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AMENDED AND RESTATED RIGHTS AGREEMENT
dated as of
July 29, 2002
between
THE BANK OF BERMUDA LIMITED
and
BERMUDA TRUST COMPANY LIMITED
as Rights Agent
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AMENDED AND RESTATED RIGHTS AGREEMENT
Table of Contents
Page
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ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions ............................................ 3
ARTICLE II
THE RIGHTS
2.1 Summary of Rights .............................................. 14
2.2 Legend on Common Share Certificates ............................ 14
2.3 Exercise of Rights; Separation of Rights ....................... 15
2.4 Adjustments to Exercise Price; Number of Rights ................ 21
2.5 Date on Which Exercise is Effective ............................ 24
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates ............................................ 25
2.7 Registration, Registration of Transfer and
Exchange ....................................................... 26
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates ................................................... 28
2.9 Persons Deemed Owners .......................................... 29
2.10 Delivery and Cancellation of Certificates ...................... 30
2.11 Agreement of Rights Holders .................................... 31
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in ........................................................ 32
3.2 Flip-over ...................................................... 36
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ARTICLE IV
THE RIGHTS AGENT
4.1 General ........................................................ 38
4.2 Merger or Consolidation or Change of Name of
Rights Agent ................................................... 39
4.3 Duties of Rights Agent ......................................... 41
4.4 Change of Rights Agent ......................................... 45
ARTICLE V
MISCELLANEOUS
5.1 Redemption ..................................................... 47
5.2 Expiration ..................................................... 48
5.3 Issuance of New Rights Certificates ............................ 48
5.4 Supplements and Amendments ..................................... 49
5.5 Fractional Shares .............................................. 50
5.6 Rights of Action ............................................... 51
5.7 Holder of Rights Not Deemed a Stockholder ...................... 51
5.8 Notice of Proposed Actions ..................................... 52
5.9 Notices ........................................................ 53
5.10 Suspension of Exercisability ................................... 54
5.11 Costs of Enforcement ........................................... 54
5.12 Successors ..................................................... 55
5.13 Benefits of this Agreement ..................................... 55
5.14 Determination and Actions by the Board of
Directors, etc ................................................. 55
5.15 Descriptive Headings ........................................... 56
5.16 Governing Law .................................................. 56
5.17 Counterparts ................................................... 57
5.18 Severability ................................................... 57
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EXHIBIT A
Form of Rights Certificate
(Together with Form of
Election to Exercise)
EXHIBIT B
Form of Deed of Covenant
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AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
AMENDED AND RESTATED RIGHTS AGREEMENT (as amended from time to time,
this "Agreement"), dated as of July 29, 2002, between The Bank of Bermuda
Limited, a Bermuda company (the "Company"), and Bermuda Trust Company Limited,
as Rights Agent (the "Rights Agent", which term shall include any successor
Rights Agent hereunder).
WITNESSETH:
WHEREAS, on November 24, 1997, the Board of Directors of the Company,
in accordance with a resolution of the shareholders of the Company approved on
June 12, 1997 delegated to a Committee of the said Board the power to authorize
a distribution of rights, and the said Committee on December 3, 1997 authorized
a distribution of rights ("Rights") to the holders of Common Shares (as
hereinafter defined) as well as with respect to the holders of certain warrants
and options then outstanding, at the close of business on December 12, 1997 (the
"Record Date"), and has authorised the issuance, upon the terms and subject to
the conditions hereinafter set forth, of one right in respect of each share
issued after the Record Date (others than shares issued pursuant to certain
Warrants and Options, as to which rights are distributed as of the Record Date),
each Right representing the right initially to subscribe for one
quarter of one Share upon the terms and subject to the conditions hereinafter
set forth;
WHEREAS, in accordance with the foregoing, the Company and the Rights
Agent entered into a Rights Agreement dated as of December 10, 1997 (the
"Original Rights Agreement");
WHEREAS, there are no longer any warrants outstanding and all
certificates for Common Shares received with respect to all options exercised
since the Record Date also evidence the Rights associated with such Common
Shares in accordance with the Original Rights Agreement;
WHEREAS, the Board of Directors has terminated all Rights previously
issued with respect to options which have not yet been exercised, and instead
has authorised the issuance of one Right in respect of each Common Share issued
on or after the date hereof (including pursuant to the exercise of options) and
prior to the Distribution Date;
WHEREAS, the Original Rights Agreement provides that prior to the
Distribution Date (as defined in the Original Rights Agreement), the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of the Original Rights Agreement without the approval of any holders
of certificates representing Common Shares;
WHEREAS, the Distribution Date (as defined in the Original Rights
Agreement) has not occurred; and
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WHEREAS, the Company and the Rights Agent wish to amend and restate the
Original Rights Agreement in its entirety as follows:
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
15% or more of the outstanding Common Shares; provided, however, that the term
"Acquiring Person" shall not include any Person (i) who shall become the
Beneficial Owner of 15% or more of the outstanding Common Shares solely as a
result of a purchase for cancellation by the Company of Common Shares, until
such time hereafter or thereafter as any of such Persons shall become the
Beneficial Owner (other than by means of a bonus issue, a stock dividend, share
subdivision or stock split) of any additional Common Shares, (ii) who is the
Beneficial Owner of 15% or more of the outstanding Common Shares but who
acquired Beneficial Ownership of Common Shares without any plan or intention to
seek or affect control of the Company, if such Person promptly enters into an
irrevocable commit-
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ment promptly to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting, with respect to such shares), sufficient
Common Shares (or securities convertible into, exchangeable into or exercisable
for Common Shares) so that such Person ceases to be the Beneficial Owner of 15%
or more of the outstanding Common Shares or (iii) who Beneficially Owns Common
Shares consisting solely of one or more of (A) Common Shares Beneficially Owned
pursuant to the grant or exercise of an option granted to such Person by the
Company in connection with an agreement to amalgamate with, or acquire, the
Company entered into prior to a Flip-in Date, (B) Common Shares (or securities
convertible into, exchangeable into or exercisable for Common Shares)
Beneficially Owned by such Person or its Affiliates or Associates at the time of
grant of such option, (C) Common Shares (or securities convertible into,
exchangeable into or exercisable for Common Shares) acquired by Affiliates or
Associates of such Person after the time of such grant which, in the aggregate,
amount to less than 1% of the outstanding shares of Common Shares or (D) Common
Shares (or securities convertible into, exchangeable into or exercisable for
Common Shares) which are held by such Person in trust accounts, managed accounts
and the like or otherwise held in a fiduciary capacity, that are beneficially
owned by third persons who are not Affiliates or Associates of such Person or
acting together
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with such Person to hold such shares, or which are held by such Person in
respect of a debt previously contracted. In addition, the Company, any
wholly-owned Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly-owned Subsidiary of the Company
shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rules 13d-3 and 13d-5 under the Unites
States Securities Exchange Act of 1934, as such Rules are in effect on the date
of this Agreement as well as any securities as to which such Person or any of
such Person's Affiliates or Associates has the right to become Beneficial Owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial
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Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
security (i) solely because such security has been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered security is accepted for payment or exchange or
(ii) solely because such Person or any of such Person's Affiliates or Associates
has or shares the power to vote or direct the voting of such security pursuant
to a revocable proxy given in response to a public proxy solicitation, except if
such power (or the arrangements relating thereto) is then reportable under Item
6 of Schedule 13D under the Securities Exchange Act of 1934 (or any similar
provision of a comparable or successor report). Notwithstanding the foregoing,
no officer or director of the Company shall be deemed to Beneficially Own any
securities of any other Person by virtue of any actions such officer or director
takes in such capacity. For purposes of this Agreement, in determining the
percentage of the outstanding Common Shares with respect to which a Person is
the Beneficial Owner, all shares as to which such Person is deemed the
Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the Islands of Bermuda are generally
authorised or obligated by law or executive order to close.
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"Close of business" on any given date shall mean 5:00 p.m. Bermuda time
on such date (or, if such date is not a Business Day, 5:00 p.m. Bermuda time on
the next succeeding Business Day).
"Common Shares" shall mean the common shares, par value $1.00 per
share, of the Company.
"Companies Act" means the Companies Xxx 0000 of Bermuda, as amended
from time to time.
"Distribution Date" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the
Distribution Date that would otherwise have occurred) after the date on which
any Person commences a tender or exchange offer which, if consummated, would
result in such Person becoming an Acquiring Person and (ii) the Flip-in Date;
provided, that if any tender or exchange offer referred to in clause (i) of this
paragraph is cancelled, terminated or otherwise withdrawn prior to the
Distribution Date without the purchase of any Common Shares pursuant thereto,
such offer shall be deemed, for purposes of this paragraph, never to have been
made.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
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"Expiration Date" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) July 29, 2012 and (iv) pursuant to an agreement
entered into prior to a Flip-in Date, upon the amalgamation of the Company into
another company or with another company in which all Common Shares are either
converted into cash and/or securities of another corporation or, with respect to
treasury shares and shares owned by the other party to the merger or its
affiliates, cancelled.
"Flip-in Date" shall mean the tenth business day after any Share
Acquisition Date or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-in
Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in the
case of a Flip-over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which Common Shares
are being converted or exchanged and, if no such securities are being issued,
the other party to such Flip-over Transaction or Event and (ii) in the case of a
Flip-over Transaction or Event referred to in clause (ii) of the definition
thereof, the Person receiving the greatest portion of the assets or earning
power being transferred in such Flip-over Transaction or Event, provided in all
cases if such Person
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is a subsidiary of a corporation, the parent corporation shall be the Flip-over
Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other persons similarly responsible for direction of the business and
affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-in Date in which, directly or indirectly, (i) the
Company shall amalgamate or enter into another transaction pursuant to which all
of the Common Shares are acquired, including, without limitation, pursuant to
Section 102 of the Companies Act, with any other Person if, at the time of the
amalgamation or other transaction or at the time the Company enters into any
agreement with respect to any such amalgamation or other transaction, the
Acquiring Person Controls the Board of Directors of the Company and either (A)
any term of or arrangement concerning the treatment of shares of capital stock
in such amalgamation or other transaction relating to the Acquiring Person is
not identical to the terms and arrangements relating to other holders of the
Common Shares or (B) the Person with whom the transaction or series of
transactions occurs is the Acquiring Person or an Affiliate or Associate of the
Acquiring Person or (ii) the Company shall sell or otherwise
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transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of the operating
income or cash flow, of the Company and its Subsidiaries (taken as a whole) to
any Person (other than the Company or one or more of its wholly owned
Subsidiaries) or to two or more such Persons which are Affiliates or Associates
or otherwise acting in concert, if, at the time of the entry by the Company (or
any such Subsidiary) into an agreement with respect to such sale or transfer of
assets, the Acquiring Person Controls the Board of Directors of the Company. An
Acquiring Person shall be deemed to Control the Company's Board of Directors
when, following a Flip-in Date, the persons who were directors of the Company
before the Flip-in Date shall cease to constitute a majority of the Company's
Board of Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days during such period of 20 Trading Days
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not to be fully comparable with the closing price on such date, each
such closing price so used shall be appropriately adjusted in order to make it
fully comparable with the closing price on such date. The closing price per
share of any securities on any date shall be the last reported sale price,
regular way, or, in case no such sale takes place or is quoted on such date, the
average of the closing bid and asked prices, regular way, for each share of such
securities, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange, Inc. or, if the securities are not listed or admitted
to trading on the New York Stock Exchange, Inc., as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such other
system then in use, or, if on any such date the securities are not listed or
admitted to trading on the New York Stock Exchange, Inc. or quoted by any such
organization, as reported by the Bermuda Stock Exchange; provided, however, that
if on any such date the securities are not listed or admitted to trading on any
of the foregoing, the closing price per share of such securities on such date
shall mean the fair value per share of securities on such date as determined in
good faith by the Board of Directors of the Company, after consultation with a
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
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"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement), corporation or
other entity.
"Purchase Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Purchase Price
shall equal $50.
"Redemption Price" shall mean an amount equal to one cent, $0.01.
"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Share Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has become
such.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the principal securities exchange which such securities are listed
or
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admitted to trading is open for the transaction of business or, if such
securities are not listed or admitted to trading on any securities exchange, a
Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the date hereof,
the Company will notify each shareholder of the amended terms of the Rights at
such holder's address as shown by the records of the Company.
2.2 Legend on Common Share Certificate. Certificates for the Common
Shares issued after the date hereof but prior to the Distribution Date shall
evidence one Right for each Common Share represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
Until the Distribution Date (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights Agreement,
dated as of July 29, 2002 (as such may be amended from time to time, the
"Rights Agreement"), between The Bank of Bermuda Limited (the "Company")
and Bermuda Trust Company Limited, as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may become exercisable for securities or assets of the Company or
of another entity, may be exchanged for Common Shares or other securities
or assets of the Company, may expire, may become void (if they are
"Beneficially Owned" by an "Acquiring Person" or an Affiliate or Associate
thereof, as such terms are defined in the Rights Agreement, or by any
transferee of any of the fore-
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going) or may be evidenced by separate certificates and may no longer be
evidenced by this certificate. The Company will mail or arrange for the
mailing of a copy of the Rights Agreement to the holder of this
certificate without charge promptly after the receipt of a written request
therefor.
Certificates representing Common Shares that were issued and outstanding at the
Record Date shall evidence one Right for each Common Share evidenced thereby
notwithstanding the absence of the foregoing legend and certificates
representing Common Shares issued after the Record Date but prior to the date
hereof bearing the form of legend set forth in the Original Rights Agreement
shall evidence one Right for each Common Share on the terms set forth in this
Agreement.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections
3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each Right will
entitle the holder thereof, after the Distribution Date and prior to the
Expiration Time, to purchase, for the Exercise Price, one quarter of Common
Share.
(b) Until the Distribution Date, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate for the associated Common Share
(together, in the case of certificates issued prior to the Record Date, with the
letter mailed to the record holder thereof pursuant to the Original Rights
Agreement) and will be transferable only together with, and will be transferred
by a transfer
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(whether with or without such letter) of, such associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1 and 5.10,
after the Distribution Date and prior to the Expiration Time, the Rights (i) may
be exercised and (ii) may be transferred independent of Common Shares. Promptly
following the Distribution Date, the Rights Agent will mail to each holder of
record of Common Shares as of the Distribution Date (other than any Person whose
Rights have become void pursuant to Section 3.1(b)), at such holder's address as
shown by the records of the Company (the Company hereby agreeing to furnish
copies of such records to the Rights Agent for this purpose), (x) a certificate
(a "Rights Certificate") in substantially the form of Exhibit A hereto
appropriately completed, representing the number of Rights held by such holder
at the Distribution Date and having such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage, and (y) a disclosure statement
describing the Rights.
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(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be exercised on
any Business Day after the Distribution Date and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Purchase Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for Common Shares or depositary receipts (or both) in a name other
than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to Sections
3.1, 5.1 and 5.10, the Rights Agent will thereupon promptly (i)(A) requisition
from a transfer agent share certificates evidencing such number of Common Shares
or other securities to be purchased (the Company hereby irrevocably authorizing
its transfer agents to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 5.5 not to issue certificates representing fractional
shares, requisition
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from the depositary selected by the Company depositary receipts representing the
fractional shares to be purchased or requisition from the Company the amount of
cash to be paid in lieu of fractional shares in accordance with Section 5.5 and
(ii) after receipt of such certificates, depositary receipts and/or cash,
deliver the same to or upon the order of the registered holder of such Rights
Certificate, registered (in the case of certificates or depositary receipts) in
such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorised, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the laws of Bermuda, United States Securities Act of 1933 or the
United States Securities Exchange Act of 1934, and the rules
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and regulations thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights; (iii) file
the Deed of Covenant in substantially the form attached hereto as Exhibit B at
the Distribution Date; and (iv) pay when due and payable any and all Bermuda and
United States federal and state governmental changes, stamp duties, transfer
taxes and charges which may be payable in respect of the original issuance or
delivery of the Rights Certificates or of any shares issued upon the exercise of
Rights, provided that the Company shall not be required to pay any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable for securities in
any jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, such exercise shall not be permitted under applicable law or
a registration statement in respect of such securities shall not have been
declared effective. In particular, the Rights do not constitute an offer to, and
may not be exercised by, any Person in Bermuda (a "Subject Person") unless and
until, or to the extent that, the Board of Directors of the Company determines
that any securities
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which would be acquired on the exercise of any Rights by a Subject Person (or by
Subject Persons generally) may lawfully be offered to that Subject Person (or to
Subject Persons generally). The Company shall use its best efforts to prepare,
file and publish, on the Distribution Date or as soon as practicable thereafter
(if and to the extent that such steps have not previously been taken), a
prospectus or other appropriate documents and/or take such other steps as the
Board of Directors deems expedient under applicable laws in Bermuda in order to
extend the offer of such securities to Subject Persons generally. The Company
further agrees to seek to obtain any necessary approvals of the Bermuda Monetary
Authority under the Exchange Control Xxx 0000 and related regulations, and the
exercise of Rights will, if required by law, be subject to obtaining such
approvals. If and to the extent that the Board of Directors determines that
compliance with the laws of Bermuda or any other territory would be
impracticable or unduly onerous in order for the securities which would be
acquired on the exercise of any Rights lawfully to be offered within that
territory, the Board of Directors may arrange for the securities which would
otherwise be issued on the exercise of Rights by Persons in the relevant
territory or territories ("Excluded Persons") to be allotted or issued to some
other Person nominated by the Board of Directors for the purpose and on the
terms that:
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(x) such securities shall be sold in the market or
otherwise for the benefit of the Excluded Persons, if
they can be sold at a price in excess of the total
Purchase Price referable to such securities and the
expenses of sale; and
(y) the proceeds of sale, after deducting a sum equal to
the total Purchase Price and expenses of sale, will be
distributed to the Excluded Persons in the proportions
to which, but for the provisions of this paragraph,
they would otherwise have been entitled to exercise
Rights, provided that no distribution need be made to
any Excluded Person of a sum of less than $5 (any such
sums being payable to the Company for its own benefit).
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event
the Company shall at any time after the date hereof and prior to the
Distribution Date (i) declare or pay a dividend on Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares or (iii) combine the
outstanding Common Shares into a smaller number of Common Shares, (x) the
Purchase Price in effect after such adjustment will be equal to the Purchase
Price in effect immediately prior to such adjustment divided by the number of
Common Shares (the "Expansion Factor") that a holder of one Common Share
immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the Common
Shares with
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respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision or
combination, so that each such Common Share will have exactly one Right
associated with it. Each adjustment made pursuant to this paragraph shall be
made as of the payment or effective date for the applicable dividend,
subdivision or combination.
In the event the Company shall at any time after the date hereof and
prior to the Distribution Date issue any Common Shares otherwise than in a
transaction referred to in the preceding paragraph, each such Common Share so
issued shall automatically have one new Right associated with it, which Right
shall be evidenced by the certificate representing such share. To the extent
provided in Section 5.3, Rights shall be issued by the Company in respect of
Common Shares that are issued or sold by the Company after the Distribution
Date.
(b) In the event the Company shall at any time after the date hereof
and prior to the Distribution Date issue or distribute any securities or assets
in respect of, in lieu of or in exchange for Common Shares (other than pursuant
to a regular periodic cash dividend or a dividend paid solely in Common Shares)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such
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adjustments, if any, in the Purchase Price, number of Rights and/or securities
or other property purchasable upon exercise of Rights as the Board of Directors
of the Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Purchase Price made pursuant to this Section
2.4 shall be calculated to the nearest cent. Whenever an adjustment to the
Purchase Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Shares a copy
of such certificate.
(d) Rights Certificates shall represent the right to purchase the
securities purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon exercise of the Rights,
even though such certificates may continue to express the securities purchasable
at the time of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person whose name is
entered in the Company's register of
-22-
members for Common Shares upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the shares represented thereby on
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company in any manner authorised by the Bye-laws of the Company with respect to
certificates for Common Shares of the Company. The signature of any of officers
on the Rights Certificates and affixation of the Company's common seal may be
manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have
-23-
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Distribution Date, the Company will notify the
Rights Agent of such Distribution Date and will deliver Rights Certificates
executed by the Company to the Rights Agent for countersignature, and, subject
to Section 3.1(b), the Rights Agent shall manually countersign and deliver such
Rights Certificates to the holders of the Rights pursuant to Section 2.3(c)
hereof. No Rights Certificate shall be valid for any purpose unless manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Distribution Date, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Distribution Date as herein provided. In the event that the Rights
Agent shall cease to be the Rights Registrar, the Rights Agent will have the
right to examine the Rights Register at all reasonable times after the
Distribution Date.
-24-
After the Distribution Date and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Sections 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a
-25-
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed or terminated under
Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost
-26-
or stolen Rights Certificate, a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment 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 Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b), shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Distribution Date, the associated Common Share
certificate) for registration of transfer, the Company, the Rights Agent and
any agent of the Company or the Rights Agent may deem and treat the person in
whose name such Rights Certificate (or, prior to the Distribution Date, such
Common Share certificate) is registered as the absolute owner thereof and of the
Rights
-27-
evidenced thereby for all purposes whatsoever, including the payment of the
Redemption Price and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the registered
holder of such Rights (or, prior to the Distribution Date, the associated Common
Shares.
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall return all cancelled Rights
Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting
the same consents and agrees with the
-28-
Company and the Rights Agent and with every other holder of Rights that:
(a) prior to the Distribution Date, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
Common Share;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
-29-
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of Common Shares having an aggregate Market Price on the Share Acquisition Date
equal to twice the Purchase Price for an amount in cash equal to the Purchase
Price (such right to be appropriately adjusted in order to protect the interests
of the holders of Rights generally in the event that on or after such Share
Acquisition Date an event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the Common Shares).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Share Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person present-
-30-
ing the same will not complete the certification set forth at the end of the
form of assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and Associates) as
the Company shall reasonably request, then the Company shall be entitled
conclusively to deem the Beneficial Owner thereof to be an Acquiring Person or
an Affiliate or Associate thereof or a transferee of any of the foregoing and
accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding Common Shares, elect to
exchange all (but not less than all) the then outstanding Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
3.1(b)) for Common Shares at an exchange ratio of two Common Shares per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Distribution Date an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Shares (such exchange ratio, as adjusted
from time to time, being hereinafter referred to as the "Exchange Ratio").
-31-
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of Common Shares equal to the
Exchange Ratio. Promptly after the action of the Board of Directors electing to
exchange the Rights, the Company shall give notice thereof (specifying the steps
to be taken to receive Common Shares in exchange for Rights) to the Rights Agent
and the holders of the Rights (other than Rights that have become void pursuant
to Section 3.1(b)) outstanding immediately prior thereto by mailing such notice
in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the register of members of the Company is closed, such Person
shall be
-32-
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the stock transfer
books of the Company are open.
(d) If the number of Common Shares in the Company's authorised capital
but not outstanding or reserved for issuance other than upon exercise of the
Rights is not sufficient to permit the exercise or exchange in full of the
Rights in accordance with Section 3.1(a) or (c), the Company shall take such
action as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Share
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Purchase Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Purchase Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Purchase Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a
Common Share on the Flip-in Date times the Exchange Ratio in effect on
-33-
the Flip-in Date, where in any case set forth in (x) or (y) above the fair value
of such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Purchase Price for an
amount in cash equal to the Purchase Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall
-34-
assume, by virtue of such Flip-over Transaction or Event and such supplemental
agreement, all the obligations and duties of the Company pursuant to this
Agreement. The provisions of this Section 3.2 shall apply to successive
Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material respect
the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the admin-
-35-
istration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any
company into which the Rights Agent or any successor Rights Agent may be
amalgamated or merged or with which it may be consolidated, or any corporation
resulting from any amalgamation, merger or consolidation to
-36-
which the Rights Agent or any successor Rights Agent is a party, or any company
succeeding to the stockholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 4.4 hereof. In case at the time such successor Rights Agent succeeds to
the agency created by this Agreement any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and
-37-
in case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by a person believed by the Rights Agent to be the Chief
Executive Officer, the Chief Financial Officer, the
-38-
Chief Operating Officer, the General Counsel or the Corporate Secretary (an
"Officer") and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate for securities
purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in
-39-
any Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by
-40-
the Rights Agent an Officer of the Company, and to apply to such persons for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agree-
-41-
ment upon 90 days' notice (or such lesser notice as is acceptable to the
Company) in writing mailed to the Company and to each transfer agent of Common
Shares by registered or certified mail. The Company may remove the Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent and to each transfer
agent of the Common Shares by registered or certified mail. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of any Rights (which holder shall,
with such notice, submit such holder's Rights Certificate for inspection by the
Company), then the holder of any Rights may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of Bermuda or of the
United States or any State of the United States, in good standing, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and, with respect to United States entities, is
both subject to supervision or examination by federal or state authority and has
at the time of its appointment as
-42-
Rights Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares. Failure
to give any notice provided for in this Section 4.4, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the Flip-in Date, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or Common Shares or other
-43-
securities of the Company deemed by the Board of Directors, in the exercise of
its sole discretion, to be at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form
-44-
as may be approved by its Board of Directors to reflect any adjustment or change
in the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of Common Shares by the Company
following the Distribution Date and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into Common Shares or to options,
in each case issued or granted prior to, and outstanding at, the Distribution
Date, the Company shall issue to the holders of such Common Shares, Rights
Certificates representing the appropriate number of Rights in connection with
the issuance or sale of such Common Shares; provided, however, in each case, (i)
no such Rights Certificate shall be issued, if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or to the
Person to whom such Rights Certificates would be issued, (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
-45-
5.4 Supplements and Amendments. Prior to the Distribution Date, the
Company may, at any time or from time to time, supplement or amend this
Agreement in any respect without the approval of any holders of Rights.
Thereafter, the Company may, at any time or from time to time, supplement or
amend this Agreement without the approval of any holders of Rights in order to
cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent herein, or to make any other provisions
in regard to matters or questions arising thereunder which the Company may deem
necessary or desirable and which do not materially adversely affect the
interests of holders of Rights, and may make any other supplements or amendments
with the approval of holders of all Rights. The Rights Agent agrees it will
execute and deliver any supplement or amendment requested by the Company to
effectuate any of the foregoing purposes. The Rights Agent shall have no
obligation, responsibility or liability to any holder of Rights or any other
person for executing and delivering any such supplement or amendment to this
Agreement.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights, the
Company shall, in lieu thereof, in the sole discretion of the Board of
Directors, either (a) evidence such fractional shares by depositary
-46-
receipts issued pursuant to an appropriate agreement between the Company and a
depositary selected by it, providing that each holder of a depositary receipt
shall have all of the rights, privileges and preferences to which such holder
would be entitled as a beneficial owner of such fractional share, or (b) sell
such shares on behalf of the holders of Rights and pay to the registered holder
of such Rights the appropriate fraction of the price per share received upon
such sale.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of
the Rights Agent or of the holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise such holder's Rights in the manner provided in such holder's
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific
-47-
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
the Distribution Date and prior to the Expiration Time (i) to effect or permit
occurrence of any Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of
-48-
such proposed action, which shall specify the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date of
the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
The Bank of Bermuda Limited
0 Xxxxx Xxxxxx
Xxxxxxxx XX 11
Attention: Corporate Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Bermuda Trust Company Limited
0 Xxxxx Xxxxxx
Xxxxxxxx XX 00
Xxxxxxx
Xxxxxxxxx: Corporate Secretary
-49-
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with the Companies Act or United States federal or
state securities laws, the Company may suspend the exercisability of the Rights
for a reasonable period in order to take such action or comply with such laws.
In the event of any such suspension, the Company shall issue as promptly as
practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
-50-
5.11 Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to
-51-
(i) interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors of the Company to any
liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF ISLANDS OF BERMUDA AND
FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH SUCH LAWS
APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH
JURISDICTION. THE COMPANY AND EACH HOLDER OF RIGHTS HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE ISLANDS OF BERMUDA FOR PURPOSES OF
ANY PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, AND THE COMPANY AND EACH HOLDER OF RIGHTS HEREBY CONSENTS
TO THE
-52-
JURISDICTION OF SUCH COURTS (AND THE APPROPRIATE APPELLATE COURTS THEREFROM IN
ANY SUCH PROCEEDING) AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING VENUE OF ANY
SUCH PROCEEDING IN ANY SUCH COURT OR THAT ANY SUCH PROCEEDING WHICH IS BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
5.17 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to
such jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application
-53-
of such term or provision to circumstances other than those as to which it is
held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as a deed under seal as of the date first above
written.
The Common Seal of the Bank
of Bermuda Limited was
hereunto affixed in the
presence of:
/s/ Xxxxxx X. Xxxxxx
------------------------------
/s/ Xxxxx X. Xxxxx
------------------------------
The Common Seal of Bermuda
Trust Company Limited was
hereunto affixed in the
presence of:
/s/ Xxxxx X. Xxxxxxx
------------------------------
/s/ Xxxxxxx X. Xxxxxx
------------------------------
-54-
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE,
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF
THE FOREGOING WILL BE VOID.
Rights Certificate
THE BANK OF BERMUDA LIMITED
This certifies that ____________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement, dated as of July 29,
2002 (as amended from time to time, the "Rights Agreement"), between The Bank of
Bermuda Limited, a Bermuda company (the "Company"), and Bermuda Trust Company
Limited, as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to the close of business on July 29, 2012, one quarter of a
fully paid Common Share, par value $1.00 per share (the "Common Shares"), of the
Company (subject to adjustment as provided in the Rights Agreement)
at the Purchase Price referred to below, upon presentation and surrender of this
Rights Certificate with the Form of Election to Exercise duly executed at the
principal office of the Rights Agent in Hamilton, Bermuda. The Purchase Price
shall initially be $50 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Company Shares, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the
-2-
Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor evidencing an aggregate number
of Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate shall
be exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced
by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
quarter of a Common Share per Right (or, in certain cases, other securities or
assets of the Company), subject in each case to adjustment in certain events as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted
-3-
to shareholders at any meeting thereof, or to give or with hold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ____________
ATTEST: THE BANK OF BERMUDA LIMITED
By
------------------------------- ----------------------------------
Secretary
Countersigned:
BERMUDA TRUST COMPANY LIMITED
By
-----------------------------
Authorized Signature
-4-
06 89-5P [Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _________________________ hereby
sells, assigns and transfers unto __________________________
(Please print name
________________________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, 20__
-------------------------------
Signature (Signature must
correspond to name as written
upon the face of this Rights
Certificate in every
particular, without alteration
or enlargement or any change
whatsoever)
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
-------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-2-
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
----------------------------
(To be executed if holder desires to exercise
the Rights Certificate.)
TO: THE BANK OF BERMUDA LIMITED
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the Common Shares issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name of:
-----------------------------------
Address:
-----------------------------------
-----------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
-----------------------------------
Address:
-----------------------------------
-----------------------------------
Dated: _______________, 20__
-------------------------------
Signature (Signature must
correspond to name as written
upon the face of the attached
Rights Certificate in every
particular, without alteration
or enlargement or any change
whatsoever)
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and Common Shares, that the Rights evidenced by the attached Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
-------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-1-
EXHIBIT B
DEED OF COVENANT
----------------
THIS DEED OF COVENANT is made as of 29 July 2002.
BY
(1) THE BANK OF BERMUDA LIMITED (the "Company")
IN FAVOUR OF
(2) THE RIGHTS HOLDERS (as defined below).
WHEREAS
(A) The Company has entered a rights agreement with Bermuda Trust Company
Limited, a Bermuda company (the "Rights Agent") dated as of 29 July 2002
(the "Rights Agreement") to amend and restate the Original Rights Agreement
(as defined in the Rights Agreement).
(B) The Rights Agreement provides for one Right for each common share of the
Company, with each Right initially representing the right to purchase one
quarter of a Common Share upon the terms and subject to the conditions as
set out in the Rights Agreement.
(C) The Company wishes to make arrangements for the enforcement of the Rights
Agreement by the Rights Holders.
THIS DEED OF COVENANT WITNESSES as follows:
1. INTERPRETATION
1.1 In this Deed unless the context otherwise requires the following words and
expressions shall have the following meanings:
"Acquiring Person" has the meaning set forth in the Rights Agreement.
this "Deed" means this Deed of Covenant;
"Right" has the meaning set forth in the Rights Agreement;
2 EXHIBIT B
"Rights Certificate" has the meaning set forth in the Rights Agreement;
"Rights Holders" means the holders from time to time of Rights;
1.2 In this Deed unless the context otherwise requires:
1.2.1 references to statutory provisions shall be construed as references
to those provisions as amended or re-enacted or as their application
is modified by other provisions from time to time and shall include
references to any provisions of which they are re-enactments
(whether with or without modification);
1.2.2 references to clauses and schedules are references to clauses hereof
and schedules hereto; references to sub-clauses or paragraphs are,
unless otherwise stated, references to sub-clauses of the clause or
paragraphs of the schedule in which the reference appears;
1.2.3 references to the singular shall include the plural and vice versa
and references to the masculine shall include the feminine and/or
neuter and vice versa; and
1.2.4 references to persons shall include companies, partnerships,
associations and bodies of persons, whether incorporated or
unincorporated.
2. DIRECT RIGHTS
2.1 Each Rights Holder shall have against the Company the right (the "Direct
Rights") to enforce the provisions of the Rights Agreement in accordance
with the terms of the Rights Agreement.
2.2 No further action shall be required on the part of the Company or any other
person for the Policy Holders to enjoy the Direct Rights.
3. DEPOSIT OF DEED
3 EXHIBIT B
This Deed shall be deposited with and held by the Secretary of the Company
from time to time at the Company's registered office until the date on
which all the obligations of the Company under or in respect of any Rights
(including, without limitation, its obligations under this Deed) have been
discharged in full. The Company hereby acknowledges the right of every
Rights Holder to the production of this Deed.
4. COVENANTS
The Company hereby warrants, represents and covenants with each Rights
Holder that it has all corporate power, and has taken all necessary
corporate or other steps, to enable it to execute, deliver and perform this
Deed, and that this Deed constitutes a legal, valid and binding obligation
enforceable in accordance with its terms subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and
subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
5. BENEFIT OF DEED
5.1 This Deed shall take effect as a deed poll for the benefit of the Rights
Holders from time to time.
5.2 This Deed shall enure to the benefit of each Rights Holder and its (and any
subsequent) successors and assigns, each of which shall be entitled
severally to enforce this Deed against the Company.
5.3 The Company shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder. Each Rights Holder shall be
entitled to assign all or any of its rights and benefits hereunder.
6. MISCELLANEOUS
6.1 If any of the clauses, conditions, covenants or restrictions of this Deed
or any deed or document emanating from it shall be found to be void but
would be valid if some part thereof were deleted or modified, then such
clause, condition, covenant or restriction
4 EXHIBIT B
shall apply with such deletion or modification as may be necessary to make
it valid and effective.
6.2 The headings in this Deed are inserted for convenience only and shall not
affect the construction of this Deed.
7. PROPER LAW AND JURISDICTION
The terms and conditions of this Deed and the rights of the parties
hereunder shall be governed by and construed in all respects in accordance
with the laws of the Islands of Bermuda. The parties to this Deed hereby
irrevocably agree that the courts of Bermuda shall have exclusive
jurisdiction in respect of any dispute, suit, action, arbitration or
proceedings ("Proceedings") which may arise out of or in connection with
this Deed and waive any objection to Proceedings in the courts of Bermuda
on the grounds of venue or on the basis that the Proceedings have been
brought in an inconvenient forum.
IN WITNESS whereof this Deed of Covenant has been executed by the Company and is
intended to be and is hereby delivered as of the date first before written.
EXECUTED as a deed )
under the common seal of )
THE BANK OF )
BERMUDA LIMITED )
in the presence of: )
