Exhibit 10.32
JUNIOR SUBORDINATED INDENTURE
between
VALIDUS HOLDINGS, LTD.
and
WILMINGTON TRUST COMPANY,
as Trustee
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Dated as of June 21, 2007
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions................................................ 1
Section 1.2. Compliance Certificate and Opinions........................ 10
Section 1.3. Forms of Documents Delivered to Trustee.................... 10
Section 1.4. Acts of Holders............................................ 11
Section 1.5. Notices, Etc. to Trustee and Company....................... 13
Section 1.6. Notice to Holders; Waiver.................................. 13
Section 1.7. Effect of Headings and Table of Contents................... 13
Section 1.8. Successors and Assigns..................................... 13
Section 1.9. Separability Clause........................................ 14
Section 1.10. Benefits of Indenture...................................... 14
Section 1.11. Governing Law.............................................. 14
Section 1.12. Submission to Jurisdiction................................. 14
Section 1.13. Non-Business Days.......................................... 14
ARTICLE II
SECURITY FORMS
Section 2.1. Form of Security........................................... 15
Section 2.2. Restricted Legend.......................................... 20
Section 2.3. Form of Trustee's Certificate of Authentication............ 22
Section 2.4. Temporary Securities....................................... 23
Section 2.5. Definitive Securities...................................... 24
Section 2.6. Limited Holders............................................ 25
ARTICLE III
THE SECURITIES
Section 3.1. Payment of Principal and Interest.......................... 23
Section 3.2. Denominations.............................................. 25
Section 3.3. Execution, Authentication, Delivery and Dating............. 25
Section 3.4. Global Securities.......................................... 26
Section 3.5. Registration, Transfer and Exchange Generally.............. 28
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities........... 29
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Section 3.7. Persons Deemed Owners...................................... 30
Section 3.8. Cancellation............................................... 30
Section 3.9. Deferrals of Interest Payment Dates........................ 30
Section 3.10. Right of Set-Off........................................... 31
Section 3.11. Agreed Tax Treatment....................................... 31
Section 3.12. CUSIP Numbers.............................................. 31
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.................... 32
Section 4.2. Application of Trust Money................................. 33
ARTICLE V
REMEDIES
Section 5.1. Events of Default.......................................... 33
Section 5.2. Acceleration of Maturity; Rescission and Annulment......... 34
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.................................................... 35
Section 5.4. Trustee May File Proofs of Claim........................... 36
Section 5.5. Trustee May Enforce Claim Without Possession of Securities. 36
Section 5.6. Application of Money Collected............................. 36
Section 5.7. Limitation on Suits........................................ 37
Section 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest....................................... 38
Section 5.9. Restoration of Rights and Remedies......................... 38
Section 5.10. Rights and Remedies Cumulative............................. 38
Section 5.11. Delay or Omission Not Waiver............................... 38
Section 5.12. Control by Holders......................................... 38
Section 5.13. Waiver of Past Defaults.................................... 39
Section 5.14. Undertaking for Costs...................................... 39
Section 5.15. Waiver of Usury, Stay or Extension Laws.................... 40
ARTICLE VI
THE TRUSTEE
Section 6.1. Corporate Trustee Required................................. 40
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Section 6.2. Certain Duties and Responsibilities........................ 40
Section 6.3. Notice of Defaults......................................... 41
Section 6.4. Certain Rights of Trustee.................................. 42
Section 6.5. May Hold Securities........................................ 43
Section 6.6. Compensation; Reimbursement; Indemnity..................... 44
Section 6.7. Resignation and Removal; Appointment of Successor.......... 45
Section 6.8. Acceptance of Appointment by Successor..................... 45
Section 6.9. Merger, Conversion, Consolidation or Succession to Business 46
Section 6.10. Not Responsible for Recitals or Issuance of Securities..... 46
Section 6.11. Appointment of Authenticating Agent........................ 46
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders.. 48
Section 7.2. Preservation of Information, Communications to Holders..... 48
Section 7.3. Reports by Company......................................... 48
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms....... 49
Section 8.2. Successor Company Substituted.............................. 49
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures without Consent of Holders......... 50
Section 9.2. Supplemental Indentures with Consent of Holders............ 51
Section 9.3. Execution of Supplemental Indentures....................... 52
Section 9.4. Effect of Supplemental Indentures.......................... 52
Section 9.5. Reference in Securities to Supplemental Indentures......... 52
ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest................. 52
Section 10.2. Money for Security Payments to be Held in Trust............ 52
Section 10.3. Statement as to Compliance................................. 54
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Section 10.4. Calculation Agent.......................................... 54
Section 10.5. Additional Amounts......................................... 54
Section 10.6. Additional Covenants....................................... 55
Section 10.7. Waiver of Covenants........................................ 56
Section 10.8. Treatment of Securities.................................... 56
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. Optional Redemption........................................ 56
Section 11.2. Special Event Redemption................................... 56
Section 11.3. Election to Redeem; Notice to Trustee...................... 57
Section 11.4. Selection of Securities to be Redeemed..................... 57
Section 11.5. Notice of Redemption....................................... 57
Section 11.6. Deposit of Redemption Price................................ 58
Section 11.7. Payment of Securities Called for Redemption................ 58
ARTICLE XII
SUBORDINATION OF SECURITIES
Section 12.1. Securities Subordinate to Senior Debt...................... 59
Section 12.2. No Payment When Senior Debt in Default; Payment Over of
Proceeds Upon Dissolution, Etc............................. 59
Section 12.3. Payment Permitted If No Default............................ 61
Section 12.4. Subrogation to Rights of Holders of Senior Debt............ 61
Section 12.5. Provisions Solely to Define Relative Rights................ 61
Section 12.6. Trustee to Effectuate Subordination........................ 62
Section 12.7. No Waiver of Subordination Provisions...................... 62
Section 12.8. Notice to Trustee.......................................... 62
Section 12.9. Reliance on Judicial Order or Certificate of Liquidating
Agent...................................................... 63
Section 12.10. Trustee Not Fiduciary for Holders of Senior Debt........... 63
Section 12.11. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights........................................... 63
Section 12.12. Article Applicable to Paying Agents........................ 63
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SCHEDULES
Schedule A -- Determination of LIBOR
Exhibit A -- Form of Officer's Financial Certificate
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JUNIOR SUBORDINATED INDENTURE, dated as of June 21, 2007, between VALIDUS
HOLDINGS, LTD., a company with limited liability organized under the laws of
Bermuda (the "Company"), and Wilmington Trust Company, a banking corporation
organized under the laws of the State of Delaware, as debenture trustee (in such
capacity, the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its unsecured junior subordinated
deferrable interest debentures designated "Junior Subordinated Deferrable
Interest Debentures due 2037" (the "Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, this Indenture Witnesseth:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article I have the meanings assigned
to them in this Article I;
(b) the words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation";
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture;
(e) the words "hereby," "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on any
amounts payable on the Securities, the payment of which has not been made on the
applicable Interest Payment Date and which shall accrue at the rate per annum
specified or determined as specified in such Security, in each case to the
extent legally enforceable.
"Additional Amounts" has the meaning specified in Section 10.5.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Depositary Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Applicable Insurance Regulatory Authority" means, when used with respect
to any Regulated Insurance Company, (x) the insurance department or similar
administrative authority or agency located in each state or jurisdiction
(foreign or domestic) in which such Regulated Insurance Company is domiciled or
(y) to the extent asserting regulatory jurisdiction over such Regulated
Insurance Company, the insurance department, authority or agency in each state
or jurisdiction (foreign or domestic) in which such Regulated Insurance Company
is licensed, and shall include any Federal or national insurance regulatory
department, authority or agency that may be created and that asserts insurance
regulatory jurisdiction over such Regulated Insurance Company.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.11 to act on behalf of the Trustee to authenticate the Securities.
"Bankruptcy Code" means Title 11 of the United States Code or any
successor statute(s) thereto, or any similar federal or state law for the relief
of debtors, in each case as amended from time to time.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification.
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"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in the City of New York or Bermuda are
authorized or required by law or executive order to remain closed or (iii) a day
on which the Corporate Trust Office of the Trustee is closed for business.
"Calculation Agent" has the meaning specified in Section 10.4.
"Common Shares" means the common shares, par value $0.175 per share, of
the Company.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, its Vice Chairman of the Board of Directors, its Chief Executive
Officer, President or a Vice President, and by its Chief Financial Officer, its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of this Indenture is located at 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust
Administration.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person, whether currently existing or hereafter
incurred and whether or not contingent and without duplication, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or other accrued liabilities arising in the ordinary
course of business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of this
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise; and (viii) any renewals, extensions, refundings, amendments or
modifications of any obligation of the type referred to in clauses (i) through
(vii).
"Defaulted Interest" has the meaning specified in Section 3.1.
"Depositary" means an organization registered as a clearing agency under
the Exchange Act that is designated as Depositary by the Company or any
successor thereto.
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"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Depositary effects
book-entry transfers and pledges of securities deposited with the Depositary.
"Dollar" or "$" means the currency of the United States of America that,
as at the time of payment, is legal tender for the payment of public and private
debts.
"DTC" means The Depository Trust Company, a New York corporation, or any
successor thereto.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
"Extension Period" has the meaning specified in Section 3.9.
"Fixed Rate Period" means, with respect to any Security, the period from
June 21, 2007 through but excluding June 15, 2012.
"GAAP" means United States generally accepted accounting principles,
consistently applied, from time to time in effect.
"Global Security" means a Security that evidences all or part of the
Securities, the ownership and transfers of which shall be made through book
entries by a Depositary.
"Government Obligation" means (a) any security that is (i) a direct
obligation of the United States of America of which the full faith and credit of
the United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (b) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any
Government Obligation that is specified in clause (a) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any Government Obligation
that is so specified and held, provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be amended or supplemented by one or more amendments or indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
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"Insurance Business" means one or more aspects of the business of selling,
issuing or underwriting insurance or reinsurance.
"Interest Payment Date" means March 15, June 15, September 15 and December
15 of each year, commencing on September 15, 2007, during the term of this
Indenture, as such dates may be adjusted pursuant to Section 1.13.
"Investment Company Act" means the Investment Company Act of 1940 or any
successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Company of an Opinion
of Counsel experienced in such matters to the effect that, as a result of the
occurrence of a change in law or regulation (including any announced prospective
change) or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Company is or,
within ninety (90) days of the date of such opinion will be, considered an
"investment company" that is required to be registered under the Investment
Company Act, which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Securities.
"LIBOR" has the meaning specified in Schedule A.
"LIBOR Business Day" has the meaning specified in Schedule A.
"LIBOR Determination Date" has the meaning specified in Schedule A.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or any installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"New York Court" has the meaning specified in Section 1.12.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(c).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company and
delivered to the Trustee.
"Operative Documents" means the Indenture, the Purchase Agreement and the
Securities.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or any Affiliate of the Company.
"Optional Redemption Price" has the meaning set forth in Section 11.1.
"Original Issue Date" means the date of original issuance of each
Security.
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"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided, that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Securities that have been paid or in substitution for or in
lieu of which other Securities have been authenticated and delivered
pursuant to the provisions of this Indenture, unless proof satisfactory to
the Trustee is presented that any such Securities are held by Holders in
whose hands such Securities are valid, binding and legal obligations of
the Company;
provided, that, in determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means the Trustee or any Person authorized by the Company
to pay the principal of or any premium or interest on, or other amounts in
respect of, any Securities on behalf of the Company.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Place of Payment" means, with respect to the Securities, the Corporate
Trust Office of the Trustee.
"Policies" means all insurance policies, annuity contracts, guaranteed
interest contracts and funding agreements (including riders to any such policies
or contracts, certificates issued with respect to group life insurance or
annuity contracts and assumption certificates issued or to be issued (or filed
pending current review by applicable governmental authorities) by any
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Regulated Insurance Company and any coinsurance agreements entered into or to be
entered into by any Regulated Insurance Company.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 12.2.
"Purchase Agreement" means the agreement, dated as of June 20, 2007,
between the Company and KBW, Inc., First Tennessee Bank, N.A., Preferred Term
Securities XXVI, Ltd., TWE, Ltd. and Xxxxx, Xxxxxxxx & Xxxxx, Inc.
"Redemption Date" means, when used with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Security to be
redeemed, in whole or in part, the Special Redemption Price or the Optional
Redemption Price, as applicable, at which such Security or portion thereof is to
be redeemed as fixed by or pursuant to this Indenture.
"Reference Banks" has the meaning specified in Schedule A.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities means the date that is fifteen (15) days
preceding such Interest Payment Date (whether or not a Business Day).
"Regulated Insurance Company" means any Subsidiary of the Company, whether
now owned or hereafter acquired, that is authorized or admitted to carry on or
transact Insurance Business in any jurisdiction (foreign or domestic) and is
regulated by any Applicable Insurance Regulatory Authority.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Principal Office of the Trustee, including any vice-president, any
assistant vice-president, any secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or other officer of the Principal
Trust Office of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rights Plan" means a plan of the Company providing for the issuance by
the Company to all holders of its Common Shares of rights entitling the holders
thereof to subscribe for or purchase shares of any class or series of capital
stock of the Company which rights (i) are deemed to be transferred with such
shares of such Common Shares and (ii) are also issued in respect of future
issuances of such Common Shares, in each case until the occurrence of a
specified event or events.
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"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 or any successor statute
thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of and any premium and interest on
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company, whether or not such
claim for post-petition interest is allowed in such proceeding) all Debt
(including, without limitation, insurance obligations including obligations with
respect to Policies and guarantees thereof) of the Company, whether incurred on
or prior to the date of this Indenture or thereafter incurred, unless it is
provided in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, that such obligations are not superior in right of
payment to the Securities issued under this Indenture; provided, however, that
Senior Debt shall not be deemed to include any other debt securities and
guarantees in respect of such debt securities issued to any trust (or a trustee
of any such trust), partnership or other entity affiliated with the Company that
is a financing vehicle of the Company (a "financing entity") in connection with
the issuance by such financing entity of equity securities or other securities
that are treated as equity capital for regulatory capital purposes guaranteed by
the Company pursuant to an instrument that ranks pari passu with or junior in
right of payment to this Indenture.
"Significant Subsidiary(ies)" has the meaning set forth in Section 10.6.
"Special Event" means the occurrence of an Investment Company Event or a
Tax Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.1.
"Special Redemption Price" has the meaning set forth in Section 11.2.
"Stated Maturity" means June 15, 2037.
"Subsidiary" means a Person more than fifty percent (50%) of the
outstanding voting stock or other voting interests of which is owned, directly
or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For purposes of this definition,
"voting stock" means stock that ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
"Tax Event" means the receipt by the Company of an Opinion of Counsel
experienced in such matters to the effect that, as a result of (a) any amendment
to or change (including any announced prospective change) in the treaties or
laws or any regulations thereunder of Bermuda or any taxing jurisdiction having
jurisdiction over the Company or any political subdivision or taxing authority
thereof or therein or any change in the application or official interpretation
of such treaties, laws or regulations or (b) any judicial decision or any
official administrative pronouncement or regulatory procedure, including any
notice or announcement of intent to adopt
8
any such pronouncement or procedure (an "Administrative Action"), regardless of
whether such judicial decision or Administrative Action is issued to or in
connection with a proceeding involving the Company and whether or not subject to
review or appeal, which amendment, change, judicial decision or Administrative
Action is enacted, promulgated or announced, in each case, on or after the date
of issuance of the Securities, there is more than an insubstantial risk that (i)
the Company is, or will be as of the next Interest Payment Date, required to pay
to any Holder of Securities Additional Amounts as provided in Section 10.5
hereunder, or (ii) interest payable by the Company on the Securities is not, or
as of the next Interest Payment Date, will not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes.
"Transfer" means, the voluntarily or involuntarily to transfer, sell,
pledge or hypothecation or otherwise dispose of, whether directly or indirectly
and whether through one or a series of transactions.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument, solely in its capacity as such and not in its individual
capacity, until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and, thereafter, "Trustee" shall mean
or include each Person who is then a Trustee hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
and as in effect on the date as of this Indenture.
SECTION 1.2. Compliance Certificate and Opinions.
(a) Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall, if
requested by the Trustee, furnish to the Trustee an Officers' Certificate
stating that all conditions precedent (including covenants compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with and, if so requested by
the Trustee, an Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent (including covenants compliance with which
constitutes a condition precedent), if any, have been complied with.
(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
provided pursuant to Section 10.3) shall include:
(i) a statement by each individual signing such certificate or
opinion that such individual has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions of such individual
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such individual, he or she
has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
9
(iv) a statement as to whether, in the opinion of such individual,
such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or after reasonable
inquiry should know, that the certificate or opinion or representations with
respect to matters upon which his or her certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or after reasonable inquiry should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally received in the corrected form and, irrespective of the date or dates
of the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Without limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to the benefits of
this Indenture equally and ratably with all other Outstanding Securities.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent thereof duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments (including any
appointment of an agent) is or are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders
10
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(c) The ownership of Securities shall be proved by the Securities
Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) Without limiting the foregoing, a Holder entitled to take any action
hereunder with regard to any particular Security may do so with regard to all or
any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
(f) Except as set forth in paragraph (g) of this Section 1.4, the Company
may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders of Securities.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to take
the relevant action, whether or not such Holders remain Holders after such
record date; provided, that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date (as defined in Section
1.4(h)) by Holders of the requisite principal amount of Outstanding Securities
on such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect). Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the manner
set forth in Section 1.6.
(g) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration or
rescission or annulment thereof referred to in Section 5.2, (iii) any request to
institute proceedings referred to in Section 5.7(b) or (iv) any
11
direction referred to in Section 5.12. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities on such record date, and
no other Holders, shall be entitled to join in such notice, declaration, request
or direction, whether or not such Holders remain Holders after such record date;
provided, that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities on such record date. Nothing in this paragraph
shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect). Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 1.6.
(h) With respect to any record date set pursuant to paragraph (f) or (g)
of this Section 1.4, the party hereto that sets such record date may designate
any day as the "Expiration Date" and from time to time may change the Expiration
Date to any earlier or later day; provided, that no such change shall be
effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 1.4, the party hereto that set such record date shall be deemed
to have initially designated the ninetieth (90th) day after such record date as
the Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the one hundred eightieth (180th) day after
the applicable record date.
SECTION 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver,
Act of Holders, or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with and
received by the Trustee at its Corporate Trust Office, or
(b) the Company by the Trustee or any Holder shall be sufficient for every
purpose hereunder if in writing and mailed, first class, postage prepaid, to the
Company addressed to it at Validus Holdings, Ltd., Bermuda Commercial Bank
Building, 19 Par-La-Ville Road, Second Floor, Xxxxxxxx HM11 Bermuda, Attention:
Chief Financial Officer (facsimile: (441 278-9091), with a copy to Xxxxxx Xxxxxx
& Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxx, Esq. and Xxxx Xxxxxxxx, Esq. (facsimile: (000) 000-0000) or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first
12
class, postage prepaid, to each Holder affected by such event to the address of
such Holder as it appears in the Securities Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. If, by reason of the suspension of or irregularities in regular mail
service or for any other reason, it shall be impossible or impracticable to mail
notice of any event to Holders when said notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction of this Indenture.
SECTION 1.8. Successors and Assigns.
This Indenture shall be binding upon and shall inure to the benefit of any
successor to the Company and the Trustee, including any successor by operation
of law. Except in connection with a transaction involving the Company that is
permitted under Article VIII and pursuant to which the assignee agrees in
writing to perform the Company's obligations hereunder, the Company shall not
assign its obligations hereunder.
SECTION 1.9. Separability Clause.
If any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and
there shall be deemed substituted for the provision at issue a valid, legal and
enforceable provision as similar as possible to the provision at issue.
SECTION 1.10. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Securities and any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.11. Governing Law.
THIS INDENTURE AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE
COMPANY AND THE TRUSTEE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT
OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
13
SECTION 1.12. Submission to Jurisdiction.
ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS INDENTURE MAY BE BROUGHT IN OR REMOVED TO THE
COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE
SITTING IN THE BOROUGH OF MANHATTAN) (COLLECTIVELY, "NEW YORK COURT"). BY
EXECUTION AND DELIVERY OF THIS INDENTURE, EACH PARTY ACCEPTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING
OUT OF OR IN CONNECTION WITH THIS INDENTURE.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest, premium, if any, or
principal or other amounts in respect of such Security shall not be made on such
date, but shall be made on the next succeeding Business Day (and additional
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, through but excluding such next succeeding
Business Day) except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the Interest
Payment Date or Redemption Date or at the Stated Maturity. If any Interest
Payment Date of any Security, during the Fixed Rate Period, shall not be a
Business Day, and payment of interest, premium, or principal or other amounts in
respect of such Security are made on the next succeeding Business Day,
additional interest shall not accrue in respect of the amounts whose payment is
so delayed for the period from and after such Interest Payment Date through but
excluding such next succeeding Business Day.
SECTION 1.14. No Recourse Against Others.
No director, officer, employee incorporator, Affiliate or stockholder of
the Company shall have any liability for any obligations of the Company under
the Securities or the Indenture or for a claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Securities by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
SECTION 1.15. Agent for Service of Process.
The Company will designate and appoint CT Corporation System in New York
City as its process agent (the "Process Agent") upon which process may be served
in any action arising out of or relating to this Indenture which may be
instituted in any New York Court by the Trustee or the Holders, in accordance
with legal procedures prescribed for such courts within fifteen (15) days of
execution of the Indenture by the parties hereto, and will expressly consent to
the non-exclusive jurisdiction of any such court in respect of any such action,
and waive any other requirements of or objections to personal jurisdiction with
respect thereto. Such appointment
14
shall be irrevocable. Service of process upon the Process Agent and written
notice of such service of process to it shall be deemed, in every respect,
effective service of process upon the Company. Nothing herein shall in any way
be deemed to limit the ability of the Trustee or the Holders to serve any such
legal process, summons, notices and documents in any other manner permitted by
applicable law or to obtain jurisdiction over the Company or to bring actions,
suits or proceedings against the Company in such other jurisdictions, and in
such manner, as may be permitted by applicable law.
SECTION 1.16. Currency Indemnity.
If, for the purposes of obtaining judgment in any court in any
jurisdiction with respect to any payment due hereunder, it becomes necessary to
convert into the currency of such jurisdiction (the "Judgment Currency") any
amount due hereunder in any currency other than the Judgment Currency (the
"Currency Due"), then conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which judgment is given. For
this purpose, "rate of exchange" means the rate at which the Trustee is able, on
the relevant date, to purchase the Currency Due with the Judgment Currency in
accordance with its normal practice. In the event that there is a change in the
rate of exchange prevailing between the Business Day before the day on which the
judgment is given and the date of payment of the amount due, the Company will,
on the day of payment, pay such additional amount, if any, or be entitled to
receive reimbursement of such amount, if any, as may be necessary to ensure that
the amount paid on such date is the amount in the Judgment Currency which when
converted at the rate of exchange prevailing on the date of payment is the
amount then due hereunder in the Currency Due. If the amount of the Currency Due
which the Trustee would be able to purchase at such rate of exchange is less
than the amount of the Currency Due originally due to it, the Company shall
indemnify and save the Trustee and the Holders harmless from and against loss or
damage arising as a result of such deficiency. If the amount of the Currency Due
which the Trustee would be able to purchase at such rate of exchange is greater
than the amount of the Currency Due originally due to it, the Trustee shall
promptly pay to the Company in U.S. dollars an amount equal to such excess. This
indemnity shall constitute an obligation separate and independent from the other
obligations contained herein, shall give rise to a separate and independent
cause of action and shall continue in full force and effect notwithstanding any
judgment or order for a liquidated sum in respect of an amount due hereunder or
under any judgment or order.
ARTICLE II
SECURITY FORMS
SECTION 2.1. Form of Security.
Any Security issued hereunder shall be in substantially the following
form:
VALIDUS HOLDINGS, LTD.
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE 2037
No. [__] $[ ]
15
Validus Holdings, Ltd., a company with limited liability organized under
the laws of Bermuda (hereinafter called the "Company," which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] ($[ ]) in accordance with the Indenture on June 15,
2037. The Company further promises to pay interest on said principal sum from
June 21, 2007, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on March 15, June15, September 15 and December 15 of each
year, commencing September 15, 2007, or if any such day is not a Business Day,
on the next succeeding Business Day (and additional interest shall accrue in
respect of the amounts whose payment is so delayed for the period from and after
such Interest Payment Date through but excluding such next succeeding Business
Day), except that, if such Business Day falls in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on the Interest Payment
Date, at a fixed rate equal to 8.48% per annum through but excluding June 15,
2012 and thereafter at a variable rate equal to LIBOR plus 2.95% per annum,
together with Additional Amounts, if any, as provided in Section 10.5 of the
Indenture, until the principal hereof is paid or duly provided for or made
available for payment; provided, further, that any overdue principal, premium,
if any, or Additional Amounts and any overdue installment of interest shall bear
Additional Interest at a fixed rate equal to 8.48% through but excluding June
15, 2012 and thereafter at a variable rate equal to LIBOR plus 2.95% per annum;
(to the extent that the payment of such interest shall be legally enforceable),
compounded quarterly, from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand,
provided further that during the Fixed Rate Period if any Interest Payment Date
shall not be a Business Day, and payment of interest, premium, or principal or
other amounts are made on the next succeeding Business Day, additional interest
shall not accrue in respect of the amounts whose payment is so delayed for the
period from and after such Interest Payment Date through but excluding such next
succeeding Business Day.
The amount of interest payable for any interest period shall be computed
and paid (i) during the Fixed Rate Period on the basis of a 360-day year of
twelve 30-day months and (ii) thereafter on the basis of a 360-day year and the
actual number of days elapsed in the relevant interest period. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest installment. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than ten (10) days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of this
Security, to defer the payment of interest on this Security for a period of up
to twenty (20) consecutive quarterly interest payment periods (each such period,
an "Extension Period"), during which Extension Period(s),
16
no interest shall be due and payable (except any Additional Amounts that may be
due and payable). No Extension Period shall end on a date other than an Interest
Payment Date, and no Extension Period shall extend beyond the Stated Maturity of
the principal of this Security. No interest shall be due and payable during an
Extension Period (except any Additional Amounts that may be due and payable),
except at the end thereof, but each installment of interest that would otherwise
have been due and payable during such Extension Period shall bear Additional
Interest (to the extent payment of such interest would be legally enforceable)
at a fixed rate equal to 8.48% per annum through but excluding June 15, 2012 and
thereafter at a variable rate equal to LIBOR plus 2.95% per annum; compounded
quarterly, from the dates on which amounts would have otherwise been due and
payable until paid or made available for payment. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
this Security, together with such Additional Interest to Holders of record of
this Security as of the record date established for the Interest Payment Date
coinciding with the end of such Extension Period (regardless of who the Holders
of record may have been on any date during such Extension Period). Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest; provided, that (i) all such previous and further extensions
comprising such Extension Period do not exceed twenty (20) consecutive quarterly
interest payment periods, (ii) no Extension Period shall end on a date other
than an Interest Payment Date and (iii) no Extension Period shall extend beyond
the Stated Maturity of the principal of this Security. Upon the termination of
any such Extension Period and upon the payment of all accrued and unpaid
interest and any Additional Interest then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period; provided, that (i) such
Extension Period does not exceed twenty (20) consecutive quarterly interest
payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date and (iii) no Extension Period shall extend beyond the
Stated Maturity of the principal of this Security. The Company shall give the
Holder of this Security and the Trustee written notice of its election to begin
any such Extension Period at least five (5) Business Days prior to the next
succeeding Interest Payment Date on which interest on this Security would be
payable but for such deferral.
During any such Extension Period, the Company shall not, and shall not
permit any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's or such subsidiary's capital stock (other
than payments of dividends or distributions to the Company) or make any
guarantee payments with respect to the foregoing, (ii) make any payment of
principal of or any interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu in all respects
with or junior in interest to this Security (other than, with respect to clauses
(i) and (ii) above, (a) repurchases, redemptions or other acquisitions of shares
of capital stock of the Company or any subsidiary of the Company in connection
with (1) any employment contract, benefit plan or other similar arrangement with
or for the benefit of any one or more employees, officers, directors or
consultants, (2) a dividend reinvestment or stockholder stock purchase plan
and/or (3) the issuance of capital stock of the Company or of such subsidiary
(or securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the applicable
Extension Period, (b) as a result of an exchange or conversion of any class or
series of the Company's capital stock (or any capital stock of a subsidiary of
the Company) for any class or series of the Company's capital stock (or, in the
case of a subsidiary of the Company, any class or series of such subsidiary's
capital stock)or of any class or series of the Company's indebtedness for any
class or series of the Company's capital stock (or in the case of indebtedness
of a subsidiary of the
17
Company, of any class or series of such subsidiary's indebtedness for any class
or series of such subsidiary's capital stock), (c) the purchase of fractional
interests in shares of the Company's capital stock (or the capital stock of a
subsidiary of the Company) pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith or (f) any repurchases, redemptions or other acquisitions
of shares of capital stock of the Company or any subsidiary of the Company made
by the Company or such subsidiary, which the Company's Board of Directors
determine in good faith are necessary or advisable in order to avoid, ameliorate
or limit any material adverse tax or regulatory consequences for the Company or
its shareholders) or (iii) enter into any new (as opposed to existing) contracts
on less than an arm's-length negotiation basis with shareholders holding more
than 10% of the outstanding shares of Common Shares of the Company.
Payment of principal of, premium, if any, and interest on this Security
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payments of principal, premium, if any, and interest due at the Maturity of this
Security shall be made at the Place of Payment upon surrender of such Securities
to the Paying Agent, and payments of interest shall be made, subject to such
surrender where applicable, by wire transfer at such place and to such account
at a banking institution in the United States as may be designated in writing to
the Paying Agent at least ten (10) Business Days prior to the date for payment
by the Person entitled thereto unless proper written transfer instructions have
not been received by the relevant record date, in which case such payments shall
be made by check mailed to the address of such Person as such address shall
appear in the Security Register.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued under the Junior Subordinated Indenture, dated
as of June 21, 2007 (the
18
"Indenture"), between the Company and Wilmington Trust Company, as Trustee (in
such capacity, the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Debt, the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Company may, on any Interest Payment Date, at its option and in
accordance with the Indenture, on or after June 15, 2012 and subject to the
terms and conditions of Article XI of the Indenture, redeem this Security in
whole at any time or in part from time to time at a Redemption Price equal to
one hundred percent (100%) of the principal amount hereof, together, in the case
of any such redemption, with accrued interest, including any Additional
Interest, through but excluding the date fixed as the Redemption Date.
In addition, upon the occurrence and during the continuation of a Special
Event, the Company may, at its option and in accordance with the Indenture,
redeem this Security, in whole but not in part, subject to the terms and
conditions of Article XI of the Indenture at a Redemption Price equal to
TIME PERIOD PERCENTAGE
----------- ----------
June 21, 2007 - June 14, 2008 105%
June 15, 2008 - June 14, 2009 103.75%
June 15, 2009 - June 14, 2010 102.5%
June 15, 2010 - June 14, 2011 101.25%
June 15, 2011 and thereafter 100%
together, in the case of any such redemption, with accrued interest, including
any Additional Interest, through but excluding the date fixed as the Redemption
Date.
In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof. If less than all the Securities
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than sixty (60) days prior to the Redemption Date by the Trustee from
the Outstanding Securities not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any Security.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the
19
Securities, with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities. The Indenture also contains
provisions permitting Holders of specified percentages in principal amount of
the Securities, on behalf of the Holders of all Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, if any, and
interest, including any Additional Interest (to the extent legally enforceable),
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar and duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Securities, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Company and, by its acceptance of this Security or a beneficial
interest herein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that, for United States federal, state and
local tax purposes, it is intended that this Security constitute indebtedness.
THIS SECURITY SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
20
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed on this ____ day of __________, 20__.
VALIDUS HOLDINGS, LTD.
By: ___________________________
Name:
Title:
SECTION 2.2. Restricted Legend.
(a) Any Security issued hereunder shall bear a legend in substantially the
following form:
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF [ ] OR A NOMINEE OF [ ]. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
[ ] OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY [ ] TO A NOMINEE OF [ ] OR BY A NOMINEE OF [ ] TO
[ ] OR ANOTHER NOMINEE OF [ ]) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF [ ]
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF [ ] OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF [ ] (AND
ANY PAYMENT HEREON IS MADE TO [ ]. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF [ ]), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, [ ], HAS AN INTEREST HEREIN.]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND SUCH SECURITIES, AND ANY INTEREST
THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
21
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD
OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (III) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR (V) PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III) OR
(V), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF COUNSEL
AND OTHER INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER WILL NOTIFY
ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY
INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS
THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH SECURITIES, OR ANY INTEREST
THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH SECURITIES.
THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE
HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN
EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS
22
SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY
ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION
4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING
THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.
NOTWITHSTANDING THE FOREGOING, HOLDERS OF THIS SECURITY AND/OR BENEFICIAL
INTERESTS THEREIN ARE LIMITED AS SET FORTH IN SECTION 2.6 OF THE
INDENTURE.
HOLDERS OF THIS SECURITY AND/OR BENEFICIAL INTERESTS THEREIN ARE SUBJECT
TO THE CONFIDENTIALITY PROVISIONS AS SET FORTH IN SECTION 7.3 OF THE
INDENTURE."
(b) The above legends shall not be removed from any Security unless there
is delivered to the Company satisfactory evidence, which may include an Opinion
of Counsel, as may be reasonably required to ensure that any future transfers
thereof may be made without restriction under or violation of the provisions of
the Securities Act and other applicable law. Upon provision of such satisfactory
evidence, the Company shall execute and deliver to the Trustee, and the Trustee
shall deliver, upon receipt of a Company Order directing it to do so, a Security
that does not bear the legend.
SECTION 2.3. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:
WILMINGTON TRUST COMPANY, as Trustee
By: ________________________
Authorized signatory
SECTION 2.4. Temporary Securities.
(a) Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities that are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
23
(b) If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for that purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of any authorized
denominations having the same Original Issue Date and Stated Maturity and having
the same terms as such temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
SECTION 2.5. Definitive Securities.
The Securities issued on the Original Issue Date shall be in definitive
form. The definitive Securities shall be printed, lithographed or engraved, or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
24
SECTION 2.6. Limited Holders.
Notwithstanding anything contained in this Indenture or the Securities to
the contrary, for until the earlier of (i) June 15, 2012, (ii) the date on which
Standard & Poors ("S&P") issues any public rating on the Company or any
Significant Subsidiary for any reason or (iii) the first date on which the
Company elects to defer interest pursuant to Section 3.9, no Holder may Transfer
its Security or a beneficial interest therein if after giving effect to such
Transfer there would be greater than twenty (20) Holders of the Securities
(and/or of beneficial interests in the Securities) (the "Limited Holder
Restriction") without the prior written consent of the Company ("Limited Holder
Company Consent"), which Limited Holder Company Consent shall not be
unreasonably withheld or delayed; provided, however, that no Limited Holder
Company Consent shall be required if the Transfer of such Security or beneficial
interest in a Security is being made pursuant to the terms of the documents
governing the duties with respect to credit deterioration or substitution of a
collateral manager or trustee of a collateralized debt obligor Holder. The
Company shall notify the Trustee of the occurrence of item (ii) above. Neither
the Trustee nor the Securities Registrar shall be responsible for monitoring
compliance with any of the above limitations; provided, that the Trustee and the
Securities Registrar shall promptly respond to a Company request to identify the
Holders of the Securities. Any Transfer made in violation of the terms of this
Section 2.6 shall be an ineffective Transfer and shall be null and void.
ARTICLE III
THE SECURITIES
SECTION 3.1. Payment of Principal and Interest.
(a) The unpaid principal amount of the Securities shall bear interest at a
fixed rate equal to 8.48% per annum through but excluding June 15, 2012 and
thereafter at a variable rate of LIBOR plus 2.95% per annum until paid or duly
provided for; such interest to accrue from June 21, 2007, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, and any overdue principal, premium, if any, or Additional Amounts and any
overdue installment of interest shall bear Additional Interest at the rate equal
to a fixed rate equal to 8.48% per annum through but excluding June 15, 2012 and
thereafter at a variable rate of LIBOR plus 2.95% per annum; compounded
quarterly from the dates such amounts are due until they are paid or funds for
the payment thereof are made available for payment.
(b) Interest and Additional Interest on any Security that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, except that interest and any Additional Interest payable on
the Stated Maturity (or any date of principal repayment upon early maturity) of
the principal of a Security or on a Redemption Date shall be paid to the Person
to whom principal is paid. The initial payment of interest on any Security that
is issued between a Regular Record Date and the related Interest Payment Date
shall be payable as provided in such Security.
(c) Any interest on any Security that is due and payable, but is not
timely paid or duly provided for, on any Interest Payment Date for Securities
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date
25
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in paragraph (i) or (ii)
below:
(i) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest (a "Special
Record Date"), which shall be fixed in the following manner. At least
thirty (30) days prior to the date of the proposed payment, the Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest, which
shall be not more than fifteen (15) days and not less than ten (10) days
prior to the date of the proposed payment and not less than ten (10) days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first class, postage prepaid, to each Holder
of a Security at the address of such Holder as it appears in the
Securities Register not less than ten (10) days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered on such Special
Record Date; or
(ii) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed and, upon such
notice as may be required by such exchange (or by the Trustee if the
Securities are not listed), if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such payment
shall be deemed practicable by the Trustee.
(d) Payments of interest on the Securities shall include interest accrued
to but excluding the respective Interest Payment Dates. Interest payments for
the Securities shall be computed and paid (i) during the Fixed Rate Period on
the basis of a 360-day year of twelve 30-day months and (ii) thereafter on the
basis of a 360-day year and the actual number of days elapsed in the relevant
interest period.
(e) Payment of principal of, premium, if any, and interest on the
Securities shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal, premium, if any, and interest due at the
Maturity of such Securities shall be made at the Place of Payment upon surrender
of such Securities to the Paying Agent and payments of interest shall be made
subject to such surrender where applicable, by wire transfer at such place and
to such account at a banking institution in the United States as may be
designated in writing to the Paying Agent at
26
least ten (10) Business Days prior to the date for payment by the Person
entitled thereto unless proper written transfer instructions have not been
received by the relevant record date, in which case such payments shall be made
by check mailed to the address of such Person as such address shall appear in
the Security Register.
(f) Subject to the foregoing provisions of this Section 3.1, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security.
SECTION 3.2. Denominations.
The Securities shall be in registered form without coupons and shall be
issuable in minimum denominations of $100,000 and any integral multiple of
$1,000 in excess thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
(a) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities in an aggregate principal
amount (including all then Outstanding Securities) not in excess of Two Hundred
Million Dollars ($200,000,000) executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon:
(i) a copy of any Board Resolution relating thereto; and
(ii) an Opinion of Counsel substantially to the effect that: (1)
such Securities, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute, and the Indenture
constitutes, valid and legally binding obligations of the Company, each
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles; (2) the Securities have been duly
authorized and executed by the Company and have been delivered to the
Trustee for authentication in accordance with this Indenture; (3) the
Securities are not required to be registered under the Securities Act; and
(4) the Indenture is not required to be qualified under the Trust
Indenture Act.
(b) The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its Chief Financial Officer, its President or one of its Vice
Presidents. The signature of any of these officers on the Securities may be
manual or facsimile. Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
27
(c) No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.8, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
(d) Each Security shall be dated the date of its authentication.
SECTION 3.4. Global Securities.
(a) Upon the election of the Holder after the Original Issue Date, which
election need not be in writing, the Securities owned by such Holder shall be
issued in the form of one or more Global Securities registered in the name of
the Depositary or its nominee. Each Global Security issued under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture. In connection
with any such election, if requested by a Holder in writing, the Company will
act reasonably (including, without limitation, in light of Section 2.6 of this
Indenture) in designating and entering into any necessary arrangements, at the
cost of such Holder, with a Depositary reasonably acceptable to it and such
Holder.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for registered Securities, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee and the Company in
writing that such Depositary is no longer willing or able to properly discharge
its responsibilities as Depositary with respect to such Global Security, and no
qualified successor is appointed by the Company within ninety (90) days of
receipt by the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no successor is appointed
by the Company within ninety (90) days after obtaining knowledge of such event,
(iii) the Company executes and delivers to the Trustee a Company Order stating
that the Company elects to terminate the book-entry system through the
Depositary or (iv) an Event of Default shall have occurred and be continuing.
Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv)
above, the Trustee shall notify the Depositary and instruct the Depositary to
notify all owners of beneficial interests in such Global Security of the
occurrence of such event and of the availability of Securities to such owners of
beneficial interests requesting the same. The Trustee may conclusively rely, and
be protected in relying, upon the written identification of the owners of
beneficial interests furnished by the Depositary, and shall not be liable for
any delay resulting from a delay by the Depositary. Upon the issuance of such
Securities and the registration in the Securities Register of such Securities in
the names of the Holders of the beneficial interests therein, the Trustees shall
recognize such holders of beneficial interests as Holders.
28
(c) If any Global Security is to be exchanged for other Securities or
canceled in part, or if another Security is to be exchanged in whole or in part
for a beneficial interest in any Global Security, then either (i) such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article III or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to (x) the portion thereof to be so exchanged or
canceled, or (y) the principal amount of such other Security to be so exchanged
for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Securities Registrar,
whereupon the Trustee, in accordance with the Applicable Depositary Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration
instructions, the Company shall execute and the Trustee shall authenticate and
deliver any Securities issuable in exchange for such Global Security (or any
portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
(e) [Reserved].
(f) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Depositary
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Depositary Participants. The Securities Registrar and the Trustee shall be
entitled to deal with the Depositary for all purposes of this Indenture relating
to a Global Security (including the payment of principal and interest thereon
and the giving of instructions or directions by owners of beneficial interests
therein and the giving of notices) as the sole Holder of the Security and shall
have no obligations to the owners of beneficial interests therein. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Depositary Participants.
(h) No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such Global Security for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, nothing herein
29
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.
SECTION 3.5. Registration, Transfer and Exchange Generally.
(a) The Trustee shall cause to be kept at the Corporate Trust Office a
register (the "Securities Register") in which the registrar and transfer agent
with respect to the Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Securities and of transfers and exchanges of Securities. The Trustee shall at
all times also be the Securities Registrar. The provisions of Article VI shall
apply to the Trustee in its role as Securities Registrar.
(b) Subject to compliance with Section 2.2(b), upon surrender for
registration of transfer of any Security at the offices or agencies of the
Company designated for that purpose the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations of like
tenor and aggregate principal amount.
(c) At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations, of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.
(d) All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
(e) Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.
(f) No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.
(g) Neither the Company nor the Trustee shall be required pursuant to the
provisions of this Section 3.5 (g): (i) to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business
fifteen (15) days before the day of selection for redemption of Securities
pursuant to Article XI and ending at the close of business on the day of mailing
of the notice of redemption or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.
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(h) The Company shall designate an office or offices or agency or agencies
where Securities may be surrendered for registration or transfer or exchange.
The Company initially designates the Corporate Trust Office as its office and
agency for such purposes. The Company shall give prompt written notice to the
Trustee and to the Holders of any change in the location of any such office or
agency.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
(a) If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Trustee to save the Company
and the Trustee harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of like tenor and
aggregate principal amount and bearing a number not contemporaneously
outstanding.
(b) If there shall be delivered to the Trustee (i) evidence to its
satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by it to save each of the Company and
the Trustee harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and aggregate principal amount as such
destroyed, lost or stolen Security, and bearing a number not contemporaneously
outstanding.
(c) If any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
(d) Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
(e) Every new Security issued pursuant to this Section 3.6 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
(f) The provisions of this Section 3.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee shall
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any interest
on such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
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SECTION 3.8. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 3.8, except as expressly
permitted by this Indenture. All canceled Securities shall be retained or
disposed of by the Trustee in accordance with its customary practices and the
Trustee shall deliver to the Company a certificate of such disposition.
SECTION 3.9. Deferrals of Interest Payment Dates.
(a) So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Security, to defer the payment of interest on the Securities for a period
of up to twenty (20) consecutive quarterly interest payment periods (each such
period, an "Extension Period"), during which Extension Period(s), the Company
shall have the right to make no payments or partial payments of interest on any
Interest Payment Date (except any Additional Amounts that otherwise may be due
and payable). No Extension Period shall end on a date other than an Interest
Payment Date and no Extension Period shall extend beyond the Stated Maturity of
the principal of the Securities. No interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest (to the extent payment of such interest would be
legally enforceable) at the rate equal to a fixed rate equal to 8.48% per annum
through but excluding June 15, 2012 and thereafter at a variable rate equal to
LIBOR plus 2.95% per annum, compounded quarterly, from the dates on which
amounts would have otherwise been due and payable until paid or until funds for
the payment thereof have been made available for payment. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
the Securities together with such Additional Interest. Prior to the termination
of any such Extension Period, the Company may extend such Extension Period and
further defer the payment of interest; provided, that (i) all such previous and
further extensions comprising such Extension Period do not exceed twenty (20)
consecutive quarterly interest payment periods, (ii) no Extension Period shall
end on a date other than an Interest Payment Date and (iii) no Extension Period
shall extend beyond the Stated Maturity of the principal of the Securities. Upon
the termination of any such Extension Period and upon the payment of all accrued
and unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period; provided, that (i)
such Extension Period does not exceed twenty (20) consecutive quarterly interest
payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date and (iii) no Extension Period shall extend beyond the
Stated Maturity of the principal of the Securities. The Company shall notify (i)
the Holders of the Securities at the address provided upon request to the
Securities Registrar, (ii) the Trustee at its Corporate Trust Office (iii) FTN
Financial Capital Markets at 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx
00000, (000) 000-0000, (iv) Xxxxx, Xxxxxxxx & Xxxxx, Inc. at 000 0xx Xxxxxx, 0xx
Xxxxx, (000) 000-0000 and (v) TWE, Ltd. at c/o Maples Finance Limited,
32
P.O. Box 1093 GT, Queensgate House, South Church Street, Xxxxxx Town, Grand
Cayman, Cayman Islands, (000) 000-0000, Attention: The Directors, in writing and
by telephone (except in the case of notice to the Holders) of its election to
begin any such Extension Period at least five (5) Business Days prior to the
next succeeding Interest Payment Date on which interest on the Securities would
be payable but for such deferral.
(b) In connection with any such Extension Period, the Company shall be
subject to the restrictions set forth in Section 10.6.
SECTION 3.10. [Reserved].
SECTION 3.11. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by its
acceptance or acquisition of a Security or a beneficial interest therein, the
Holder of, and any Person that acquires a direct or indirect beneficial interest
in, such Security, intend and agree to treat such Security as indebtedness of
the Company for United States Federal, state and local tax purposes. The
provisions of this Indenture shall be interpreted to further this intention and
agreement of the parties.
SECTION 3.12. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption and other similar or related materials as a convenience to
Holders; provided, that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other
than (A) Securities that have been mutilated, destroyed, lost or stolen
and that have been replaced or paid as provided in Section 3.6 and (B)
Securities for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Company and thereafter
33
repaid to the Company or discharged from such trust as provided in Section
10.2) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee
for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year of the date of deposit, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of subclause (ii)(A), (B) or (C) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose (x) an amount in the currency or currencies in
which the Securities are payable, (y) Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than the due date of
any payment, money in an amount or (z) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest (including any Additional Interest)
to the date of such deposit (in the case of Securities that have become
due and payable) or to the Stated Maturity (or any date of principal
repayment upon early maturity) or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6, the obligations of
the Company to any Authenticating Agent under Section 6.11 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and Section
10.2(e) shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of Section 10.2(e), all money or Government
Obligations deposited with the Trustee pursuant to Section 4.1 shall be held in
trust and applied by the Trustee, in accordance with the provisions of the
Securities and this Indenture, to the payment in accordance with Section 3.1,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal and any premium and interest (including any Additional
Interest) for the
34
payment of which such money or obligations have been deposited with or received
by the Trustee. Moneys held by the Trustee under this Section 4.2 shall not be
subject to the claims of holders of Senior Debt under Article XII.
SECTION 4.3. Defeasance and Discharge of Indenture.
The Company shall be deemed to have paid and discharged the entire indebtedness
on all the Outstanding Securities on the first date all the conditions set forth
in the proviso below are satisfied, and the provisions of this Indenture, as it
relates to such Outstanding Securities, shall no longer be in effect (and the
Trustee, at the expense of the Company, shall at Company Request, execute proper
instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities to receive, from the trust funds
described in subparagraph (1) hereof, payment of the principal of (and premium,
if any) and each installment of principal of (and premium, if any) or interest
on the Securities on the Stated Maturity of such principal or installment of
principal or interest or on a Redemption Date in accordance with the terms of
this Indenture and the Securities;
(b) the Company's obligations with respect to such Securities under
Sections 2.4, 3.5, 3.6, 4.2, 4.5, 7.1 and 10.2; and
(c) the obligations of the Company to the Trustee under Section 6.6,
provided that the following conditions shall have been satisfied:
(i) the Company has or caused to be irrevocably deposited (except as
provided in Section 4.2) with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
the Securities,
(A) money in the currency or currencies in which the Securities are
payable in an amount sufficient, or
(B) Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide not later than one day before the due date of any payment
referred to in clause (A) or (B) of this subparagraph money in an
amount, or (b) a combination of such money and such Government
Obligations, sufficient, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee,
to pay and discharge the principal of (and premium, if any) and each installment
of principal of (and premium, if any) and interest on the Outstanding Securities
on the Stated Maturity of such principal or installment of principal or interest
or on the applicable Redemption Date in accordance with the terms of this
Indenture and of the Securities;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, any applicable laws, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is bound;
35
(iii) no Event of Default or event which with notice or lapse of
time would become an Event of Default with respect to the Securities shall have
occurred and be continuing on the date of such deposit; and
(iv) if the deposit referred to in subparagraph (1) of this section
is to be made on or prior to one year from the Stated Maturity for payment of
principal of the Outstanding Securities, the Company has delivered to the
Trustee an Opinion of Counsel or a favorable ruling of the Internal Revenue
Service, in either case to the effect that Holders of the Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred.
SECTION 4.4. Defeasance of Certain Obligations.
The Company may omit to comply with any term, provision or condition set forth
in the sections of this Indenture or such Security with respect to the
Securities ("Covenant Defeasance") if:
(a) with reference to this section, the Company has deposited or caused to
be irrevocably deposited with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
the Securities of that series,
(i) money in the currency or currencies in which the Securities are
payable in an amount sufficient, or
(ii) (a) Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide not later than one day before the due date of any payment
referred to in clause (A) or (B) of this subparagraph money in an amount,
or (b) a combination of such money and such Government Obligation,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee,
to pay and discharge the principal of (and premium, if any) and each installment
of principal (and premium, if any) and interest on the Outstanding Securities of
that series on the Stated Maturity of such principal or installment of principal
or interest;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;
(c) if the deposit referred to in subparagraph (1) of this section is to
be made on or prior to one year from the Stated Maturity for payment of
principal of the Outstanding Securities, the Company has delivered to the
Trustee an Opinion of Counsel or a favorable ruling of the Internal Revenue
Service, in either case to the effect that Holders of the Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance of certain obligations and will be subject to
federal income tax on the same amount and in the same manner and at the same
times, as would have been the case if such deposit and defeasance had not
occurred;
36
(d) no Event of Default or event which with notice or lapse of time would
become an Event of Default with respect to the Securities shall have occurred
and be continuing on the date of such deposit; and
(e) the Company has delivered to the Trustee an Officers' Certificate
(upon which the Trustee may conclusively rely) stating that all conditions
precedent herein provided for relating to the defeasance contemplated by this
section have been complied with.
SECTION 4.5. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or Government
Obligations in accordance with Section 4.1, 4.3 or 4.4 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities of the applicable
series shall be revived and reinstated as though no deposit had occurred
pursuant to Section 4.1, 4.3 or 4.4, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money or Government
Obligations in accordance with Section 4.1, 4.3 or 4.4; provided that, if the
Company has made any payment of principal of or interest on the Securities of
any series because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or Government Obligations held by the Trustee or Paying
Agent.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default" means, wherever used herein with respect to the
Securities, any one of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Security, including
any Additional Interest in respect thereof, when it becomes due and payable, and
continuance of such default for a period of thirty (30) days (subject to the
deferral of any due date in the case of an Extension Period); or
(b) default in the payment of the principal of or any premium on any
Security at its Maturity; or
(c) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture and continuance of such default or breach for a
period of thirty (30) days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least twenty five percent (25%) in aggregate principal
amount of the Outstanding Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder;
37
(d) the entry by a court having jurisdiction in the premises of a decree
or order adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of sixty (60) consecutive days;
(e) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it, or the filing by the Company of
a petition or answer or consent seeking reorganization or relief under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due and its willingness to be adjudicated
a bankrupt or insolvent, or the taking of corporate action by the Company in
furtherance of any such action; or
(f) [Reserved]; or
(g) any representation, warranty, certification or statement of fact made
or deemed made by the Company herein or in any other Operative Document or in
any document delivered in connection herewith or therewith shall be incorrect or
misleading in any materially adverse respect when made.
SECTION 5.2. Acceleration of Maturity; Rescission, Annulment, Audit Rights
and Additional Reports.
(a) If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than twenty five percent (25%)
in aggregate principal amount of the Outstanding Securities may declare the
principal amount of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders).
(b) At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this
Article V, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all Securities,
(B) any accrued Additional Interest on all Securities,
38
(C) the principal of and any premium on any Securities that
have become due otherwise than by such declaration of acceleration
and interest (including any Additional Interest) thereon at the rate
borne by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel; and
(ii) all Events of Default with respect to Securities, other than
the non-payment of the principal of Securities that has become due solely
by such acceleration, have been cured or waived as provided in Section
5.13;
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
(c) In the event that either (a) an Event of Default has occurred and is
continuing or (b) the Company has elected to defer payments of interest on the
Securities by extending the interest payment period (as provided for in Section
3.9 hereof), Holders of not less than twenty five percent (25%) in aggregate
principal amount of the Outstanding Securities may audit the quarterly and
annual financial statements and statutory statements of the Company.
(d) In the event that either (a) an Event of Default has occurred and is
continuing or (b) the Company has elected to defer payments of interest on the
Securities by extending the interest payment period (as provided for in Section
3.9 hereof), the Company shall provide to the Trustee and the Holders quarterly
and annual statutory statements, as well as quarterly updates on any of its
subsidiaries or affiliates, which may be in liquidation, under supervisory
regulation or in runoff.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
(a) The Company covenants that if:
(i) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest
becomes due and payable and such default continues for a period of thirty
(30) days, or
(ii) default is made in the payment of the principal of and any
premium on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any premium and interest (including any
Additional Interest) and, in addition thereto, all amounts owing the Trustee
under Section 6.6.
(b) If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by
39
law out of the property of the Company or any other obligor upon the Securities,
wherever situated.
(c) If an Event of Default with respect to Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or similar judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, at
the Company's expense, by intervention in such proceeding or otherwise, to take
any and all actions authorized hereunder in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to first pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6.
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, subject to
Article XII and after provision for the payment of all the amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to the Securities pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or property on account of principal or any premium or
interest (including any Additional Interest), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee, any predecessor
Trustee and other Persons under Section 6.6;
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SECOND: To the payment of all Senior Debt of the Company if and to the
extent required by Article XII;
THIRD: Subject to Article XII, to the payment of the amounts then due and
unpaid upon the Securities for principal and any premium and interest (including
any Additional Interest) in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and any
premium and interest (including any Additional Interest), respectively; and
FOURTH: The balance, if any, to the Company.
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a custodian, receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities;
(b) the Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding for sixty (60) days; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such sixty (60)-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium,
if any, and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium on such Security at its Maturity and
payment of interest (including any Additional Interest) on such Security when
due and payable and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder. The
41
rights of any Holder hereunder or under any other Operative Document may be
exercised by such Holder or any collateral manager thereof.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
such Holder, then and in every such case the Company, the Trustee and such
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in Section 3.6(f), no right or remedy herein
conferred upon or reserved to the Trustee or the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or the Holders, as the case may
be.
SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided, that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.2, the Trustee shall have the
right to decline to follow such direction if a Responsible Officer or Officers
of the Trustee shall, in good faith, reasonably determine that the proceeding so
directed would be unjustly prejudicial to the Holders not joining in any such
direction or would involve the Trustee in personal liability.
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SECTION 5.13. Waiver of Past Defaults.
(a) The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may waive any past Event of Default hereunder and
its consequences except an Event of Default:
(i) in the payment of the principal of or any premium or interest
(including any Additional Interest) on any Security (unless such Event of
Default has been cured and the Company has paid to or deposited with the
Trustee a sum sufficient to pay all installments of interest (including
any Additional Interest) due and past due and all principal of and any
premium on all Securities due otherwise than by acceleration), or
(ii) in respect of a covenant or provision hereof that under Article
IX cannot be modified or amended without the consent of each Holder of any
Outstanding Security.
(b) Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities.
(c) Upon any such waiver, such Event of Default shall cease to exist and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.14 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than ten percent (10%) in aggregate principal amount of
the Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or any premium on the Security
after the Stated Maturity or any interest (including any Additional Interest) on
any Security after it is due and payable.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE VI
THE TRUSTEE
SECTION 6.1. Corporate Trustee Required.
There shall at all times be a Trustee hereunder with respect to the
Securities. The Trustee shall be a corporation organized and doing business
under the laws of the United States or of any state thereof, authorized to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or state
authority and having an office within the United States. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then, for the purposes
of this Section 6.1, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.1, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VI.
SECTION 6.2. Certain Duties and Responsibilities.
Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
provided, that in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they substantially conform on their face to the
requirements of this Indenture.
(b) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall, prior to the receipt of directions, if any, from
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities, exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.2. To the extent that, at law or in
equity, the Trustee has duties and liabilities relating to the Holders, the
44
Trustee shall not be liable to any Holder for the Trustee's good faith reliance
on the provisions of this Indenture. The provisions of this Indenture, to the
extent that they restrict the duties and liabilities of the Trustee otherwise
existing at law or in equity, are agreed by the Company and the Holders to
replace such other duties and liabilities of the Trustee.
(d) No provisions of this Indenture shall be construed to relieve the
Trustee from liability with respect to matters that are within the authority of
the Trustee under this Indenture for its own negligent action, negligent failure
to act or willful misconduct, except that:
(i) the Trustee shall not be liable for any error or judgment made
in good faith by an authorized officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee
under this Indenture; and
(iii) the Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with
the Company and money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.
SECTION 6.3. Notice of Defaults.
Within ninety (90) days after the occurrence of any default actually known
to the Trustee, the Trustee shall give the Holders notice of such default unless
such default shall have been cured or waived; provided, that except in the case
of a default in the payment of the principal of or any premium or interest on
any Securities, the Trustee shall be fully protected in withholding the notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that withholding the notice is in the interest of holders of
Securities; and provided, further, that in the case of any default of the
character specified in Section 5.1(c), no such notice to Holders shall be given
until at least thirty (30) days after the occurrence thereof. For the purpose of
this Section 6.3, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default.
SECTION 6.4. Certain Rights of Trustee.
Subject to the provisions of Section 6.2:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting in good faith and in accordance with the terms
hereof upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
45
(b) if (i) in performing its duties under this Indenture the Trustee is
required to decide between alternative courses of action, (ii) in construing any
of the provisions of this Indenture the Trustee finds ambiguous or inconsistent
with any other provisions contained herein or (iii) the Trustee is unsure of the
application of any provision of this Indenture, then, except as to any matter as
to which the Holders are entitled to decide under the terms of this Indenture,
the Trustee shall deliver a notice to the Company requesting the Company's
written instruction as to the course of action to be taken and the Trustee shall
take such action, or refrain from taking such action, as the Trustee shall be
instructed in writing to take, or to refrain from taking, by the Company;
provided, that if the Trustee does not receive such instructions from the
Company within ten Business Days after it has delivered such notice or such
reasonably shorter period of time set forth in such notice the Trustee may, but
shall be under no duty to, take such action, or refrain from taking such action,
as the Trustee shall deem advisable and in the best interests of the Holders, in
which event the Trustee shall have no liability except for its own negligence,
bad faith or willful misconduct;
(c) any request or direction of the Company shall be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board
of Directors may be sufficiently evidenced by a Board Resolution;
(d) the Trustee may consult with counsel (which counsel may be counsel to
the Trustee, the Company or any of its Affiliates, and may include any of its
employees) and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses (including reasonable attorneys' fees and expenses) and
liabilities that might be incurred by it in compliance with such request or
direction, including reasonable advances as may be requested by the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
note or other paper or document, but the Trustee in its discretion may make such
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(h) whenever in the administration of this Indenture the Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action with respect to enforcing any remedy or
right hereunder, the Trustees (i) may request instructions from the Holders
(which instructions may only be given by the Holders of the same
46
aggregate principal amount of Outstanding Securities as would be entitled to
direct the Trustee under this Indenture in respect of such remedy, right or
action), (ii) may refrain from enforcing such remedy or right or taking such
action until such instructions are received and (iii) shall be protected in
acting in accordance with such instructions;
(i) except as otherwise expressly provided by this Indenture, the Trustee
shall not be under any obligation to take any action that is discretionary under
the provisions of this Indenture;
(j) without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with any bankruptcy, insolvency or other proceeding referred to in
clauses (d) or (e) of the definition of Event of Default, such expenses
(including legal fees and expenses of its agents and counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy laws or law relating to creditors rights
generally;
(k) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate addressing such matter, which,
upon receipt of such request, shall be promptly delivered by the Company;
(l) the Trustee shall not be charged with knowledge of any Event of
Default unless either (i) a Responsible Officer of the Trustee shall have actual
knowledge or (ii) the Trustee shall have received written notice thereof from
the Company or a Holder; and
(m) in the event that the Trustee is also acting as Paying Agent,
Authenticating Agent or Securities Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VI shall also be
afforded such Paying Agent, Authenticating Agent, or Securities Registrar.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Securities Registrar or such other agent.
SECTION 6.6. Compensation; Reimbursement; Indemnity.
(a) The Company agrees:
(i) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder in such amounts as the Company
and the Trustee shall agree from time to time (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
47
(ii) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful misconduct; and
(iii) to the fullest extent permitted by applicable law, to
indemnify the Trustee and its Affiliates, and their officers, directors,
shareholders, agents, representatives and employees for, and to hold them
harmless against, any loss, damage, liability, tax (other than income,
franchise or other taxes imposed on amounts paid pursuant to (i) or (ii)
hereof), penalty, expense or claim of any kind or nature whatsoever
incurred without negligence, bad faith or willful misconduct on its part
arising out of or in connection with the acceptance or administration of
this trust or the performance of the Trustee's duties hereunder, including
the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
(b) To secure the Company's payment obligations in this Section 6.6, the
Company hereby grants and pledges to the Trustee and the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee, other than money or property held in trust to pay principal and
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.
(c) The obligations of the Company under this Section 6.6 shall survive
the satisfaction and discharge of this Indenture and the earlier resignation or
removal of the Trustee.
(d) In no event shall the Trustee be liable for any indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
(e) In no event shall the Trustee be liable for any failure or delay in
the performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Indenture.
SECTION 6.7. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.8.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 6.8 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series. If the
48
acceptance of appointment is substantially contemporaneous with the resignation,
then the notice called for by the first sentence of this subsection may be
combined with the instrument called for by Section 6.8.
(c) Unless an Event of Default shall have occurred and be continuing, the
Trustee may be removed at any time by the Company by a Board Resolution. If an
Event of Default shall have occurred and be continuing, the Trustee may be
removed by Act of the Holders of a majority in aggregate principal amount of the
Outstanding Securities, delivered to the Trustee and to the Company.
(d) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any reason, at a time
when no Event of Default shall have occurred and be continuing, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee, and such
successor Trustee and the retiring Trustee shall comply with the applicable
requirements of Section 6.8. If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, at a time when an Event of Default shall have occurred and be
continuing, the Holders, by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities, shall promptly appoint a
successor Trustee, and such successor Trustee and the retiring Trustee shall
comply with the applicable requirements of Section 6.8. If no successor Trustee
shall have been so appointed by the Company or the Holders and accepted
appointment within sixty (60) days after the giving of a notice of resignation
by the Trustee or the removal of the Trustee in the manner required by Section
6.8, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of such Holder and all others similarly situated, and any
resigning Trustee may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(e) The Company shall give notice to all Holders in the manner provided in
Section 1.6 of each resignation and each removal of the Trustee and each
appointment of a successor Trustee. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 6.8. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee, each
successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in paragraph
(a) of this Section 6.8.
49
(c) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article VI.
SECTION 6.9. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Trustee 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 Trustee shall be a party, or any Person succeeding to
all or substantially all of the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, provided,
that such Person shall be otherwise qualified and eligible under this Article
VI. In case any Securities shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
or as otherwise provided above in this Section 6.9 to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated, and in case any Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor Trustee or in the name of such successor Trustee, and in all
cases the certificate of authentication shall have the full force which it is
provided anywhere in the Securities or in this Indenture that the certificate of
the Trustee shall have.
SECTION 6.10. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.
SECTION 6.11. Appointment of Authenticating Agent.
(a) The Trustee may appoint an Authenticating Agent or Agents with respect
to the Securities, which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.6, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, or of any State or Territory thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or state authority. If such Authenticating
Agent publishes reports of condition at least annually pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 6.11 the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at
50
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 6.11, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.11.
(b) Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to all or substantially all of the corporate
trust business of an Authenticating Agent shall be the successor Authenticating
Agent hereunder, provided such Person shall be otherwise eligible under this
Section 6.11, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
(c) An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.11, the Trustee may appoint a successor
Authenticating Agent eligible under the provisions of this Section 6.11, which
shall be acceptable to the Company, and shall give notice of such appointment to
all Holders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent.
(d) The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.11 in such
amounts as the Company and the Authenticating Agent shall agree from time to
time.
(e) If an appointment of an Authenticating Agent is made pursuant to this
Section 6.11, the Securities may have endorsed thereon, in addition to the
Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
This is one of the Securities referred to in the within mentioned Indenture.
Dated:
WILMINGTON TRUST COMPANY, as Trustee
By:
---------------------------------
Authenticating Agent
By:
---------------------------------
Authorized signatory
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ARTICLE VII
HOLDER'S LISTS AND REPORTS BY COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, on or before June 30 and December 31 of each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of a date not more than fifteen (15) days prior to
the delivery thereof, and
(b) at such other times as the Trustee may request in writing, within
thirty (30) days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than fifteen (15) days prior to
the time such list is furnished,
in each case to the extent such information is in the possession or control of
the Company and has not otherwise been received by the Trustee in its capacity
as Securities Registrar.
SECTION 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Company.
(a) The Company shall furnish to (i) the Trustee, (ii) FTN Financial
Capital Markets, (iii) Xxxxx, Xxxxxxxx & Xxxxx, Inc. and (iv) prospective
purchasers of Securities (the "Prospective Purchasers"), upon their written
request, the information required to be furnished pursuant to Rule 144A(d)(4)
under the Securities Act. The delivery requirements of the Company set forth in
the preceding sentence may be satisfied by compliance with Section 7.3(b) hereof
by the Company.
(b) The Company shall furnish to each of (i) FTN Financial Capital Markets
(at 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxx or such other address as designated by FTN Financial Capital Markets),
(ii) Xxxxx, Xxxxxxxx & Xxxxx, Inc. (at 000 0xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxxx Xxxxxxxx or
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such other address as designated by Xxxxx, Xxxxxxxx & Xxxxx, Inc.), (iii) TWE,
Ltd. c/o Maples Finance Limited at P.O. Box 1093 GT, Queensgate House, South
Church Street, Xxxxxx Town, Grand Cayman, Cayman Islands, Attention: Directors
and (iv) any beneficial owner of the Securities who requests the same (the
Persons set forth in (b)(i) - (iii), each, a "Recipient" and, collectively, the
"Recipients"), a duly completed and executed certificate substantially and
substantively in the form attached hereto as Exhibit A, including all of the
Company's financial statements referenced in such Exhibit, which certificate and
financial statements shall be so furnished by the Company not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
each fiscal year of the Company and not later than ninety (90) days after the
end of each fiscal year of the Company. Each Recipient shall maintain the
confidentiality of such information except that such information may be
disclosed (i) on a no-name basis to any investor in a collateralized debt
obligor Holder (a "CDO Investor"), (ii) on a named-basis, to any CDO Investor or
Prospective Purchaser who has agreed with such furnishing Recipient or with the
Company to hold the information confidential in accordance with the terms
hereof, (iii) to its officers, directors, employees and agents, including
accountants, legal counsel and other advisors (it being understood that such
Persons shall be informed of and subject to the confidentiality requirements
hereof), (iv) to the extent requested by any regulatory authority, (v) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, or (vi) to the extent such information becomes publicly available
other than as a result of the action of such Recipient.
(c) If the Company intends to file its annual and quarterly information
with the Securities and Exchange Commission (the "Commission") in electronic
form pursuant to Regulation S-T of the Commission using the Commission's
Electronic Data Gathering, Analysis and Retrieval ("XXXXX") system, the Company
shall notify the Trustee in the manner prescribed herein of each such annual and
quarterly filing. The Trustee is hereby authorized to access the XXXXX system
for purposes of retrieving the financial information so filed. Compliance with
the foregoing shall constitute delivery by the Company of its financial
statements to the Trustee in compliance with the provisions of Section 314(a) of
the Trust Indenture Act, if applicable. The Trustee shall have no duty to search
for or obtain any electronic or other filings that the Company makes with the
Commission, regardless of whether such filings are periodic, supplemental or
otherwise. Delivery of reports, information and documents to the Trustee
pursuant to this Section 7.3(c) shall be solely for purposes of compliance with
this Section 7.3(c) and, if applicable, with Section 314(a) of the Trust
Indenture Act. The Trustee's receipt of such reports, information and documents
shall not constitute notice to it of the content thereof or any matter
determinable from the content thereof, including the Company's compliance with
any of its covenants hereunder, as to which the Trustee is entitled to rely upon
Officers' Certificates.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not, while any of the Securities remain outstanding,
consolidate or amalgamate with or merge into any other Person or sell, convey,
transfer or lease all or substantially all of its properties and assets as an
entirety to any Person unless:
53
(a) if the Company shall consolidate or amalgamate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such
consolidation or amalgamation or into which the Company is merged or the Person
that acquires by conveyance or transfer, or that leases, the properties and
assets of the Company substantially as an entirety shall be an entity organized
and existing under the laws of the United States of America or any State or
Territory thereof, the District of Columbia, Bermuda, the Cayman Islands or any
other country or state which is a member of the Organization for Economic
Cooperation and Development, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium and interest (including any Additional Interest) on all the
Securities and the performance of every covenant of this Indenture on the part
of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
constitute an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, any such supplemental indenture comply with this Article
VIII and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee may rely upon such
Officers' Certificate and Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 8.1.
SECTION 8.2. Successor Company Substituted.
(a) Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1 and the execution and delivery to the Trustee of the supplemental indenture
described in Section 8.1(a), the successor entity formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; and in the event of
any such conveyance or transfer, following the execution and delivery of such
supplemental indenture, the Company shall be discharged from all obligations and
covenants under the Indenture and the Securities.
(b) Such successor Person may cause to be executed, and may issue either
in its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
that such successor Person thereafter shall cause to be executed and delivered
to the Trustee on its behalf. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture.
54
(c) In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate to reflect such occurrence.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form reasonably satisfactory
to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or
(b) to cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein, or to
make or amend any other provisions with respect to matters or questions arising
under this Indenture, which shall not be inconsistent with the other provisions
of this Indenture, provided, that such action pursuant to this clause (b) shall
not adversely affect in any material respect the interests of any Holders; or
(c) to add to the covenants, restrictions or obligations of the Company or
to add to the Events of Default, provided, that such action pursuant to this
clause (c) shall not adversely affect in any material respect the interests of
any Holders; or
(d) to modify, eliminate or add to any provisions of the Indenture or the
Securities to such extent as shall be necessary to ensure that the Securities
are treated as indebtedness of the Company for United States Federal income tax
purposes, provided, that such action pursuant to this clause (d) shall not
adversely affect in any material respect the interests of any Holders; or
(e) provide for any replacement Trustee or Administrative Agent in
accordance with Article VI.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
(a) With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security,
(i) change the Stated Maturity of the principal or any premium of
any Security or change the date of payment of any installment of interest
(including any Additional Interest) on any Security, or reduce the
principal amount thereof or the rate of interest
55
thereon or any premium payable upon the redemption thereof or change the
place of payment where, or the coin or currency in which, any Security or
interest thereon is payable, or restrict or impair the right to institute
suit for the enforcement of any such payment on or after such date, or
(ii) reduce the percentage in aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with any provision of this Indenture or of
defaults hereunder and their consequences provided for in this Indenture,
or
(iii) modify any of the provisions of this Section 9.2, Section 5.13
or Section 10.7, except to increase any percentage in aggregate principal
amount of the Outstanding Securities, the consent of whose Holders is
required for any reason, or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each Security.
(b) It shall not be necessary for any Act of Holders under this Section
9.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in conclusively relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent herein provided for relating to such action have been
complied with. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that affects the Trustee's own rights, duties,
indemnities or immunities under this Indenture or otherwise. Copies of the final
form of each supplemental indenture shall be delivered by the Trustee at the
expense of the Company to each Holder promptly after the execution thereof.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
56
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of the
Securities that it will duly and punctually pay the principal of and any premium
and interest (including any Additional Interest) on the Securities in accordance
with the terms of the Securities and this Indenture. As of the date of this
Indenture, the Company represents that it has no present intention to exercise
its right under Section 2.11 to defer payments of interest on the Securities.
SECTION 10.2. Money for Security Payments to be Held in Trust.
(a) If the Company shall at any time act as its own Paying Agent with
respect to the Securities, it will, on or before each due date of the principal
of and any premium or interest (including any Additional Interest) on the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest
(including Additional Interest) so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee in writing of its failure so to act.
(b) Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of or
any premium or interest (including any Additional Interest) on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided in the Trust Indenture Act and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its failure so to act.
(c) The Company will cause each Paying Agent for the Securities other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 10.2, that such Paying Agent will (i) comply with the provisions of this
Indenture and the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities) in the making of any payment in respect of the Securities,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent for payment in respect of the Securities.
(d) The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
(e) Any money deposited with the Trustee or any Paying Agent, or then held
by the Company in trust for the payment of the principal of and any premium or
interest (including any Additional Interest) on any Security and remaining
unclaimed for two years after such principal
57
and any premium or interest has become due and payable shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be paid on Company Request to the Company, or (if then held by the
Company) shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than thirty (30) days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 10.3. Statement as to Compliance.
The Company shall deliver to the Trustee, within ninety (90) days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate covering the preceding calendar year, stating whether or
not to the knowledge of the signers thereof the Company is in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (without regard to any period of grace or requirement of notice
provided hereunder), and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 10.4. Calculation Agent.
(a) The Company hereby agrees that for so long as any of the Securities
remain Outstanding, there will at all times be an agent appointed to calculate
LIBOR in respect of each Interest Payment Date in accordance with the terms of
Schedule A (the "Calculation Agent"). The Company has initially appointed the
Trustee as Calculation Agent for purposes of determining LIBOR for each Interest
Payment Date. The Calculation Agent may be removed by the Company at any time.
If the Calculation Agent is unable or unwilling to act as such or is removed by
the Company, the Company will promptly appoint as a replacement Calculation
Agent the London office of a leading bank which is engaged in transactions in
Eurodollar deposits in the international Eurodollar market and which does not
control or is not controlled by or under common control with the Company or its
Affiliates. The Calculation Agent may not resign its duties without a successor
having been duly appointed.
(b) The Calculation Agent shall be required to agree that, as soon as
possible after 11:00 a.m. (London time) on each LIBOR Determination Date (as
defined in Schedule A), but in no event later than 11:00 a.m. (London time) on
the Business Day immediately following each LIBOR Determination Date, the
Calculation Agent will calculate the interest rate (the Interest Payment shall
be rounded to the nearest cent, with half a cent being rounded upwards) for the
related Interest Payment Date, and will communicate such rate and amount to the
Company, the Trustee, each Paying Agent and the Depositary. The Calculation
Agent will also specify to the Company the quotations upon which the foregoing
rates and amounts are based and, in any event, the Calculation Agent shall
notify the Company before 5:00 p.m. (London time) on each
58
LIBOR Determination Date that either: (i) it has determined or is in the process
of determining the foregoing rates and amounts or (ii) it has not determined and
is not in the process of determining the foregoing rates and amounts, together
with its reasons therefor. The Calculation Agent's determination of the
foregoing rates and amounts for any Interest Payment Date will (in the absence
of manifest error) be final and binding upon all parties. For the sole purpose
of calculating the interest rate for the Securities, "Business Day" shall be
defined as any day on which dealings in deposits in Dollars are transacted in
the placeCityLondon interbank market.
SECTION 10.5. Additional Amounts.
All payments of principal of and premium, if any, interest (including any
Additional Interest) and any other amounts on, or in respect of, the Securities
of any series shall be made 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 (each, 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 (i) the laws (or any regulations or
ruling promulgated thereunder) of a taxing jurisdiction or any political
subdivision or taxing authority thereof or therein or (ii) an official position
regarding the application, administration, interpretation or enforcement of any
such laws, regulations or rulings (including, without limitation, a holding by a
court of competent jurisdiction or by a taxing authority in a taxing
jurisdiction or any political subdivision thereof).
If a withholding or deduction at source is required, the Company shall,
subject to certain limitations and exceptions set forth below, pay to the Holder
of any such Security such additional amounts ("Additional Amounts") as may be
necessary so that every net payment of principal, premium, if any, interest
(including any Additional Interest) or any other amount made to such Holder,
after such withholding or deduction, shall not be less than the amount provided
for in such Security and this Indenture to be then due and payable; provided,
however, that the Company shall not be required to make payment of such
Additional Amounts for or on account of:
(a) 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, such Security; (B) presented
such Security, where presentation is required, for payment in the relevant
taxing jurisdiction or any political subdivision thereof, unless such Security
could not have been presented for payment elsewhere; or (C) presented such
Security, where presentation is required, more than thirty (30) days after the
date on which the payment in respect of such Security first 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 Security for payment on any day within such period of thirty (30) days;
(b) any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge;
59
(c) 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
Security to comply with any reasonable request by the Company addressed to the
Holder within ninety (90) days of such request (A) to provide information
concerning the nationality, residence or identity of the Holder or such
beneficial owner or (B) to make any declaration or other similar claim or
satisfy any information or reporting requirement, which, in the case of (A) or
(B), 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;
(d) any withholding or deduction required to be made pursuant to any EU
Directive on the taxation of savings implementing the conclusions of the ECOFIN
Council meetings of 26-27 November 2000, 3 June 2003 or any law implementing or
complying with, or introduced in order to confirm to, such EU Directive; or
(e) any combination of items (a), (b), (c) and (d);
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or premium, if any, interest or any other amounts on, any such
Security to any Holder who is a fiduciary or partnership or other than the sole
beneficial owner of such Security 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
Security.
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of or any premium, interest (including Additional Interest) or
any other amounts on, or in respect of, any Security of any series or the net
proceeds received on the sale or exchange of any Security of any series, such
mention shall be deemed to include mention of the payment of Additional Amounts
provided by the terms of such series established hereby or pursuant hereto to
the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms, and express mention of the
payment of Additional Amounts (if applicable) in any provision hereof shall not
be construed as excluding the payment of Additional Amounts in those provisions
hereof where such express mention is not made.
SECTION 10.6. Additional Covenants.
The Company covenants and agrees with each Holder of Securities that if
(i) an Event of Default shall have occurred and be continuing, (ii) any
Significant Subsidiaries (as defined in Section 1-02(w) of Regulation S-X of the
Securities Act (the "Significant Subsidiaries") of the Company which is rated by
A.M. Best Company, Inc. and which (A) is rated B or below by A.M. Best Company,
Inc. or (B) A.M. Best Company, Inc. withdraws its rating or (iii) the Company
shall have given notice of its election to begin an Extension Period with
respect to the Securities, then, from the date on which the Company shall have
given notice of its election to begin an Extension Period through the end of any
such Extension Period (including any extension thereof), then the Company shall
not, and shall not permit any subsidiary of the Company to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or
60
make a liquidation payment with respect to, any shares of the Company's or such
subsidiary's capital stock (other than payments of dividends or distributions to
the Company) or make any guarantee payments with respect to the foregoing, (ii)
make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Securities (other than,
with respect to clauses (ii) and (iii) above, (A) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company or any subsidiary
of the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company or of such subsidiary (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (B) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock (or in the case of a subsidiary
of the Company, any class or series of such subsidiary's capital stock) or of
any class or series of the Company's indebtedness for any class or series of the
Company's capital stock (or in the case of indebtedness of a subsidiary of the
Company, of any class or series of such subsidiary's indebtedness for any class
or series of such subsidiary's capital stock), (C) the purchase of fractional
interests in shares of the Company's capital stock (or the capital stock of a
subsidiary of the Company) pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (D) any
declaration of a dividend in connection with any Rights Plan, the issuance of
rights, stock or other property under any Rights Plan or the redemption or
repurchase of rights pursuant thereto, or (E) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith or (F) any repurchases, redemptions or other acquisitions
of shares of capital stock of the Company or any subsidiary of the Company made
by the Company or such subsidiary, which the Company's Board of Directors
determine in good faith are necessary or advisable in order to avoid, ameliorate
or limit any material adverse tax or regulatory consequences for the Company or
its shareholders), or (iii) enter into any new (as opposed to existing)
contracts with shareholders on less than an arm's-length negotiation basis
holding more than 10% of the outstanding shares of Common Shares of the Company.
SECTION 10.7. Waiver of Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition contained in Section 10.6 if, before or after the time for
such compliance, the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
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SECTION 10.8. Treatment of Securities.
The Company will treat the Securities as indebtedness, and the amounts,
other than payments of principal, payable in respect of the principal amount of
such Securities as interest, for all U.S. federal income tax purposes. All
payments in respect of the Securities will be made free and clear of U.S.
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W-9 or W-8BEN (or any substitute or successor form)
establishing its U.S. or non-U.S. status for U.S. federal income tax purposes,
or any other applicable form establishing a complete exemption from U.S.
withholding tax.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Optional Redemption.
The Company may, at its option, on any Interest Payment Date, on or after
June 15, 2012, redeem the Securities in whole at any time or in part from time
to time, at a Redemption Price equal to one hundred percent (100%) of the
principal amount thereof (or of the redeemed portion thereof, as applicable),
together, in the case of any such redemption, with accrued interest, including
any Additional Interest, through but excluding the date fixed as the Redemption
Date (the "Optional Redemption Price").
SECTION 11.2. Special Event Redemption.
Prior to June 15, 2012, upon the occurrence and during the continuation of
a Special Event, the Company may, at its option, redeem the Securities, in whole
but not in part, at a Redemption Price equal to
TIME PERIOD PERCENTAGE
----------- ----------
June 21, 2007 - June 14, 2008 105%
June 15, 2008 - June 14, 2009 103.75%
June 15, 2009 - June 14, 2010 102.5%
June 15, 2010 - June 14, 2011 101.25%
June 15, 2011 and thereafter 100%
of the principal amount thereof, together, in the case of any such redemption,
with accrued interest, including any Additional Interest, through but excluding
the date fixed as the Redemption Date (the "Special Redemption Price"). Unless
the Company defaults in the payment of the Special Redemption Price, on and
after the Redemption Date, interest will cease to accrue on the Securities
called for redemption.
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SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities, in whole or in part,
shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, not less than
forty-five (45) days and not more than seventy-five (75) days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee in writing of such date and of the principal amount of the
Securities to be redeemed and provide the additional information required to be
included in the notice or notices contemplated by Section 11.5. In the case of
any redemption of Securities, in whole or in part, (a) prior to the expiration
of any restriction on such redemption provided in this Indenture or the
Securities or (b) pursuant to an election of the Company which is subject to a
condition specified in this Indenture or the Securities, the Company shall
furnish the Trustee with an Officers' Certificate and an Opinion of Counsel
evidencing compliance with such restriction or condition.
SECTION 11.4. Selection of Securities to be Redeemed.
(a) If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected and redeemed on a pro rata basis not
more than sixty (60) days prior to the Redemption Date by the Trustee from the
Outstanding Securities not previously called for redemption, provided, that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
(b) The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security that has been or is to be redeemed.
(c) The provisions of paragraphs (a) and (b) of this Section 11.4 shall
not apply with respect to any redemption affecting only a single Security,
whether such Security is to be redeemed in whole or in part. In the case of any
such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
SECTION 11.5. Notice of Redemption.
(a) Notice of redemption shall be given not later than the thirtieth
(30th) day, and not earlier than the sixtieth (60th) day, prior to the
Redemption Date to each Holder of Securities to be redeemed, in whole or in
part.
(b) With respect to Securities to be redeemed, in whole or in part, each
notice of redemption shall state:
(i) the Redemption Date;
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(ii) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price, as calculated by the Company, together
with a statement that it is an estimate and that the actual Redemption
Price will be calculated on the fifth Business Day prior to the Redemption
Date (and if an estimate is provided, a further notice shall be sent of
the actual Redemption Price on the date that such Redemption Price is
calculated);
(iii) if less than all Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption, the respective
principal amounts) of the particular Securities to be redeemed;
(iv) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Security or portion thereof, and that any
interest (including any Additional Interest) on such Security or such
portion, as the case may be, shall cease to accrue on and after said date;
and
(v) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
(c) Notice of redemption of Securities to be redeemed, in whole or in
part, at the election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company
and shall be irrevocable. The notice if mailed in the manner provided above
shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice. In any case, a failure to give such notice by mail
or any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
SECTION 11.6. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date specified
in the notice of redemption given as provided in Section 11.5, the Company will
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Section 10.2) an amount of money sufficient to pay the Redemption
Price of, and any accrued interest (including any Additional Interest) on, all
the Securities (or portions thereof) that are to be redeemed on that date.
SECTION 11.7. Payment of Securities Called for Redemption.
(a) If any notice of redemption has been given as provided in Section
11.5, the Securities or portion of Securities with respect to which such notice
has been given shall become due and payable on the date and at the place or
places stated in such notice at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment specified in
such notice, the Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date.
(b) Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the
64
Company, a new Security or Securities, of authorized denominations, in aggregate
principal amount equal to the unredeemed portion of the Security so presented
and having the same Original Issue Date, Stated Maturity and terms.
(c) If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and any premium on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article XII, the payment of the
principal of and any premium and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Debt (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed).
SECTION 12.2. No Payment When Senior Debt in Default; Payment Over of
Proceeds Upon Dissolution, Etc.
(a) In the event and during the continuation of any default by the Company
in the payment of any principal of or any premium or interest on any Senior Debt
(following any grace period, if applicable) when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by declaration
of acceleration or otherwise, then, upon written notice of such default to the
Company by the holders of such Senior Debt or any trustee therefor, unless and
until such default shall have been cured or waived or shall have ceased to
exist, no direct or indirect payment (in cash, property, securities, by set-off
or otherwise) shall be made or agreed to be made on account of the principal of
or any premium or interest (including any Additional Interest) on any of the
Securities, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the Securities.
(b) In the event of a bankruptcy, insolvency or other proceeding described
in clause (d) or (e) of the definition of Event of Default (each such event, if
any, herein sometimes referred to as a "Proceeding"), all Senior Debt (including
any interest thereon accruing after the commencement of any such proceedings)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of any of the
Securities on account thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
entity provided for by a plan of reorganization or readjustment the payment of
which is subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Debt at the time outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment), which
would otherwise (but for these subordination provisions) be payable or
deliverable in respect of the Securities shall be paid or delivered directly to
the holders of Senior Debt in accordance with the priorities
65
then existing among such holders until all Senior Debt (including any interest
thereon accruing after the commencement of any Proceeding) shall have been paid
in full.
(c) In the event of any Proceeding, after payment in full of all sums
owing with respect to Senior Debt, the Holders of the Securities, together with
the holders of any obligations of the Company ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
and any premium and interest (including any Additional Interest) on the
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or any obligations of the Company ranking junior to the Securities and
such other obligations. If, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other entity
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment) shall be received
by the Trustee or any Holder in contravention of any of the terms hereof and
before all Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt at the time outstanding in accordance with the priorities then existing
among such holders as calculated and certified by the Company for application to
the payment of all Senior Debt remaining unpaid, to the extent necessary to pay
all such Senior Debt (including any interest thereon accruing after the
commencement of any Proceeding) in full. In the event of the failure of the
Trustee or any Holder to endorse or assign any such payment, distribution or
security, each holder of Senior Debt is hereby irrevocably authorized to endorse
or assign the same.
(d) The Trustee and the Holders, at the expense of the Company, shall take
such reasonable action (including the delivery of this Indenture to an agent for
any holders of Senior Debt or consent to the filing of a financing statement
with respect hereto) as may, in the opinion of counsel designated by the holders
of a majority in principal amount of the Senior Debt at the time outstanding, be
necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.
(e) The provisions of this Section 12.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
(f) The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
SECTION 12.3. Payment Permitted If No Default.
Nothing contained in this Article XII or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time, except during
the pendency of the conditions described in paragraph (a) of Section 12.2 or of
any Proceeding referred to in Section
66
12.2, from making payments at any time of principal of and any premium or
interest (including any Additional Interest) on the Securities or (b) the
application by the Trustee of any moneys deposited with it hereunder to the
payment of or on account of the principal of and any premium or interest
(including any Additional Interest) on the Securities or the retention of such
payment by the Holders, if, at the time of such application by the Trustee, it
did not have knowledge (in accordance with Section 12.8) that such payment would
have been prohibited by the provisions of this Article XII, except as provided
in Section 12.8.
SECTION 12.4. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on all
Senior Debt, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of
the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article XII (equally and ratably with the holders of all indebtedness of
the Company that by its express terms is subordinated to Senior Debt of the
Company to substantially the same extent as the Securities are subordinated to
the Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights of
the holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of and
any premium and interest (including any Additional Interest) on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article XII, and no payments made
pursuant to the provisions of this Article XII to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
SECTION 12.5. Provisions Solely to Define Relative Rights.
The provisions of this Article XII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article XII or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of and any
premium and interest (including any Additional Interest) on the Securities as
and when the same shall become due and payable in accordance with their terms,
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than their rights in relation to
the holders of Senior Debt or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, including filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article XII of the holders
of Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
67
SECTION 12.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article XII and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
SECTION 12.7. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
(b) Without in any way limiting the generality of paragraph (a) of this
Section 12.7, the holders of Senior Debt may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to such Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of such Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding, (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt, (iii) release any Person
liable in any manner for the payment of Senior Debt and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 12.8. Notice to Trustee.
(a) The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article XII or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment to or by the Trustee
in respect of the Securities, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or a holder
of Senior Debt or from any trustee, agent or representative therefor; provided,
that if the Trustee shall not have received the notice provided for in this
Section 12.8 at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of and any premium on or interest (including any
Additional Interest) on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
68
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor)
to establish that such notice has been given by a holder of Senior Debt (or a
trustee, agent, representative or attorney-in-fact therefor). In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article XII, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 12.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article XII, the Trustee and the Holders of the Securities shall be
entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such Proceeding is pending, or a certificate of
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII.
SECTION 12.10. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article XII or otherwise.
SECTION 12.11. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII with respect to any Senior Debt that may at any
time be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
SECTION 12.12. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article XII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XII in addition to or in place of the Trustee; provided,
that Sections
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12.8 and 12.11 shall not apply to the Company or any Affiliate of the Company if
the Company or such Affiliate acts as Paying Agent.
* * * *
This instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
* * * *
70
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed as of the day and year first above written.
VALIDUS HOLDINGS, LTD.
By:
---------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Trustee
By:
---------------------------------
Name:
Title:
71
SCHEDULE A
DETERMINATION OF LIBOR
With respect to the Securities, the London interbank offered rate
("LIBOR") shall be determined by the Calculation Agent in accordance with the
following provisions (in each case rounded to the nearest .000001%):
(1) On the second LIBOR Business Day (as defined below) prior to an Interest
Payment Date (each such day, a "LIBOR Determination Date"), LIBOR for any given
security shall for the following interest payment period equal the rate, as
obtained by the Calculation Agent from Bloomberg Financial Markets Commodities
News, for three-month Eurodollar deposits that appears on Dow Xxxxx Telerate
Page 3750 (as defined in the International Swaps and Derivatives Association,
Inc. 1991 Interest Rate and Currency Exchange Definitions), or such other page
as may replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date.
(2) If, on any LIBOR Determination Date, such rate does not appear on Dow Xxxxx
Telerate Page 3750 or such other page as may replace such Page 3750, the
Calculation Agent shall determine the arithmetic mean of the offered quotations
of the Reference Banks (as defined below) to leading banks in the London
interbank market for three-month Eurodollar deposits in an amount determined by
the Calculation Agent by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by
the Calculation Agent to the Reference Banks. If, on any LIBOR Determination
Date, at least two of the Reference Banks provide such quotations, LIBOR shall
equal such arithmetic mean of such quotations. If, on any LIBOR Determination
Date, only one or none of the Reference Banks provide such quotations, LIBOR
shall be deemed to be the arithmetic mean of the offered quotations that leading
banks in the City of New York selected by the Calculation Agent are quoting on
the relevant LIBOR Determination Date for three-month Eurodollar deposits in an
amount determined by the Calculation Agent by reference to the principal London
offices of leading banks in the London interbank market; provided that, if the
Calculation Agent is required but is unable to determine a rate in accordance
with at least one of the procedures provided above, LIBOR shall be LIBOR as
determined on the previous LIBOR Determination Date.
(3) As used herein: "Reference Banks" means four major banks in the London
interbank market selected by the Calculation Agent; and "LIBOR Business Day"
means a day on which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in London.
EXHIBIT A
FORM OF OFFICER'S FINANCIAL CERTIFICATE
The undersigned, the [Chief Financial Officer/Treasurer/Assistant
Treasurer/ Secretary/Assistant Secretary, Chairman/Vice Chairman/Chief Executive
Officer/President/Vice President] hereby certifies, pursuant to Section 7.3(b)
and Section 10.3 of the Junior Subordinated Indenture, dated as of June 15, 2006
(the "Indenture"), among Validus Holdings, Ltd. (the "Company") and JPMorgan
Chase Bank, National Association, as trustee, that, as of [date], [20__], the
Company, if any, had the following unaudited ratios and balances:
[For the Company and its Subsidiary Insurance Companies (as defined below, if
any), on a consolidated basis, provide:]
[INSURANCE COMPANY]
As of [Quarterly/Annual Financial Date], 20__
NAIC Risk Based Capital Ratio (authorized control level) ________%
Total Policyholders' Surplus $________
Consolidated Debt to Total Policyholders' Surplus ________%
Total Assets $________
NAIC Class 1 & 2 Rated Investments to Total Fixed Income ________%
Investments
NAIC Class 1 & 2 Rated Investments to Total Investments ________%
Return on Policyholders' Surplus ________%
Net Premiums Written $________
Expense Ratio ________%
Loss and LAE Ratio ________%
Combined Ratio ________%
Net Premiums Written (annualized) to Policyholders' Surplus ________%]
A table describing the quarterly report calculation procedures is provided
on page 3 hereof
N/A denotes "Not Applicable."
The following is a complete list as of [Quarterly/Annual Financial Date] of the
Company's companies which are authorized to write insurance business or
otherwise conduct insurance or reinsurance business (the "Subsidiary Insurance
Companies"):
[List of subsidiary insurance companies]
[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of the Company and its consolidated subsidiaries for the
[three years] ended [date], 20__.
Pursuant to Section 10.3 of the Indenture, each of the undersigned hereby
certifies that, to the knowledge of the undersigned, the Company is not in
default in the performance or observance of any of the terms, provisions or
conditions contained in the Indenture (without regard to any period of grace or
requirement of notice provided under the Indenture), for the calendar year
ending on ______________, 20__ [, except as follows: specify each such default
and the nature and status thereof.]
[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of the Company and its consolidated subsidiaries for the fiscal
quarter ended [date], 20__.]
The financial statements fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles ("GAAP"), the
financial position of the Company and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the date, and for
the [quarter] [annual] period ended [date], 20__, and such financial statements
have been prepared in accordance with GAAP consistently applied throughout the
period involved (expect as otherwise noted therein).
IN WITNESS WHEREOF, the undersigned has executed this Officer's Financial
Certificate as of this _______ day of __________________, 20__.
By: __________________________
Name:
Validus Holdings, Ltd.
Bermuda Commercial Bank Building
19 Par-La-Ville Road, Second Floor
Xxxxxxxx HM11 Bermuda
Attention: Chief Financial Officer
facsimile: (441 278-9091)
* Or such shorter period since the first audit performed after the Company's
formation.
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FINANCIAL DEFINITIONS
INSURANCE COMPANY
REPORT ITEM DESCRIPTION OF CALCULATION
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NAIC RISK BASED CAPITAL RATIO-P&C Total Adjusted Capital/Authorized Control
Level Risk-Based Capital
NAIC RISK BASED CAPITAL RATIO-LIFE (Total Adjusted Capital-Asset Valuation
Reserve)/Authorized Control Level
Risk-Based Capital
TOTAL CAPITAL AND SURPLUS-LIFE Common Capital
Stock + Preferred Capital Stock + Aggregate
Write-Ins for other than special surplus
funds + Surplus Notes + Gross Paid-In and
Contributed Surplus + Aggregate Write-Ins
for Special Surplus Funds + Unassigned Funds
(Surplus) -- Treasury Stock
TOTAL CAPITAL AND SURPLUS-P&C Aggregate Write-Ins
for Special Surplus Funds + Common Capital
Stock + Preferred Capital Stock + Aggregate
Write Ins for other than special surplus
funds + Surplus Notes + Gross Paid-In and
Contributed Surplus + Unassigned Funds
(Surplus) -- Treasury Stock
TOTAL CLASS 1 & 2 RATED INVESTMENTS (Total Class 1 + Total Class 2 Rated
TO TOTAL FIXED INCOME INVESTMENTS Investments)/Total Fixed Income
Investments
TOTAL CLASS 1 & 2 RATED INVESTMENTS (Total Class 1 + Total Class 2 Rated
TO TOTAL INVESTMENTS Investments)/Total Investments
TOTAL ASSETS Total Assets
RETURN ON POLICYHOLDERS' SURPLUS Net Income/Policyholders' Surplus
EXPENSE RATIO Other Underwriting Expenses Incurred/Net
premiums Earned
LOSS AND LAE RATIO (Losses Incurred + Loss Expenses
Incurred)/Net Premiums Earned
COMBINED RATIO Expense Ratio + Loss and LAE Ratio
NET PREMIUMS WRITTEN (ANNUALIZED) Net Premiums Written/Policyholders'
TO POLICYHOLDERS' SURPLUS Surplus
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