO TAKE NO ACTION
INCONSISTENT WITH SUCH TREATMENT.
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE ACT, AND MAY NOT BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM AND IN ACCORDANCE WITH THE FISCAL AGENCY
AGREEMENT DATED AS OF MARCH 26, 2004, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE PRINCIPAL CORPORATE TRUST OFFICE OF THE FISCAL AGENT. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY
RULE 144A THEREUNDER.
BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT SUCH
A-2
HOLDER IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR THE
ACCOUNT OF PERSONS WHO ARE QUALIFIED INSTITUTIONAL BUYERS.
1. Interest. RAM HOLDINGS LTD. (the "Company"), a limited liability company
organized under the laws of Bermuda, promises to pay interest on the principal
amount of this Note at the rate of 6.875% per annum. The Company will pay
interest semi-annually on April 1st and October 1st of each year, commencing
October 1, 2004, to Holders at the close of business on the relevant record
dates specified in Paragraph 2 below. Interest on the Notes will accrue from the
most recent Interest Payment Date with respect to which interest has been paid
or, if no interest has been paid, from March 26, 2004. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. When paying interest on the Notes, the Company will
pay, or cause to be paid, interest on the Notes to the Persons who are
registered Holders at the close of business on the March 15 or September 15 next
preceding the Interest Payment Date. Noteholders must surrender Notes to a
Paying Agent to collect payments of principal and the Make-Whole Amount, if any.
The Company will pay, or cause to be paid, principal, interest and the
Make-Whole Amount in money of the United States that at the time of payment is
legal tender for payment of public and private debt. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding Business Day, and no interest on the amount payable on such
payment date shall accrue for the intervening period.
3. Paying Agent; Registrar. Initially, The Bank of New York (the "Fiscal
Agent") will act as Paying Agent, Authenticating Agent and Registrar. The
Company may change any Paying Agent, Registrar or Co-Registrar by giving notice
to the Fiscal Agent. The Company may act as Paying Agent, Registrar or
Co-Registrar.
4. Agreement. The Company issued this Note as one of a duly authorized
issue of Notes of the Company designated as its 6.875% Notes due 2024 (the
"Notes") under a Fiscal Agency Agreement, dated as of March 26, 2004 (the
"Agreement"), between the Company and the Fiscal Agent. The Notes are subject to
the terms and conditions hereof and thereof, and Noteholders are referred to the
Agreement for a statement of those terms. Unless the context otherwise requires,
terms used herein that are defined in the Agreement shall have the respective
meanings assigned thereto in the Agreement.
5. ERISA Restrictions. No employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the prohibited transaction provisions of the Code, as to which the
Company is a party in interest or a disqualified person (each a "Plan"), and no
Person acting on behalf of a Plan, may acquire this Note, unless the acquisition
of the Note is exempt under one or more of Prohibited Transaction Exemptions
84-14, 90-1 or 91-38, 95-60 or 96-23 (or any amendment thereof) or another
applicable exemption from the prohibited transaction provisions under ERISA and
the Code. The purchase by any Person of this Note constitutes a representation
by such Person to the Company and the Fiscal Agent that such Person either (i)
is not a Plan, or (ii) is a Plan, but may acquire such Note under an applicable
exemption from the prohibited transaction provisions under ERISA and the Code.
A-3
6. Denominations; Transfer; Exchange. The Notes are in registered form
without coupons in minimum denominations of $100,000 and any amount in excess
thereof that is an integral multiple of $1,000. Notes may be exchanged as
provided in the Agreement. The Registrar may require a Noteholder, among other
things, to furnish appropriate endorsements, opinions of counsel and transfer
documents and to pay any taxes and fees required by law or permitted by the
Agreement.
7. Redemption. (a) The Notes are subject to optional redemption, in whole
or in part, at the option of the Company at any time or from time to time, with
at least 45 days' advance notice to the Fiscal Agent and at least 30 days'
advance notice to the relevant Noteholder, at a redemption price equal to the
sum of (i) accrued interest to the date of the redemption (the "Redemption
Date"), (ii) principal and (iii) the Make-Whole Amount (as defined in the
Agreement), if any.
(b) In the case of any partial redemption of Notes, the Notes to be
redeemed shall be in an amount not less than 5% of the aggregate principal
amount of the Notes then outstanding and selected by the Fiscal Agent not more
than 30 days prior to the date of such redemption, from the Outstanding Notes
not previously called for redemption, by such method as the Fiscal Agent shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of registered Notes of a denomination larger than $100,000.
(c) Notices to redeem Notes shall be given to Noteholders in writing
mailed, first-class postage prepaid, to each Holder of registered Notes, or
portions thereof, so to be redeemed, at his address as it appears in the
Register. Such notice will be given once not less than 30 days and not more than
60 days prior to the date fixed for redemption. If by reason of the suspension
of regular mail service, or by reason of any other cause, it shall be
impracticable to give notice to the Noteholders in the manner prescribed herein,
then such notification in lieu thereof as shall be made by the Company or by the
Fiscal Agent on behalf of and at the instruction of the Company shall constitute
sufficient provision of such notice, if such notification shall, so far as may
be practicable, approximate the terms and conditions of the mailed notice in
lieu of which it is given. Neither the failure to give notice nor any defect in
any notice given to any particular Noteholder shall affect the sufficiency of
any notice with respect to other Notes. Notices to redeem Notes shall identify
the Notes to be redeemed (including CUSIP numbers) and specify the date fixed
for redemption, the aggregate principal amount of the Notes to be redeemed on
such date, the redemption price, the place or places of payment, that payment
will be made upon presentation and surrender of the Notes to be redeemed (or
portion thereof in the case of a partial redemption), that interest accrued to
the date fixed for redemption (unless the date of redemption is an Interest
Payment Date) will be paid as specified in said notice and that on and after
said date interest thereon will cease to accrue if the Notes are so redeemed. In
addition, in the case of a partial redemption, the Redemption Notice shall
specify the Notes called for redemption and the aggregate principal amount of
the Notes to remain outstanding after the redemption.
(d) If notice of redemption has been given in the manner set forth in the
Agreement, the Notes so to be redeemed shall be payable in full or in part, as
applicable, on the date specified in such notice and upon presentation and
surrender of the Notes at the place or places specified in such notice, the
Notes shall be paid and redeemed by the Company at the places and
A-4
in the manner and currency and at the redemption price together with accrued
interest (unless the Redemption Date is an Interest Payment Date) to the
Redemption Date specified in the Agreement. From and after the Redemption Date,
if monies for the redemption of Notes called for redemption shall have been made
available at the principal office of the Fiscal Agent for redemption on the
Redemption Date, the Notes called for redemption shall cease to bear interest,
and the only right of the Holders with respect to such Notes or portion thereof
being redeemed shall be to receive payment of the redemption price together with
accrued interest (unless the Redemption Date is an Interest Payment Date) to the
Redemption Date as aforesaid. If monies for the redemption of the Notes are not
made available for payment until after the Redemption Date, the Notes called for
redemption shall not cease to bear interest until such monies have been so made
available.
(e) Any Note which is to be redeemed only in part shall be surrendered
with, if the Company or the Fiscal Agent so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Fiscal Agent duly executed by, the Noteholder thereof or his attorney duly
authorized in writing, and the Company shall execute, and the Fiscal Agent shall
authenticate and deliver to the Holder of such Note without service charge, a
new registered Note or Notes, of any authorized denomination as requested by
such Noteholder, and as permitted by Section 2.1 of the Agreement, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
8. Persons Deemed Owners. The registered Holder may be treated as its owner
for all purposes.
9. Amendment, Supplement, Waiver. Subject to certain exceptions, the
Agreement or the Notes may be amended, supplemented or modified, with the
consent of the Company and the Holders of a majority in aggregate principal
amount of the Outstanding Notes, and any existing default may be waived with the
consent of the Holders of at least a majority in aggregate principal amount of
the Outstanding Notes and without the consent of any Noteholder, the Agreement
or the Notes may be amended, modified or supplemented inter alia, to cure any
ambiguity or correct any defective provision, to evidence the succession of
another entity to the Company and provide for assumption of the Company's
covenants and obligations under the Agreement and the Notes or to make any
change that the Fiscal Agent and the Company determine is necessary or desirable
and which shall not adversely affect the interests of any Noteholder in any
material respect.
10. Fiscal Agent Dealings With the Company. The Fiscal Agent under the
Agreement, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company and may otherwise deal with
the Company as if it were not Fiscal Agent.
11. No Recourse Against Others. A director, officer, employee or policy
owner, as such, of the Company shall not have any liability for any obligations
of the Company under the Notes or the Agreement or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Noteholder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.
A-5
12. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
13. Governing Law. The Agreement, the Notes and the obligations of the
Company thereunder shall be governed by and construed in accordance with the
laws of New York, without regard to the conflicts of laws principles thereof.
14. Copy of Agreement. The Company will furnish any Noteholder upon written
request and without charge a copy of the Agreement. Requests may be made to: RAM
Holdings Ltd., ▇▇ ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: General
Counsel.
A-6
ANNEX A - ASSIGNMENT FORM
To assign this Note fill in the form below:
We assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________________________________
agent to transfer this Note on the books of RAM Holdings Ltd. The agent may
substitute another to act for him.
Date: Your signature:
----------------------- ------------------------
(Sign exactly as your name appears on
the other side of this Note)
-------------------------------------
Signature Guaranteed:
A-7
EXHIBIT B - FORM OF GLOBAL NOTE
(FACE OF NOTE)
CUSIP No. 751302 AA 8 $40,000,000
RAM HOLDINGS LTD.
6.875% SENIOR NOTE DUE 2024
RAM HOLDINGS LTD., a limited liability company organized under the laws of
Bermuda, promises to pay to Cede & Co. or registered assigns, the principal sum
of $40,000,000 on April 1, 2024.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
This Note shall not be valid until authenticated by the manual signature of
the Fiscal Agent (as defined on the reverse hereof) or the Authenticating Agent.
IN WITNESS WHEREOF, RAM HOLDINGS LTD. has caused this Note to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto or imprinted hereon.
Dated: March 26, 2004 RAM HOLDINGS LTD.
Authenticated:
By:
------------------------------------
THE BANK OF NEW YORK, Name:
----------------------------------
as Fiscal Agent Title:
---------------------------------
By: By:
--------------------------------- ------------------------------------
Authorized Signatory Name:
----------------------------------
Title.
---------------------------------
B-1
(REVERSE OF NOTE)
RAM HOLDINGS LTD.
6.875% Note due April 1, 2024
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE (I) BY THE
DEPOSITORY, THE DEPOSITORY TRUST COMPANY, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY, (II) BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR (III) BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITORY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITORY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF RAM HOLDINGS LTD. THAT
THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)
TO RAM HOLDINGS LTD. OR (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE, TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER", AS DEFINED IN RULE 144A (TOGETHER WITH ANY SUCCESSOR PROVISION THERETO,
AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE 144A") UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN A TRANSACTION IN
ACCORDANCE WITH RULE 144A, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAW OF
THE STATES OF THE UNITED STATES, SUBJECT IN EACH CASE TO ANY REQUIREMENT OF LAWS
THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF ANY SUCH ACCOUNT OR
ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL. ANY RESALE OR OTHER
TRANSFER OF THIS NOTE WHICH IS PROPOSED TO BE MADE PURSUANT TO CLAUSE (B) ABOVE
SHALL REQUIRE THAT THE TRANSFEROR AND THE TRANSFEREE COMPLETE THE CERTIFICATE OF
TRANSFER APPEARING ON THE REVERSE OF THIS NOTE AND DELIVER SUCH CERTIFICATE OF
TRANSFER TO THE FISCAL AGENT UNDER THE FISCAL AGENCY AGREEMENT DATED AS OF MARCH
26, 2004 (THE "FISCAL AGENT").
BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT IT IS ITS
B-2
INTENT AND IT UNDERSTANDS IT IS THE INTENT OF RAM HOLDINGS LTD., FOR PURPOSES OF
UNITED STATES FEDERAL, STATE AND LOCAL INCOME TAXES, THAT THE NOTES BE TREATED
AS INDEBTEDNESS OF RAM HOLDINGS LTD., AGREES TO SUCH TREATMENT AND AGREES TO
TAKE NO ACTION INCONSISTENT WITH SUCH TREATMENT.
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE ACT, AND MAY NOT BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM AND IN ACCORDANCE WITH THE FISCAL AGENCY
AGREEMENT DATED AS OF MARCH 26, 2004, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE PRINCIPAL CORPORATE TRUST OFFICE OF THE FISCAL AGENT. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY
RULE 144A THEREUNDER.
BY ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT SUCH HOLDER IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF PERSONS WHO
ARE QUALIFIED INSTITUTIONAL BUYERS.
1. Interest. RAM HOLDINGS LTD. (the "Company"), a limited liability company
organized under the laws of the Bermuda, promises to pay interest on the
principal amount of this Note at the rate of 6.875% per annum. The Company will
pay interest semi-annually on April 1st and October 1st of each year, commencing
October 1, 2004 to Holders at the close of business on the relevant record dates
specified in Paragraph 2 below. Interest on the Notes will accrue from the most
recent Interest Payment Date with respect to which interest has been paid or, if
no interest has been paid, from March 26, 2004. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment. When paying interest on the Notes, the Company will
pay, or cause to be paid, interest on the Notes to the Persons who are
registered Holders at the close of business on the March 15 or September 15 next
preceding the Interest Payment Date. Noteholders must surrender Notes to a
Paying Agent to collect payments of principal and the Make-Whole Amount, if any.
The Company will pay, or cause to be paid, principal, interest and the
Make-Whole Amount in money of the United States that at the time of payment is
legal tender for payment of public and private debt. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding Business Day, and no interest on the amount payable on such
payment date shall accrue for the intervening period.
3. Paying Agent; Registrar. Initially, The Bank of New York (the "Fiscal
Agent") will act as Paying Agent, Authenticating Agent and Registrar. The
Company may change any Paying Agent, Registrar or Co-Registrar by giving notice
to the Fiscal Agent. The Company may act as Paying Agent, Registrar or
Co-Registrar.
B-3
4. Agreement. The Company issued this Note as one of a duly authorized
issue of Notes of the Company designated as its 6.875% Notes due 2024 (the
"Notes") under a Fiscal Agency Agreement, dated as of March 26, 2004 (the
"Agreement"), between the Company and the Fiscal Agent. The Notes are subject to
the terms and conditions hereof and thereof, and Noteholders are referred to the
Agreement for a statement of those terms. Unless the context otherwise requires,
terms used herein that are defined in the Agreement shall have the respective
meanings assigned thereto in the Agreement.
5. ERISA Restrictions. No employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the prohibited transaction provisions of the Code, as to which the
Company is a party in interest or a disqualified person (each a "Plan"), and no
Person acting on behalf of a Plan, may acquire this Note, unless the acquisition
of the Note is exempt under one or more of Prohibited Transaction Exemptions
84-14, 90-1 or 91-38, 95-60 or 96-23 (or any amendment thereof) or another
applicable exemption from the prohibited transaction provisions under ERISA and
the Code. The purchase by any Person of this Note constitutes a representation
by such Person to the Company and the Fiscal Agent that such Person either (i)
is not a Plan, or (ii) is a Plan, but may acquire such Note under an applicable
exemption from the prohibited transaction provisions under ERISA and the Code.
6. Denominations; Transfer; Exchange. The Notes are in registered form
without coupons in minimum denominations of $100,000 and any amount in excess
thereof that is an integral multiple of $1,000. Notes may be exchanged as
provided in the Agreement. The Registrar may require a Noteholder, among other
things, to furnish appropriate endorsements, opinions of counsel and transfer
documents and to pay any taxes and fees required by law or permitted by the
Agreement.
7. Redemption. (a) The Notes are subject to optional redemption, in whole
or in part, at the option of the Company at any time or from time to time, with
at least 45 days' advance notice to the Fiscal Agent and at least 30 days'
advance notice, at a redemption price equal to the sum of (i) accrued interest
to the date of the redemption (the "Redemption Date"), (ii) principal and (iii)
the Make-Whole Amount (as defined in the Agreement), if any.
(b) In the case of any partial redemption of Notes, the Notes to be
redeemed shall be in an amount not less than 5% of the aggregate principal
amount of the Notes then outstanding and selected by the Fiscal Agent not more
than 30 days prior to the date of such redemption, from the Outstanding Notes
not previously called for redemption, by such method as the Fiscal Agent shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of registered Notes of a denomination larger than $100,000.
(c) Notices to redeem Notes shall be given to Noteholders in writing
mailed, first-class postage prepaid, to each Holder of registered Notes, or
portions thereof, so to be redeemed, at his address as it appears in the
Register. Such notice will be given once not less than 30 days and not more than
60 days prior to the date fixed for redemption. If by reason of the suspension
of regular mail service, or by reason of any other cause, it shall be
impracticable to give notice to the Noteholders in the manner prescribed herein,
then such notification in lieu thereof as shall be
B-4
made by the Company or by the Fiscal Agent on behalf of and at the instruction
of the Company shall constitute sufficient provision of such notice, if such
notification shall, so far as may be practicable, approximate the terms and
conditions of the mailed notice in lieu of which it is given. Neither the
failure to give notice nor any defect in any notice given to any particular
Noteholder shall affect the sufficiency of any notice with respect to other
Notes. Notices to redeem Notes shall identify the Notes to be redeemed
(including CUSIP numbers) and specify the date fixed for redemption, the
aggregate principal amount of the Notes to be redeemed on such date, the
redemption price, the place or places of payment, that payment will be made upon
presentation and surrender of the Notes to be redeemed (or portion thereof in
the case of a partial redemption), that interest accrued to the date fixed for
redemption (unless the date of redemption is an Interest Payment Date) will be
paid as specified in said notice and that on and after said date interest
thereon will cease to accrue if the Notes are so redeemed. In addition, in the
case of a partial redemption, the Redemption Notice shall specify the Notes
called for redemption and the aggregate principal amount of the Notes to remain
outstanding after the redemption.
(d) If notice of redemption has been given in the manner set forth in the
Agreement, the Notes so to be redeemed shall be payable in full or in part, as
applicable, on the date specified in such notice and upon presentation and
surrender of the Notes at the place or places specified in such notice, the
Notes shall be paid and redeemed by the Company at the places and in the manner
and currency and at the redemption price together with accrued interest (unless
the Redemption Date is an Interest Payment Date) to the Redemption Date
specified in the Agreement. From and after the Redemption Date, if monies for
the redemption of Notes called for redemption shall have been made available at
the principal office of the Fiscal Agent for redemption on the Redemption Date,
the Notes called for redemption shall cease to bear interest, and the only right
of the Holders with respect to such Notes or portion thereof being redeemed
shall be to receive payment of the redemption price together with accrued
interest (unless the Redemption Date is an Interest Payment Date) to the
Redemption Date as aforesaid. If monies for the redemption of the Notes are not
made available for payment until after the Redemption Date, the Notes called for
redemption shall not cease to bear interest until such monies have been so made
available.
(e) Any Note which is to be redeemed only in part shall be surrendered
with, if the Company or the Fiscal Agent so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Fiscal Agent duly executed by, the Noteholder thereof or his attorney duly
authorized in writing, and the Company shall execute, and the Fiscal Agent shall
authenticate and deliver to the Holder of such Note without service charge, a
new registered Note or Notes, of any authorized denomination as requested by
such Noteholder, and as permitted by Section 2.1 of the Agreement, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
8. Persons Deemed Owners. The registered Holder may be treated as its owner
for all purposes.
9. Amendment, Supplement, Waiver. Subject to certain exceptions, the
Agreement or the Notes may be amended, supplemented or modified, with the
consent of the Company and the Holders of a majority in aggregate principal
amount of the Outstanding Notes, and any existing default may be waived with the
consent of the Holders of at least a majority in aggregate
B-5
principal amount of the Outstanding Notes and without the consent of any
Noteholder, the Agreement or the Notes may be amended, modified or supplemented
inter alia, to cure any ambiguity or correct any defective provision, to
evidence the succession of another entity to the Company and provide for
assumption of the Company's covenants and obligations under the Agreement and
the Notes or to make any change that the Fiscal Agent and the Company determine
is necessary or desirable and which shall not adversely affect the interests of
any Noteholder in any material respect.
10. Fiscal Agent Dealings With the Company. The Fiscal Agent under the
Agreement, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company and may otherwise deal with
the Company as if it were not Fiscal Agent.
11. No Recourse Against Others. A director, officer, employee or policy
owner, as such, of the Company shall not have any liability for any obligations
of the Company under the Notes or the Agreement or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Noteholder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.
12. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
13. Governing Law. The Agreement, the Notes and the obligations of the
Company thereunder shall be governed by and construed in accordance with the
laws of New York,without regard to the conflicts of laws principles thereof.
14. Copy of Agreement. The Company will furnish any Noteholder upon written
request and without charge a copy of the Agreement. Requests may be made to: RAM
Holdings Ltd., ▇▇ ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: General
Counsel.
B-6
EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED UPON
EXCHANGE OR REGISTRATION OF TRANSFER OF NOTE
Re: 6.875% Senior Note due 2024 of RAM Holdings Ltd.
This Certificate relates to $____________ principal amount of Notes held in
*__ book-entry or *__ definitive form by ____________________________ (the
"Transferor").
The Transferor*:
- has requested the Registrar and the Fiscal Agent by written order deliver
in exchange for its beneficial interest in Global Notes held by the Depository a
Note or Notes in definitive registered form of authorized denominations and in
an aggregate principal amount equal to its beneficial interest in such Global
Notes (or the portion thereof indicated above); or
- has requested the Registrar and the Fiscal Agent by written order cause
it, in exchange for its surrendering a Note or Notes in definitive registered
form for cancellation, to be recorded as the owner of a beneficial interest in
Global Notes of an authorized denomination and an aggregate principal amount
equal to its aggregate interest in such definitive Note or Notes (or the portion
thereof indicated above); or
- has requested the Registrar and the Fiscal Agent by written order
exchange or register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify to RAM Holdings Ltd. (the "Company") and the
Registrar either:*
- Such Note is owned by the Transferor and is being exchanged without
transfer; or
In connection with the resale or other transfer of such Note occurring
prior to the time the legend originally set forth on such Note (or one or more
predecessor Notes) restricting resales and other transfers thereof has been
removed with the consent of the Company in accordance with the procedures set
forth in the Fiscal Agency Agreement referred to therein (other than a resale or
other transfer made to the Company), the undersigned confirms that without
utilizing any general solicitation or general advertising:
- Such Note is being transferred by the undersigned to a "qualified
institutional buyer", as defined in Rule 144A under the Securities Act of 1933,
as amended, to whom notice has been given that such transfer is being made in
reliance on Rule 144A, pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Rule 144A thereunder.
C-1
If the foregoing box is not checked, then, so long as such Note shall bear a
legend restricting resales and other transfers thereof (except in the case of a
resale or other transfer made to the Company), the Registrar shall not be
obligated to register such Note in the name of any person other than the holder
thereof unless and until the conditions to any such transfer of registration set
forth in such Note and in the Fiscal Agency Agreement shall have been satisfied.
Dated:
----------------------------- ----------------------------------------
(Type or print name of holder)
By:
------------------------------------
The signature of the holder must
correspond with the name as written upon
the face of such Note in every
particular, without alteration or
enlargement or any change whatsoever.
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------
Date:
-------------------------------
* Check applicable box.
C-2
TO BE COMPLETED BY TRANSFEREE
The undersigned represents and warrants that (i) it is a "qualified
institutional buyer", as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that the undersigned either has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information, (ii) this
instrument has been executed on behalf of the undersigned by one of its
executive officers and (iii) it is aware that the Holder of such Note is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A. The undersigned acknowledges and agrees
that such Note has not been registered under the Securities Act of 1933, as
amended, and may not be transferred except in accordance with the resale and
other transfer restrictions set forth in the legend thereon. The undersigned
agrees, on its own behalf and on behalf of any accounts for which it is acting,
that it will transfer such Note only in accordance with the transfer
restrictions set forth in such legend. The Company, the Fiscal Agent and the
Registrar are entitled to rely upon this certification and are irrevocably
authorized to produce this certification or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Dated:
----------------------------- ----------------------------------------
(Type or print name of holder)
By:
------------------------------------
Executive Officer
C-3
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.
C-4