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Exhibit 4.2
FISCAL AGENCY AGREEMENT
between
RAM HOLDINGS LTD.
and
THE BANK OF NEW YORK,
as Fiscal Agent
dated as of March 26, 2004
regarding
$40,000,000 6.875% Senior Notes due April 1, 2024
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS......................................................
1
SECTION 1.1.
Definitions...............................................
1
SECTION 1.2. Rules of
Construction..................................... 9
ARTICLE II THE
NOTES.......................................................
9
SECTION 2.1.
Form......................................................
9
SECTION 2.2. Execution and
Authentication.............................. 10
SECTION 2.3. Registrar,
Paying Agent, Depository and Custodian......... 10
SECTION 2.4. Payment on
Notes.......................................... 11
SECTION 2.5. Noteholder
Lists.......................................... 12
SECTION 2.6. Replacement
Notes......................................... 12
SECTION 2.7. Outstanding
Notes......................................... 12
SECTION 2.8. Treasury
Notes............................................ 13
SECTION 2.9.
Cancellation..............................................
13
SECTION 2.10. Person Deemed
Owner....................................... 13
SECTION 2.11. CUSIP
Numbers............................................. 13
SECTION 2.12. Payments Free and
Clear of Taxes.......................... 14
ARTICLE III TRANSFER, EXCHANGE AND REDEMPTION; TRANSFER
RESTRICTIONS....... 15
SECTION 3.1. Transfer and
Exchange..................................... 15
SECTION 3.2. Optional
Redemption....................................... 20
SECTION 3.3. ERISA
Restrictions........................................ 22
ARTICLE IV
COVENANTS.......................................................
23
SECTION 4.1. Payment of
Principal and Interest......................... 23
SECTION 4.2. Rule 144A and
Other Information........................... 23
SECTION 4.3. Limitation on
Liens....................................... 23
ARTICLE V EVENTS OF
DEFAULT................................................
23
ARTICLE VI
REMEDIES........................................................
25
SECTION 6.1.
Acceleration..............................................
25
SECTION 6.2. Other
Remedies............................................ 25
SECTION 6.3.
Rescission................................................
25
SECTION 6.4. No Waivers or
Election of Remedies, Expenses, Etc......... 26
ARTICLE VII FISCAL
AGENT...................................................
26
SECTION 7.1. Duties of Fiscal
Agent.................................... 26
SECTION 7.2. Rights of Fiscal
Agent.................................... 26
SECTION 7.3. Individual
Rights of Fiscal Agent......................... 28
SECTION 7.4. Fiscal Agent's
Disclaimer................................. 28
SECTION 7.5. Compensation and
Indemnity................................ 28
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SECTION 7.6. Replacement of
Fiscal Agent............................... 29
SECTION 7.7. Successor Fiscal
Agent, Agent by Merger, Etc.............. 29
SECTION 7.8.
Eligibility...............................................
30
ARTICLE VIII AMENDMENTS, SUPPLEMENTS AND
WAIVERS........................... 30
SECTION 8.1. Without Consent
of Noteholders............................ 30
SECTION 8.2. With Consent of
Noteholders............................... 30
SECTION 8.3. Revocation and
Effect of Consents......................... 31
SECTION 8.4. Notation on or
Exchange of Notes.......................... 32
SECTION 8.5. Fiscal Agent to
Sign Amendments Etc....................... 32
ARTICLE IX MEETING OF
NOTEHOLDERS.......................................... 32
SECTION 9.1. Purposes for
Which Meetings May Be Called................. 32
SECTION 9.2. Call, Notice and
Place of Meetings........................ 32
SECTION 9.3. Persons Entitled
to Vote at Meetings...................... 33
SECTION 9.4.
Quorum....................................................
33
SECTION 9.5. Action by
Written Consent................................. 33
SECTION 9.6. Determination of
Voting Rights; Conduct and Adjournment
of Meetings...............................................
33
SECTION 9.7. Counting Votes
and Recording Action of Meetings........... 34
ARTICLE X
MISCELLANEOUS....................................................
34
SECTION 10.1.
Notices...................................................
34
SECTION 10.2. Tax
Information........................................... 35
SECTION 10.3. Governing Law; Jury
Trial................................. 35
SECTION 10.4. No Recourse Against
Others................................ 36
SECTION 10.5. Duplicate Originals;
Counterparts......................... 36
SECTION 10.6. Headings and Table of
Contents............................ 36
SECTION 10.7. Successor and
Assigns..................................... 36
SECTION 10.8.
Separability..............................................
36
SECTION 10.9. Legal
Holidays............................................ 36
SECTION 10.10.
Force Majeure.............................................
36
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FISCAL AGENCY AGREEMENT dated as of March 26, 2004, between RAM
HOLDINGS
LTD., a limited liability company organized under the laws of
Bermuda (the
"Company"), and THE BANK OF NEW YORK, a New York banking
corporation, as Fiscal
Agent (together with any permitted successor Fiscal Agent
hereunder, the "Fiscal
Agent").
Each
party agrees as follows for the benefit of the other party and for
the
equal and ratable benefit of the holders of the Company's 6.875%
unsecured
senior notes due 2024 (the "Notes"):
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
In
this Agreement, unless the context otherwise requires:
"Agent" means any Registrar, Paying Agent, Co-Registrar or
Custodian.
"Agreement" means this Agreement, as amended or supplemented from
time to
time.
"Authenticating Agent" means the Fiscal Agent, in its capacity
as
Authenticating Agent.
"Authorized Officer" means any officer or assistant officer of the
Fiscal
Agent assigned by the Fiscal Agent to administer the transactions
contemplated
hereby.
"Backstop Facility" means a credit agreement or other
contractual
arrangement which provides (i) for advances thereunder if one or
more parties to
a Soft Capital Facility shall fail to make an advance under such
Soft Capital
Facility and (ii) that recourse for the obligations incurred
thereunder are
limited to the collateral securing such Soft Capital Facility.
"Beneficial Holder" means each participant in the Depository that
holds an
interest in a Note, as indicated in the Participant List.
"Business Day" means any day other than a Saturday, Sunday or any
other day
on which banking institutions are authorized or required by law or
executive
order to close in New York, New York or in Hamilton, Bermuda.
"Closing Date" means March 26, 2004.
"Code" means the United States Internal Revenue Code of 1986, as
amended
from time to time. Any reference to a particular section of the
Code shall
include any successor Code section.
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"Company Order" means any request, instruction, order or directive
signed
by an authorized signatory of the Company.
"Contingent Capital Facility" means a facility which provides a
pool of
capital which may be drawn upon by the Company or any Subsidiary at
its option
in connection with the purchase of either Debt or preferred stock
issued by the
Company or any Subsidiary.
"Consolidated Net Worth" means the combined shareholders' equity of
the
Guarantor, the Company and its Subsidiaries as determined in
accordance with
U.S. GAAP.
"Co-Registrar" has the meaning set forth in Section 2.3(a).
"Custodian" has the meaning set forth in Section 2.1(b).
"Debt" of any Person means, all obligations of such Person for
borrowed
money (including obligations of such Person evidenced by bonds,
debentures,
notes or similar instruments).
"Default" means an event or condition the occurrence or existence
of which
would, with the lapse of time or the giving of notice or both,
become an Event
of Default.
"Default Rate" means the rate of interest that is 2% per annum
above the
Stated Rate.
"Definitive Note" has the meaning set forth in Section 2.1(a).
"Depository" means, with respect to the Notes issuable or issued in
whole
or in part in global form, the Person specified in Section 2.3 as
the Depository
with respect to the Global Notes, until a successor shall have been
appointed
and becomes such pursuant to the applicable provisions of this
Agreement, and,
thereafter, "Depository" shall mean such successor.
"DTC" means The Depository Trust Company.
"Event of Default" has the meaning set forth in Article V.
"Exchange Act" means the United States Securities Exchange Act of
1934, as
amended.
"Existing Credit
Agreements" means the Credit Agreement, dated as of May
11, 1999, among RAM Re, various banks and Norddeutsche Landesbank
Girozentrale,
New York Branch, as Agent, as amended, restated or replaced from
time to time.
"Global Note" has the meaning set forth in Section 2.1(a).
"Guarantor" means RAM Holdings II Ltd., as guarantor pursuant to
the
Guaranty.
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"Guaranty" means the guaranty by Holdings II in favor of the
Holders, dated
as of March 26, 2004.
"Guaranty Event of Default" has the meaning set forth in the
Guaranty.
"Holdings II" means RAM Holdings II Ltd., a limited liability
company
organized under the laws of Bermuda.
"Holder" or "Noteholder" means the Person in whose name a Note
is
registered on the Registrar's books.
"Interest Payment Date" means each April 1st and October 1st,
commencing
October 1, 2004.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust,
lien, pledge, hypothecation, encumbrance, charge or security
interest in, or on
such asset, and (b) the interest of a vendor or a lessor under any
conditional
sale agreement, capital lease or title retention agreement (or any
financing
lease having substantially the same economic effect as any of the
foregoing)
related to such asset.
"Liquidity Facility" means unsecured lines of credit that provide
any
Subsidiary with liquidity to pay claims in respect of financial
guaranty
insurance policies or to meet other operating short-term cash
short-falls that
may occur in the ordinary course of business.
"Make-Whole Amount" has the meaning set forth in Section
3.2(a).
"material" means material in relation to the business, operations,
affairs,
financial condition, assets or properties of the Company and its
Subsidiaries
taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the
business, operations, affairs, financial condition, assets or
properties of the
Company and its Subsidiaries, taken as a whole, or (b) the ability
of the
Company to perform its obligations under the Transaction Documents,
or (c) the
validity or enforceability of the Transaction Documents.
"Maturity Date" means April 1, 2024.
"Notes" has the meaning set forth in the second paragraph
hereof.
"Officer" means any of the Chairman, President, Chief Executive
Officer,
Chief Financial Officer, Managing Director Finance or Senior Vice
President of
the Company.
"Officer's Certificate" means a certificate signed by an
Officer.
"Opinion of Counsel" means a written opinion from the general
counsel of
the Company.
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"Outstanding Notes" means, at any given point in time, the
Notes
outstanding at such time as determined in accordance with Section
2.7.
"Participant List" means the list furnished by the Depository
showing
participants that have a beneficial interest in the Notes evidenced
by any
Global Note held by the Depository and the amount of such interest.
If DTC is
the Depository, then the Participant List shall be the DTC Security
Position
Listing Report furnished by DTC showing DTC participants that have
a beneficial
interest in the Notes evidenced by any Global Note held by DTC and
the amount of
such interest.
"Paying Agent" has the meaning set forth in Section 2.3(b).
"Payment Date" means an Interest Payment Date, Maturity Date or
Redemption
Date, as the context requires.
"Permitted Liens" means:
(i)
Liens for taxes,
assessments or other governmental charges that are
not yet due and payable or the payment of which are being contested
in
good faith and by appropriate proceedings and adequate reserves
with
respect thereto are maintained on the books of the Company;
(ii)
Liens to secure statutory obligations (including obligations
under
workers compensation, unemployment insurance and other social
welfare
legislation), incurred in the ordinary course of business and not
in
connection with the borrowing of money;
(iii) easements, rights-of-way, restrictions and similar
encumbrances
incurred in the ordinary course of business and subleases, leases,
and
statutory liens of landlords which are not material in amount and
do
not detract from the value of the properties of the Company or
interfere with the ordinary conduct of business of the Company;
(iv)
Liens in respect of property or assets of the Company imposed by
law,
which are incurred in the ordinary course of business, such as
carriers, warehousemen's and mechanics' Liens, Liens on
insurance
license security deposits and other similar Liens arising in
the
ordinary
course of business and not in connection with borrowing money
and (a) which do not in the aggregate materially detract from
the
value of the properties of the Company, taken as a whole, or (b)
which
are being contested in good faith by appropriate proceedings,
which
proceedings have the effect of preventing the forfeiture or sale
of
the property or assets subject to such Lien;
(v)
Liens on assets in any
trust established for the benefit of
reinsurance cedents;
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(vi)
Liens on cash and securities incurred as part of the management of
the
investment portfolios of the Company and its Subsidiaries in
the
ordinary course of business;
(vii) Liens arising in the ordinary course of business on
operating
accounts (including any related securities accounts) maintained by
the
Company or any of its Subsidiaries in the ordinary course of
business;
(viii) Liens incurred pursuant to security arrangements in
connection with
insurance and reinsurance polices;
(ix)
Attachments, judgments and other similar Liens, provided that
the
execution or enforcement of such Lien is stayed, contested in
good
faith and bonded;
(x)
Liens existing on the
Closing Date;
(xi)
Liens securing Debt of the Company or any Subsidiary under the
Existing Credit Agreements, any Soft Capital Facility and any
Backstop
Facility;
(xii) Liens securing Debt under Contingent Capital Facilities;
(xiii) Liens securing Liquidity Facilities in an aggregate amount
not in
excess of the greater of $60,000,000 and 30% of Consolidated
Net
Worth;
(xiv) Liens securing other credit facilities entered into by the
Company or
any of its Subsidiaries from time to time in order solely to
provide
support for a specified transaction or transactions in which
obligations are insured or reinsured by the Company or any of
its
Subsidiaries under an insurance policy or contract selling or
providing protection, provided that such Liens in respect of each
such
transaction are limited to the interests of the Company or such
Subsidiary in connection with such transaction;
(xv)
Liens incurred after the Closing Date given to secure the payment
of
the purchase price incurred in connection with the acquisition,
construction or improvement of property useful and intended to be
used
in carrying on the business of the Company, including Liens
existing
on such property at the time of acquisition or construction
thereof
(or created within 180 days after such acquisition), provided that
(a)
the Lien shall attach solely to the property acquired,
purchased,
constructed or improved; (b) at the time of acquisition,
construction
or improvement of such property, the aggregate amount remaining
unpaid
on all Debt secured by Liens on such property, whether or not
assumed
by the Company or a
5
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Subsidiary, shall not exceed the cost of such acquisition,
construction or improvement; and (c) at the time of such
incurrence
and after giving effect thereto, no Default or Event of Default
would
exist;
(xvi) any Lien existing on property of a Person immediately prior
to its
being consolidated with or merged into the Company, or any Lien
existing on any property acquired by the Company at the time
such
property is so acquired (whether or not the Debt secured thereby
shall
have been assumed), provided that (a) no such Lien shall have
been
created or assumed in contemplation of such consolidation or merger
or
such acquisition of property, (b) each such Lien shall extend
solely
to the item or items of property so acquired and, if required by
the
terms of the instrument originally creating such Lien, other
property
which is an improvement to or is acquired for specific use in
connection with such acquired property, and (c) at the time of
such
incurrence and after giving effect thereto, no Default or Event
of
Default would exist;
(xvii) in addition to the Liens permitted by the preceding
subparagraphs
(i) through (xvi), Liens securing Debt of the Company, provided
that
the aggregate principal amount of Debt secured by Liens pursuant
to
this clause shall not exceed the greater of $30,000,000 and 10%
of
Consolidated Net Worth; and
(xviii) any extension, renewal or replacement of any Lien permitted
by the
foregoing, provided, that no additional property (other than a
substitution of like property) shall be encumbered thereby unless
such
additional Lien on such property would have been permitted in
connection with the original creation, incurrence or assumption
of
such Lien.
"Permitted Corporate Transaction" means the consolidation,
amalgamation or
merger by the Company with any other Person or the conveyance,
transfer or lease
by the Company of substantially all of the assets of the Company in
a single
transaction or series of transactions to any other Person; provided
that:
(i)
the successor formed
by such consolidation or amalgamation or the
survivor of such merger or the Person that acquires by
conveyance,
transfer or lease substantially all of the assets of the Company as
an
entirety (the "Successor Corporation"), shall be a solvent
corporation, partnership or trust organized and existing under
the
laws of the United States of America, any State thereof, the
District
of Columbia or Bermuda;
(ii)
if the Company is not the Successor Corporation, such Successor
Corporation shall have executed and delivered to each Holder
its
6
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assumption of the due and punctual performance and observance of
each
covenant and condition of this Agreement and the Notes;
provided,
however,
to the extent that the Successor Corporation is legally bound
under Bermuda law to assume the obligations under this Agreement
and
the Notes pursuant to an amalgamation, such assumption shall not
be
required; and
(iii) immediately after giving effect to such transaction no
Default or
Event of Default would exist.
"Permitted Holdings II Transaction" means the consolidation or
merger or
amalgamation by the Guarantor with any other corporation or the
conveyance,
transfer or lease by the Guarantor of substantially all assets of
the Guarantor,
as the case may be, in a single transaction or series of
transactions to any
other Person; provided that:
(i)
the successor formed
by such consolidation or amalgamation or the
survivor of such merger or the Person that acquires by
conveyance,
transfer or lease substantially all of the assets of the Guarantor
as
an entirety, as the case may be (the "Successor Guarantor"), shall
be
a solvent corporation organized and existing under the laws of
the
United States of America, any State thereof, the District of
Columbia
or Bermuda;
(ii)
if the Guarantor is not the Successor Guarantor, such Successor
Guarantor shall have executed and delivered to each Holder its
assumption of the due and punctual performance and observance of
each
covenant and condition of the Guaranty; provided, however, to
the
extent that the Successor Guarantor is legally bound under Bermuda
law
to assume the obligations under the Guaranty pursuant to an
amalgamation, such assumption shall not be required; and
(iii) immediately after giving effect to such transaction no
default under
the Guaranty or Guaranty Event of Default would exist.
"Person" means any individual, corporation, partnership, limited
liability
company, association, trust, unincorporated organization or a
government or
agency or political subdivision thereof.
"Plan" has the meaning set forth in Section 3.3.
"Purchase Agreement" has the meaning set forth in Section
2.1(a).
"Purchaser" means the Purchaser named in the Purchase
Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A under
the Securities Act.
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"RAM
Re" means RAM Reinsurance Company Ltd., a Subsidiary of the
Company.
"Record Date" means with respect to an Interest Payment Date, the
March 15
or September 15 next preceding such Interest Payment Date.
"Redemption Date" has the meaning set forth in Section 3.2(a).
"Registrar" has the meaning set forth in Section 2.3(a).
"Register" means the register of the Notes maintained pursuant to
Section
2.3.
"Responsible Officer" means any named executive officer and any
other
officer of the Company with responsibility for the administration
of the
relevant portion of this Agreement.
"Restricted Note" means any Note that bears or is required to bear
the
legend set forth in Section 3.1.
"Rule 144A" has the meaning set forth in Section 2.1(a).
"Rule 144A Information" has the meaning set forth in Section
4.2.
"Securities Act" means the United States Securities Act of 1933, as
amended
from time to time.
"Significant Subsidiary" means each Subsidiary of the Company in
which (i)
the Company has a direct or indirect equity ownership interest in
the shares of
capital stock of such Subsidiary, and (ii) the Company's direct and
indirect
equity interests in and advances to such Subsidiary constitute 25%
or more of
the total assets of the Company and its Subsidiaries on a combined
basis.
"Soft Capital Facility" means credit agreements and other
contractual
arrangements which (i) are similar to the Existing Credit
Agreements, (ii)
contractually transfer a portion of the risk of loss under insured
obligations
from the Company and its Subsidiaries to a third party, and (iii)
provide that
recourse for any advance made thereunder is limited to the
premiums, collateral
and proceeds of collateral securing the insured obligations in
respect of which
such advance shall have been made.
"Stated Rate" means a rate of interest equal to 6.875% per
annum.
"Subsidiary" means, as to any Person, any corporation, association,
or
other business entity in which at least a majority of the
outstanding voting
securities shall be beneficially owned, directly or indirectly, by
such Person.
The term "Subsidiary" shall mean a Subsidiary of the Company.
"U.S. GAAP" means those generally accepted accounting principles as
in
effect from time to time in the United States. U.S. GAAP currently
requires that
the
8
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Company's financial statements be presented on a combined rather
than
consolidated basis.
SECTION 1.2. Rules of Construction. In this Agreement, unless the
context
otherwise requires:
(i) the words "herein," "hereof" and "hereunder" and other words
of
similar import refer to this Agreement and the forms of Note
included as
exhibits hereto as a whole, and not any particular Article, Section
or
other subdivision;
(ii) words in the singular include the plural, and words in the
plural
include the singular;
(iii) provisions apply to successive events and transactions;
and
(iv) any reference to a party includes its permitted successors
from
time
to time.
ARTICLE II
THE NOTES
SECTION 2.1. Form. (a) The Notes are being offered and sold by the
Company,
pursuant to a Note Purchase Agreement, dated March 23, 2004 (the
"Purchase
Agreement"), between the Company and the Purchaser, which Notes
will be in fully
registered form without coupons. The Notes may be represented by
registered
notes in global form ("Global Notes") or notes in certificated form
registered
in the name of an individual purchaser or its nominee ("Definitive
Notes"). The
Definitive Notes shall be substantially in the form attached as
Exhibit A
hereto. The Global Note shall be substantially in the form attached
as Exhibit
B. Any applicable legends for the Notes shall be provided in
Exhibit A and
Exhibit B, as applicable.
(b)
Each Note sold by the Purchaser in an initial resale to a QIB
in
reliance on Rule 144A ("Rule 144A") under the Securities Act shall
be
represented by one or more permanent Global Notes, with such
legends applicable
to such form of Note as are applicable to Global Notes included
thereon. Each
such Global Note shall be deposited with a Person (which may be the
Fiscal
Agent) appointed by the Company to act as custodian for the
Depository (the
"Custodian") and registered in the name of the Depository or
nominee thereof.
(c)
Each Global Note shall represent such of the Outstanding Notes as
shall
be specified therein and shall provide that it shall represent the
aggregate
amount of Outstanding Notes from time to time endorsed thereon and
that the
aggregate amount of Outstanding Notes represented thereby may, from
time to
time, be increased or reduced to reflect transfers or exchanges.
Any endorsement
of a Global Note to reflect the amount of any increase or decrease
in the amount
of Outstanding Notes represented thereby shall be made by the
Fiscal Agent or
the Custodian, at the direction of the Fiscal Agent, in such manner
and upon
instructions given by the Holder thereof. Payment of
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any interest on any Global Note shall be made to the Holder thereof
as of the
close of business on the relevant Record Date.
(d)
The Notes may have notations, legends or endorsements required by
law,
securities exchange rule or usage. Each Note shall be dated the
date of its
authentication.
(e)
The Notes shall be issuable in minimum denominations of $100,000
and
any amount in excess thereof that is an integral multiple of
$1,000.
SECTION 2.2. Execution and Authentication. (a) Any two Officers
shall sign
the Notes on behalf of the Company by manual or facsimile
signature.
(b)
If an Officer whose signature is on a Note no longer holds that
office
at the time the Note is authenticated, the Note shall nevertheless
be valid.
(c) A Note shall not
be valid until authenticated by the manual signature
of an Authorized Officer of the Fiscal Agent. The Fiscal Agent's
signature shall
be conclusive evidence that the Note has been authenticated under
this
Agreement.
(d)
The Fiscal Agent shall authenticate the Notes for original issue in
the
aggregate principal amount of $40,000,000 upon a written order of
the Company
signed by any two Officers. The aggregate principal amount of
Outstanding Notes
at any time may not exceed the sum of (i) $40,000,000, and (ii) the
principal
amount of lost, destroyed or stolen Notes for which replacement
Notes are issued
pursuant to Section 2.6.
(e)
The Fiscal Agent is hereby appointed as the Authenticating Agent
to
authenticate Notes. The Authenticating Agent may authenticate Notes
whenever the
Fiscal Agent may do so, other than upon original issuance or
pursuant to Section
2.6. Each reference in this Agreement to authentication by the
Fiscal Agent
includes authentication by such agent. The Authenticating Agent has
the same
rights as an Agent to deal with the Company.
SECTION 2.3. Registrar, Paying Agent, Depository and Custodian. (a)
The
Company shall appoint itself or another Person to maintain an
office or agency
where Notes may be presented for registration of transfer or
exchange (the
Company or such other Person being referred to, in such capacity,
as the
"Registrar"); provided, however, that the Company shall at all
times maintain an
office of the Registrar in the Borough of Manhattan, The City of
New York. As
set forth in Article IV hereof, the Registrar shall keep a register
of the Notes
and of their transfer and exchange. The Company may appoint one or
more
co-Registrars (each, a "Co-Registrar") and may act as Co-Registrar.
The Company
initially appoints the Fiscal Agent to act as Registrar.
(b)
The Company shall appoint itself or another Person to maintain
an
office or agency where Notes may be presented for payment (the
Company or such
other Person being referred to, in such capacity, as the "Paying
Agent"). The
term "Paying Agent" includes any additional paying agent. The
Company initially
appoints the Fiscal Agent to act as Paying Agent.
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(c)
The Company shall appoint one or more other Persons to act as
depository (the "Depository") with respect to any Global Notes. The
Company
initially appoints DTC to act as Depository with respect to the
Global Notes. As
set forth in Section 3.1(d), the Company may, in certain
circumstances, appoint
a successor Depository or determine that the Notes issued in the
form of Global
Notes shall no longer be represented by such Global Notes.
(d)
The Company shall appoint itself or one or more other Persons to
act as
Custodian with respect to any Global Note. The Company initially
appoints the
Fiscal Agent to act as Custodian with respect to the Global
Notes.
(e)
The Company shall notify the Fiscal Agent of the name and address
of
the Depository and of any Agent not a party to this Agreement, and
shall give
the Fiscal Agent at least 30 days' notice prior to changing the
Depository or
any such Agent.
SECTION 2.4. Payment on Notes. (a) The Company shall use its best
efforts
to provide to the Paying Agent, in immediately available funds on
or prior to
10:00 a.m., New York time, on each Interest Payment Date or the
applicable
Maturity Date or Redemption Date, such amount, in U.S. dollars, as
is necessary
to make such payment as is due, and the Company hereby authorizes
and directs
the Paying Agent from funds so provided to it to make or cause to
be made
payment of the principal of and interest on, and Make-Whole Amount
with respect
to, the Notes in the manner, at the times and for the purposes set
forth herein
and in the text of the Notes; provided that any payment of interest
on the Notes
may be made on the Payment Date by check mailed to the Noteholders
as of the
close of business on the relevant Record Date. Payments of interest
on or
principal of, and any Make-Whole Amount with respect to, the Notes
may be made,
in the case of a Noteholder of at least $5,000,000 aggregate
principal amount of
Notes, by electronic funds transfer providing immediately available
funds on the
Payment Date to an account maintained by the payee with a bank if
such
Noteholder so elects by giving written notice to the Paying Agent,
not less than
15 days prior to the date on which such payments are scheduled to
be made, of
such election and of the account to which payment is to be made.
Unless such
designation is revoked not less than 15 days prior to a Payment
Date, any such
designation made by such Noteholder with respect to such Notes
shall remain in
effect with respect to any future payments with respect to the
Notes payable to
such Noteholder. The Company shall pay any reasonable
administrative costs in
connection with making any such payments. Any monies held in
respect of the
Notes remaining unclaimed at the end of two years after such
amounts shall have
become payable (whether at the Maturity Date, Redemption Date or
otherwise) and
monies sufficient therefor shall have been duly made available for
payment
shall, together with any interest made available for payment
thereon, be repaid
to the Company upon written request and upon such repayment all
liability of the
Fiscal Agent with respect thereto shall cease, without, however,
limiting in any
way any obligation the Company may have to pay principal of and
interest on the
Notes and any Make-Whole Amount.
(b)
Interest will continue to accrue at (i) the Stated Rate on any
unpaid
principal, and (ii) to the extent permitted by applicable law, the
Default Rate
on any
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<PAGE>
payment of interest which is not punctually paid or duly provided
for on the
applicable Interest Payment Date, in each case to, but not
including, the date
of actual payment.
(c)
The Company shall require each Paying Agent other than the Fiscal
Agent
to agree in writing that the Paying Agent will hold in trust for
the benefit of
Noteholders or the Fiscal Agent all money held by the Paying Agent
for the
payment of principal of or interest on, or the Make-Whole Amount
with respect
to, the Notes, and will notify the Fiscal Agent of any failure by
the Company to
make any such payment. Until any such failure has been remedied,
the Fiscal
Agent may require a Paying Agent to pay all money held by it to the
Fiscal
Agent. In the event the Company wishes to terminate the Fiscal
Agent's
appointment as Paying Agent, the Company shall provide 30 days'
prior written
notice to the Fiscal Agent that the Fiscal Agent's appointment to
act as Paying
Agent is so terminated and the Fiscal Agent may rely on such
notice. The Company
at any time may require a Paying Agent to pay all money held by the
Paying Agent
to the Fiscal Agent. Upon doing so the Paying Agent shall have no
further
liability for the money so paid.
SECTION 2.5. Noteholder Lists. The Fiscal Agent shall preserve, in
as
current a form as is reasonably practicable, a list of names and
addresses of
Noteholders. If the Fiscal Agent is not the Registrar, the Company
shall cause
the Registrar to furnish to the Fiscal Agent not less than five
Business Days
prior to each Interest Payment Date and at such other times as the
Fiscal Agent
may request in writing a list of the names and addresses of
Noteholders in such
form and as of such date as the Fiscal Agent may reasonably
require.
SECTION 2.6. Replacement Notes. If any Note shall be mutilated,
destroyed,
lost or stolen, the Company shall, upon the written request of the
Holder of
such Note, issue and execute, and the Fiscal Agent shall
authenticate and make
available for delivery, in replacement thereof, a replacement Note
payable to
such Noteholder and in the same principal amount as the Note so
mutilated,
destroyed, lost or stolen. If the Note being replaced has become
mutilated, the
Noteholder shall surrender such Note to the Fiscal Agent to save
harmless the
Company and the Fiscal Agent. If the Note has been destroyed, lost
or stolen,
the Holder of such Note shall furnish to the Company and the Fiscal
Agent (i)
satisfactory evidence of such Noteholder's ownership of such Note,
(ii)
satisfactory evidence of the destruction, loss or theft of such
Note, and (iii)
such security or indemnity as may be required by the Company and
the Fiscal
Agent to save harmless the Company and the Fiscal Agent. Upon the
issuance of a
replacement Note pursuant to this Section, the Noteholder
requesting such
replacement Note shall pay to the Fiscal Agent a sum sufficient to
cover any
transfer tax or governmental charge payable in connection with the
issuance of
such replacement Note. Any Note issued pursuant to this Section
shall be
registered with the Registrar.
Every replacement Note shall be an obligation of the Company.
SECTION 2.7. Outstanding Notes. (a) The Notes deemed to be
outstanding at
any time are only those Notes authenticated by the Fiscal Agent (or
an
authenticating agent appointed pursuant to Section 2.2) except for
those
cancelled by the Fiscal Agent,
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<PAGE>
those delivered to the Fiscal Agent for cancellation, those
reductions in the
interests in a Global Note effected by the Fiscal Agent hereunder,
and those
described in this Section as not outstanding.
(b)
A Note does not cease to be outstanding because the Company holds
the
Note.
(c)
If a Note is replaced pursuant to Section 2.6, it ceases to be
outstanding unless the Fiscal Agent receives proof satisfactory to
it that the
replaced Note is held by a protected purchaser.
(d)
Notes are not outstanding which have been called for redemption
in
accordance with Section 4.2 or which otherwise have become payable
at the
Maturity Date and, in each case, monies sufficient to pay the
principal thereof,
any interest thereon and the Make-Whole Amount with respect thereto
have been
paid.
SECTION 2.8. Treasury Notes. In determining whether the Noteholders
of the
required principal amount of Outstanding Notes have concurred in
any direction,
waiver or consent, Notes owned by the Company or any subsidiary or
affiliate of
the Company shall be disregarded, except that for the purposes of
determining
whether the Fiscal Agent shall be protected in relying on any such
direction,
waiver or consent, only Notes which an Authorized Officer of the
Fiscal Agent
actually knows are so owned by the Company or any subsidiary or
affiliate of the
Company shall be so disregarded.
SECTION 2.9. Cancellation. The Company at any time may deliver
Notes to the
Fiscal Agent for cancellation. The Registrar and Paying Agent shall
promptly
forward to the Fiscal Agent any Notes surrendered to them for
registration of
transfer, exchange or payment. The Fiscal Agent shall cancel all
Notes
surrendered for registration of transfer, exchange, payment or
cancellation and
shall dispose of such cancelled Notes in accordance with its
customary
procedures. The Company may not issue new Notes to replace Notes
that it has
paid or delivered to the Fiscal Agent for cancellation.
SECTION 2.10. Person Deemed Owner. Prior to due presentment for
registration of transfer, the Company, the Fiscal Agent, the
Authenticating
Agent, if any, and any Agent may treat the Person in whose name a
Note is
registered on the Registrar's books as the owner of such Note for
the purpose of
receiving payment of principal of, interest on, and the Make-Whole
Amount with
respect to, such Note and for all other purposes whatsoever, and
neither the
Company, the Fiscal Agent, the Authenticating Agent, nor any other
Agent shall
be affected by notice to the contrary.
SECTION 2.11. CUSIP Numbers. The Company in issuing the Notes may
use
"CUSIP" numbers (if then generally in use), and, if so, the Fiscal
Agent may use
"CUSIP" numbers in notices to Noteholders; provided, that any such
notice may
state that no representation is made as to the correctness of such
numbers
either as printed on the Notes or as contained in any notice of a
redemption.
The Company will promptly notify the Fiscal Agent in writing of any
change in
the CUSIP numbers.
13
<PAGE>
SECTION 2.12. Payments Free and Clear of Taxes. The Company will
make all
payments of principal, interest and any other amounts on, or in
respect of, the
Notes without withholding or deduction at source for, or on account
of, any
present or future taxes, fees, duties, assessments or governmental
charges of
whatever nature imposed or levied by or on behalf of Bermuda or any
other
jurisdiction in which the Company is organized or any other
jurisdiction from
which or through which a payment is made by the Company (a
"taxing
jurisdiction") or any political subdivision or taxing authority
thereof or
therein, unless such taxes, fees, duties, assessments or
governmental charges
are required to be withheld or deducted by (a) the laws (or any
regulations or
rulings promulgated thereunder) of a taxing jurisdiction or any
political
subdivision or taxing authority thereof or therein, or (b) an
official position
regarding the application, administration, interpretation or
enforcement of any
such laws, regulations or rulings (including, without limitation, a
holding by a
court of competent jurisdiction or by a taxing authority in a
taxing
jurisdiction or any political subdivision thereof). If a
withholding or
deduction at source is required, the Company will, subject to
certain
limitations and exceptions described below, pay to the Noteholder
such
additional amounts as may be necessary so that every net payment of
principal,
interest or any other amount made to such Noteholder, after the
withholding or
deduction, will not be less than the amount provided for in such
Note and
pursuant to the terms of this Agreement to be then due and payable.
The Company
will not be required to pay any additional amounts for or on
account of:
(i)
any tax, fee, duty,
assessment or governmental charge of whatever
nature which would not have been imposed but for the fact that
such
holder (A) was a resident, domiciliary or national of, or engaged
in
business or maintained a permanent establishment or was
physically
present in, the relevant taxing jurisdiction or any political
subdivision thereof or otherwise had some connection with the
relevant
taxing jurisdiction other than by reason of the mere ownership of,
or
receipt of payment under, or enforcement of claims under such
Note,
(B) presented such Note for payment in the relevant taxing
jurisdiction or any political subdivision thereof, unless such
Note
could not have been presented for payment elsewhere without
incurring
taxes, or (C) presented such Note for payment more than 30 days
after
the date on which the payment in respect of such Note became due
and
payable or provided for, whichever is later, except to the extent
that
the holder would have been entitled to such additional amounts if
it
had presented such Note for payment on any day within that
30-day
period;
(ii)
any estate, inheritance, gift, sale, transfer, personal property
or
similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge that is
imposed or
withheld by reason of the failure by the holder or the
beneficial
owner of such Note to comply with any reasonable request by the
Company addressed to the holder within 90 days of such request
(such
request to include any relevant form required to provide the
following
information or
14
<PAGE>
declaration in English) (A) to provide information concerning
the
nationality, residence or identity of the holder or such
beneficial
owner, or (B) to make any declaration or other similar claim or
satisfy any information or reporting requirement, which is required
or
imposed by statute, treaty, regulation or administrative practice
of
the relevant taxing jurisdiction or any political subdivision
thereof
as a precondition to exemption from all or part of such tax,
assessment or other governmental charge;
(iv)
any withholding or deduction required to be made pursuant to any
EU
Directive on the taxation of savings implementing the conclusions
of
ECOFIN Council meetings of 26-27 November 2000 or 3 June 2003 or
any
law implementing or complying with, or introduced in order to
conform
to, such EU Directive; or
(v)
any combination of
items (i), (ii), (iii) and (iv).
In addition, the Company will not pay additional amounts with
respect to any
payment of principal, interest or any other amounts on, any such
Note to any
Holder who is a fiduciary or partnership or other than the sole
beneficial owner
of such Note to the extent such payment would be required by the
laws of the
relevant taxing jurisdiction (or any political subdivision or
relevant taxing
authority thereof or therein) to be included in the income for tax
purposes of a
beneficiary or partner or settlor with respect to such fiduciary or
a member of
such partnership or a beneficial owner who would not have been
entitled to such
additional amounts had it been the Holder of the Note.
ARTICLE III
TRANSFER, EXCHANGE AND REDEMPTION; TRANSFER RESTRICTIONS
SECTION 3.1. Transfer and Exchange. (a) When Definitive Notes are
presented
to the Registrar with a request to register the transfer of such
Definitive
Notes or to exchange such Definitive Notes for an equal principal
amount of
Definitive Notes of other authorized denominations, the Registrar
shall register
the transfer or make the exchange as requested if its requirements
for such
transaction are met; provided, however, that the Definitive Notes
surrendered
for registration of transfer or exchange (A) shall be duly endorsed
or
accompanied by a written instrument of transfer in form
satisfactory to the
Company and the Registrar, duly executed by the Noteholder thereof
or its
attorney, duly authorized in writing, and (B) in the case of
definitive
Restricted Notes only, shall be accompanied by the following
additional
information and documents, as applicable:
(i) if such definitive Restricted Note is being exchanged,
without transfer, a certification from such Noteholder to that
effect
(in substantially the form of Exhibit C hereto); or
15
<PAGE>
(ii) if such definitive Restricted Note is being transferred to
a
QIB in accordance with Rule 144A or pursuant to an exemption
from
registration in accordance with Rule 144(k) under the Securities
Act,
certifications from the transferor and the transferee to that
effect
(in substantially the form of Exhibit C hereto).
To permit registrations of transfers and exchanges, the Company
shall execute
and the Fiscal Agent (or an authenticating agent appointed pursuant
to Section
2.2) shall authenticate and make available for delivery definitive
Notes at the
Registrar's request, and upon written direction of the Company. No
service
charge shall be made for any registration of transfer or exchange,
but the
Company may require payment of a sum sufficient to cover any
transfer tax or
other governmental charge payable in connection with any
registration of
transfer or exchange. All Notes issued upon any registration of
transfer or
exchange of Notes shall be the valid obligations of the Company,
evidencing the
same debt, and entitled to the same benefits under this Agreement,
as the Notes
surrendered upon such registration of transfer or exchange.
(b)
Except as permitted by this Section 4.1(b), each certificate
evidencing
the Global Notes and each of the Definitive Notes (and all
securities issued in
exchange therefor or substitution thereof) shall bear a legend in
substantially
the following form:
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF RAM HOLDINGS LTD.
THAT
THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)
TO RAM HOLDINGS LTD. OR (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE
FOR RESALE, TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL
BUYER", AS DEFINED IN RULE 144A (TOGETHER WITH ANY SUCCESSOR
PROVISION THERETO,
AND AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME, "RULE 144A")
UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN A
TRANSACTION IN
ACCORDANCE WITH RULE 144A, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAW OF
THE STATES OF THE UNITED STATES, SUBJECT IN EACH CASE TO ANY
REQUIREMENT OF LAWS
THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF ANY SUCH
ACCOUNT OR
ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL. ANY RESALE OR
OTHER
TRANSFER OF THIS NOTE WHICH IS PROPOSED TO BE MADE PURSUANT TO
CLAUSE (B) ABOVE
SHALL REQUIRE THAT THE TRANSFEROR AND THE TRANSFEREE COMPLETE THE
CERTIFICATE OF
TRANSFER APPEARING ON THE REVERSE OF THIS NOTE AND DELIVER SUCH
CERTIFICATE OF
TRANSFER TO THE FISCAL AGENT UNDER THE FISCAL AGENCY AGREEMENT
DATED AS OF MARCH
26, 2004 (THE "FISCAL AGENT").
BY
ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE
DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT IT IS ITS INTENT AND IT
UNDERSTANDS
IT IS THE INTENT OF RAM HOLDINGS LTD., FOR PURPOSES OF UNITED
STATES FEDERAL,
STATE AND LOCAL INCOME TAXES, THAT THE NOTES BE TREATED AS
INDEBTEDNESS
16
<PAGE>
OF RAM HOLDINGS LTD., AGREES TO SUCH TREATMENT AND AGREES TO TAKE
NO ACTION
INCONSISTENT WITH SUCH TREATMENT.
THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION
EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE ACT, AND MAY NOT BE
REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM AND IN ACCORDANCE WITH THE FISCAL
AGENCY
AGREEMENT DATED AS OF MARCH 26, 2004, COPIES OF WHICH ARE AVAILABLE
FOR
INSPECTION AT THE PRINCIPAL CORPORATE TRUST OFFICE OF THE FISCAL
AGENT. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
ACT PROVIDED BY
RULE 144A THEREUNDER.
BY
ITS ACCEPTANCE OF THE NOTES, EACH HOLDER OF THE NOTES SHALL BE
DEEMED TO
HAVE REPRESENTED TO RAM HOLDINGS LTD. THAT SUCH HOLDER IS A
QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT
OF PERSONS WHO
ARE QUALIFIED INSTITUTIONAL BUYERS.
Upon any request for registration of transfer of a Restricted Note
(including
any Restricted Notes represented by a Global Note) made subsequent
to the date
which is two years (or such period as may be required by Rule
144(k) under the
Securities Act, or any successor rule or regulation) after the
later of (i) the
date of original issuance of the Notes, and (ii) the last date on
which the
Company or an affiliate of the Company within the meaning of Rule
144 under the
Securities Act was the Noteholder of such Restricted Note and with
respect to
which a certification substantially in the form of Exhibit C hereto
is furnished
by the transferor, (a) in the case of any Definitive Restricted
Note, the
Registrar shall permit the Noteholder thereof to exchange such
Restricted Note
for Definitive Notes that do not bear the legend set forth above
and such
request shall be effective to rescind any restriction on the
further transfer of
such Note, and (b) any such Restricted Notes represented by a
Global Note shall
not be subject to any restriction on transfer set forth above; and
in each such
case, such Notes (whether in definitive or global form) shall no
longer
constitute "Restricted Notes" for purposes of this Agreement. The
Registrar (at
the direction of the Company) and the Company shall be entitled
(but not
obligated) to require such additional certificates, opinions of
counsel and
information as it may reasonably deem necessary to demonstrate that
any sale or
other transfer of a Restricted Note is made in compliance with the
applicable
restrictions set forth above and with applicable securities laws.
The Company
shall give the Registrar written direction as to the additional
information
which is necessary to evidence such compliance.
(c)
Notwithstanding any other provisions of this Agreement or the
Notes, a
Global Note shall not be exchanged in whole or in part for a Note
registered in
the name of any Person other than the Depository or a nominee
thereof, provided
that a Global Note may be exchanged for Notes registered in the
names of any
Person designated by
17
<PAGE>
the Depository in the event that (i) the Depository has notified
the Company
that it is unwilling or unable to continue as Depository for such
Global Note
and the Company has not appointed a successor Depository within 60
days of
receiving such notice, or such Depository has ceased to be a
"clearing agency"
registered under the Exchange Act, (ii) an Event of Default has
occurred and is
continuing, (iii) the exchange is pursuant to a request made in
accordance with
Section 3.1(f), or (iv) the Company, at its sole discretion,
determines that the
Notes issued in the form of Global Notes shall no longer be
represented by such
Global Notes. Any Global Note exchanged pursuant to clause (i) or
(iv) above
shall be so exchanged in whole and not in part and any Global Note
exchanged
pursuant to clause (ii) or (iii) above may be exchanged in whole or
from time to
time in part as directed by the Depository. Any Note issued in
exchange for a
Global Note or any portion thereof shall be a Global Note, provided
that any
such Note so issued that is registered in the name of a Person
other than the
Depository or a nominee thereof shall not be a Global Note.
(d)
If at any time the Depository for the Notes notifies the Company
that
it is unwilling or unable to continue as Depository for the Notes,
the Company
may within 60 days of receiving such notice appoint a successor
Depository with
respect to the Notes.
(e)
If in accordance with Section 3.1(c), the Notes will no longer
be
represented by Global Notes, the Company will execute, and the
Fiscal Agent,
upon receipt of an Officer's Certificate for the authentication and
delivery of
Definitive Notes by the Company, will authenticate and make
available for
delivery, Notes in definitive form in an aggregate principal amount
equal to the
principal amount of the Notes in global form, in exchange for such
Notes in
global form. If a Definitive Note is issued in exchange for any
portion of a
Global Note after the close of business at the office or agency
where such
exchange occurs on any Record Date and before the opening of
business at such
office or agency on the next succeeding Interest Payment Date,
interest will not
be payable on such Interest Payment Date in respect of such
Definitive Note, but
will be payable on such Interest Payment Date only to the
Noteholder to whom
interest in respect of such portion of such Global Note is payable
in accordance
with the provisions of this Agreement. Definitive Notes issued in
exchange for a
Global Note pursuant to this Section shall be registered in such
names and in
such authorized denominations as the Depository, pursuant to
instructions from
its direct or indirect participants or otherwise, shall instruct
the Fiscal
Agent. Upon execution and authentication, the Fiscal Agent shall
deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered.
(f)
Any Person having a beneficial interest in Global Notes may
upon
request exchange its interest in the Global Notes for a Definitive
Note at any
time by giving at least 60 days' prior written notice to the Fiscal
Agent in
accordance with the Depository's customary procedures; provided
that such notice
requirement will not apply in the case of a transfer of a
beneficial interest in
any Global Note to a transferee required to hold its interest in
definitive
form. Upon receipt by the Registrar and the Fiscal Agent of (i)
written or
electronic instructions from the Depository or its nominee on
behalf of any
Person having a beneficial interest in Global Notes, identifying
such Person as
a beneficial holder and specifying the amount of such Person's
interest, (ii) a
written order
18
<PAGE>
of such Person requesting issuance of a Definitive Note and
containing
registration instructions, and (iii) in the case of Restricted
Notes only, a
certification from such Person in substantially the form of Exhibit
C hereto,
the Fiscal Agent or the Custodian, at the direction of the Fiscal
Agent, will
cause, in accordance with the standing instructions and procedures
existing
between the Depository and the Custodian, the aggregate principal
amount of the
Global Notes to be reduced and, following such reduction, the
Company will
execute and, upon receipt of an authentication order in the form of
an Officer's
Certificate, the Fiscal Agent will authenticate and make available
for delivery
to such Person, as the case may be, a Definitive Note.
(g)
A Definitive Note may be exchanged by the Noteholder at any time
for a
beneficial interest in Global Notes or transferred by the
Noteholder at any time
in accordance with Rule 144A to a QIB or to another Person
permitted and wishing
to hold the Global Note upon satisfaction of the requirements set
forth below.
Upon receipt by the Registrar and the Fiscal Agent of a Definitive
Note, duly
endorsed or accompanied by appropriate instruments of exchange or
transfer, as
the case may be, in form satisfactory to the Registrar, together
with (a) the
applicable certification(s), substantially in the form of Exhibit C
hereto, that
such Definitive Note is either being exchanged for a beneficial
interest in
Global Notes or being transferred to a QIB in accordance with Rule
144A and (b)
written instructions from the Noteholder surrendering such
Definitive Note for a
beneficial interest in Global Notes or so transferring Notes,
directing the
Fiscal Agent to make, or to direct the Custodian to make, an
endorsement on the
Global Note to reflect an increase in the aggregate principal
amount of the
Notes represented by the Global Note, the Fiscal Agent shall cancel
such
Definitive Note and cause, or direct the Custodian to cause, in
accordance with
the standing instructions and procedures existing between the
Depository and the
Custodian, the aggregate principal amount of Global Notes to be
increased
accordingly.
(h)
At such time as all interests in a Global Note have either been
exchanged for Definitive Notes or cancelled, such Global Note shall
be cancelled
by the Fiscal Agent in accordance with the standing procedures and
instructions
existing between the Depository and the Custodian. At any time
prior to such
cancellation, if any interest in a Global Note is exchanged for
Definitive Notes
or cancelled, the principal amount of Notes represented by such
Global Note
shall, in accordance with the standing procedures and instructions
existing
between the Depository and the Custodian, be reduced and an
endorsement shall be
made on such Global Note, by the Fiscal Agent or the Custodian, at
the direction
of the Fiscal Agent, to reflect such reduction.
(i)
Notwithstanding anything in this Agreement to the contrary, (i)
all
transfers and exchanges of the Notes may be made only in accordance
with the
procedures set forth in this Agreement (including the restrictions
on transfer);
(ii) all Notes, whether issued in definitive or global form, shall
be registered
as to principal and interest with the Registrar; (iii) the
registration of
transfer of a Note may be effected only by the surrender of the old
Note and
either the reissuance by the Company of the old Note to the new
Noteholder or
the issuance by the Company of a new Note to the new Noteholder;
and (iv) the
transfer and exchange of a beneficial interest in a Global Note
19
<PAGE>
may only be effected through the Depository in accordance with the
procedures
promulgated by the Depository.
SECTION 3.2. Optional Redemption. (a) The Notes are subject to
optional
redemption, in whole or in part, at the option of the Company at
any time or
from time to time, with at least 45 days' advance notice to the
Fiscal Agent and
at least 30 days' advance notice to the relevant Noteholder, at a
redemption
price equal to the sum of (i) accrued interest to the date of the
redemption
(the "Redemption Date"), (ii) principal and (iii) the Make-Whole
Amount (as
defined below), if any. The term "Make-Whole Amount" means with
respect to any
Note, an amount equal to the excess, if any, of the Discounted
Value of
