Exhibit 99.1
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PARTNERRE LTD.
and
JPMORGAN CHASE BANK,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of November o , 2001
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
SECTION 1.01. Definitions..........................................................1
SECTION 1.02. Compliance Certificates and Opinions................................11
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent..............12
SECTION 1.04. Acts of Holders; Record Dates.......................................13
SECTION 1.05. Notices.............................................................14
SECTION 1.06. Notice to Holders; Waiver...........................................15
SECTION 1.07. Effect of Headings and Table of Contents............................16
SECTION 1.08. Successors and Assigns..............................................16
SECTION 1.09. Separability Clause.................................................16
SECTION 1.10. Benefits of Agreement...............................................16
SECTION 1.11. Governing Law.......................................................16
SECTION 1.12. Legal Holidays......................................................16
SECTION 1.13. Counterparts........................................................17
SECTION 1.14. Inspection of Agreement.............................................17
SECTION 1.15. Appointment of Financial Institution as Agent for the Company.......17
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.....................................17
SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication.....18
ARTICLE 3
THE SECURITIES
SECTION 3.01. Amount; Form and Denominations......................................19
SECTION 3.02. Rights and Obligations Evidenced by the Certificates................19
SECTION 3.03. Execution, Authentication, Delivery and Dating......................19
SECTION 3.04. Temporary Certificates..............................................20
SECTION 3.05. Registration; Registration of Transfer and Exchange.................21
SECTION 3.06. Book-Entry Interests................................................22
SECTION 3.07. Notices to Holders..................................................23
SECTION 3.08. Appointment of Successor Depositary.................................23
SECTION 3.09. Definitive Certificates.............................................23
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates..................23
SECTION 3.11. Persons Deemed Owners...............................................25
SECTION 3.12. Cancellation........................................................25
SECTION 3.13. Transfer of Collateral upon Occurrence of Termination Event.........26
SECTION 3.14. No Consent to Assumption............................................26
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ARTICLE 4
THE PREFERRED SHARES
SECTION 4.01. Payments; Rights to Payments Preserved..............................26
SECTION 4.02. Notice and Voting...................................................27
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Common Shares...........................................28
SECTION 5.02. Payment of Purchase Price...........................................30
SECTION 5.03. Issuance of Common Shares...........................................34
SECTION 5.04. Adjustment of Settlement Rate.......................................35
SECTION 5.05. Notice of Adjustments and Certain Other Events......................41
SECTION 5.06. Termination Event; Notice...........................................41
SECTION 5.07. Early Settlement....................................................42
SECTION 5.08. Intentionally Omitted...............................................44
SECTION 5.09. No Fractional Shares................................................44
SECTION 5.10. Charges and Taxes...................................................44
SECTION 5.11. Contract Adjustment Payments........................................45
SECTION 5.12. Deferral of Contract Adjustment Payments............................46
SECTION 5.13. Payment of Additional Amounts.......................................47
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Shares....................................48
SECTION 6.02. Restoration of Rights and Remedies..................................49
SECTION 6.03. Rights and Remedies Cumulative......................................49
SECTION 6.04. Delay or Omission Not Waiver........................................49
SECTION 6.05. Undertaking for Costs...............................................49
SECTION 6.06. Waiver of Stay or Extension Laws....................................50
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.................................50
SECTION 7.02. Notice of Default...................................................51
SECTION 7.03. Certain Rights of Purchase Contract Agent...........................51
SECTION 7.04. Not Responsible for Recitals or Issuance of Securities..............53
SECTION 7.05. May Hold Securities.................................................53
SECTION 7.06. Money Held in Custody...............................................53
SECTION 7.07. Compensation and Reimbursement......................................54
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility.............54
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SECTION 7.09. Resignation and Removal; Appointment of Successor..................................54
SECTION 7.10. Acceptance of Appointment by Successor.............................................56
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business........................56
SECTION 7.12. Preservation of Information; Communications to Holders.............................57
SECTION 7.13. No Obligations of Purchase Contract Agent..........................................57
SECTION 7.14. Tax Compliance.....................................................................58
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.................................58
SECTION 8.02. Supplemental Agreements with Consent of Holders....................................59
SECTION 8.03. Execution of Supplemental Agreements...............................................60
SECTION 8.04. Effect of Supplemental Agreements..................................................60
SECTION 8.05. Reference to Supplemental Agreements...............................................60
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property
Except under Certain Conditions..........................................................61
SECTION 9.02. Rights and Duties of Successor Corporation.........................................61
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract
Agent....................................................................................62
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts..............................................62
SECTION 10.02. Maintenance of Office or Agency...................................................62
SECTION 10.03. Company to Reserve Common Shares..................................................63
SECTION 10.04. Covenants as to Common Shares.....................................................63
SECTION 10.05. Statements of Officers of the Company as to Default...............................63
SECTION 10.06. ERISA.............................................................................63
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PURCHASE CONTRACT AGREEMENT, dated as of November o, 2001, between
PARTNERRE LTD., a Bermuda company (the "Company"), and JPMORGAN CHASE BANK, a
New York banking corporation, acting as purchase contract agent for the Holders
of Securities (as defined herein) from time to time (the "Purchase Contract
Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done. For and
in consideration of the premises and the purchase of the Securities by the
Holders thereof, it is mutually agreed as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
SECTION 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular, and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision; and
(d) the following terms have the meanings given to them in this Section
1.01(d):
"Act" has the meaning, with respect to any Holder, set forth in Section
1.04.
"Additional Amounts" has the meaning set forth in Section 5.13(b).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning set forth in Section 5.01.
"Applicants" has the meaning set forth in Section 7.12(b).
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Bankruptcy Law" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws or the provisions of The Companies Act 1981, of Bermuda,
including but not limited to Part XVIII, that relate to the reorganization or
liquidation of insolvent companies, and any other or subsequent Bermuda law that
relates to the liquidation or reorganization of insolvent companies.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the
books of the Depositary or on the books of a Person maintaining an account with
such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"Board of Directors" means the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global Certificate,
registered in the name of a Depositary or a nominee thereof, ownership and
transfers of which shall be maintained and made through book entries by such
Depositary as described in Section 3.06.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in New York City, New York, are authorized or
required by law or
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executive order to remain closed; provided that for purposes of the second
paragraph of Section 1.12 only, the term "Business Day" shall also be deemed to
exclude any day on which trading on the New York Stock Exchange, Inc. is closed
or suspended.
"Cash Settlement" has the meaning set forth in Section 5.02(a)(i).
"Certificate" means a PEPS Units Certificate.
"Certificate of Designation" means the certificate of designation, rights
and preferences of the Preferred Shares approved as of November o, 2001 by the
Board of Directors.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book-entry transfers and pledges of the Securities.
"Closing Price" has the meaning set forth in Section 5.01.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.
"Collateral Agent" means JPMorgan Chase Bank, as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Shares" means the common shares of the Company, par value $1.00
per share.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"Constituent Person" has the meaning set forth in Section 5.04(b).
"Contract Adjustment Payments" means the payments payable by the Company
on the Payment Dates in respect of each Purchase Contract, at a rate per year of
o% of the Stated Amount per Purchase Contract.
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"Corporate Trust Office" means the principal corporate trust office of the
Purchase Contract Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust
Services.
"Current Market Price" has the meaning set forth in Section 5.04(a)(8).
"Deferred Contract Adjustment Payments" has the meaning set forth in
Section 5.12.
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities as contemplated by
Sections 3.06, 3.07, 3.08 and 3.09.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"DTC" means The Depository Trust Company.
"Early Settlement" has the meaning set forth in Section 5.07(a).
"Early Settlement Amount" has the meaning set forth in Section 5.07(a).
"Early Settlement Date" has the meaning set forth in Section 5.07(a).
"Early Settlement Rate" has the meaning set forth in Section 5.07(c).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning set forth in Section 1.04(e).
"Expiration Time" has the meaning set forth in Section 5.04(a)(6).
"Failed Remarketing" has the meaning set forth in Section 5.02(b).
"Global Certificate" means a Certificate that evidences all or part of the
Securities and is registered in the name of a Clearing Agency or a nominee
thereof.
"Holder" means, with respect to a Security, the Person in whose name the
Security evidenced by a Certificate is registered in the Security Register;
provided, however, that in
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determining whether the Holders of the requisite number of Securities have voted
on any matter, then for the purpose of such determination only (and not for any
other purpose hereunder), if the Security remains in the form of one or more
Global Certificates and if the Depositary which is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Securities are credited on the
record date, the term "Holder" shall mean such Depositary Participant acting at
the direction of the Beneficial Owners.
"Indebtedness" means, with respect to any Person:
(i) the principal of and any premium and interest on (a) indebtedness of
such Person for money borrowed and (b) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable;
(ii) all capitalized lease obligations of such Person;
(iii) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all obligations
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit transaction
(other than obligations with respect to letters of credit securing obligations
(other than obligations described in (i) through (iii) above) entered into in
the ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit);
(v) all obligations of the type referred to in clauses (i) through (iv) of
other Persons and all dividends of other Persons for the payment of which, in
either case, such Person is responsible or liable as obligor, guarantor or
otherwise, the amount thereof being deemed to be the lesser of the stated
recourse, if limited, and the amount of the obligation or dividends of the other
Person,
(vi) all obligations of the type referred to in clauses (i) through (v) of
other Persons secured by any lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such property or assets
or the amount of the obligation so secured; and
(vii) any amendments, modifications, refundings, renewals or extensions of
any indebtedness or obligation described as Indebtedness in clauses (i) through
(vi) above.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Company by its Chairman of the Board, its President or one of
its Vice Presidents, and by
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its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Purchase Contract Agent.
"non-electing share" has the meaning set forth in Section 5.04(b).
"NYSE" has the meaning set forth in Section 5.01.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or one of the Vice Presidents, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Purchase Contract Agent. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Agreement shall include:
(i) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) a statement that, in the opinion of each such officer, each
such officer has made such examination or investigation as is necessary to
enable such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent. An opinion of
counsel may rely on certificates as to matters of fact.
"Outstanding Securities" means, with respect to any Security and as of the
date of determination, all Securities evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:
(i) Securities evidenced by Certificates theretofore cancelled by
the Purchase Contract Agent or delivered to the Purchase Contract Agent
for cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(ii) Securities evidenced by Certificates in exchange for or in lieu
of which other Certificates have been authenticated, executed on behalf of
the Holder and delivered pursuant to this Agreement, other than any such
Certificate in respect of which there shall have been presented to the
Purchase Contract Agent proof satisfactory to it
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that such Certificate is held by a protected purchaser in whose hands the
Securities evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding Securities, except that, in determining whether the Purchase
Contract Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Securities so owned that have been pledged in good
faith may be regarded as Outstanding Securities if the pledgee establishes to
the satisfaction of the Purchase Contract Agent the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
Affiliate of the Company.
"Payment Date" means each March 31, June 30, September 30 and December 31,
commencing December 31, 2001.
"PEPS Unit" means the collective rights and obligations of a Holder of a
PEPS Units Certificate in respect of a Preferred Share, subject in each case to
the Pledge thereof, and the related Purchase Contract.
"PEPS Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of PEPS Units specified on such
certificate.
"Permitted Investments" has the meaning set forth in Section 1.01(f) of
the Pledge Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Plan" means an employee benefit plan that is subject to ERISA, a plan or
individual retirement account that is subject to Section 4975 of the Code or any
entity whose assets are considered assets of any such plan.
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Shares constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of November o,
2001, among the Company, the Collateral Agent, the Securities Intermediary and
the Purchase Contract Agent, on its own behalf and as attorney-in-fact for the
Holders from time to time of the Securities.
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"Pledged Preferred Shares" has the meaning set forth in Section 1.01(f) of
the Pledge Agreement.
"Preferred Shares" means the Series B Cumulative Redeemable Preferred
Shares of the Company, par value $1.00 per share and having a stated liquidation
preference of $50.00.
"Prospectus" means the prospectus relating to the delivery of Common
Shares in connection with an Early Settlement, in the form in which first filed,
or transmitted for filing, with the Commission after the effective date of the
Registration Statement pursuant to Rule 424(b), including the documents
incorporated by reference therein as of the date of such Prospectus; and any
reference to any amendment or supplement to such Prospectus shall be deemed to
refer to and include any documents filed after the date of such Prospectus under
the Exchange Act and incorporated by reference in such Prospectus.
"Proceeds" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Purchase Contract" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and the
Holder of such Security to purchase, Common Shares and (ii) pay the Holder
thereof Contract Adjustment Payments, in each case on the terms and subject to
the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase Contract
Agent" in the first paragraph of this Agreement until a successor Purchase
Contract Agent shall have become such pursuant to the applicable provisions of
this Agreement, and thereafter "Purchase Contract Agent" shall mean such Person.
"Purchase Contract Settlement Date" means o, 2004.
"Purchase Contract Settlement Fund" has the meaning set forth in Section
5.03.
"Purchase Price" has the meaning set forth in Section 5.01.
"Purchased Shares" has the meaning set forth in Section 5.04(a)(6).
"Record Date" as to (i) any Contract Adjustment Payment payable on any
Payment Date, means the tenth calendar day immediately preceding the relevant
Payment Date and (ii) any dividend payments on the Preferred Shares, has the
meaning set forth in the Certificate of Designation.
"Reference Dealer" means a dealer engaged in trading of convertible
securities.
"Reference Price" has the meaning set forth in Section 5.01.
"Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of Common Shares
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in connection with an Early Settlement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in such
registration statement, and any post-effective amendments thereto.
"Remarketing" means the remarketing of the Preferred Shares pursuant to
the procedures set forth in the Remarketing Agreement.
"Remarketing Agent" has the meaning set forth in Section 5.02(b).
"Remarketing Agreement" means the Remarketing Agreement, dated as of
November o, 2001, between the Company and the Remarketing Agent.
"Remarketing Date" means the date that is three Business Days prior to the
Purchase Contract Settlement Date.
"Reset Rate" has the meaning given to such term in the Remarketing
Agreement.
"Reorganization Event" has the meaning set forth in Section 5.04(b).
"Responsible Officer" means, with respect to the Purchase Contract Agent,
any officer of the Purchase Contract Agent assigned by the Purchase Contract
Agent to administer this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Securities Intermediary" means JPMorgan Chase Bank, as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"Security" means a PEPS Unit.
"Security Register" and "Securities Registrar" have the respective
meanings set forth in Section 3.05.
"Senior Indebtedness" means all Indebtedness of the Company outstanding at
any time, except:
(i) the (A) trust preferred securities guarantee issued by the Company to
PartnerRe Capital Trust I, a statutory Delaware business trust, in connection
with the issuance by PartnerRe Capital Trust I of its trust preferred securities
(which such guarantee shall rank pari passu with the payment of Contract
Adjustment Payments on the PEPS Units) and (B) junior subordinated
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debt securities guarantee issued by the Company to PartnerRe Finance I Inc., a
Delaware corporation, in connection with the issuance by PartnerRe Finance I
Inc. of its junior subordinated debt securities (which such guarantee shall rank
pari passu with the payment of Contract Adjustment Payments on the PEPS Units);
(ii) Indebtedness as to which, by the terms of the instrument creating or
evidencing the same, it is provided that such Indebtedness is subordinated to or
ranks equally with the payment of Contract Adjustment Payments on the PEPS Units
or any other Indebtedness ranking pari passu with the payment of Contract
Adjustment Payments on the PEPS Units;
(iii) Indebtedness to an Affiliate;
(iv) interest accruing after the filing of a petition initiating any
bankruptcy, insolvency or other similar proceeding unless such interest is an
allowed claim enforceable against the Company in a proceeding under Bermuda or
United States Federal or State bankruptcy laws;
(v) trade accounts payable; and
(vi) liability for income, franchise, real estate or other taxes.
"Settlement Rate" has the meaning set forth in Section 5.01.
"Stated Amount" means $50.00.
"Taxes" means any taxes, fees, duties, assessments or governmental charges
of whatever nature imposed or levied by or on behalf of the jurisdiction in any
Taxing Jurisdiction.
"Taxing Jurisdiction" means any jurisdiction in which the Company is
organized, or any political subdivision thereof.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under any Bankruptcy Law, adjudicating the Company to be insolvent,
or approving as properly filed a petition seeking reorganization or
liquidation of the Company or any other similar applicable Bermuda or
United States Federal or State law, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;
(ii) a judgment, decree or court order for the appointment of a
receiver or
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liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the termination or liquidation of its
affairs, shall have been entered, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days;
(iii) at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under any Bankruptcy
Law, or shall consent to the filing of a bankruptcy proceeding against it,
or shall file a petition or answer or consent seeking reorganization or
liquidation under any Bankruptcy Law or any other similar applicable
Bermuda or United States Federal or State law, or shall consent to the
filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
generally as they become due or otherwise; or
(iv) a Failed Remarketing that is subject to Section 5.02(b)(v)
shall have occurred.
"Threshold Appreciation Price" has the meaning set forth in Section 5.01.
"TIA" means the Trust Indenture Act of 1939, as amended from time to time,
or any successor legislation.
"Trading Day" has the meaning set forth in Section 5.01.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
November o, 2001, between the Company and the Underwriters identified in
Schedule 1 thereto.
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
SECTION 1.02. Compliance Certificates and Opinions. Except as otherwise
expressly provided by this Agreement, upon any application or request by the
Company to the Purchase Contract Agent to take any action in accordance with any
provision of this Agreement, the Company shall furnish to the Purchase Contract
Agent an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Purchase Contract Agent, an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
11
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
or she has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and
12
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Purchase Contract Agent and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 7.01) conclusive in favor of the Purchase Contract Agent
and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Certificate evidencing such Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Securities on such record date, and no other Holders,
shall be entitled to take the relevant action with respect to the Securities,
whether or not such Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken prior to or on the
applicable Expiration Date by Holders of the requisite number of Outstanding
Securities on such record date. Nothing contained in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and be of no effect), and nothing contained in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite number of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Purchase Contract Agent in writing and to each Holder of Securities in the
manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed
13
new Expiration Date is given to the Purchase Contract Agent in writing, and to
each Holder of Securities in the manner set forth in Section 1.06, prior to or
on the existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the Company shall be
deemed to have initially designated the 180th day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable record
date.
SECTION 1.05. Notices.
Any notice or communication is duly given if in writing and delivered in
Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Telecopier No.: 212-946-8158
Attention: Institutional Trust Services
If to the Company:
PartnerRe Ltd.
Chesney House
96 Pitts Bay Road
Hamilton, HM 08
Bermuda
Telecopier No.: 441-292-3060
Attention: General Counsel
with a copy to:
Telecopier No.: 212-728-8111
Attention: John S D'Alimonte, Esq.
14
If to the Collateral Agent:
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Telecopier No.: 212-946-8158
Attention: Institutional Trust Services
SECTION 1.06. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Purchase Contract Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Purchase Contract
Agent shall constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and the
Purchase Contract Agent shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 1.09. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
15
SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.
SECTION 1.11. Governing Law.
This Agreement and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York.
SECTION 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day,
notwithstanding any other provision of this Agreement or the Securities,
Contract Adjustment Payments shall not be paid on such date, but Contract
Adjustment Payments shall be paid on the next succeeding Business Day with the
same force and effect as if made on such Payment Date, provided that no interest
shall accrue or be payable by the Company or to any Holder with respect to such
payments for the period from and after any such Payment Date, except that, if
such next succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date or Early
Settlement Date shall not be a Business Day, notwithstanding any other provision
of this Agreement or the Securities, Purchase Contracts shall not be performed
and Early Settlement shall not be effected on such date, but the Purchase
Contracts shall be performed or Early Settlement effected, as applicable, on the
next succeeding Business Day with the same force and effect as if made on such
Purchase Contract Settlement Date, or Early Settlement Date, as applicable,
provided that no interest shall accrue or be payable by the Company or to any
Holder for the period from and after any such Purchase Contract Settlement Date
or Early Settlement Date, as applicable, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day with the same force and effect as if
made on such Payment Date.
SECTION 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
16
SECTION 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any Holder
or Beneficial Owner.
SECTION 1.15. Appointment of Financial Institution as Agent for the
Company.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming part of
each Security evidenced thereby) shall be in substantially the form set forth in
Exhibit A hereto, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Securities are listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.
The definitive Certificates shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing the Securities evidenced by such
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN
17
THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER
THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN."
SECTION 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of authentication of
the Securities shall be in substantially the form set forth on the form of the
applicable Certificates.
ARTICLE 3
THE SECURITIES
SECTION 3.01. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 3,450,000, except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Sections 3.04, 3.05, 3.10, 5.07 or 8.05.
The Certificates shall be issuable only in registered form and only in
denominations of a single PEPS Unit and any integral multiple thereof.
SECTION 3.02. Rights and Obligations Evidenced by the Certificates.
Each PEPS Units Certificate shall evidence the number of PEPS Units
specified therein, with each such PEPS Unit representing (1) the ownership by
the Holder thereof of a beneficial interest in a Preferred Share, subject to the
Pledge of such Preferred Share, and (2) the rights and obligations of the Holder
thereof and the Company under one Purchase Contract. The Purchase
18
Contract Agent, as attorney-in-fact for, and on behalf of, the Holder of each
PEPS Unit shall pledge, pursuant to the Pledge Agreement, the Preferred Share
forming a part of such PEPS Unit, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such Preferred Share for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase Common Shares.
Prior to the purchase of Common Shares under each Purchase Contract, such
Purchase Contracts shall not entitle the Holder of a Security to any of the
rights of a holder of Common Shares, including, without limitation, the right to
vote or receive any dividends or other payments or to consent or to receive
notice as a shareholder in respect of the meetings of shareholders or for the
election of directors of the Company or for any other matter, or any other
rights whatsoever as a shareholder of the Company.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
Upon the execution and delivery of this Agreement, and at any time and
from time to time thereafter, the Company may deliver Certificates executed by
the Company to the Purchase Contract Agent for authentication, execution on
behalf of the Holders and delivery, together with its Issuer Order for
authentication of such Certificates, and the Purchase Contract Agent in
accordance with such Issuer Order shall authenticate, execute on behalf of the
Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents or the Company
Secretary. The signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signature of an individual
who was at any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual has ceased to hold such offices prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized officer of the Purchase Contract Agent, as such Holder's
attorney-in-fact. Such signature by an authorized officer of the Purchase
Contract Agent shall be conclusive evidence that the Holder of such Certificate
has entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized officer of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be
19
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.04. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the PEPS Units are listed, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Securities as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Securities, evidenced
thereby as definitive Certificates.
SECTION 3.05. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "Security Registrar"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing PEPS Units.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of PEPS
Units.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
PEPS Units, upon surrender of the
20
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of PEPS Units and be
entitled to the same benefits and subject to the same obligations, under this
Agreement as the PEPS Units evidenced by the Certificate surrendered upon such
registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Purchase Contract Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Purchase Contract Agent duly executed, by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.06 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earliest of any Early Settlement Date for
such Certificate, the Purchase Contract Settlement Date or the Termination Date.
In lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
(i) if the Purchase Contract Settlement Date or any Early Settlement
Date has occurred, deliver the Common Shares issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
other Certificate; or
(ii) if an Early Settlement Date shall have occurred, or if a
Termination Event shall have occurred prior to the Purchase Contract
Settlement Date or any Early Settlement Date, transfer the Preferred
Shares evidenced thereby, subject to the applicable conditions and in
accordance with the applicable provisions of Section 3.13 and Article Five
hereof.
SECTION 3.06. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of one
or more fully
21
registered Global Certificates, to be delivered to the Depositary or its
custodian by, or on behalf of, the Company. The Company hereby designates DTC as
the initial Depositary. Such Global Certificates shall initially be registered
on the books and records of the Company in the name of Cede & Co., the nominee
of the Depositary, and no Beneficial Owner will receive a definitive Certificate
representing such Beneficial Owner's interest in such Global Certificate, except
as provided in Section 3.09. The Purchase Contract Agent shall enter into an
agreement with the Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to Beneficial Owners
pursuant to Section 3.09:
(i) the provisions of this Section 3.06 shall be in full force and
effect;
(ii) except as contemplated in the definition of "Holders" in
Section 1.01(d), the Company shall be entitled to deal with the Depositary
for all purposes of this Agreement (including making Contract Adjustment
Payments and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificates
and shall have no obligation to the Beneficial Owners;
(iii) to the extent that the provisions of this Section 3.06
conflict with any other provisions of this Agreement, the provisions of
this Section 3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be exercised only
through the Depositary and shall be limited to those established by law
and agreements between such Beneficial Owners and the Depositary or the
Depositary Participants.
SECTION 3.07. Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of the Depositary or the nominee of the Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
SECTION 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.
SECTION 3.09. Definitive Certificates.
If:
(i) the Depositary elects to discontinue its services as securities
depositary with respect to the Securities and a successor Depositary is
not appointed within 90 days after
22
such discontinuance pursuant to Section 3.08; or
(ii) the Company elects, after consultation with the Purchase
Contract Agent, to terminate the book-entry system for the Securities,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Securities and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Securities by the
Depositary, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Depositary. The Company shall not be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Each definitive Certificate so
delivered shall evidence Securities of the same kind and tenor as the Global
Certificate so surrendered in respect thereof.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of PEPS Units and bearing a Certificate number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Purchase Contract Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity as may be required by them to
hold each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Purchase Contract Agent that such Certificate has
been acquired by a protected purchaser, the Company shall execute and deliver to
the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the same
number of PEPS Units and bearing a Certificate number not contemporaneously
outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earliest of any Early Settlement Date for such
Certificate, the Purchase Contract Settlement Date or the Termination Date. In
lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
(i) if the Purchase Contract Settlement Date or any Early Settlement
Date has occurred, deliver the Common Shares issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
other Certificate; or
23
(ii) if an Early Settlement Date shall have occurred, or if a
Termination Event shall have occurred prior to the Purchase Contract
Settlement Date or any Early Settlement Date, transfer the Preferred
Shares evidenced thereby, subject to the applicable conditions and in
accordance with the applicable provisions of Section 3.13 and Article Five
hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Purchase Contract Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Purchase Contract Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Security evidenced thereby, for the purpose of
receiving dividends and other distributions on the Preferred Shares, receiving
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any dividends or other distributions
on the Preferred Shares, or Contract Adjustment Payments payable on the Purchase
Contracts, each constituting a part of the Security evidenced thereby shall be
overdue and notwithstanding any notice to the contrary, and neither the Company
nor the Purchase Contract Agent, nor any agent of the Company or the Purchase
Contract Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate.
24
SECTION 3.12. Cancellation.
All Certificates surrendered for delivery of Common Shares on or after the
Purchase Contract Settlement Date, upon the transfer of Preferred Shares after
the occurrence of a Termination Event or pursuant to an Early Settlement or upon
the registration of transfer or exchange of a Security shall, if surrendered to
any Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by it.
The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the
Purchase Contract Agent. No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Purchase
Contract Agent shall be disposed of in accordance with its customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
SECTION 3.13. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Preferred Shares underlying the PEPS Units
pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent shall
request transfer instructions with respect to such Preferred Shares from each
Holder by written request, substantially in the form of Exhibit B hereto, mailed
to such Holder at its address as it appears in the Security Register.
Upon book-entry transfer of the PEPS Units or delivery of a PEPS Units
Certificate to the Purchase Contract Agent with such transfer instructions, the
Purchase Contract Agent shall transfer the Preferred Shares underlying such PEPS
Units to such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of PEPS Units fails to
effect such transfer or delivery, the Preferred Shares underlying such PEPS
Units, and any distributions thereon, shall be held in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder, until the
earlier to occur of:
(i) the surrender of the PEPS Units Certificate or receipt by the
Company and the Purchase Contract Agent from such Holder of satisfactory
evidence that such PEPS Units Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Purchase
Contract Agent and the Company; and
(ii) the expiration of the time period specified in the abandoned
property laws of the relevant jurisdiction.
25
SECTION 3.14. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under any Bankruptcy Law or
subject to other similar Bermuda, Federal or State law providing for
reorganization or liquidation.
ARTICLE 4
THE PREFERRED SHARES
SECTION 4.01. Payments; Rights to Payments Preserved.
Any dividend on any Preferred Share which is paid on any Payment Date
shall, subject to receipt thereof by the Purchase Contract Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, be paid to
the Person in whose name the PEPS Units Certificate of which such Preferred
Share forms a part is registered at the close of business on the Record Date for
such Payment Date.
Each PEPS Units Certificate evidencing Preferred Shares delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu of
any other PEPS Units Certificate shall carry the rights to dividends accrued and
unpaid, and to accrue dividends, that were carried by the Preferred Shares
underlying such other PEPS Units Certificate.
In the case of any PEPS Units with respect to which Cash Settlement of the
underlying Purchase Contract is properly effected pursuant to Section 5.02
hereof, or with respect to which Early Settlement of the underlying Purchase
Contract is properly effected pursuant to Section 5.07 hereof, on a date that is
after any Record Date and prior to or on the next succeeding Payment Date,
dividends on the Preferred Shares underlying such PEPS Unit otherwise payable on
such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement or Early Settlement, and such dividends shall, subject to
receipt thereof by the Purchase Contract Agent, be payable to the Person in
whose name the PEPS Units Certificate was registered at the close of business on
the Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any PEPS Unit with respect to which Cash
Settlement or Early Settlement of the underlying Purchase Contract is properly
effected, dividends on the related Preferred Shares that would otherwise be
payable after the Purchase Contract Settlement Date or Early Settlement Date,
shall not be payable hereunder to the Holder of such PEPS Units; provided,
however, that to the extent that such Holder continues to hold separated
Preferred Shares that formerly comprised a part of such Holder's PEPS Unit, such
Holder shall be entitled to receive dividends on such separated Preferred
Shares.
26
Not less than 10 calendar days nor more than 15 calendar days prior to
the Remarketing Date, the Company shall request the Depositary to notify the
Beneficial Owners or Depositary Participants holding Securities of the
procedures to be followed by Holders of Securities who intend to effect a Cash
Settlement.
SECTION 4.02. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Preferred Shares, but only to the extent instructed in writing by
the Holders as described below. Upon receipt of notice of any meeting at which
holders of Preferred Shares are entitled to vote or upon any solicitation of
consents, waivers or proxies of holders of Preferred Shares, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of PEPS Units a notice, prepared for such
purpose by the Company:
(i) containing such information as is contained in the notice or
solicitation;
(ii) stating that each Holder on the record date set by the Purchase
Contract Agent therefor (which, to the extent possible, shall be the same
date as the record date for determining the holders of Preferred Shares
entitled to vote) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting rights pertaining to such Preferred
Shares underlying their PEPS Units; and
(iii) stating the manner in which such instructions may be given.
Upon the written request of the Holders of PEPS Units on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Preferred Shares as to which any particular
voting instructions are received. In the absence of specific instructions from
the Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting
the Preferred Shares underlying such PEPS Unit. The Company hereby agrees, if
applicable, to solicit Holders of PEPS Units to timely instruct the Purchase
Contract Agent in order to enable the Purchase Contract Agent to vote such
Preferred Shares.
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Common Shares.
Each Purchase Contract shall obligate the Holder of the related Security
to purchase, and the Company to sell, on the Purchase Contract Settlement Date
at a price equal to the Stated
27
Amount (the "Purchase Price"), a number of Common Shares (subject to Section
5.09) equal to the Settlement Rate unless, prior to or on the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to such Purchase Contract. The "Settlement Rate" is
equal to:
(i) if the Applicable Market Value (as defined below) is greater
than or equal to $o (the "Threshold Appreciation Price"), o Common Shares
per Purchase Contract;
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $o (the "Reference Price"), the number
of Common Shares per Purchase Contract having a value, based on the
Applicable Market Value, equal to the Stated Amount; and
(iii) if the Applicable Market Value is less than or equal to the
Reference Price, o Common Shares per Purchase Contract,
subject to adjustment as provided in Section 5.04 (and rounded upward or
downward to the nearest 1/10,000th of a share).
The "Applicable Market Value" means the average of the Closing Price per
Common Share on each of the 20 consecutive Trading Days ending on the third
Trading Day immediately preceding the Purchase Contract Settlement Date (or
Early Settlement Date, in respect of an Early Settlement).
The "Closing Price" per Common Share on any date of determination means:
(i) the closing sale price as of the close of the principal trading
session (or, if no closing price is reported, the last reported sale
price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such
date;
(ii) if the Common Shares are not listed for trading on the NYSE on
any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which the Common Shares are so listed;
(iii) if the Common Shares are not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by the Nasdaq National Market;
(iv) if the Common Shares are not so reported, the last quoted bid
price for the Common Shares in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(v) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of the Common Shares on such date from at
least three nationally
28
recognized independent investment banking firms retained for this purpose
by the Company.
A "Trading Day" means a day on which the Common Shares (1) are not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) have
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Shares.
Each Holder of a PEPS Unit, by its acceptance thereof:
(i) irrevocably authorizes the Purchase Contract Agent to enter into
and perform the related Purchase Contract on its behalf as its
attorney-in-fact (including the execution of Certificates on behalf of
such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
(iii) covenants and agrees to perform its obligations under such
Purchase Contracts;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to enter into
and perform this Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact; and
(vi) consents to, and agrees to be bound by, the Pledge of the
Preferred Shares pursuant to the Pledge Agreement,
provided that upon a Termination Event, the rights of the Holder of such
Security under the Purchase Contract may be enforced without regard to any other
rights or obligations. Each Holder of a PEPS Unit, by its acceptance thereof,
further covenants and agrees that to the extent and in the manner provided in
Section 5.02 and the Pledge Agreement, but subject to the terms thereof,
payments of the Purchase Price in performance of the Purchase Contract included
in such PEPS Unit that are funded by a Remarketing of the Preferred Shares on
the Purchase Contract Settlement Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee)
by the terms of this Agreement, the Purchase Contracts underlying such
Certificate, the Certificate of Designation and the Pledge Agreement and the
transferor shall be released from the obligations under this Agreement, the
Purchase Contracts underlying the Certificate so transferred and the Pledge
Agreement. The
29
Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
SECTION 5.02. Payment of Purchase Price.
(a) (i) Unless a Holder of a PEPS Unit effects an Early Settlement of the
underlying Purchase Contract in the manner described in Section 5.07, each
Holder who intends to pay in cash to satisfy such Holder's obligations under the
Purchase Contract on the Purchase Contract Settlement Date shall notify the
Purchase Contract Agent by use of a notice in substantially the form of Exhibit
C hereto of his intention to pay in cash ("Cash Settlement") the Purchase Price
for the Common Shares to be purchased pursuant to the related Purchase Contract.
Such notice shall be given prior to 5:00 p.m. (New York City time) on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business
Day, the Purchase Contract Agent shall notify the Collateral Agent of the
receipt of such notices from Holders intending to make a Cash Settlement.
(ii) A Holder of a PEPS Unit who has so notified the Purchase
Contract Agent of his intention to effect a Cash Settlement in accordance
with paragraph 5.02(a)(i) above shall pay the Purchase Price to the
Securities Intermediary for deposit in the Collateral Account prior to
11:00 a.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, in lawful money of the
United States by certified or cashiers' check or wire transfer in
immediately available funds payable to or upon the order of the Securities
Intermediary. Any cash received by the Collateral Agent shall be invested
promptly by the Securities Intermediary in Permitted Investments and paid
to the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contracts in accordance with the terms of this Agreement and
the Pledge Agreement. Any funds received by the Securities Intermediary in
respect of the investment earnings from such Permitted Investments in
excess of the Purchase Price for the Common Shares to be purchased by such
Holder shall be distributed to the Purchase Contract Agent when received
for payment to the Holder.
(iii) If a Holder of a PEPS Unit fails to notify the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph 5.02(a)(i) above, or does notify the Purchase Contract
Agent as provided in paragraph 5.02(a)(i) above of his intention to pay
the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.02(a)(ii) above, such Holder shall be deemed to have consented
to the disposition of the Pledged Preferred Shares pursuant to the
Remarketing as described in paragraph 5.02(b) below.
(iv) Promptly after 11:00 a.m. (New York City time) on the fifth
Business Day preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent, based on notices received by the Purchase Contract Agent
pursuant to Section 5.02(a) hereof and notice from the Securities
Intermediary regarding cash received by it prior to such time, shall
notify the Collateral Agent of the aggregate number of Preferred Shares to
be
30
tendered for purchase in the Remarketing in a notice substantially in the
form of D hereto.
(b) (i) In order to dispose of the Preferred Shares of PEPS Units
Holders who have not notified the Purchase Contract Agent of their intention to
effect a Cash Settlement as provided in paragraph 5.02(a)(i) above, or who have
so notified the Purchase Contract Agent but failed to make such payment as
required by paragraph 5.02(a)(ii) above, the Company shall engage Morgan Stanley
& Co. Incorporated, as Remarketing Agent (the "Remarketing Agent"), pursuant to
the Remarketing Agreement (and subject to removal as provided in the Remarketing
Agreement) to sell such Preferred Shares. In order to facilitate the
Remarketing, the Purchase Contract Agent, based on the notices specified in
Section 5.02(a)(iv), shall notify the Remarketing Agent, promptly after 11:00
a.m. (New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, of the aggregate number of Preferred Shares
that are part of PEPS Units to be remarketed. Concurrently, the Collateral
Agent, pursuant to the terms of the Pledge Agreement, shall cause such Preferred
Shares to be presented to the Remarketing Agent for Remarketing.
(ii) Upon receipt of such notice from the Purchase Contract Agent
and such Preferred Shares, the Remarketing Agent shall, on the third
Business Day immediately preceding the Purchase Contract Settlement Date,
use reasonable efforts to remarket such Preferred Shares on such date at a
price (the "Remarketing Price") equal to 100.25% of the Stated Amount
($50) per Preferred Share, plus any accrued and unpaid dividends thereon,
as provided in the Remarketing Agreement. The proceeds from the
Remarketing shall be invested by the Collateral Agent in Permitted
Investments, in accordance with the Pledge Agreement, and then applied to
satisfy in full such PEPS Units Holders' obligations to pay the Purchase
Price for the Common Shares under the related Purchase Contracts on the
Purchase Contract Settlement Date; provided that (i) any portion of the
proceeds representing any accrued and unpaid dividends with respect to
such Preferred Shares shall be paid to the holder thereof and (ii) 0.25%
of the Stated Amount ($50) per Preferred Share of the proceeds shall
automatically be remitted to the Remarketing Agent for services rendered
in connection with the Remarketing (the "Remarketing Fee").
(iii) If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Preferred Shares of such Holders of PEPS
Units at a price equal to the Remarketing Price, then the Remarketing
Agent shall increase the dividend rate on the Preferred Shares, so that
the market value of such Preferred Shares will equal the Remarketing
Price. If the Remarketing Agent determines that it will be able to
remarket the related Preferred Shares of such Holders of PEPS Units at a
price in excess of the Remarketing Price, then the Remarketing Agent shall
decrease the dividend rate on the Preferred Shares so that the market
value of such Preferred Shares will be equal to the Remarketing Price. If
the Remarketing Agent cannot remarket the Preferred Shares after such
increase or decrease, the Remarketing shall be deemed to have failed (a
"Failed Remarketing").
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(iv) If, following the Failed Remarketing, there are, on the
Purchase Contract Settlement Date, (A) no accrued and unpaid dividends on
such Preferred Shares and (B) no accrued and unpaid Contract Adjustment
Payments or Deferred Contract Adjustment Payments, an event of default
shall be deemed to have occurred under this Agreement, the Purchase
Contracts and the Pledge Agreement and in accordance with the terms of the
Pledge Agreement, the Collateral Agent, for the benefit of the Company,
shall exercise its rights as a secured party with respect to such
Preferred Shares, including those actions specified in paragraph 5.02(c)
below.
(v) If, following the Failed Remarketing, there are, on the Purchase
Contract Settlement Date, any (A) accrued and unpaid dividends on such
Preferred Shares and/or (B) accrued and unpaid Contract Adjustment
Payments or Deferred Contract Adjustment Payments, a "Termination Event"
shall be deemed to have occurred, and pursuant to Section 5.06, the
Company shall promptly pay on such date any such accrued and unpaid
Contract Adjustment Payments and Deferred Contract Adjustment Payments in
the manner described in Section 5.11(a).
(vi) The Company shall cause a notice of such Failed Remarketing to
be published on the second Business Day immediately preceding the Purchase
Contract Settlement Date in a daily newspaper in the English language of
general circulation in the City of New York, which is expected to be The
Wall Street Journal, and on Bloomberg News or, if Bloomberg News is no
longer available or, in the opinion of the Company, is no longer an
appropriate electronic news medium to give such notice, such other
national electronic news medium as, in the opinion of the Company, is
appropriate on the second Business Day immediately preceding the Purchase
Contract Settlement Date.
(c) With respect to any Preferred Shares that are subject to a Failed
Remarketing to which Section 5.02(b)(iv) applies, the Collateral Agent for the
benefit of the Company reserves all of its rights as a secured party with
respect thereto and, subject to applicable law and paragraph 5.02(f) below,
shall, in full satisfaction of the Holders' obligations under the Purchase
Contracts among other things, (i) retain the Preferred Shares, (ii) sell the
Preferred Shares in one or more public or private sales or (iii) take, or choose
not to take, any other action with respect to the Preferred Shares, which in
every case specified in (i), (ii) and (iii) (including if the Collateral Agent
for the benefit of the Company, or the Company itself, chooses not to take any
action to exercise its rights as a secured party with respect to such Preferred
Shares) shall constitute payment in full for the aggregate Purchase Price for
the Common Shares to be purchased under the Purchase Contracts.
(d) Any distribution to Holders of any payments described above shall be
payable at the office of the Purchase Contract Agent in New York City maintained
for that purpose or, at the option of the Holder, by check mailed to the address
of the Person entitled thereto at such address as it appears on the Security
Register.
(e) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Preferred Shares underlying the
relevant Security to be
32
released from the Pledge, free and clear of any security interest of the
Company, and transferred to the Purchase Contract Agent for delivery to
the Holder thereof or its designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase Contract Agent
shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Preferred Shares (or, if no such instructions are given to
the Purchase Contract Agent by the Holder, the Purchase Contract Agent
shall hold such Preferred Shares and any dividends or other payment
thereon, in the name of the Purchase Contract Agent or its nominee in
trust for the benefit of such Holder until the expiration of the time
period specified in the abandoned property laws of the relevant
jurisdiction).
(f) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early Settlement
or Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.
(g) The Company shall not be obligated to issue any Common Shares in
respect of a Purchase Contract or deliver any certificates thereof to the Holder
of the related Security unless the Company shall have received payment in full
for the aggregate Purchase Price for the Common Shares to be purchased
thereunder in the manner herein set forth.
SECTION 5.03. Issuance of Common Shares.
Unless a Termination Event or Early Settlement shall have occurred,
subject to Section 5.04(b), on the Purchase Contract Settlement Date upon
receipt of the aggregate Purchase Price payable on all Outstanding Securities,
the Company shall issue and deposit with the Purchase Contract Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing newly issued Common Shares registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such certificates
for Common Shares, together with any dividends or distributions for which a
record date and payment date for such dividend or distribution has occurred
after the Purchase Contract Settlement Date, being hereinafter referred to as
the "Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder.
Subject to the foregoing, upon surrender of a Certificate to the Purchase
Contract Agent on or after the Purchase Contract Settlement Date or Early
Settlement Date, as applicable, together with settlement instructions thereon
duly completed and executed, the Holder of such Certificate shall be entitled to
receive forthwith in exchange therefor a certificate representing that number of
newly issued whole Common Shares which such Holder is entitled to receive
pursuant to the provisions of this Article Five (after taking into account all
Securities then held by such Holder), together with cash in lieu of fractional
shares as provided in Section 5.09 and
33
any dividends or distributions with respect to such shares constituting part of
the Purchase Contract Settlement Fund, but without any interest thereon, and the
Certificate so surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as specified in
the settlement instructions provided by the Holder to the Purchase Contract
Agent. If any Common Shares issued in respect of a Purchase Contract are to be
registered to a Person other than the Person in whose name the Certificate
evidencing such Purchase Contract is registered, no such registration shall be
made unless the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name other than that of
the registered Holder of the Certificate evidencing such Purchase Contract or
has established to the satisfaction of the Company that such tax either has been
paid or is not payable.
SECTION 5.04. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other distribution
on Common Shares in Common Shares, the Settlement Rate in effect at the opening
of business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of Common Shares outstanding
at the close of business on the date fixed for such determination; and
(ii) the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of Common Shares at any time outstanding shall
not include shares held in the treasury of the Company but shall include any
shares issuable in respect of any scrip certificates issued in lieu of fractions
of Common Shares. The Company shall not pay any dividend or make any
distribution on Common Shares held in the treasury of the Company.
(2) In case the Company shall issue rights, warrants or options[, other
than pursuant to reinvestment or share purchase plans,] to all holders of its
Common Shares (not being available on an equivalent basis to Holders of the
Securities upon settlement of the Purchase Contracts underlying such Securities)
entitling them, for a period expiring within 45 days after the record date for
the determination of shareholders entitled to receive such rights, warrants or
options, to subscribe for or purchase Common Shares at a price per share less
than the Current Market Price per Common Share on the date fixed for the
determination of shareholders entitled to receive such rights, warrants or
options, the Settlement Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by dividing
such Settlement Rate by a fraction of which:
34
(i) the numerator shall be the number of Common Shares outstanding
at the close of business on the date fixed for such determination plus the
number of Common Shares which the aggregate of the offering price of the
total number of Common Shares so offered for subscription or purchase
would purchase at such Current Market Price; and
(ii) the denominator shall be the number of Common Shares
outstanding at the close of business on the date fixed for such
determination plus the number of Common Shares so offered for subscription
or purchase,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (2), the number of Common Shares at any time outstanding shall
not include shares held in the treasury of the Company but shall include any
shares issuable in respect of any scrip certificates issued in lieu of fractions
of Common Shares. The Company agrees that it shall not issue any such rights,
warrants or options in respect of Common Shares held in the treasury of the
Company.
(3) In case outstanding Common Shares shall be subdivided or split into a
greater number of Common Shares, the Settlement Rate in effect at the opening of
business on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and, conversely, in case
outstanding Common Shares shall each be combined into a smaller number of Common
Shares, the Settlement Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Shares evidences of its indebtedness or assets (including
securities, but excluding any rights, warrants or options referred to in
paragraph (2) of this Section 5.04(a), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in paragraph
(1) of this Section 5.04(a)), the Settlement Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution by a
fraction of which:
(i) the numerator shall be the Current Market Price per Common Share
on the date fixed for such determination less the then fair market value
(as reasonably determined by the Board of Directors, whose determination
shall be conclusive and the basis for which shall be described in a Board
Resolution) of the portion of the assets or evidences of indebtedness so
distributed applicable to one Common Share; and
(ii) the denominator shall be such Current Market Price per Common
Share,
35
such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.04(a) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.
(5) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Shares cash (excluding:
(i) any quarterly cash dividend on Common Shares to the extent that
the aggregate cash dividend per Common Share in any fiscal quarter does
not exceed $o per share (as adjusted from time to time to reflect the
subdivisions or combinations of Common Shares, the "Dividend Threshold"),
and
(ii) any dividend or distribution in connection with the
liquidation, dissolution or termination of the Company, whether voluntary
or involuntary),
then, in such case, the Settlement Rate shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on such record date by a fraction of
which:
(i) the numerator shall be the Current Market Price of Common Shares
on the record date less the amount of cash so distributed (and not
excluded as provided above) applicable to one Common Share; and
(ii) the denominator shall be the Current Market Price of Common
Shares,
such increase to be effective immediately prior to the opening of business on
the day following the record date; provided, however, that in the event the
portion of cash so distributed applicable to one Common Share is equal to or
greater than the Current Market Price per Common Share on the record date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder of a Security shall have the right to receive upon settlement of the
Securities the amount of cash receivable by a Holder of the number of Common
Shares issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such record date. In the event
that such dividend or distribution is not so paid or made, the Settlement Rate
shall again be adjusted to be the Settlement Rate which would then be in effect
if such dividend or distribution had not been declared. If any adjustment is
required to be made as set forth in this Section 5.04(a)(5) as a result of a
distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the Dividend
Threshold. If an adjustment is required to be made as set forth in this Section
5.04(a)(5) above as a result of a distribution that is not a quarterly dividend,
such adjustment shall be based upon the full amount of the distribution.
36
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Shares shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares as
herein defined) of (I) an aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution)
that combined together with the aggregate of the cash plus the fair market value
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration payable
in respect of any other tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of Common Shares expiring
within the 12 months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to this paragraph (6) has been
made, and (II) the aggregate amount of any distributions to all holders of
Common Shares made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) has been made, exceeds 15% of the product
of the Current Market Price per Common Share as of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of Common Shares
outstanding (including any tendered shares) on the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day after
the date of the Expiration Time, the Settlement Rate shall be adjusted so that
the same shall equal the rate determined by dividing the Settlement Rate
immediately prior to the close of business on the date of the Expiration Time by
a fraction:
(i) the numerator of which shall be equal to (A) the product of (I)
the Current Market Price per Common Share on the date of the Expiration
Time and (II) the number of Common Shares outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus
the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the transactions described
in clauses (I) and (II) above (assuming in the case of clause (I) the
acceptance, up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares); and
(ii) the denominator of which shall be equal to the product of (A)
the Current Market Price per Common Share as of the Expiration Time and
(B) the number of Common Shares outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares").
(7) The reclassification of Common Shares into securities including
securities other than Common Shares (other than any reclassification upon a
Reorganization Event to which Section 5.04(b) applies) shall be deemed to
involve:
37
(i) a distribution of such securities other than Common Shares to
all holders of Common Shares (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution" and
the "date fixed for such determination" within the meaning of paragraph
(4) of this Section); and
(ii) a subdivision, split or combination of the number of Common
Shares outstanding immediately prior to such reclassification into the
number of Common Shares outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day
upon which such subdivision or split becomes effective" or "the day upon
which such combination becomes effective", and "the day upon which such
subdivision, split or combination becomes effective" within the meaning of
paragraph (3) of this Section).
(8) The "Current Market Price" per Common Share on any date of
determination means the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more than 30
Trading Days before, and ending not later than, the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date," when used with respect to any issuance or distribution, shall
mean the first date on which Common Shares trades on such exchange or in such
market without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a Common Share (or if there is not a nearest 1/10,000th of
a share, to the next lower 1/10,000th of a share). No adjustment in the
Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.04(a), an adjustment shall
also be made to the Applicable Market Value solely to determine which of clauses
(i), (ii) or (iii) of the definition of Settlement Rate in Section 5.01 will
apply on the Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction of which the numerator
shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.04(a) and
the denominator shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.04(a)
during the period taken into consideration for determining the Applicable Market
Value, appropriate and customary adjustments shall be made to the Settlement
Rate.
38
(10) The Company may, but shall not be required to, make such increases in
the Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to any
holders of Common Shares resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Shares outstanding
immediately prior to the merger or consolidation are not exchanged for
cash, securities or other property of the Company or another corporation);
(ii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an
entirety;
(iii) any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition); or
(iv) any liquidation, dissolution or termination of the Company
other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of Common Shares issuable on account of each Purchase
Contract if the Purchase Contract Settlement Date had occurred immediately prior
to such Reorganization Event, assuming such Holder of Common Shares is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Shares held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is
not the same for each Common Share held immediately prior to such Reorganization
Event by other than a Constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-electing
share"), then for the
39
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each non-electing share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Security shall
have the rights provided by this Section 5.04(b). Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
(c) All calculations and determinations pursuant to this Section 5.04
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
SECTION 5.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance
with Section 5.04 and prepare and transmit to the Purchase Contract Agent
an Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section
5.04 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the Securities of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the adjustment to
the Settlement Rate was determined and setting forth the adjusted
Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any Common Shares, or of any securities or property, which may at the
time be issued or delivered with respect to any Purchase Contract; and the
Purchase Contract Agent makes no representation with respect thereto. The
Purchase Contract Agent shall not be responsible for any failure of the Company
to issue, transfer or deliver any Common Shares
40
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
SECTION 5.06. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, and the rights and obligations of Holders to purchase
Common Shares, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, prior to or on the Purchase Contract Settlement Date, a
Termination Event shall have occurred; provided that the obligation of the
Company to pay any accrued and unpaid Contract Adjustment Payments and any
Deferred Contract Adjustment Payments shall survive such termination, and the
Company shall promptly pay at such time any such accrued and unpaid Contract
Adjustment Payments and Deferred Contract Adjustment Payments in the manner
described in Section 5.11(a).
Upon and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Preferred Shares in accordance
with the provisions of Section 5.04 of the Pledge Agreement and the right to
receive any accrued and unpaid Contract Adjustment Payments and Deferred
Contract Adjustment Payments. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice thereof to the Purchase Contract Agent, the Collateral Agent
and the Holders, at their addresses as they appear in the Security Register.
SECTION 5.07. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.07, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("Early Settlement") on or prior to 5:00 p.m.
(New York City time) on the seventh Business Day immediately preceding the
Purchase Contract Settlement Date. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts, the Holder of the
Certificate evidencing Securities shall deliver to the Purchase Contract Agent
at the Corporate Trust Office an Election to Settle Early form (on the reverse
side of the Certificate) and any other documents requested by the Purchase
Contract Agent and accompanied by payment (payable to the Company in immediately
available funds) in an amount (the "Early Settlement Amount") equal to the
product of (A) the Stated Amount less the aggregate amount of any accrued and
unpaid Contract Adjustment Payments and any Deferred Contract Adjustment
Payments per Purchase Contract as of the Early Settlement Date (as deferred
below) times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement.
No payment shall be made upon Early Settlement of any Purchase Contract on
account of any dividends payable on the Common Shares issued upon such Early
Settlement, the record date for which payment occurred prior to the Early
Settlement Date. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities prior to or at 5:00 p.m. (New
York City time) on a Business Day, such day shall be the "Early Settlement Date"
with respect to such Securities, and if such requirements are first satisfied
after 5:00 p.m. (New York City time) on a Business Day or on a day that is not a
Business Day,
41
the "Early Settlement Date" with respect to such Securities shall be the next
succeeding Business Day (so long as such next succeeding Business Day is not
later than the seventh Business Day immediately preceding the Purchase Contract
Settlement Date).
(b) No Early Settlement will be permitted under this Section 5.07 unless,
at the time of delivery of the Election to Settle Early form or time the Early
Settlement is effected, there is an effective Registration Statement with
respect to the Common Shares to be issued and delivered in connection with such
Early Settlement, if such a Registration Statement is required (in the view of
counsel, which need not be in the form of a written opinion, for either the
Company or the Purchase Contract Agent) under the Securities Act. If such a
Registration Statement is so required, the Company covenants and agrees to use
commercially reasonable efforts to have in effect a Registration Statement and
Prospectus covering the Common Shares to be delivered in respect of the Purchase
Contracts being settled in a form that the Purchase Contract Agent may use in
connection with such Early Settlement.
(c) Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to
receive, o Common Shares on account of each Purchase Contract as to which Early
Settlement is effected (the "Early Settlement Rate"). The Early Settlement Rate
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted pursuant to Section 5.04.
(d) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(i) the Common Shares issuable upon Early Settlement of Purchase
Contracts to be issued and delivered, together with payment in lieu of any
fraction of a share, as provided in Section 5.09; and
(ii) the related Preferred Shares to be released from the Pledge by
the Collateral Agent and transferred, in each case, to the Purchase
Contract Agent for delivery to the Holder thereof or its designee.
(e) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of Common Shares from the Company and the Preferred Shares from the
Securities Intermediary, as applicable, the Purchase Contract Agent shall, in
accordance with the instructions provided by the Holder thereof on the Election
to Settle Early form (on the reverse of the Certificate evidencing the related
Securities):
(i) transfer to the Holder the Preferred Shares forming a part of
such Securities;
(ii) deliver to the Holder a certificate or certificates for the
full number of Common Shares issuable upon such Early Settlement, together
with payment in lieu of any fraction of a share, as provided in Section
5.09; and
42
(iii) if so required under the Securities Act, deliver a Prospectus
for the Common Shares issuable upon such Early Settlement as contemplated
by Section 5.07(b).
(f) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holder and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Securities as to which Early Settlement was not effected.
(g) A Holder of a Security who effects Early Settlement may elect to have
the Preferred Shares no longer a part of a PEPS Unit remarketed. A Holder making
such an election must notify the Purchase Contract Agent prior to 11:00 a.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, of the aggregate number of Preferred Shares
that are not part of PEPS Units to be remarketed. Any such notice will be
irrevocable and may not be conditioned upon the level at which the Reset Rate is
established in the Remarketing. Concurrently, the Purchase Contract Agent shall
cause such Preferred Shares to be presented to the Remarketing Agent for
Remarketing.
SECTION 5.08. Intentionally Omitted.
SECTION 5.09. No Fractional Shares.
No fractional shares or scrip representing fractional Common Shares shall
be issued or delivered upon settlement on the Purchase Contract Settlement Date
or upon Early Settlement of any Purchase Contracts. If Certificates evidencing
more than one Purchase Contract shall be surrendered for settlement at one time
by the same Holder, the number of full Common Shares which shall be delivered
upon settlement shall be computed on the basis of the aggregate number of
Purchase Contracts evidenced by the Certificates so surrendered. Instead of any
fractional Common Share which would otherwise be deliverable upon settlement of
any Purchase Contracts on the Purchase Contract Settlement Date or upon Early
Settlement, the Company, through the Purchase Contract Agent, shall make a cash
payment in respect of such fractional interest in an amount equal to the value
of such fractional shares times the Applicable Market Value. The Company shall
provide the Purchase Contract Agent from time to time with sufficient funds to
permit the Purchase Contract Agent to make all cash payments required by this
Section 5.09 in a timely manner.
SECTION 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the Common Shares pursuant to the Purchase
Contracts; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a Common
Share in a name other than that of the registered Holder of a
43
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Purchase Contract Agent, as custodian for such Holder,
and the Company shall not be required to issue or deliver such share
certificates or Certificates unless or until the Person or Persons requesting
the transfer or issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
SECTION 5.11. Contract Adjustment Payments. (a) Subject to Section 5.12,
the Company shall pay, on each Payment Date, the Contract Adjustment Payments
payable in respect of each Purchase Contract to the Person in whose name a
Certificate is registered at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments will be payable at
the office of the Purchase Contract Agent in New York City maintained for that
purpose or, at the option of the Holder, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Security
Register. If any date on which Contract Adjustment Payments are to be made is
not a Business Day, then payment of the Contract Adjustment Payments payable on
such date will be made on the next day that is a Business Day (and without any
interest in respect of any such delay).
(b) Upon the occurrence of a Termination Event, the Company's obligation
to pay future Contract Adjustment Payments shall cease.
(c) Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other Certificate shall carry
the right to accrued and unpaid or deferred Contract Adjustment Payments and the
right to accrue Contract Adjustment Payments, which rights were carried by the
Purchase Contracts underlying such other Certificates.
(d) Subject to Section 5.07, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and prior to or on the next
succeeding Payment Date, Contract Adjustment Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Contract Adjustment Payments shall be paid to the Person in
whose name the Certificate evidencing such Security is registered at the close
of business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Contract Adjustment Payments that would otherwise be
payable after the Early Settlement Date with respect to such Purchase Contract
shall not be payable.
(e) The obligations of the Company with respect to Contract Adjustment
Payments will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness. In the event of:
(i) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to
creditors of the Company, as such, or to the Company's
44
assets;
(ii) any voluntary or involuntary liquidation, dissolution or other
winding up of the Company, whether or not involving insolvency or
bankruptcy; or
(iii) any assignment for the benefit of creditors or any other
marshalling of the Company's assets and liabilities,
then and in any such event (A) the holders of Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision will be made for such payment
in cash, before the Holders of the PEPS Units are entitled to receive or retain
any payment of Contract Adjustment Payments, and (B) in furtherance of the
foregoing, the holders of Senior Indebtedness will be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other Senior Indebtedness being subordinated to the payment of Contract
Adjustment Payments on the PEPS Units, which may be payable or deliverable in
respect of the PEPS Units in any such case, proceeding, dissolution, liquidation
or other winding up event.
Subject to the payment in full of all Senior Indebtedness, the rights of
the Holders of the PEPS Units with respect to Contract Adjustment Payments will
be subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the Contract Adjustment Payments
with respect to the PEPS Units have been paid in full.
The Company shall not make any payment of Contract Adjustment Payments
with respect to the PEPS Units if any Senior Indebtedness is not paid when due
and such default has not been cured or waived or ceased to exist, or if the
maturity of any Senior Indebtedness has been accelerated because of a default.
SECTION 5.12. Deferral of Contract Adjustment Payments. (a) The Company
has the right to defer payment of all or part of the Contract Adjustment
Payments in respect of each Purchase Contract until no later than the Purchase
Contract Settlement Date, but only if the Company shall give the Holders and the
Purchase Contract Agent written notice of its election to defer such payment
(specifying the amount to be deferred) at least ten Business Days prior to the
earlier of (i) the next succeeding Payment Date or (ii) the date the Company is
required to give notice of the Record Date or Payment Date with respect to
payment of such Contract Adjustment Payments to the NYSE or other applicable
self-regulatory organization or to Holders of the Securities, but in any event
not less than one Business Day prior to such Record Date. If the Company so
elects to defer Contract Adjustment Payments, the Company shall pay additional
Contract Adjustment Payments on such deferred installments of Contract
Adjustment Payments at a rate equal to o % per annum, compounding quarterly,
until such deferred installments are
45
paid in full (such deferred installments of Contract Adjustment Payments
together with the accrued additional Contract Adjustment Payments thereon, being
referred to herein as the "Deferred Contract Adjustment Payments"). Deferred
Contract Adjustment Payments shall be due on the Payment Date except to the
extent that payment is deferred pursuant to this Section. No Contract Adjustment
Payments may be deferred to a date that is after the Purchase Contract
Settlement Date.
(b) In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Contract Adjustment Payments and
Deferred Contract Adjustment Payments. The Company shall pay such amounts on the
Purchase Contract Settlement Date in the manner described in Section 5.02(d).
(c) In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until all Deferred Contract Adjustment
Payments have been paid, the Company shall not, and shall not permit any of its
subsidiaries to, declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment with respect
to, any of its capital stock or their capital stock; provided that the Company's
subsidiaries will not be restricted from declaring or paying such dividends, or
making such distributions, to the Company or any of the Company's other
subsidiaries as a result of the foregoing.
SECTION 5.13. Payment of Additional Amounts. (a) The Company shall make
all payments in respect of the PEPS Units (including any dividend payments or
other distributions payable on the Preferred Shares and Contract Adjustment
Payments on the Purchase Contracts that form such PEPS Units) without
withholding or deduction at source for, or on account of, any present or future
Taxes, unless such Taxes are required to be withheld or deducted by (i) the laws
(or any regulations or rulings promulgated thereunder) of a Taxing Jurisdiction
or any taxing authority therein or (ii) 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).
(b) If a withholding or deduction by the Company is required by the law of
any Taxing Jurisdiction, the Company shall, subject to certain limitations and
exceptions described in Section 5.13(c), pay to the Holder of any such PEPS Unit
such additional amounts (the "Additional Amounts") as may be necessary so that
every net payment made to such Holder in respect thereof, after the withholding
or deduction, will not be less than the amount provided for in this Agreement,
the Purchase Contract and Certificate of Designation to be then due and payable.
46
(c) Notwithstanding the foregoing, the Company shall not be required to
pay any Additional Amounts under any PEPS Unit for or on account of:
(i) any Taxes 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 otherwise had
some connection with the relevant taxing jurisdiction other than by reason
of the mere ownership of, or receipt of payment under, such PEPS Unit, (b)
presented such PEPS Unit for payment in the relevant Taxing Jurisdiction,
unless such PEPS Unit could not have been presented for payment elsewhere,
or (c) presented such PEPS Unit for payment more than 30 days after the
date on which the payment in respect of such PEPS Unit 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 PEPS Unit for payment on any day within that 30-day period;
(ii) any estate, inheritance, gift, sale, transfer, personal
property or similar Taxes;
(iii) any Taxes that are imposed or withheld by reason of the
failure by the Holder or the beneficial owner of such PEPS Unit to comply
with any reasonable request by the Company addressed to the Holder within
90 days of such request (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 as a precondition to exemption from all or part of
such Taxes; or
(iv) any combination of items (i), (ii) and (iii).
In addition, the Company shall not pay Additional Amounts with respect to
any payment of any amounts on any such PEPS Unit to any Holder who is a
fiduciary or partnership or other than the sole beneficial owner of such PEPS
Unit to the extent such payment would be required by the laws of the relevant
Taxing Jurisdiction (or any relevant taxing authority 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 PEPS Unit.
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Shares.
Each Holder of a Security shall have the right, which is absolute and
unconditional, to (i)
47
subject to the right of the Company to defer such payments in accordance with
Section 5.12, receive each Contract Adjustment Payment with respect to the
Purchase Contract comprising part of such Security on the respective Payment
Date and (ii) purchase Common Shares pursuant to such Purchase Contract and, in
each such case, to institute suit for the enforcement of any such right to
receive Contract Adjustment Payments and the right to purchase Common Shares,
and such rights shall not be impaired without the consent of such Holder.
SECTION 6.02. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
SECTION 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.04. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right. Every right and remedy given by this Article or by law to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by such
Holders.
SECTION 6.05. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a Security, by its
acceptance of such Security shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Purchase Contract Agent
for any action taken, suffered or omitted by it as Purchase Contract Agent, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and costs against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
48
Section shall not apply to any suit instituted by the Purchase Contract Agent,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of dividends or other distributions on any
Preferred Shares or Contract Adjustment Payments on any Purchase Contracts on or
after the respective Payment Date therefor in respect of any Security held by
such Holder, or for enforcement of the right to purchase Common Shares under the
Purchase Contracts constituting part of any Security held by such Holder.
SECTION 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Securities, such duties and
only such duties as are specifically set forth in this Agreement and the Pledge
Agreement, and no implied covenants or obligations shall be read into this
Agreement or the Pledge Agreement against the Purchase Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part, may, with
respect to the Securities, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Purchase Contract Agent and conforming to the
requirements of this Agreement or the Pledge Agreement, as applicable, but in
the case of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Purchase Contract Agent, the
Purchase Contract Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement or the Pledge
Agreement, as applicable (but need not confirm or investigate the accuracy of
the mathematical calculations or other facts stated therein).
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to
49
relieve the Purchase Contract Agent from liability for its own negligent action,
its own negligent failure to act, its own bad faith or its own willful
misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Purchase Contract Agent was negligent in ascertaining the pertinent
facts;
(3) no provision of this Agreement or the Pledge Agreement shall require
the Purchase Contract 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 indemnity satisfactory to the
Purchase Contract Agent is not provided to it; and
(4) the Purchase Contract Agent shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Securities.
(c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Purchase Contract Agent.
SECTION 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and addresses appear in
the Security Register, notice of such default hereunder, unless such default
shall have been cured or waived.
SECTION 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
50
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Purchase Contract Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its selection
appointed with due care by it hereunder and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Purchase Contract Agent, in its discretion, may make
reasonable further inquiry or investigation into such facts or matters related
to the execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable opportunity to
examine the relevant books, records and premises of the Company, personally or
by agent or attorney and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation;
(6) the Purchase Contract Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate and the Purchase Contract Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it hereunder;
(7) the Purchase Contract Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement at the request or
direction of any of the Holders pursuant to this Agreement, unless such Holders
shall have offered to the Purchase Contract Agent security or indemnity
satisfactory to the Purchase Contract Agent against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(8) the Purchase Contract Agent shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(9) the Purchase Contract Agent shall not be deemed to have notice of any
default hereunder unless a Responsible Officer of the Purchase Contract Agent
has actual knowledge
51
thereof or unless written notice of any event which is in fact such a default is
received by the Purchase Contract Agent at the Corporate Trust Office of the
Purchase Contract Agent, and such notice references the Securities and this
Agreement;
(10) the Purchase Contract Agent may request that the Company deliver an
Officers' 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 Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded; and
(11) the rights, privileges, protections, immunities and benefits given to
the Purchase Contract Agent, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Purchase Contract
Agent in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.
SECTION 7.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
SECTION 7.05. May Hold Securities.
Any Security Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it would
have if it were not Security Registrar or such other agent, or the Purchase
Contract Agent. The Company may become the owner or pledgee of Securities.
SECTION 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder or agreed in writing with the Company.
SECTION 7.07. Compensation and Reimbursement.
The Company agrees:
52
(1) to pay to the Purchase Contract Agent compensation for all services
rendered by it hereunder and under the Pledge Agreement as the Company and the
Purchase Contract Agent shall from time to time agree in writing;
(2) except as otherwise expressly provided for herein, to reimburse the
Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent in
accordance with any provision of this Agreement or the Pledge Agreement
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct or bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor Purchase
Contract Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its duties hereunder, including the costs and expenses of defending itself
against any claim (whether asserted by the Company, a Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The provisions of this Section shall survive the resignation and removal
of the Purchase Contract Agent and the termination of this Agreement.
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which
shall be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
53
(b) The Purchase Contract Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Purchase Contract
Agent required by Section 7.10 shall not have been delivered to the Purchase
Contract Agent within 30 days after the giving of such notice of resignation,
the resigning Purchase Contract Agent may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after the giving of such
notice of resignation, the resigning Purchase Contract Agent may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Purchase Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section 310(b)
of the TIA, as if the Purchase Contract Agent were an indenture trustee
under an indenture qualified under the TIA, after written request therefor
by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible under
Section 7.08 and shall fail to resign after written request therefor by
the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public officer
shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company shall promptly appoint a successor
Purchase Contract Agent and shall comply with the applicable requirements of
Section 7.10. If no successor Purchase Contract Agent shall have been so
appointed by the Company and accepted appointment in the manner required by
Section
54
7.10, any Holder who has been a bona fide Holder of a Security for at least six
months, on behalf of itself and all others similarly situated, or the Purchase
Contract Agent may petition at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Purchase Contract
Agent and the address of its Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase Contract
Agent, every such successor Purchase Contract Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Purchase Contract
Agent an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Purchase Contract Agent; but, on the request of the Company or the
successor Purchase Contract Agent, such retiring Purchase Contract Agent shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Purchase Contract Agent all the rights, powers and trusts of the
retiring Purchase Contract Agent and shall duly assign, transfer and deliver to
such successor Purchase Contract Agent all property and money held by such
retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph 7.10(a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided that such
corporation shall be otherwise qualified and eligible under this Article, with
the execution or filing of any
55
paper or any further act on the part of any of the parties hereto. In case any
Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract Agent
may adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Purchase
Contract Agent had itself authenticated and executed such Securities.
SECTION 7.12. Preservation of Information; Communications to Holders.
(a) The Purchase Contract Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Purchase Contract Agent, and furnish to the Purchase Contract
Agent reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Purchase Contract Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
SECTION 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this Agreement, the
Purchase Contract Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The Company
agrees, and each Holder of a Certificate, by his or her acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution of
the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, employees or agents be liable under
this Agreement to any third party for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Purchase
Contract Agent, incurred without any act or deed that is found to be
attributable to gross negligence or willful misconduct on the part of the
Purchase Contract Agent.
56
SECTION 7.14. Tax Compliance.
(a) The Company and the Purchase Contract Agent will comply with all
applicable certification, information reporting and withholding (including
"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (i) any payments made with respect to
the Securities or (ii) the issuance, delivery, holding, transfer, redemption or
exercise of rights under the Securities. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the terms
hereof with any written direction received from the Company with respect to the
execution or certification of any required documentation and the application of
such requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on any
such direction in accordance with the provisions of Section 7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Purchase Contract
Agent, at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Purchase
Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders pursuant to
the
57
requirements of Section 5.04(b); or
(5) except as provided for in Section 5.04, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, or make any other provisions with respect to
such matters or questions arising under this Agreement, provided that such
action shall not adversely affect the interests of the Holders.
SECTION 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract Agent may enter into
an agreement or agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter the rights in
or to such Collateral;
(3) impair the right to institute suit for the enforcement of any
Purchase Contract;
(4) reduce the number of Common Shares to be purchased pursuant to
any Purchase Contract, increase the price to purchase Common Shares upon
settlement of any Purchase Contract or change the Purchase Contract
Settlement Date;
(5) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
or
(6) reduce any Contract Adjustment Payments or change the coin or
currency in which any Contract Adjustment Payment is payable; or
provided that the unanimous consent of the Holders of each outstanding
Purchase Contract of such class affected thereby shall be required to approve
any amendment or proposal specified in clauses (1) through (6) above.
58
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement and that any and all conditions precedent to the execution and
delivery of such supplemental agreement have been satisfied. The Purchase
Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.
SECTION 8.05. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions.
The Company covenants that it will not consolidate with or merge into any
other
59
corporation or convey, transfer or lease all or substantially all of its
properties and assets to any Person, unless:
(i) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, all or substantially all of the Company's properties and
assets shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement and the Pledge Agreement by one or more
supplemental agreements in form reasonably satisfactory to the Purchase
Contract Agent and the Collateral Agent, executed and delivered to the
Purchase Contract Agent and the Collateral Agent by such corporation; and
(ii) the Company or such successor corporation, shall not,
immediately after such consolidation, merger, conveyance, transfer or
lease, be in default in the performance of any covenant or condition
hereunder, under any of the Securities or under the Pledge Agreement.
SECTION 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of PartnerRe Ltd., any or all of the Certificates evidencing Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Purchase Contract Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent.
The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall
receive an
60
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
such merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance, and any such assumption, complies with the provisions of this
Article and that all conditions precedent to the consummation of any such
merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance have been met.
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from time
to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of Common Shares upon settlement of the Purchase Contracts on the
Purchase Contract Settlement Date or Early Settlement Date and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or reestablishment of PEPS Units and where notices and demands to
or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Purchase Contract
Agent of the location, and any change in the location, of such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Purchase Contract Agent with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office, and the Company hereby appoints the
Purchase Contract Agent as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York City for such purposes. The Company will give prompt written
notice to the Purchase Contract Agent of any such designation or rescission and
of any change in the location of any such other office or agency. The Company
hereby designates as the place of payment for the Securities the Corporate Trust
Office and appoints the Purchase Contract Agent at its Corporate Trust Office as
paying agent in such city.
SECTION 10.03. Company to Reserve Common Shares.
61
The Company shall at all times prior to the Purchase Contract Settlement
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Shares the full number of Common Shares issuable
against tender of payment in respect of all Purchase Contracts constituting a
part of the Securities evidenced by Outstanding Certificates.
SECTION 10.04. Covenants as to Common Shares.
The Company covenants that all Common Shares which may be issued against
tender of payment in respect of any Purchase Contract constituting a part of the
Outstanding Securities will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable.
SECTION 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120 days
after the end of each fiscal year of the Company (which as of the date hereof is
December 31) ending after the date hereof, an Officers' Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company), stating whether or not
to the knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
SECTION 10.06. ERISA.
Each Holder from time to time of the Securities that is a Plan hereby
represents that its acquisition of the PEPS Units and the holding of the same
satisfies the applicable fiduciary requirements of ERISA and that it is entitled
to exemption relief from the prohibited transaction provisions of ERISA and the
Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.
[SIGNATURES ON THE FOLLOWING PAGE]
62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PARTNERRE LTD.
By: ________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: ________________________________
Name:
Title:
EXHIBIT A
FACE OF PEPS UNITS CERTIFICATE
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"),
OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. ____ CUSIP No. o
Number of PEPS Units:______________
PARTNERRE LTD.
PEPS UNITS
This PEPS Units Certificate certifies that ___________________ is the
registered Holder of the number of PEPS Units set forth above. Each PEPS Unit
consists of (i) the beneficial ownership by the Holder of one Preferred Share
(the "Preferred Share") of PartnerRe Ltd., a Bermuda company (the "Company"),
having a stated liquidation preference of $50, subject to the Pledge of such
Preferred Share by such Holder pursuant to the Pledge Agreement and (ii) the
rights and obligations of the Holder under one Purchase Contract with the
Company. All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Preferred Shares constituting part
of each PEPS Unit evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising part of such PEPS Unit.
The Pledge Agreement provides that all payments of the liquidation
preference with respect to any of the Pledged Preferred Shares, or cash
dividends or other distributions on any Pledged Preferred Shares (as defined in
the Pledge Agreement) constituting part of the PEPS Units received by the
Securities Intermediary shall be paid by wire transfer in same day funds (i) in
the case of (A) cash dividends or other distributions with respect to Pledged
Preferred Shares and (B) any payments of the liquidation preference with respect
to any Preferred Shares that have been released from the Pledge pursuant to the
Pledge Agreement, to the Purchase Contract Agent to the account designated by
the Purchase Contract Agent, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Securities Intermediary (provided
that in the event such payment is received by the Securities Intermediary on a
day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day) and (ii) in the case of payments
of the liquidation preference with respect to any of the Pledged Preferred
Shares on the Purchase Contract Settlement Date (as described herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the PEPS Units of which such Pledged
Preferred Shares are a part under the Purchase Contracts forming a part of such
PEPS Units. Distributions on any Preferred Share forming part of a PEPS Unit
evidenced hereby, which are payable quarterly in arrears on March 31, June 30,
September 30, and December 31 of each year, commencing December 31, 2001 (a
"Payment Date"), shall, subject to receipt thereof by the Purchase Contract
Agent from the Securities Intermediary, be paid to the Person in whose name this
PEPS Unit Certificate (or a Predecessor PEPS Unit Certificate) is registered at
the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this PEPS
Units Certificate to purchase, and the Company to sell, on o, 2004 (the
"Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of common shares, $1.00 par value ("Common Shares"), of the
Company, equal to the Settlement Rate, unless on or prior to the Purchase
Contract Settlement Date there shall have occurred a Termination Event or an
Early Settlement with respect to the PEPS Unit of which such Purchase Contract
is a part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the "Purchase Price") for
the Common Shares purchased pursuant to each Purchase Contract evidenced hereby,
if not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of payment received in respect of the liquidation preference with
respect to any Pledged Preferred Shares pursuant to the Remarketing pledged to
secure the obligations under such Purchase Contract of the Holder of the PEPS
Unit of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract
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forming part of a PEPS Unit evidenced hereby, an amount (the "Contract
Adjustment Payments") equal to o% per year of the Stated Amount. Such Contract
Adjustment Payments shall be payable to the Person in whose name the PEPS Unit
Certificate is registered at the close of business on the Record Date for such
Payment Date. The Company may, at its option, defer such Contract Adjustment
Payments.
Dividends and other distributions on the Preferred Shares and Contract
Adjustment Payments on the Purchase Contracts will be payable at the office of
the Purchase Contract Agent in New York City or, at the option of the Company,
by check mailed to the address of the Person entitled thereto as such address
appears on the Security Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this PEPS Units Certificate shall
not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PARTNERRE LTD.
By:
-------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: JPMORGAN CHASE BANK,
not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------------
Name:
Title:
DATED:__________________
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CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the PEPS Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: JPMORGAN CHASE BANK,
as Purchase Contract Agent
By:
-------------------------------------
Authorized Officer
Dated: ____________________
A-5
(FORM OF REVERSE OF PEPS UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of o, 2001 (as may be supplemented from time to time, the
"Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as
Purchase Contract Agent (including its successors hereunder, the "Purchase
Contract Agent"), to which Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Purchase Contract Agent, the Company, and the Holders and of the terms upon
which the PEPS Units Certificates are, and are to be, executed and delivered.
Unless a Cash Settlement or Early Settlement has occurred, each Purchase
Contract evidenced hereby obligates the Holder of this PEPS Units Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at a
price equal to the Stated Amount (the "Purchase Price"), a number of Common
Shares equal to the Settlement Rate, unless, prior to or on the Purchase
Contract Settlement Date, there shall have occurred a Termination Event with
respect to the Security of which such Purchase Contract is a part or an Early
Settlement shall have occurred. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is greater
than or equal to $o (the "Threshold Appreciation Price"), o Common Shares
per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $o (the "Reference Price"), the number
of Common Shares per Purchase Contract having a value, based on the
Applicable Market Value, equal to $50; and
(3) if the Applicable Market Value is less than or equal to the
Reference Price, o Common Shares per Purchase Contract,
subject to adjustment as provided in the Purchase Contract Agreement (and
rounded upward or downward to the nearest 1/10,000th of a share).
No fractional Common Shares will be issued upon settlement of Purchase
Contracts, as provided in Section 5.09 of the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Cash Settlement or Early Settlement, shall obligate the Holder of the related
PEPS Unit to purchase at the Purchase Price, and the Company to sell, a number
of Common Shares equal to the Settlement Rate or the Early Settlement Rate, as
applicable.
The "Applicable Market Value" means the average of the Closing Price per
Common Share on each of the 20 consecutive Trading Days ending on the third
Trading Day immediately
A-6
preceding the Purchase Contract Settlement Date (or Early Settlement Date, as
applicable).
The "Closing Price" per Common Share on any date of determination means:
(1) the closing sale price as of the close of the principal trading
session (or, if no closing price is reported, the last reported sale
price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such
date;
(2) if the Common Shares are not listed for trading on the NYSE on
any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which Common Shares is so listed;
(3) if the Common Shares are not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by Nasdaq National Market;
(4) if the Common Shares are not so reported, the last quoted bid
price for the Common Shares in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of the Common Shares on such date from at
least three nationally recognized independent investment banking firms
retained for this purpose by the Company.
A "Trading Day" means a day on which Common Shares (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of Common
Shares.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this PEPS Units Certificate may pay the Purchase Price for the Common
Shares purchased pursuant to each Purchase Contract evidenced hereby by
effecting a Cash Settlement or any Early Settlement or from the proceeds of a
Remarketing of the related Pledged Preferred Shares. A Holder of PEPS Units who
(1) does not effect, on or prior to 11:00 a.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, an
effective Cash Settlement or (2) does not effect on or prior to 5:00 p.m. (New
York City time) on the seventh Business Day immediately preceding the Purchase
Contract Settlement Date, an effective Early Settlement, shall pay the Purchase
Price for the Common Shares to be delivered under the related Purchase Contract
from the proceeds of the sale of the related Pledged Preferred Shares held by
the Collateral Agent. Such sale will be made by the Remarketing Agent pursuant
to the terms of the Remarketing Agreement on the third Business Day prior to the
Purchase Contract Settlement Date. If, as provided in the Purchase Contract
Agreement,
A-7
upon the occurrence of a Failed Remarketing, the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured creditor with respect
to the Pledged Preferred Shares related to this PEPS Units certificate, any
accrued and unpaid dividends on such Pledged Preferred Shares will become
payable by the Company to the holder of this PEPS Units Certificate in the
manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any Common Shares in respect
of a Purchase Contract or deliver any certificates therefor to the Holder unless
it shall have received payment of the aggregate purchase price for the Common
Shares to be purchased thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Preferred
Share forming a part of each PEPS Unit from the Pledge. A PEPS Unit shall
thereafter represent the right to receive the Preferred Share forming a part of
such PEPS Unit in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Preferred Shares. Upon receipt of notice of any meeting at which
holders of Preferred Shares are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Preferred Shares, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail to the PEPS Units
Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each PEPS Unit Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Preferred
Shares entitled to vote) shall be entitled to instruct the Purchase
Contract Agent as to the exercise of the voting rights pertaining to the
Preferred Shares constituting a part of such Holder's PEPS Unit; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the PEPS Unit Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Shares as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting the
Preferred Share evidenced by such PEPS Unit.
The PEPS Certificates are issuable only in registered form and only in
denominations of
A-8
a single PEPS Unit and any integral multiple thereof. The transfer of any PEPS
Units Certificate will be registered and PEPS Units Certificates may be
exchanged as provided in the Purchase Contract Agreement. The Security Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange, but
the Company and the Purchase Contract Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a PEPS Unit remains in effect, such PEPS Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such PEPS Unit in respect of the Preferred Shares
and Purchase Contract constituting such PEPS Unit may be transferred and
exchanged only as a PEPS Unit.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the PEPS Units Certificate evidencing such Purchase Contract is registered
at the close of business on the Record Date for such Payment Date. Contract
Adjustment Payments will be payable at the office of the Purchase Contract Agent
in New York City or, at the option of the Holder, by check mailed to the address
of the Person entitled thereto at such address as it appears on the Security
Register.
The Company has the right to defer payment of all or part of the Contract
Adjustment Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date. If the Company so elects to defer Contract
Adjustment Payments, the Company shall pay additional Contract Adjustment
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to o% per annum, compounding quarterly, until such deferred installments
are paid. In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date, the aggregate amount of accrued and unpaid Contract Adjustment Payments
and Deferred Contract Adjustment Payments.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder shall immediately and automatically terminate, without
the necessity of any notice or action by any Holder, the Purchase Contract Agent
or the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred; provided that the obligation of the
Company to pay any accrued and unpaid Contract Adjustment Payments and any
Deferred Contract Adjustment Payments shall survive such termination and the
Company shall promptly pay at such time to the Person in whose name the PEPS
Units Certificate evidencing such Purchase Contract is registered at the close
of business on the such date of termination, and such payments will be payable
at the office of the Purchase Contract Agent in New York City or, at the option
of the Holder, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Security Register. Upon the occurrence of a
A-9
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Purchase Contract Agent, the
Collateral Agent and the Holders, at their addresses as they appear in the
Security Register. Upon and after the occurrence of a Termination Event, the
Collateral Agent shall release the Preferred Shares from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this PEPS Units Certificate,
the Holder of this PEPS Units Certificate shall deliver to the Purchase Contract
Agent at the Corporate Trust Office an Election to Settle Early form set forth
below and any other documents requested by the Purchase Contract Agent duly
completed and accompanied by payment in the form of immediately available funds
payable to the order of the Company in an amount (the "Early Settlement Amount")
equal to the product of (A) $50 times (less the aggregate amount of any accrued
and unpaid Contract Adjustment Payments and any Deferred Contract Adjustment
Payments per Purchase Contract as of the Early Settlement Date) (B) the number
of Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Preferred Shares underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of Common Shares on account of each
Purchase Contract forming part of a PEPS Unit as to which Early Settlement is
effected equal to o Common Shares per Purchase Contract (the "Early Settlement
Rate"). The Early Settlement Rate shall be adjusted in the same manner and at
the same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this PEPS Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this PEPS Units Certificate. The Company covenants and agrees, and
the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound
by the provisions of this paragraph.
The Holder of this PEPS Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the PEPS Units evidenced hereby on its behalf
as its attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee in
the event that the Company becomes the subject of a case under any Bankruptcy
Law, including the Bankruptcy Code, agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform his obligations under such
Purchase Contracts, consents to the provisions of the Purchase Contract
Agreement, authorizes the Purchase Contract Agent to enter into and perform the
Purchase Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Preferred Shares underlying
this PEPS Units
A-10
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate liquidation preference of the Pledged Preferred
Shares on the Purchase Contract Settlement Date shall be paid by the Collateral
Agent to the Company in satisfaction of such Holder's obligations under such
Purchase Contract and such Holder shall acquire no right, title or interest in
such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to conflicts of laws
principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and any agent
of the Company or the Purchase Contract Agent may treat the Person in whose name
this PEPS Units Certificate is registered as the owner of the PEPS Units
evidenced hereby for the purpose of receiving payments of dividends payable
quarterly on the Preferred Shares, receiving payments of Contract Adjusment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of Common Shares.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Purchase Contract Agent.
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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 of __________
-------------------------------------------------------
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
- --------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
- --------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within PEPS Units Certificates and all rights thereunder, hereby irrevocably
constituting and appointing attorney __________________, to transfer said PEPS
Units Certificates on the books of PartnerRe Ltd. with full power of
substitution in the premises.
Dated: Signature
------------------------ -------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within PEPS
Units Certificates in every particular,
without alteration or enlargement or any
change whatsoever.
Signature Guarantee:
----------------------------------------
A-12
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for Common Shares
deliverable upon settlement on or after the Purchase Contract Settlement Date of
the Purchase Contracts underlying the number of PEPS Units evidenced by this
PEPS Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated:________________________ ________________________________________
Signature
Signature Guarantee:____________________
(if assigned to another Person)
If shares are to be registered
in the name of and delivered
to a Person other than the
Holder, please (i) print such REGISTERED HOLDER
Person's name and address and
(ii) provide a guarantee of Please print name and address of
your signature: Registered Holder:
- ----------------------------------- ----------------------------------------
Name Name
- ----------------------------------- ----------------------------------------
Address Address
- ----------------------------------- ----------------------------------------
- ----------------------------------- ----------------------------------------
- ----------------------------------- ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ________________________________________
A-13
Transfer Instructions for Pledged Preferred Shares transferable upon a
Termination Event:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this PEPS Units Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of PEPS Units evidenced by this PEPS Units Certificate
specified below. The undersigned Holder directs that a certificate for Common
Shares deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
PEPS Units Certificate representing any PEPS Units evidenced hereby as to which
Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Preferred Shares deliverable upon such Early
Settlement will be transferred in accordance with the transfer instructions set
forth below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:________________________ ________________________________________
Signature
Signature Guarantee:____________________
A-15
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If Common Shares or PEPS Units REGISTERED HOLDER
Certificates are to be
registered in the name of and
delivered to and Pledged
Preferred Shares are to be
transferred to a Person other
than the Holder, please print Please print name and address of
such Person's name and address: Registered Holder:
- ----------------------------------- ----------------------------------------
Name Name
- ----------------------------------- ----------------------------------------
Address Address
- ----------------------------------- ----------------------------------------
- ----------------------------------- ----------------------------------------
- ----------------------------------- ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ________________________________________
A-16
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
========================================================================================================================
Number of PEPS
Amount of Amount of Units evidenced Signature of
increase in decrease in by this Global authorized
Number of PEPS Number of PEPS Certificate signatory of
Units evidenced Units evidenced following such Trustee or
by the Global by the Global decrease or Securities
Date Certificate Certificate increase Custodian
=======================================================================================================================
=======================================================================================================================
=======================================================================================================================
=======================================================================================================================
=======================================================================================================================
=======================================================================================================================
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A-17
EXHIBIT B
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
- ----------
- ----------
Attention:
Telecopy: __________
Re: __________ PEPS Units of PartnerRe Ltd., a Bermuda company
(the "Company")
Please refer to the Purchase Contract Agreement, dated as of November o,
2001 (the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of PEPS Units from time to time.
We hereby notify you that a Termination Event has occurred and that
Preferred Shares underlying your ownership interest in _____ PEPS Units have
been released and are being held by us for your account pending receipt of
transfer instructions with respect to such Preferred Shares (the "Released
Securities").
Pursuant to Section 3.13 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your PEPS Units
effected through book-entry or by delivery to us of your PEPS Units Certificate,
we shall transfer the Released Securities by book-entry transfer or other
appropriate procedures, in accordance with your instructions. In the event you
fail to effect such transfer or delivery, the Released Securities and any
dividends or other distributions thereon, shall be held in our name, or a
nominee in trust for your benefit, until such time as such PEPS Units are
transferred or your PEPS Units Certificate is surrendered or satisfactory
evidence is provided that such PEPS Units Certificate has been destroyed, lost
or stolen, together with any indemnification that we or the Company may require.
Date: By: JPMORGAN CHASE BANK
----------------------------------------
Name:
Title: Authorized Officer
B-2
EXHIBIT C
NOTICE TO SETTLE BY CASH
JPMorgan Chase Bank
o
o
Attention: Corporate Trust Department
Re: _______ PEPS Units of PartnerRe Ltd., a Bermuda company (the
"Company")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.02 of the Purchase Contract Agreement, dated as of November o, 2001
(the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers' check or wire transfer, in immediately
available funds), $______ as the Purchase Price for the Common Shares issuable
to such Holder by the Company under the related Purchase Contracts on the
Purchase Contract Settlement Date. The undersigned Holder hereby instructs you
to notify promptly the Collateral Agent of the undersigned Holders' election to
make such cash settlement with respect to the Purchase Contracts related to such
Holder's PEPS Units.
Date:________________________ ________________________________________
Signature
Signature Guarantee:____________________
Please print name and address of Registered Holder:
C-1
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Purchase Contract through Remarketing)
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Telecopier No.: 212-946-8158
Attention: Institutional Trust Services
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Telecopier No.: 212-946-8158
Attention: Institutional Trust Services
Re: __________ PEPS Units of PartnerRe Ltd., a Bermuda company
(the "Company")
Please refer to the Purchase Contract Agreement, dated as of November o,
2001 (the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the Holders of PEPS Units from time to time.
In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on instructions and Cash Settlements received from Holders of PEPS Units
as of 11:00 a.m. (New York City time), the fifth Business Day preceding the
Purchase Contract Settlement Date, we hereby notify you that ______ Preferred
Shares are to be tendered for purchase in the Remarketing.
Date: By: JPMORGAN CHASE BANK
----------------------------------------
Name:
Title: Authorized Officer
D-1