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SCOTTISH RE GROUP LIMITED
AND
JPMORGAN CHASE BANK, as Collateral Agent, Custodial Agent and
Securities Intermediary
AND
JPMORGAN CHASE BANK, as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of December 17, 2003
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions................................................1
ARTICLE 2
PLEDGE
Section 2.01. Pledge.....................................................5
Section 2.02. Control; Financing Statement...............................6
Section 2.03. Termination................................................6
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.01. Income and Distributions...................................6
Section 3.02. Payments Following Termination Event.......................6
Section 3.03. Payments Prior to or on Purchase Contract Settlement Date..6
Section 3.04. Payments to Purchase Contract Agent........................7
Section 3.05. Assets Not Properly Released...............................7
ARTICLE 4
CONTROL
Section 4.01. Establishment of Collateral Account........................8
Section 4.02. Treatment as Financial Assets..............................8
Section 4.03. Sole Control by Collateral Agent...........................8
Section 4.04. Securities Intermediary's Jurisdiction.....................8
Section 4.05. No Other Claims............................................9
Section 4.06. Investment and Release.....................................9
Section 4.07. Statements and Confirmations...............................9
Section 4.08. Tax Allocations............................................9
Section 4.09. No Other Agreements........................................9
Section 4.10. Powers Coupled with an Interest............................9
Section 4.11. Waiver of Lien; Waiver of Set-off..........................9
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ARTICLE 5
INITIAL DEPOSIT; CREATION OF TREASURY UNITS
AND RECREATION OF HYBRID CAPITAL UNITS
Section 5.01. Initial Deposit of Convertible Preferred Shares...........10
Section 5.02. Creation of Treasury Units................................10
Section 5.03. Recreation of Hybrid Capital Units........................11
Section 5.04. Termination Event.........................................12
Section 5.05. Cash Settlement...........................................13
Section 5.06. Early Settlement and Specified Merger Early
Settlement................................................14
Section 5.07. Application of Proceeds in Settlement of
Purchase Contracts........................................15
ARTICLE 6
VOTING RIGHTS - Pledged Convertible Preferred Shares
Section 6.01. Voting Rights.............................................17
ARTICLE 7
RIGHTS AND REMEDIES
Section 7.01. Rights and Remedies of the Collateral Agent...............17
Section 7.02. Remarketing...............................................18
Section 7.03. Successful Remarketing....................................18
Section 7.04. Substitutions.............................................19
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.01. Representations and Warranties............................19
Section 8.02. Covenants.................................................19
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND
THE SECURITIES INTERMEDIARY
Section 9.01. Appointment, Powers and Immunities........................20
Section 9.02. Instructions of the Company...............................21
Section 9.03. Reliance by Collateral Agent and the Securities
Intermediary..............................................21
Section 9.04. Certain Rights............................................21
Section 9.05. Merger, Conversion, Consolidation or Succession
to Business...............................................22
Section 9.06. Rights in Other Capacities................................22
Section 9.07. Non-Reliance on the Collateral Agent, the Custodial
Agent and the Securities Intermediary.....................22
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Section 9.08. Compensation and Indemnity................................23
Section 9.09. Failure to Act............................................23
Section 9.10. Resignation of the Collateral Agent, the Custodial
Agent and the Securities Intermediary.....................24
Section 9.11. Right to Appoint Agent or Advisor.........................25
Section 9.12. Survival..................................................26
Section 9.13. Exculpation...............................................26
ARTICLE 10
AMENDMENT
Section 10.01. Amendment Without Consent of Holders......................26
Section 10.02. Amendment With Consent of Holders.........................27
Section 10.03. Execution of Amendments...................................28
Section 10.04. Effect of Amendments......................................28
Section 10.05. Reference of Amendments...................................28
ARTICLE 11
MISCELLANEOUS
Section 11.01. No Waiver.................................................28
Section 11.02. Governing Law; Submission to Jurisdiction;
Service of Process........................................28
Section 11.03. Notices...................................................29
Section 11.04. Successors and Assigns....................................29
Section 11.05. Counterparts..............................................29
Section 11.06. Severability..............................................30
Section 11.07. Expenses, Etc.............................................30
Section 11.08. Security Interest Absolute................................30
Section 11.09. Notice of Specified Merger and Termination Event..........31
Section 11.10. Regarding the Purchase Contract Agent.....................31
Section 11.11. Book-Entry Interests......................................31
Section 11.12. Non-Recourse Obligation...................................31
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Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Creation of Treasury Units)
Exhibit B - Instruction from Purchase Contract Agent to Collateral Agent
(Recreation of Hybrid Capital Units)
Exhibit C - Notice of Cash Settlement from Collateral Agent to Purchase
Contract Agent (Cash Settlement Amounts)
Exhibit D - Instruction to Custodial Agent (Regarding Remarketing)
Exhibit E - Instruction to Custodial Agent (Withdrawal from Remarketing)
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PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of December 17, 2003 by and between SCOTTISH RE
GROUP LIMITED, a Cayman Islands exempted company (the "Company"), JPMORGAN CHASE
BANK, as collateral agent (in such capacity, together with its successors in
such capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent"), as
securities intermediary (as defined in Sections 8-102(a)(14) of the UCC) with
respect to the Collateral Account (in such capacity, together with its
successors in such capacity, the "Securities Intermediary") and as purchase
contract agent and as attorney-in-fact of the Holders from time to time of the
Units (in such capacity, together with its successors in such capacity, the
"Purchase Contract Agent") under the Purchase Contract Agreement.
Capitalized terms used herein and not defined herein have the meanings
assigned to them in the Purchase Contract Agreement (as defined therein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which 5,000,000 Hybrid Capital Units (or 5,750,000
Hybrid Capital Units if the over-allotment option granted to the Underwriters
pursuant to the Underwriting Agreement is exercised in full) will be issued;
WHEREAS, each Hybrid Capital Unit, at issuance, consists of a unit
comprised of (a) a share purchase contract (a "Purchase Contract") pursuant to
which the Holder will purchase from the Company on the Purchase Contract
Settlement Date, for an amount equal to $25 (the "Stated Amount"), a number of
shares of the Company's ordinary shares, par value $0.01 per share (the
"Ordinary Shares"), equal to the Settlement Rate and (b) a convertible preferred
share, par value of $0.01 per share, $25 liquidation preference per share (a
"convertible preferred share"); and
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders of the Units have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral to secure the Obligations.
NOW, THEREFORE, the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section, Exhibit or other subdivision;
(b) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";
and
(c) the following terms have the meanings given to them in this Section
1.01(c):
"AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.
"CASH" means any coin or currency of the United States of America as at the
time shall be legal tender for payment of public and private debts.
"CERTIFICATE OF DESIGNATIONS" means the Certificate of Designations duly
adopted by a resolution of the duly authorized Finance and Investment Committee
of the Board of Directors of the Company on December 11, 2003 under which the
Convertible Preferred Shares are issued.
"COLLATERAL" means the collective reference to:
(i) the Collateral Account and all investment property and other
financial assets from time to time credited to the Collateral Account,
including, without limitation, (A) the Convertible Preferred Shares and
security entitlements relating thereto that are a component of the Hybrid
Capital Units from time to time, (B) any Treasury Securities and security
entitlements relating thereto delivered from time to time upon creation of
Treasury Units in accordance with Section 5.02 hereof and (C) payments made
by Holders pursuant to Section 5.05 hereof;
(ii) all Proceeds (other than Excess Proceeds) of any of the foregoing
(whether such Proceeds arise before or after the commencement of any
proceeding under any applicable bankruptcy, insolvency or other similar
law, by or against the pledgor or with respect to the pledgor); and
(iii) all powers and rights now owned or hereafter acquired under or
with respect to the Collateral.
"COLLATERAL ACCOUNT" means the securities account of the Collateral Agent
designated "JPMorgan Chase Bank, as Collateral Agent of Scottish Re Group
Limited, as pledgee of JPMorgan Chase Bank, as the Purchase Contract Agent on
behalf of and as attorney-in-fact for the Holders".
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"COMPANY" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.
"CONVERTIBLE PREFERRED SHARES" means the convertible preferred shares to be
issued by the Company under the Certificate of Designations.
"HYBRID CAPITAL UNIT" means the collective rights and obligations of a
Holder of a Hybrid Capital Unit Certificate in respect of a Convertible
Preferred Share, subject to the Pledge thereof, and the related Purchase
Contract.
"HYBRID CAPITAL UNITS CERTIFICATE" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Hybrid Capital
Units specified on such certificate.
"INTRINSIC VALUE" has the meaning specified in the Purchase Contract
Agreement.
"OBLIGATIONS" means, with respect to each Holder, all obligations and
liabilities of such Holder under such Holder's Purchase Contract, the Purchase
Contract Agreement and this Agreement or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing before and
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent that are required to be paid by the Holder pursuant to the
terms of any of the foregoing agreements).
"PERMITTED INVESTMENTS" means any one of the following, in each case
maturing on the Business Day following the date of acquisition:
(1) any evidence of indebtedness with an original maturity of 365 days
or less issued, or directly and fully guaranteed or insured, by the United
States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in
support of the timely payment thereof or such indebtedness constitutes a
general obligation of it);
(2) deposits, certificates of deposit or acceptances with an original
maturity of 365 days or less of any institution which is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less than $50,000,000 as of the date of its latest filed
report of condition or its audited financial statements (and which may
include the Collateral Agent);
(3) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to
in clause (2);
3
(4) repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by
the United States of America or issued by any agency thereof and backed as
to timely payment by the full faith and credit of the United States of
America;
(5) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated
under the laws of the United States of America or any State thereof, which
commercial paper has a rating at the time of purchase at least equal to
"A-1" by Standard & Poor's Ratings Services ("S&P") or at least equal to
"P-1" by Xxxxx'x Investors Service, Inc. ("Moody's"); and
(6) investments in money market funds (including, but not limited to,
money market funds managed by the Collateral Agent or an affiliate of the
Collateral Agent) registered under the Investment Company Act of 1940, as
amended, rated in the highest applicable rating category by S&P or Moody's.
"PERSON" means any legal person, including, without limitation, any
individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PLEDGE" means the lien and security interest created by this Agreement.
"PLEDGED CONVERTIBLE PREFERRED SHARES" means the Convertible Preferred
Shares and security entitlements relating thereto from time to time credited to
the Collateral Account and not then released from the Pledge.
"PLEDGED SECURITIES" means the Pledged Convertible Preferred Shares and the
Pledged Treasury Securities, collectively.
"PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.
"PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets and other property received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of any financial
assets from time to time held in the Collateral Account.
"PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph
preceding the recitals of this Agreement.
"SEPARATE CONVERTIBLE PREFERRED SHARES" means Convertible Preferred Shares
which are not components of Hybrid Capital Units.
"TERMINATION EVENT" has the meaning specified in the Purchase Contract
Agreement.
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"TRADES" means the Treasury/Reserve Automated Debt Entry
System maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES REGULATIONS" means the regulations of the United
States Department of the Treasury, published at 31 C.F.R. Part 357, as amended
from time to time. Unless otherwise defined herein, all terms defined in the
TRADES Regulations are used herein as therein defined.
"TRANSFER" means (i) in the case of certificated securities in
registered form, delivery as provided in Section 8-301(a) of the UCC, endorsed
to the transferee or in blank by an effective endorsement; (ii) in the case of
Treasury Securities, registration of the transferee as the owner of such
Treasury Securities on TRADES; and (iii) in the case of security entitlements,
including, without limitation, security entitlements with respect to Treasury
Securities, a securities intermediary indicating by book entry that such
security entitlement has been credited to the transferee's securities account.
"TREASURY SECURITIES" means zero coupon U.S. treasury
securities that mature on February 15, 2007 (CUSIP No.
000000XX0).
"TREASURY UNIT" means, following the substitution of Treasury
Securities for Convertible Preferred Shares as collateral to secure a Holder's
obligations under the Purchase Contract, the collective rights and obligations
of a Holder of a Treasury Units Certificate in respect of such Treasury
Securities, subject to the Pledge thereof, and the related Purchase Contract.
"TREASURY UNITS CERTIFICATE" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Treasury
Units specified on such certificate.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time.
"UNIT" means a Hybrid Capital Unit or a Treasury Unit, as the
case may be.
"VALUE" means, with respect to any item of Collateral on any
date, as to (i) Cash, the face amount thereof, (ii) Treasury Securities, the
aggregate principal amount thereof at maturity and (iii) Convertible Preferred
Shares, the aggregate liquidation preference thereof.
(d) Terms used and not defined herein shall have the meanings set forth in
the Purchase Contract Agreement.
ARTICLE 2
PLEDGE
Section 2.01. Pledge. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, and the Purchase Contract Agent, acting
solely as such attorney-in-fact, hereby pledges and grants to the Collateral
Agent, as agent of and for the benefit
5
of the Company, a continuing security interest in and to, and a lien upon and
right of set-off against, all of such Person's right, title and interest in and
to the Collateral to secure the prompt and complete payment and performance when
due (whether at stated maturity, by acceleration or otherwise) of the
Obligations. The Collateral Agent shall have all of the rights, remedies and
recourses with respect to the Collateral afforded a secured party by the UCC, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded to the Collateral Agent by this Agreement.
Section 2.02. Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Article 4 of this Agreement.
(b) As soon as practicable, subsequent to the date of initial issuance of
the Units, the Company shall deliver to the Collateral Agent a copy of the
financing statement prepared by the Company and filed in the Office of the
Secretary of State of the State of New York and any other jurisdictions which
the Company deems necessary, authorized by the Purchase Contract Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
such filing to be undertaken by the Company.
Section 2.03. Termination. As to each Holder, this Agreement and the Pledge
created hereby shall automatically terminate upon the satisfaction of such
Holder's Obligations or the occurrence of a Termination Event. Upon such
termination, the Collateral Agent shall Transfer such Holder's portion of the
Collateral to the Purchase Contract Agent for distribution to such Holder, free
and clear of the Pledge created hereby.
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.01. Income and Distributions. The Collateral Agent shall transfer
all income and distributions received by the Collateral Agent on account of the
Pledged Convertible Preferred Shares and any Excess Proceeds, or Permitted
Investments from time to time held in the Collateral Account (ABA No. 00000000,
A/C No. 507943635, Re: Scottish Re Group Limited) to the Purchase Contract Agent
for distribution to the applicable Holders as provided in the Purchase Contracts
or Purchase Contract Agreement.
Section 3.02. Payments Following Termination Event. Following a Termination
Event, the Collateral Agent shall transfer all payments it receives, if any, in
respect of (a) the liquidation preference of the Pledged Convertible Preferred
Shares and (b) the Pledged Treasury Securities, to the Purchase Contract Agent
for the benefit of the applicable Holders for distribution to such Holders in
accordance with their respective interests, free and clear of the Pledge created
hereby.
Section 3.03. Payments Prior to or on Purchase Contract Settlement Date.
(a) Subject to the provisions of Sections 5.05 and 5.06, and except as
provided in clause 3.03(b) below, if no Termination Event shall have occurred,
all payments
6
received by the Collateral Agent in respect of (1) the liquidation preference of
the Pledged Convertible Preferred Shares from the Proceeds of the Remarketing
and (2) the Pledged Treasury Securities, shall be held and invested in Permitted
Investments until the Purchase Contract Settlement Date, and transferred to the
Company on the Purchase Contract Settlement Date to the extent and otherwise as
provided in Section 5.07 hereof. Any balance remaining in the Collateral Account
shall be released from the Pledge and transferred to the Purchase Contract Agent
for the benefit of the applicable Holders for distribution to such Holders in
accordance with their respective interests, free and clear of the Pledge created
thereby. The Company shall instruct the Collateral Agent in writing as to the
type of Permitted Investments in which any payments made under this Section
shall be invested, provided, however, that if the Company fails to deliver such
instructions by 10:30 a.m. (New York City time) on the day such payments are
received by the Collateral Agent, the Collateral Agent shall invest such
payments in the Permitted Investments described in clause (6) of the definition
of Permitted Investments. In no event shall the Collateral Agent be liable for
the selection of Permitted Investments or for investment losses incurred
thereon. The Collateral Agent shall have no liability in respect of losses
incurred as a result of the failure of the Company to provide timely written
investment direction.
(b) All payments received by the Collateral Agent in respect of (1) the
liquidation preference of the Pledged Convertible Preferred Shares and (2) the
Treasury Securities or security entitlements thereto, that, in each case, have
been released from the Pledge pursuant hereto shall be transferred to the
Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.
Section 3.04. Payments to Purchase Contract Agent. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments to the
Purchase Contract Agent hereunder to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m. (New York City time)
on the Business Day such payment is received by the Collateral Agent; provided,
however, that if such payment is received on a day that is not a Business Day or
after 11:00 a.m. (New York City time) on a Business Day, then the Collateral
Agent shall use all commercially reasonable efforts to deliver such payment to
the Purchase Contract Agent no later than 10:30 a.m. (New York City time) on the
next succeeding Business Day.
Section 3.05. Assets Not Properly Released. If the Purchase Contract Agent
or any Holder shall receive any payments in respect of (1) the liquidation
preference of the Pledged Convertible Preferred Shares and (2) the Treasury
Securities or security entitlements thereto credited to the Collateral Account
and not released therefrom in accordance with this Agreement, the Purchase
Contract Agent or such Holder shall hold the same as trustee of an express trust
for the benefit of the Company and, upon receipt of an Officers' Certificate of
the Company so directing, promptly deliver the same to the Collateral Agent for
credit to the Collateral Account or to the Company for application to the
Obligations of the Holders, and the Purchase Contract Agent and Holders shall
acquire no right, title or interest in any such payments of amounts so received.
The Purchase Contract Agent shall have no liability under this Section 3.05
unless and until it has been notified in writing that such payment was delivered
to it erroneously and shall have no liability for any action taken, suffered or
omitted to be taken prior to its receipt of such notice.
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ARTICLE 4
CONTROL
Section 4.01. Establishment of Collateral Account. The Collateral Agent
hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to this
Agreement or the Purchase Contract Agreement will be credited promptly to the
Collateral Account; and
(e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be (i) registered in the name of the
Purchase Contract Agent and endorsed to the Collateral Agent or in blank, (ii)
registered in the name of the Collateral Agent or (iii) credited to another
securities account maintained in the name of the Collateral Agent. The
Collateral Agent may, at any time or from time to time, in its sole discretion,
cause any or all securities or other property underlying any financial assets
credited to the Collateral Account not registered in its name to be so
registered in its name. In no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract Agent or
any Holder or specially endorsed to the Purchase Contract Agent or any Holder.
Section 4.02. Treatment as Financial Assets. Each item of property (whether
investment property, financial asset, security, instrument or cash) credited to
the Collateral Account shall be treated as a financial asset.
Section 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Except as
otherwise permitted under this Agreement, until termination of the Pledge, the
Securities Intermediary will not comply with any entitlement orders issued by
the Purchase Contract Agent or any Holder.
Section 4.04. Securities Intermediary's Location. The Collateral Account,
and the rights and obligations of the Securities Intermediary, the Purchase
Contract Agent and the Holders with respect thereto, shall be governed by the
laws of the State of New York.
8
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location.
Section 4.05. No Other Claims. Except for the claims and interest of the
Collateral Agent, the Securities Intermediary, Purchase Contract Agent and the
Holders in the Collateral Account, the Securities Intermediary (without any duty
to investigate) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Purchase Contract Agent.
Section 4.06. Investment and Release. All proceeds of financial assets from
time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or as determined to be appropriate by Collateral
Agent.
Section 4.07. Statements and Confirmations. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto to the Purchase Contract Agent at its address for notices under
this Agreement.
Section 4.08. Tax Allocations. The Company shall report all items of
income, gain, expense and loss recognized in the Collateral Account, to the
extent such reporting is required by law, to the Internal Revenue Service or
applicable state authorities in the manner required by law. Neither the
Securities Intermediary nor the Collateral Agent shall have any tax reporting
duties hereunder.
Section 4.09. No Other Agreements. Neither the Securities Intermediary nor
the Collateral Agent has entered into, and prior to the termination of the
Pledge will not enter into, any agreement with any other Person relating to the
Collateral Account or any financial assets credited thereto, including, without
limitation, any agreement to comply with entitlement orders of any Person.
Section 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Collateral Agent and the Securities Intermediary under this Article 4 shall
continue in effect until the termination of the Pledge.
Section 4.11. Waiver of Lien; Waiver of Set-off. Each of the Collateral
Agent and the Securities Intermediary waives any security interest, lien or
right to make deductions or setoffs that it may now have or hereafter acquire in
or with respect to the Collateral Account, any financial asset credited thereto
or any security entitlement in respect thereof. Neither the financial assets
credited to the Collateral Account nor the security entitlements in respect
thereof will be subject to deduction, set-off, banker's lien, or any other right
in favor of any Person other than the Company.
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ARTICLE 5
INITIAL DEPOSIT; CREATION OF TREASURY UNITS
AND RECREATION OF HYBRID CAPITAL UNITS
Section 5.01. Initial Deposit of Convertible Preferred Shares. (a) Prior to
or concurrently with the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Hybrid Capital Units,
shall Transfer to the Collateral Agent, for credit to the Collateral Account,
the Convertible Preferred Shares or security entitlements with respect thereto.
(b) Unless a Termination Event shall have occurred and be continuing, the
Collateral Agent agrees to hold any Convertible Preferred Shares or security
entitlements relating thereto, constituting a portion of the Collateral
registered in the name of the Purchase Contract Agent, as attorney-in-fact for
the Holders, with appropriate endorsement in the form delivered to it and except
as provided in Section 4.01(e) shall not re-register such Convertible Preferred
Shares or security interests relating thereto unless a Termination Event shall
have occurred and be continuing.
Section 5.02. Creation of Treasury Units.
(a) A Holder of Hybrid Capital Units shall have the right, at any time
prior to 5:00 p.m. (New York City time) on the seventh Trading Day immediately
preceding the Purchase Contract Settlement Date, to create Treasury Units by
substitution of Treasury Securities or security entitlements with respect
thereto for the Pledged Convertible Preferred Shares comprising a part of such
Holder's Hybrid Capital Units, in integral multiples of 40 Hybrid Capital Units
by:
(i) Transferring to the Collateral Agent, for credit to the Collateral
Account, Treasury Securities or security entitlements with respect thereto
having a Value equal to the aggregate liquidation preference of the Pledged
Convertible Preferred Shares to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract Agreement,
whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
a notice, substantially in the form of Exhibit A hereto, (A) stating that
such Holder has notified the Purchase Contract Agent that such Holder has
Transferred Treasury Securities or security entitlements with respect
thereto to the Collateral Agent for credit to the Collateral Account, (B)
stating the Value of the Treasury Securities or security entitlements with
respect thereto Transferred by such Holder and (C) requesting that the
Collateral Agent release from the Pledge the Pledged Convertible Preferred
Shares that are a component of such Hybrid Capital Units; and
(ii) delivering the related Hybrid Capital Units to the Purchase
Contract Agent.
10
Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements with respect thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice to release such Pledged Convertible
Preferred Shares from the Pledge by Transfer to the Purchase Contract Agent for
distribution to such Holder, free and clear of the Pledge created hereby.
(b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Hybrid
Capital Units and receipt of the related instruction from the Purchase Contract
Agent, the Securities Intermediary, the Collateral Agent shall release such
Pledged Convertible Preferred Shares, and shall promptly Transfer the same to
the Purchase Contract Agent for distribution to such Holder, free and clear of
the Pledge created hereby.
Section 5.03. Recreation of Hybrid Capital Units.
(a) At any time prior to 5:00 p.m. (New York City time) on the seventh
Trading Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Treasury Units shall have the right to recreate Hybrid Capital Units
by substitution of Convertible Preferred Shares or security entitlements with
respect thereto for Pledged Treasury Securities in integral multiples of 40
Treasury Units by:
(i) Transferring to the Collateral Agent, for credit to the Collateral
Account, Convertible Preferred Shares or security entitlements with respect
thereto having an aggregate liquidation preference equal to the Value of
the Pledged Treasury Securities to be released, accompanied by a notice,
substantially in the form of Exhibit C to the Purchase Contract Agreement,
whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
a notice, substantially in the form of Exhibit B hereto, stating that such
Holder has notified the Purchase Contract Agent that such Holder has
Transferred the Convertible Preferred Shares or security entitlements with
respect thereto to the Collateral Agent for credit to the Collateral
Account and requesting that the Collateral Agent release from the Pledge
the Pledged Treasury Securities related to such Treasury Units; and
(ii) delivering the related Treasury Units to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Convertible Preferred
Shares or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice to release such Pledged
Treasury Securities from the Pledge by Transfer to the Purchase Contract Agent
for distribution to such Holder, free and clear of the Pledge created hereby.
(b) Upon credit to the Collateral Account of Convertible Preferred Shares
or security entitlements with respect thereto delivered by a Holder of Treasury
Units and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release such
11
Pledged Treasury Securities and shall promptly Transfer the same to the Purchase
Contract Agent for distribution to such Holder, free and clear of the Pledge
created hereby.
Section 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the Company
or the Purchase Contract Agent that a Termination Event has occurred, the
Collateral Agent shall release all Collateral from the Pledge and instruct the
Securities Intermediary to promptly Transfer:
(i) any Pledged Convertible Preferred Shares or security entitlements
with respect thereto,
(ii) any Pledged Treasury Securities, and
(iii) any payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof,
to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders, in accordance with their respective interests, free and clear
of the Pledge created hereby; provided, however, if any Holder shall be entitled
to receive less than $1,000 with respect to his ownership interest in a Treasury
Security, the Purchase Contract Agent shall have the right to dispose of such
interest for cash and deliver to such Holder cash in lieu of delivering the
Treasury Security.
(b) If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code or becoming subject to a petition under clause
(ii) of the definition of Bankruptcy Law, and if the Collateral Agent shall for
any reason fail promptly to effectuate the release and Transfer of all Pledged
Convertible Preferred Shares, Pledged Treasury Securities and payments by
Holders (or the Permitted Investments of such payments) pursuant to Section 5.05
hereof and Proceeds of any of the foregoing, as the case may be, as provided by
this Section 5.04, the Purchase Contract Agent shall:
(i) upon direction in writing by a majority of the Holders, use its
reasonable best efforts to obtain an opinion of a nationally recognized law
firm reasonably acceptable to the Collateral Agent to the effect that,
notwithstanding the Company's being the debtor in such a bankruptcy case or
becoming subject to a petition under clause (ii) of the definition of
Bankruptcy Law, the Collateral Agent will not be prohibited from releasing
or Transferring the Collateral as provided in this Section 5.04, and shall
deliver or cause to be delivered such opinion to the Collateral Agent
within 10 days after the occurrence of such Termination Event, and if (A)
the Purchase Contract Agent shall be unable to obtain such opinion within
10 days after the occurrence of such Termination Event or (B) the
Collateral Agent shall continue, after delivery of such opinion, to refuse
to effectuate the release and Transfer of all Pledged Convertible Preferred
Shares, Pledged Treasury Securities and the payments by Holders (or the
Permitted Investments of such payments) pursuant to Section 5.05 hereof and
Proceeds of any of the foregoing, as the case may be, as provided in this
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Section 5.04, then the Purchase Contract Agent shall within 15 days after
the occurrence of such Termination Event commence an action or proceeding
in the court having jurisdiction of the Company's case under the applicable
Bankruptcy Law seeking an order requiring the Collateral Agent (or such
other persons as may be appropriate) to effectuate the release and transfer
of all Pledged Convertible Preferred Shares, Pledged Treasury Securities
and the payments by Holders (or the Permitted Investments of such payments)
pursuant to Section 5.05 hereof and Proceeds of any of the foregoing, or as
the case may be, as provided by this Section 5.04; or
(ii) commence an action or proceeding like that described in clause
5.04(b)(i) hereof within 10 days after the occurrence of such Termination
Event;
provided that the Purchase Contract Agent shall have the right to refuse to act
under these Sections 5.04(b)(i) and (ii) unless it shall be indemnified to its
satisfaction as provided herein.
Section 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the Purchase
Contract Agent promptly after the receipt by the Purchase Contract Agent of a
notice from a Holder of Hybrid Capital Units that such Holder has elected, in
accordance with the procedures specified in Section 5.02(c)(i) of the Purchase
Contract Agreement to effect a Cash Settlement and (2) payment by such Holder by
deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on or
before the fifth Trading Day immediately preceding the Purchase Contract
Settlement Date, or on the Trading Day immediately preceding the Purchase
Contract Settlement Date in the case of a Failed Remarketing, of the Purchase
Price in lawful money of the United States of America by certified or cashier's
check or wire transfer, in each case in immediately available funds payable to
or upon the order of the Securities Intermediary, then the Collateral Agent
shall instruct the Securities Intermediary to:
(i) promptly invest any such Cash in Permitted Investments;
(ii) release from the Pledge such Holder's related Pledged Convertible
Preferred Shares as to which such Holder has effected a Cash Settlement
pursuant to this Section 5.05(a); and
(iii) Transfer all such Pledged Convertible Preferred Shares to the
Purchase Contract Agent for distribution to such Holder, in each case free
and clear of the Pledge created hereby.
The Company shall instruct the Collateral Agent in writing as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such written instructions by 10:30
a.m. (New York City time) on the day such Cash is received by the Collateral
Agent or to be reinvested by the Securities Intermediary, the Collateral Agent
shall instruct the Securities Intermediary to invest such Cash in the Permitted
Investments described in clause (6) of the definition of Permitted Investments.
In no event shall the Collateral Agent be liable for the selection of Permitted
Investments or for
13
investment losses incurred thereon. The Collateral Agent shall have no liability
in respect of losses incurred as a result of the failure of the Company to
provide timely written investment direction.
Upon receipt of the proceeds upon the maturity of the Permitted Investments
on the Purchase Contract Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) release any amounts in excess of the Purchase Price earned from such
Permitted Investments to the Purchase Contract Agent for distribution to the
Company.
(b) If a Holder of Hybrid Capital Units (i) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement as provided in
paragraph 5.02(c)(i) of the Purchase Contract Agreement or (ii) does notify the
Purchase Contract Agent of its intention to pay the Purchase Price in cash, but
fails to make such payment as required by paragraph 5.02(c)(ii) of the Purchase
Contract Agreement, such Holder shall be deemed to have consented to the
disposition of such Holder's Pledged Convertible Preferred Shares in accordance
with paragraph 5.02(c)(iii) of the Purchase Contract Agreement.
(c) As soon as practicable after 5:00 p.m. (New York City time) on the
fifth Trading Day immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit C hereto, stating (i) the amount of Cash
that it has received with respect to the Cash Settlement of Hybrid Capital Units
and (ii) the amount of Pledged Convertible Preferred Shares to be remarketed in
the Remarketing pursuant to Section 5.02(c)(iv) of the Purchase Contract
Agreement.
Section 5.06. Early Settlement and Specified Merger Early Settlement. Upon
receipt by the Collateral Agent of a notice from the Purchase Contract Agent
that a Holder of Units has elected to effect either (a) Early Settlement of its
obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms of the Purchase Contracts and Section 5.07 of the
Purchase Contract Agreement or (b) Specified Merger Early Settlement of its
obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms of the Purchase Contracts and Section 5.04(b)(2) of
the Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to effect Early
Settlement or Specified Merger Early Settlement), and that the Purchase Contract
Agent has received from such Holder, and paid to the Company as confirmed in
writing by the Company, the related Purchase Price pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement or Specified Merger Early Settlement, as the case may
be, have been satisfied, then the Collateral Agent shall release from the
Pledge, (i) Pledged Convertible Preferred Shares in the case of a Holder of
Hybrid Capital Units or (ii) Pledged Treasury Securities, in the case of a
Holder of Treasury Units, in each case with a Value equal to the product of (x)
the Stated Amount times (y) the number of Purchase Contracts as to which such
Holder has elected to effect Early Settlement or Specified Merger Early
Settlement, and shall instruct the Securities Intermediary to Transfer all such
Pledged Convertible Preferred Shares or Pledged Treasury Securities, as the case
may be, to
14
the Purchase Contract Agent for distribution to such Holder, in each case free
and clear of the Pledge created hereby. A holder of Treasury Units may settle
early only in integral multiples of 40 Treasury Units.
Section 5.07. Application of Proceeds in Settlement of Purchase Contracts.
(a) If a Holder of Hybrid Capital Units has not elected to make an
effective Cash Settlement by notifying the Purchase Contract Agent in the manner
provided for in Section 5.02(c)(i) of the Purchase Contract Agreement or does
notify the Purchase Contract Agent as provided in paragraph 5.02(c)(i) of the
Purchase Contract Agreement of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph 5.02(c)(ii) of the
Purchase Contract Agreement, such Holder shall be deemed to have elected to pay
for the Ordinary Shares to be issued under such Purchase Contracts from the
Proceeds of the Remarketing of the related Pledged Convertible Preferred Shares.
In such event, upon written direction from the Purchase Contract Agent, the
Collateral Agent shall instruct the Securities Intermediary to Transfer the
related Pledged Convertible Preferred Shares to the Remarketing Agent for
Remarketing. Upon receiving such Pledged Convertible Preferred Shares, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use
its commercially reasonable efforts to remarket such Pledged Convertible
Preferred Shares. The Remarketing Agent will deposit the Proceeds of such
Remarketing, after deducting the Remarketing Fee, in the Collateral Account, and
the Collateral Agent shall invest the Proceeds of the Remarketing in Permitted
Investments set forth in clause (6) of the definition of Permitted Investments.
On the Purchase Contract Settlement Date, the Purchase Contract Agent shall
consult with the Collateral Agent regarding the instruction the Collateral Agent
shall give to the Securities Intermediary in order to apply a portion of the
Proceeds from such Remarketing equal to the aggregate liquidation preference of
such Pledged Convertible Preferred Shares, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder on the Purchase Contract
Settlement Date, to satisfy in full such Holder's obligations to pay the
Purchase Price to purchase the shares of Ordinary Shares under the related
Purchase Contracts. The balance of the Proceeds from the Remarketing, if any,
that shall be transferred to the Purchase Contract Agent for distribution to
such Holder.
If the Remarketing Agent advises the Collateral Agent in writing that there
has been a Failed Remarketing and an event of default shall have occurred with
respect to any Purchase Contracts as provided in Section 5.02(e)(iv) of the
Purchase Contract Agreement, the Collateral Agent, for the benefit of the
Company shall, on the Purchase Contract Settlement Date, at the written
direction of the Company, exercise the Company's rights as a secured party with
respect to the related Pledged Convertible Preferred Shares in accordance with
applicable law or deliver such Pledged Convertible Preferred Shares to such
person or persons as the Company may direct to retain to the extent permitted by
applicable law. Following such action, the obligations of the Holder of such
Pledged Convertible Preferred Shares to pay the Purchase Price for the shares of
Ordinary Shares under its Purchase Contract will be deemed to be satisfied in
full, and the Purchase Contract Agent shall provide to the Collateral Agent, on
behalf of such Holders, consents to the extent required under Section 9-620 of
the UCC in order to give effect to the provisions of this paragraph. If the
Collateral Agent exercises such rights with respect to such Pledged Convertible
Preferred Shares, any accumulated and unpaid dividends on such Pledged
Convertible Preferred Shares, including any accrued and unpaid dividends as of
the
15
Purchase Contract Settlement Date, and the Intrinsic Value (or such greater
amount as required under the UCC), if any, shall become payable by the Company
(and the Company shall pay such amounts) to the Purchase Contract Agent for
payment to the Holder of the Hybrid Capital Units to which such Pledged
Convertible Preferred Shares relate.
(b) In the case of a Treasury Unit, promptly, after 11:00 a.m. (New York
City time) on the Purchase Contract Settlement Date, the Collateral Agent shall
apply the Cash Proceeds of the maturing Pledged Treasury Securities as follows.
Without receiving any instruction from any such Holder, the Collateral Agent
shall apply the Proceeds of the related Pledged Treasury Securities to the
settlement of such Purchase Contracts on the Purchase Contract Settlement Date.
In the event the Proceeds from the related Pledged Treasury Securities exceed
the aggregate Purchase Price of the Purchase Contracts being settled thereby,
less the amount of any Deferred Contract Adjustment Payments payable to such
Holder on the Purchase Contract Settlement Date, the Collateral Agent shall
instruct the Securities Intermediary to transfer such excess, when received, to
the Purchase Contract Agent for distribution to such Holder.
(c) Prior to 11:00 a.m. (New York City time) on the Trading Day immediately
preceding the applicable Remarketing Date, but no earlier than the Payment Date
immediately preceding such date, Holders of Separate Convertible Preferred
Shares may elect to have their Separate Convertible Preferred Shares remarketed
under the Remarketing Agreement, by delivering their Separate Convertible
Preferred Shares along with a notice of such election, substantially in the form
of Exhibit D hereto, to the Custodial Agent. After such time, such election
shall become an irrevocable election to have such Separate Convertible Preferred
Shares remarketed in such Remarketing. The Custodial Agent shall hold Separate
Convertible Preferred Shares in an account separate from the Collateral Account
in which the Pledged Securities shall be held. Holders of Separate Convertible
Preferred Shares electing to have their Separate Convertible Preferred Shares
remarketed will also have the right to withdraw that election by written notice
to the Custodial Agent, substantially in the form of Exhibit E hereto, prior to
11:00 a.m. (New York City time) on the fifth Trading Day immediately preceding
the applicable Remarketing Date, upon which notice the Custodial Agent shall
return such Separate Convertible Preferred Shares to such Holder.
By 11:00 a.m. (New York City time) on the Trading Day immediately preceding
the applicable Remarketing Date, the Custodial Agent shall notify the
Remarketing Agent of the aggregate liquidation preference of the Separate
Convertible Preferred Shares to be remarketed and deliver to the Remarketing
Agent for remarketing all Separate Convertible Preferred Shares delivered to the
Custodial Agent pursuant to this Section 5.07(c) and not validly withdrawn prior
to such date. In the event of a Successful Remarketing, after deducting the
Remarketing Fee (to the extent permitted under the terms of the Remarketing
Agreement), the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds of such Remarketing for payment to the Holders
of the remarketed Separate Convertible Preferred Shares, in accordance with
their respective interests. In the event of a Failed Remarketing, the
Remarketing Agent will promptly return such Separate Convertible Preferred
Shares to the Custodial Agent, and, in the event of a Failed Remarketing, the
Custodial Agent shall deliver such Separate Convertible Preferred Shares to the
appropriate Holders.
16
(d) The Purchase Contract Agent, on behalf of itself and the Holders,
acknowledges and irrevocably agrees that any Remarketing of the Convertible
Preferred Shares shall not constitute a foreclosure of the Pledge of or other
exercise of default remedies with respect to the Convertible Preferred Shares
within the meaning of the Code, but rather shall constitute a voluntary sale of
the Convertible Preferred Shares by and on behalf of the Holders and the
Purchase Contract Agent.
ARTICLE 6
VOTING RIGHTS - PLEDGED CONVERTIBLE PREFERRED SHARES
Section 6.01. Voting Rights. Subject to the terms of Section 4.02 of the
Purchase Contract Agreement, the Purchase Contract Agent may exercise, or
refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Convertible Preferred Shares or any part thereof for
any purpose not inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided, that the Purchase
Contract Agent shall not exercise or shall not refrain from exercising such
right, as the case may be, if, in the judgment of the Company, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Convertible Preferred Shares; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five Business Days' prior written notice of the manner in which it intends to
exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any Pledged
Convertible Preferred Shares, including notice of any meeting at which holders
of the Convertible Preferred Shares are entitled to vote or solicitation of
consents, waivers or proxies of holders of the Convertible Preferred Shares, the
Collateral Agent shall use reasonable efforts to send promptly to the Purchase
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Convertible Preferred Shares
(in form and substance satisfactory to the Collateral Agent) as are prepared by
the Company and delivered to the Purchase Contract Agent with respect to the
Pledged Convertible Preferred Shares.
ARTICLE 7
RIGHTS AND REMEDIES
Section 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 5.07 hereof
or otherwise available at law or in equity, after an event of default hereunder,
the Collateral Agent shall have all of the rights and remedies with respect to
the Collateral of a secured party under the UCC (whether or not the UCC is in
effect in the jurisdiction where the rights and remedies are asserted) and the
TRADES Regulations and such additional rights and remedies to which a secured
party is entitled under the laws in effect in any jurisdiction where any rights
and remedies hereunder may be asserted. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable law,
(1) retention of the Pledged
17
Convertible Preferred Shares or the Pledged Treasury Securities or (2) sale of
the Pledged Convertible Preferred Shares or the Pledged Treasury Securities in
one or more public or private sales, and in each instance, the Holders'
obligations under the Purchase Contracts and the Purchase Contract Agreement
shall be deemed to have been satisfied in full.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities as provided in Article 3 hereof, in satisfaction of the
Obligations of the Holder of the Units of which such Pledged Treasury Securities
are a part under the related Purchase Contracts, the inability to make such
payments shall constitute an event of default hereunder and the Collateral Agent
shall have and may exercise, with reference to such Pledged Treasury Securities
any and all of the rights and remedies available to a secured party under the
UCC and the TRADES Regulations after default by a debtor, and as otherwise
granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the liquidation preference
of the Pledged Convertible Preferred Shares and (ii) the principal amount of the
Pledged Treasury Securities subject, in each case, to the provisions of Article
3 hereof, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Units agrees that, from
time to time, upon the written request of the Collateral Agent or the Purchase
Contract Agent, such Holder shall execute and deliver such further documents and
do such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own grossly negligent acts, its own grossly negligent failure
to act or its own willful misconduct.
Section 7.02. Remarketing. The Collateral Agent shall, by 11:00 a.m., New
York City time, on the Business Day immediately preceding the Remarketing Date,
without any instruction from any Holder of Hybrid Capital Units, present the
related Pledged Convertible Preferred Shares to be included in the Remarketing
pursuant to the terms hereof and the Purchase Contract Agreement to the
Remarketing Agent for Remarketing. In the event of a Failed Remarketing, the
Convertible Preferred Shares presented to the Remarketing Agent pursuant to this
Section 7.02 for Remarketing shall be redeposited into the Collateral Account.
Section 7.03. Successful Remarketing. In the event the Collateral Agent
receives Proceeds of the Pledged Convertible Preferred Shares from any
Successful Remarketing prior to the Remarketing Date (after deducting any
Remarketing Fee to the extent permitted under the terms of the Remarketing
Agreement), the Collateral Agent will promptly remit the Proceeds to the
Purchase Contract Agent for payment to the Holders of Hybrid Capital Units, in
accordance with their respective interests. With respect to Separate Convertible
Preferred Shares, any Proceeds of such Remarketing (after deducting any
Remarketing Fee to the extent permitted under the terms of the Remarketing
Agreement) attributable to the Separate
18
Convertible Preferred Shares will be remitted to the Custodial Agent for payment
to the holders of Separate Convertible Preferred Shares.
Section 7.04. Substitutions. Whenever a Holder has the right to substitute
Treasury Securities, Convertible Preferred Shares or security entitlements for
any of them, as the case may be, for financial assets held in the Collateral
Account, such substitution shall not constitute a novation of the security
interest created hereby.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.01. Representations and Warranties. Each Holder from time to
time, acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral, that:
(a) such Holder has the power to grant a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent for credit to the Collateral
Account, free and clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the security interest and
lien granted under Article 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent for credit
to the Collateral Account, the Collateral Agent, for the benefit of the Company,
will have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any securities intermediary or
other entity not within the control of the Holder involved in the Transfer of
the Collateral, including the Collateral Agent, gives the notices and takes the
action required of it hereunder and under applicable law for perfection of that
interest and assuming the establishment and exercise of control pursuant to
Article 4 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Article 2 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
Section 8.02. Covenants. The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
19
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Units.
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
Section 9.01. Appointment, Powers and Immunities. The Collateral Agent, the
Custodial Agent or the Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
by the terms of this Agreement. The Collateral Agent, the Custodial Agent and
the Securities Intermediary shall:
(a) have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against the Collateral Agent, the Custodial Agent or the
Securities Intermediary, nor shall the Collateral Agent, the Custodial Agent and
the Securities Intermediary be bound by the provisions of any agreement by any
party hereto beyond the specific terms hereof;
(b) not be responsible for any recitals contained in this Agreement, or in
any certificate or other document referred to or provided for in, or received by
it under, this Agreement, the Units or the Purchase Contract Agreement, or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement (other than as against the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be), the Units, any
Collateral or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or the Securities
Intermediary as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except, in the case of the Collateral Agent, pursuant to
directions furnished under Section 9.02 hereof, subject to Section 9.08 hereof);
(d) not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own gross
negligence, bad faith or willful misconduct; and
20
(e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall take all
reasonable action in connection with the safekeeping of the Collateral
hereunder.
No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, Custodial Agent or the
Securities Intermediary be liable for any amount in excess of the Value of the
Collateral.
Section 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (a) such direction shall not conflict
with the provisions of any law or of this Agreement or involve the Collateral
Agent in personal liability and (b) the Collateral Agent shall be indemnified to
its satisfaction as provided herein. Nothing contained in this Section 9.02
shall impair the right of the Collateral Agent in its discretion to take any
action or omit to take any action which it deems proper and which is not
inconsistent with such direction.
Section 9.03. Reliance by Collateral Agent and the Securities Intermediary.
The Custodial Agent, the Collateral Agent and the Securities Intermediary shall
be entitled to rely conclusively upon any certification, order, judgment,
opinion, notice or other written communication (including, without limitation,
any thereof by e-mail or similar electronic means or facsimile) reasonably
believed by it to be genuine and to have been signed or sent by or on behalf of
the proper Person or Persons (without being required to determine the
correctness of any fact stated therein) and consult with and conclusively rely
upon advice, opinions and statements of legal counsel and other experts selected
by the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be. As to any matters not expressly provided for by this Agreement,
the Collateral Agent, the Custodial Agent or the Securities Intermediary shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company.
Section 9.04. Certain Rights. (a) Whenever in the administration of the
provisions of this Agreement the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall deem it necessary or desirable that a matter be
proved or established prior to taking, or omitting to take, any action
hereunder, or suffering to exist any state of events, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of bad faith on the part of the Collateral Agent, the Custodial Agent or
the Securities Intermediary be deemed to be conclusively proved and established
by a certificate signed by one of the Company's officers, and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary and such
certificate shall be full warrant to the Collateral Agent, the
21
Custodial Agent or the Securities Intermediary for any action taken, suffered or
omitted by it under the provisions of this Agreement upon reliance thereon.
(b) None of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, entitlement order, approval or other paper or
document.
Section 9.05. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall be a party, or any Person succeeding to the
business of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall be the successor of the Collateral Agent, the Custodial Agent
or the Securities Intermediary hereunder without the execution or filing of any
paper with any party hereto or any further act on the part of any of the parties
hereto except where an instrument of transfer or assignment is required by law
to effect such succession, anything herein to the contrary notwithstanding.
Section 9.06. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Company, the Purchase Contract Agent, any other
Person interested herein and any Holder of Units (and any of their respective
subsidiaries or affiliates) as if they were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary as the case may be, and the
Collateral Agent, the Custodial Agent or the Securities Intermediary and their
affiliates may accept fees and other consideration from the Company, the
Purchase Contract Agent and any Holder of Units without having to account for
the same to the Company; provided that each of the Custodial Agent, the
Collateral Agent and the Securities Intermediary covenants and agrees with the
Company that it shall not accept, receive or permit there to be created in favor
of itself and shall take no affirmative action to permit there to be created in
favor of any other Person, any security interest, lien or other encumbrance of
any kind in or upon the Collateral other than the lien created by the Pledge or
statutory lien in favor of the Securities Intermediary.
Section 9.07. Non-Reliance on the Collateral Agent, the Custodial Agent and
the Securities Intermediary. None of the Custodial Agent, the Collateral Agent
or the Securities Intermediary shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or any Holder of
Units of this Agreement, the Purchase Contract Agreement, the Units or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Purchase Contract Agent or any Holder of Units. None
of the Collateral Agent, the Custodial Agent or the Securities Intermediary
shall have any duty or responsibility to provide the Company with any credit or
other information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Units (or any of their respective
affiliates) that may come into the possession of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of their respective
affiliates.
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Section 9.08. Compensation and Indemnity.
The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by them
hereunder;
(b) indemnify, defend and hold harmless the Collateral Agent, the Custodial
Agent, the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, with the Collateral Agent, the
Custodial Agent and the Securities Intermediary, the "INDEMNITEES"), harmless
from and against any and all claims, liabilities, losses, damages, fines,
penalties and expenses (including reasonable fees and expenses of counsel)
(collectively, "LOSSES" and individually, a "LOSS") that may be imposed on,
reasonably incurred by, or asserted against, the Indemnitees or any of them for
following any instructions or other directions upon which any of the Indemnitees
is entitled to rely pursuant to the terms of this Agreement, provided that such
Indemnitee has not acted with gross negligence or bad faith or engaged in
willful misconduct with respect to the specific Loss against which
indemnification is sought; and
(c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's, the Custodial Agent's or the Securities Intermediary's
acceptance, performance or exercise of its rights, powers and duties under this
Agreement, provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with gross negligence or bad faith or engaged in
willful misconduct with respect to the specific Loss against which
indemnification is sought, including the Indemnitees' reasonable costs and
expenses of defending themselves against any claim (whether asserted by the
Company, a Holder or any other Person) or liability in connection with the
exercise or performance of any of the Collateral Agent's, Custodial Agent's or
the Securities Intermediary's powers or duties hereunder or thereunder or of
enforcing the provisions of this Section and Section 11.07.
The provisions of this Section and Section 9.08 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or the
Securities Intermediary and the termination of this Agreement.
Section 9.09. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be entitled,
after prompt notice to the Company and the Purchase Contract Agent, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall not
be or become liable in any way to any of the parties
23
hereto for its failure or refusal to comply with such conflicting claims,
demands or instructions. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall be entitled to refuse to act until either:
(a) such conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by agreement between
the conflicting parties as evidenced in a writing satisfactory to the Collateral
Agent, the Custodial Agent or the Securities Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting at
the expense of the Company.
The Collateral Agent, the Custodial Agent and the Securities Intermediary
may in addition elect to commence an interpleader action or seek other judicial
relief or orders as the Collateral Agent or the Custodial Agent may deem
necessary. Notwithstanding anything contained herein to the contrary, none of
the Collateral Agent, the Custodial Agent or the Securities Intermediary shall
be required to take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it or any of its
officers, employees or directors to liability.
Section 9.10. Resignation of the Collateral Agent, the Custodial Agent and
the Securities Intermediary.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or the Securities Intermediary as provided below:
(i) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Units;
(ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary may be removed at any time by the Company; and
(iii) if the Collateral Agent, the Custodial Agent or the Securities
Intermediary fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent, the Custodial Agent or
the Securities Intermediary may be removed by the Purchase Contract Agent,
acting at the direction of the Holders of a majority of the Units.
The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent, the Custodial Agent or the Securities Intermediary
pursuant to clause (iii) of this Section 9.10(a). Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, which
shall not be an Affiliate of the Purchase Contract Agent. If no successor
24
Collateral Agent, Custodial Agent or the Securities Intermediary shall have been
so appointed and shall have accepted such appointment within 30 days after the
retiring Collateral Agent's, Custodial Agent's or the Securities Intermediary's
giving of notice of resignation or the Company's or the Purchase Contract
Agent's giving notice of such removal, then the retiring or removed Collateral
Agent, Custodial Agent or the Securities Intermediary may petition any court of
competent jurisdiction, at the expense of the Company, for the appointment of a
successor Collateral Agent, Custodial Agent or the Securities Intermediary. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall each
be a bank or a national banking association which has an office (or an agency
office) in New York City with a combined capital and surplus of at least
$2,000,000,000. Upon the acceptance of any appointment as Collateral Agent,
Custodial Agent or the Securities Intermediary hereunder by a successor
Collateral Agent, Custodial Agent or the Securities Intermediary, as the case
may be, such successor Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, and
the retiring Collateral Agent, Custodial Agent or the Securities Intermediary,
as the case may be, shall take all appropriate action, subject to payment of any
amounts then due and payable to it hereunder, to transfer any money and property
held by it hereunder (including the Collateral) to such successor. The retiring
Collateral Agent, Custodial Agent or the Securities Intermediary shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent, Custodial Agent or the Securities Intermediary hereunder. After any
retiring Collateral Agent's, Custodial Agent's or the Securities Intermediary's
resignation hereunder as Collateral Agent, Custodial Agent or the Securities
Intermediary, the provisions of this Article 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Collateral Agent, Custodial Agent or the Securities
Intermediary. Any resignation or removal of the Collateral Agent, Custodial
Agent or the Securities Intermediary hereunder, at a time when such Person is
acting as the Collateral Agent, Custodial Agent or the Securities Intermediary,
shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be.
(b) Since JPMorgan Chase Bank is serving as the Collateral Agent hereunder
and the Purchase Contract Agent under the Purchase Contract Agreement, if an
event of default (other than an event of default occurring as a result of a
Failed Remarketing) occurs hereunder or under the Purchase Contract Agreement,
JPMorgan Chase Bank will resign as the Collateral Agent, but continue to act as
the Purchase Contract Agent. A successor Collateral Agent will be appointed in
accordance with the terms hereof.
Section 9.11. Right to Appoint Agent or Advisor. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 9.11
shall be subject to prior written consent of the Company, which consent shall
not be unreasonably withheld.
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Section 9.12. Survival. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9.13. Exculpation. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, directors, employees or
agents be liable under this Agreement to the Company or any third party for (i)
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, whether or not the
likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of them and regardless of
the form of action or (ii) any failure or delay in the performance of the
obligations of the Purchase Contract Agent under this Agreement or the Pledge
Agreement arising out of, or caused directly or indirectly by, circumstances
beyond its reasonable control, including, without limitation, acts of God,
earthquakes, fires, floods, wars, terrorist acts, sabotage, civil or military
disturbances, riots, epidemics, interruptions, loss or malfunctions of
utilities, computer (hardware or software) or communications service, or labor
disputes.
ARTICLE 10
AMENDMENT
Section 10.01. Amendment Without Consent of Holders. Without the consent of
any Holders, the Company, when authorized by a Board Resolution, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, at any time and from time to time, may amend this Agreement, in
form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, to:
(a) evidence the succession of another Person to the obligations of the
Company in connection with any succession pursuant to the terms of the Purchase
Contract Agreement;
(b) evidence and provide for the acceptance of appointment hereunder by a
successor Collateral Agent, Custodial Agent or Purchase Contract Agent;
(c) add to the covenants of the Company for the benefit of the Holders, or
surrender any right or power herein conferred upon the Company, provided that
such covenants or such surrender do not adversely affect the validity,
perfection or priority of the Pledge created hereunder;
(d) make provision with respect to the rights of Holders of Units pursuant
to adjustments in the Settlement Rate pursuant to Section 5.04 of the Purchase
Contract Agreement;
(e) cure any ambiguity (of formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, provided that such action shall not adversely affect the interests of
the Holders in any material respect; and
26
(f) make any other provisions with respect to such matters or questions
arising under this Agreement, which the Company, the Collateral Agent, the
Securities Intermediary and the Custodial Agent may deem necessary or advisable,
provided that such action will not adversely affect the interests of the
Holders.
Section 10.02. Amendment With Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, including without limitation the consent of the Holders obtained in
connection with a tender or an exchange offer or by Act of such Holders
delivered to the Company, the Purchase Contract Agent, the Custodial Agent, the
Securities Intermediary and the Collateral Agent, as the case may be, and the
Company, when duly authorized by a Board Resolution, may amend this Agreement
for the purpose of modifying in any manner the provisions of this Agreement;
provided, however, that no such modification shall, without the unanimous
consent of the Holders of each outstanding Purchase Contract affected by such
modification:
(a) change any payment date;
(b) change the amount or type of Pledged Securities related to the Purchase
Contracts, impair the right of the holder of any Pledged Securities to receive
distributions on the Pledged Securities or otherwise adversely affect Holders'
rights in or to the Pledged Securities;
(c) change the place or currency of payment or reduce any Contract
Adjustment Payments;
(d) impair the right to institute suit for the enforcement of the Purchase
Contracts or payment of any contract adjustment payments;
(e) reduce the number of Ordinary Shares purchasable under the Purchase
Contracts other than pursuant to Settlement Rate adjustments, increase the price
to purchase Ordinary Shares upon settlement of the Purchase Contract, change the
Purchase Contract Settlement Date, the right to Early Settlement or the Holders'
Specified Early Merger Settlement Right or otherwise adversely affect the
Holders' rights under the Purchase Contracts; or
(f) reduce the above stated percentage of outstanding Purchase Contracts
the consent of the holders of which is required for the modification or
amendment of the provisions of this Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Hybrid Capital Units or only the Treasury Units, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided, further, that the consent
of each of the holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (a) through (f) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
27
Section 10.03. Execution of Amendments. In executing any amendment
permitted by this Article, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully authorized and protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied. The Collateral Agent, Custodial Agent, the Securities Intermediary
and Purchase Contract Agent may, but shall not be obligated to, enter into any
such amendment which affects their own respective rights, duties or immunities
under this Agreement or otherwise.
Section 10.04. Effect of Amendments. Upon the execution of any amendment
under this Article, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Certificates representing Outstanding Units.
ARTICLE 11
MISCELLANEOUS
Section 11.01. No Waiver. No failure on the part of the Company, the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective agents to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by the Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary, or any
of their respective agents of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 11.02. Governing Law; Submission to Jurisdiction; Service of
Process. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) The Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Holders from time to time of the Units, acting through the
Purchase
28
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Holders from time to time
of the Units, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum. The Company agrees that service of all writs, process and summonses in
any suit, action or proceeding brought in connection with this Agreement against
the Company in any court of the State of New York or any United States federal
court, in each case, sitting in the Borough of Manhattan, City and State of New
York, may be made upon CT Corporation System at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, whom the Company irrevocably appoints as its authorized agent for
service of process. The Company represents and warrants that CT Corporation
System has agreed to act as the Company's agent for service of process. The
Company agrees that such appointment shall be irrevocable until the irrevocable
appointment by the Company of a successor in The City of New York as its
authorized agent for such purpose and the acceptance of such appointment by such
successor. The Company further agrees to take any and all action, including the
filing of any and all documents and instruments that may be necessary to
continue such appointment in full force and effect as aforesaid. If CT
Corporation System shall cease to act as the agent for service of process for
the Company, the Company shall appoint without delay, another such agent and
provide prompt written notice to the Purchase Contract Agent of such
appointment.
Section 11.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy if promptly
confirmed by telephone) delivered to the intended recipient at the "Address For
Notices" specified below its name on the signature pages hereof or, as to any
party, at such other address as shall be designated by such party in a notice to
the other parties. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 11.04. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the Units,
by their acceptance of the same, shall be deemed to have agreed to be bound by
the provisions hereof and to have ratified the agreements of, and the grant of
the Pledge hereunder by, the Purchase Contract Agent.
Section 11.05. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
29
Section 11.06. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 11.07. Expenses, Etc. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
the reasonable fees and expenses of counsel to the Collateral Agent, the
Custodial Agent and the Securities Intermediary), reasonably incurred in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
reasonable fees and expenses of counsel) reasonably incurred in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Units to satisfy its obligations under the Purchase
Contracts forming a part of the Units and (ii) the enforcement of this Section
11.07;
(c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges reasonably incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated hereby;
(d) all reasonable fees and expenses of any agent or advisor appointed by
the Collateral Agent and consented to by the Company under Section 9.11 of this
Agreement;
(e) any out-of-pocket costs and expenses reasonably incurred by the
Collateral Agent, the Custodial Agent and the Securities Intermediary in
connection with the exercise of their rights or performance of their obligations
and duties under Section 9.10 hereof; and
(f) any other reasonable out-of-pocket costs and expenses reasonably
incurred by the Collateral Agent, the Custodial Agent and the Securities
Intermediary in connection with the performance of their duties hereunder.
Section 11.08. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the Purchase
Contracts or the Units or any other agreement or instrument relating thereto;
30
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of the Units under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
Section 11.09. Notice of Specified Merger and Termination Event. Upon the
occurrence of a Specified Merger or a Termination Event, the Company shall
deliver written notice to the Purchase Contract Agent, the Collateral Agent and
the Securities Intermediary. Upon the written request of the Collateral Agent or
the Securities Intermediary, the Company shall inform such party whether or not
a Specified Merger or a Termination Event has occurred.
Section 11.10. Regarding the Purchase Contract Agent. All of the rights,
privileges, protections, indemnities and immunities afforded the Purchase
Contract Agent pursuant to the Purchase Contract Agreement are hereby
incorporated herein as if set forth herein in full.
Section 11.11. Book-Entry Interests. Unless and until definitive, fully
registered Certificates have been issued to Beneficial Owners pursuant to
Section 3.09 of the Purchase Contract Agreement, the Collateral Agent and
Custodial Agent shall be entitled to deal with the Depositary for all purposes
of this Agreement (including the receipt or transfer of any funds hereunder) as
the Holder of the Units, shall have no obligation to the Beneficial Owners and
the rights of the Beneficial Owners shall be exercised only through the
Depositary and shall be limited to those established by law and agreement
between such Beneficial Owners and the Depositary or the Depositary
Participants. The provisions of Sections 3.06 and 3.07 of the Purchase Contract
Agreement are hereby made applicable to the Collateral Agent and Custodial
Agent, mutatis mutandis, as if they were the Purchase Contract Agent as referred
to therein.
Section 11.12. Non-Recourse Obligation. The obligations of the Holders to
pay the Purchase Price are non-recourse obligations and, except to the extent
satisfied by Early Settlement, Specified Merger Early Settlement or Cash
Settlement, are payable solely out of the proceeds of the Collateral (and any
proceeds therefrom) pledged to secure the obligations of the Holders, and in no
event will Holders be liable for any deficiency between the proceeds of any
disposition of Collateral in accordance herewith and the Purchase Price.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SCOTTISH RE GROUP LIMITED JPMORGAN CHASE BANK,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Units
By: By:
----------------------------- -----------------------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
Scottish Re Group Limited JPMorgan Chase Bank,
X.X. Xxx 0000 0 Xxx Xxxx Xxxxx, 00xx Floor
Xxxxx Xxxxx, Xxxxx Xxxxx Xxx Xxxx, Xxx Xxxx 00000
0 Xxx-xx-Xxxxx Xxxx Telephone: (000) 000-0000
Xxxxxxxx HMMX, Bermuda Fax: (000) 000-0000
Telephone: (000) 000-0000 Attention: Institutional Trust Services
Attention: General Counsel
JPMORGAN CHASE BANK,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By:
-----------------------------
Name:
Title:
Address for Notices:
JPMorgan Chase Bank,
4 New York Plaza, 15th Floor
New York, New York 10004
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Institutional Trust Services
32
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Creation of Treasury Units)
JPMorgan Chase Bank,
as Collateral Agent
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Institutional Trust Services
Re: _____ Hybrid Capital Units of Scottish Re Group Limited (the "Company")
The securities account of JPMorgan Chase Bank, as
Collateral Agent, maintained by the Securities
Intermediary and designated "JPMorgan Chase Bank, as
Collateral Agent of Scottish Re Group Limited, as
pledgee of JPMorgan Chase Bank, as the Purchase
Contract Agent on behalf of and as attorney-in-fact
for the Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of December 17, 2003 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, as Securities
Intermediary and as Custodial Agent and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Hybrid Capital Units from time
to time. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $_____ Value of Treasury Securities or security entitlements with
respect thereto in exchange for an equal Value of Pledged Convertible Preferred
Shares relating to _____ Hybrid Capital Units and has delivered to the
undersigned a notice stating that the Holder has Transferred such Treasury
Securities or security entitlements with respect thereto to the Securities
Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of Pledged Convertible Preferred Shares in accordance with Section 5.02 of
the Pledge Agreement.
Date: JPMORGAN CHASE BANK,
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Units
By:
------------------------------------
Name:
Title:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged
Convertible Preferred Shares:
----------------------------------- ------------------------------------
Name:
Social Security
or other Taxpayer Identification Number,
if any
-----------------------------------
Address
-----------------------------------
-----------------------------------
EXHIBIT B
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Recreation of Hybrid Capital Units)
JPMorgan Chase Bank,
as Collateral Agent
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Institutional Trust Services
Re: _____ Treasury Units of Scottish Re Group Limited (the "Company")
Please refer to the Pledge Agreement dated as of December 17, 2003 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, as Securities
Intermediary and as Custodial Agent, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Treasury Units from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $____ Value of Convertible Preferred Shares in exchange for $_____
Value of Pledged Treasury Securities and has delivered to the undersigned a
notice stating that the holder has Transferred such Convertible Preferred Shares
to the Collateral Agent, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Convertible Preferred Shares have been credited to the
Collateral Account, to release to the undersigned $_____ Value of Treasury
Securities or security entitlements with respect thereto related to _____
Treasury Units of such Holder in accordance with Section 5.03(a) of the Pledge
Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
Dated: By:
-------------------------- -----------------------------
Name:
Title:
Please print name and address of Holder electing to substitute Convertible
Preferred Shares or security entitlements with respect thereto for Pledged
Treasury Securities:
------------------------------------ ---------------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
------------------------------------
Address
------------------------------------
------------------------------------
EXHIBIT C
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
JPMorgan Chase Bank,
as Purchase Contract Agent
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Institutional Trust Services
Re: ______ Hybrid Capital Units of Scottish Re Group Limited (the "Company")
______ Treasury Units of the Company
Please refer to the Pledge Agreement dated as of December 17, 2003 (the
"Pledge Agreement"), by and among you, the Company, and JPMorgan Chase Bank, as
Collateral Agent, Custodial Agent and Securities Intermediary. Unless otherwise
defined herein, terms defined in the Pledge Agreement are used herein as defined
therein.
In accordance with Section 5.05(c) of the Pledge Agreement, we hereby
notify you that as of 5:00 p.m. (New York City time) on the fifth Trading Day
immediately preceding _____ (the "Purchase Contract Settlement Date"), we have
received (i) $_____ in immediately available funds paid in an aggregate amount
equal to the Purchase Price due to the Company on the Purchase Contract
Settlement Date with respect to ____ Hybrid Capital Units and (ii) based on the
funds received set forth in clause (i) above, an aggregate liquidation
preference of $_____ of Pledged Convertible Preferred Shares are to be tendered
for purchase in the Remarketing.
JPMORGAN CHASE BANK,
as Collateral Agent
Dated: By:
-------------------------- -----------------------------
Name:
Title:
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
JPMorgan Chase Bank,
as Custodial Agent
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Institutional Trust Services
Re: Convertible Preferred Shares of Scottish Re Group Limited (the "Company")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of December 17, 2003 (the "Pledge Agreement"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and JPMorgan Chase Bank, as the Purchase Contract Agent and as
attorney-in-fact for the holders of Hybrid Capital Units from time to time, that
the undersigned elects to deliver $____ aggregate liquidation preference of
Separate Convertible Preferred Shares for delivery to the Remarketing Agent
prior to 10:00 a.m. (New York City time) on the fifth Trading Day immediately
preceding the ____ Remarketing Date for remarketing pursuant to Section 5.07(c)
of the Pledge Agreement. The undersigned will, upon request of the Remarketing
Agent, execute and deliver any additional documents deemed by the Remarketing
Agent or by the Company to be necessary or desirable to complete the sale,
assignment and transfer of the Separate Convertible Preferred Shares tendered
hereby. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent, to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of a
Failed Remarketing, upon receipt of the Separate Convertible Preferred Shares
tendered herewith from the Remarketing Agent, to deliver such Separate
Convertible Preferred Shares to the person(s) and the address(es) indicated
herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Separate Convertible Preferred Shares tendered hereby and that the
undersigned is the record owner of any Convertible Preferred Shares tendered
herewith in physical form or a participant in The Depositary Trust Company
("DTC") and the beneficial owner of any Convertible Preferred Shares tendered
herewith by book-entry transfer to your account at DTC, (ii) agrees to be bound
by the terms and conditions of Section 5.07(c) of the Pledge Agreement and (iii)
acknowledges and agrees that after 11:00 a.m. (New York City time) on the fifth
Trading Day immediately preceding the Remarketing Date, such election shall
become an irrevocable election to have such
Separate Convertible Preferred Shares remarketed in the Remarketing and that the
Separate Convertible Preferred Shares tendered herewith will only be returned in
the event of a Failed Remarketing.
Dated:
--------------------------------
-------------------------------------
By:
----------------------------------
Name:
Title:
Signature Guarantee:
-------------
------------------------------------- --------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
-------------------------------------
Address
-------------------------------------
-------------------------------------
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Convertible Preferred Shares which are in
physical form should be delivered to the person(s) set forth below and mailed to
the address set forth below.
Name(s)
(Please Print) Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Convertible Preferred Shares which are in
book-entry form should be credited to the account at The Depository Trust
Company set forth below.
-----------------------------------------
DTC Account Number
Name of Account Party:
------------------------------
EXHIBIT E
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
JPMorgan Chase Bank,
as Custodial Agent
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Institutional Trust Services
Re: Convertible Preferred Shares of Scottish Re Group Limited (the "Company")
The undersigned hereby notifies you in accordance with Section 5.07(c) of
the Pledge Agreement, dated as of December 17, 2003 (the "Pledge Agreement"),
among the Company and you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and JPMorgan Chase Bank, as Purchase Contract Agent and as
attorney-in-fact for the holders of Hybrid Capital Units from time to time, that
the undersigned elects to withdraw the $____ aggregate liquidation preference of
Separate Convertible Preferred Shares delivered to the Collateral Agent on ___,
200__ for remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The
undersigned hereby instructs you to return such Convertible Preferred Shares to
the undersigned in accordance with the undersigned's instructions. With this
notice, the Undersigned hereby agrees to be bound by the terms and conditions of
Section 5.07(c) of the Pledge Agreement. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Dated:
--------------------------------
-------------------------------------
By:
----------------------------------
Name:
Title:
Signature Guarantee:
--------------
------------------------------------- --------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
-------------------------------------
Address
-------------------------------------
-------------------------------------
