XL CAPITAL LTD
TO
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF MARCH 23, 2004
SENIOR DEBT SECURITIES
SUPPLEMENT TO INDENTURE DATED AS OF JANUARY 23, 2003
FIRST SUPPLEMENTAL INDENTURE, dated as of March 23, 2004 (the
"FIRST SUPPLEMENTAL INDENTURE"), by and between XL CAPITAL LTD, a Cayman Islands
exempted limited company (the "COMPANY"), having its principal office at XX
Xxxxx, Xxx Xxxxxxxxxx Xxxx, Xxxxxxxx XX00, Xxxxxxx, and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, having a Corporate Trust Office at
000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, as trustee (the
"TRUSTEE") under the Indenture.
WHEREAS, the Company and the Trustee have as of January 23, 2003
entered into an Indenture (the "BASE INDENTURE") providing for the issuance by
the Company from time to time of its senior debt securities;
WHEREAS, no Securities have been issued under the Indenture and
there do not currently exist any Holders;
WHEREAS, the Company desires to issue one series of senior debt
securities under the Base Indenture, and has duly authorized the creation and
issuance of such senior debt securities and the execution and delivery of this
First Supplemental Indenture to modify the Base Indenture and provide certain
additional provisions as hereinafter described (the Base Indenture, as amended
and supplemented by the First Supplemental Indenture is hereinafter referred to
as the "INDENTURE");
WHEREAS, the Company and the Trustee deem it advisable to enter
into this First Supplemental Indenture for the purposes of establishing the
terms of such senior debt securities and providing for the rights, obligations
and duties of the Trustee with respect to such senior debt securities;
WHEREAS, the execution and delivery of this First Supplemental
Indenture has been authorized by a resolution of the Board of Directors of the
Company or a duly authorized committee thereof;
WHEREAS, concurrent with the execution hereof, the Company has
delivered an Officers' Certificate and has caused its counsel to deliver to the
Trustee an Opinion of Counsel; and
WHEREAS, all conditions and requirements of the Base Indenture
necessary to make this First Supplemental Indenture a valid, binding and legal
instrument in accordance with its terms have been performed and fulfilled by the
parties hereto and the execution and delivery thereof have been in all respects
duly authorized by the parties hereto.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the mutual premises and agreements
herein contained, the Company and the Trustee covenant and agree, for the equal
and proportionate benefit of all Holders of the Notes (as defined below), as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms.
Unless otherwise provided herein or unless the context otherwise
requires:
(a) a term defined in the Base Indenture has the same meaning
when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not
affect interpretation;
(e) the following terms have the meanings given to them in the
Purchase Contract Agreement (as defined below), as in effect on the date
hereof: Last Failed Remarketing; Normal Unit; Purchase Price; Remarketing
Agent; Remarketing Fee; Remarketing Period; Separate Notes; Stock
Purchase Date; Subsequent Remarketing Date; and Underwriting Agreement;
and
(f) the following terms have the meanings given to them in this
Section 1.1(f):
"BUSINESS DAY" means, with respect to any Notes, any day other
than a Saturday, Sunday or other day in the City of New York, in the City of
Boston, Massachussetts, in Bermuda or in any Place of Payment on which banking
institutions are authorized by law or regulations to close.
"GLOBAL NOTE" means a Global Security representing the Notes.
"ISSUE DATE" means March 23, 2004.
"ISSUE PRICE" means 100% of the aggregate principal amount.
"OPTION TO PURCHASE ADDITIONAL UNITS" means the option granted to
the underwriters pursuant to the Underwriting Agreement to purchase up to an
additional 3,000,000 Normal Units.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of March
23, 2004, between the Company, U.S. Bank National Association, as Purchase
Contract Agent and U.S. Bank Trust National Association, as Collateral Agent,
Custodial Agent and Securities Intermediary.
"PURCHASE CONTRACT AGENT" means U.S. Bank National Association, a
national banking association, as purchase contract agent under the Purchase
Contract Agreement (as defined below), until a successor Purchase Contract Agent
shall have become such pursuant to the applicable provisions of the Purchase
Contract Agreement, and thereafter "Purchase Contract Agent" shall mean such
successor.
"PURCHASE CONTRACT AGREEMENT" means the Purchase Contract
Agreement, dated as of March 23, 2004, between the Company and U.S. Bank
National Association, as purchase contract agent.
"RELEVANT DATE" means, in respect of any payment, the date on
which such payment first becomes due and payable, but if the full amount of the
moneys payable has not been received by the Trustee on or prior to such due
date, it means the first date on which, the full amount of such moneys having
been so received and being available for payment to Holders, notice to that
effect shall have been duly given to the Holders of the Notes.
"REMARKETING" means any remarketing conducted pursuant to and in
accordance with the Remarketing Agreement.
"REMARKETING AGREEMENT" means the Remarketing Agreement to be
entered into by and among the Company, a remarketing agent and the Purchase
Contract Agent.
"REMARKETING DATE" means the ninth Business Day before the Stock
Purchase Date, which shall be May 2, 2007.
"REMARKETING VALUE" means, with respect to any Note, the principal
amount of such Note.
"RESET DATE" means the date following the Remarketing Date or a
Subsequent Remarketing Date, as applicable, on which the trades in a successful
remarketing of the Notes pursuant to the Purchase Contract Agreement and the
Remarketing Agreement settle. Notwithstanding whether a successful remarketing
occurs on the Remarketing Date or on a Subsequent Remarketing Date, the
settlement date for such remarketing, if successful, shall be on the Stock
Purchase Date; provided that the Company with the consent of the Remarketing
Agent and the Purchase Contract Agent shall have the option to provide for a
settlement date of a successful remarketing that is earlier than the Stock
Purchase Date so long as the Company shall pay on the Stock Purchase Date to the
Holders of the Normal Units and the Separate Notes participating in the
remarketing an interest payment on the Notes for the period from and including
the Payment Date immediately preceding the Stock Purchase Date to but excluding
the Stock Purchase Date at the Initial Interest Rate.
"RESET RATE" has the meaning set forth in Section 2.19.
ARTICLE II
CREATION OF THE NOTES
Section 2.1. Designation of Series.
Pursuant to the terms hereof and Sections 201 and 301 of the Base
Indenture, the Company hereby creates a series of its senior debt securities
designated as the 2.53% Senior Notes due 2009 (the "NOTES"), which Notes shall
be deemed "Securities" for all purposes under the Indenture.
Section 2.2. Form of Notes.
The definitive form of the Notes shall be substantially in the
form set forth in EXHIBIT A attached hereto, which is incorporated herein and
made part hereof.
The Final Maturity of the Notes shall be May 15, 2009.
Section 2.3. Interest and Interest Rate Reset.
(a) Each Note will bear interest from the Issue Date or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for, as the case may be, initially at the rate of 2.53% per
annum (the "INITIAL INTEREST RATE") up to but excluding the Reset Date,
payable in in immediately available funds, in such coin or currency of
the United States of America as at the time of payment shall be legal
tender for the payment of public and private debts; provided that in the
event that a Last Failed Remarketing occurs, each Note shall continue to
bear interest at the Initial Interest Rate until the principal of the
Notes is paid or made available for payment. In the event the Notes are
successfully remarketed pursuant to the Purchase Contract Agreement and
the Remarketing Agreement, each Note shall bear interest at the Reset
Rate from and including the Reset Date to the date on which the principal
of the Notes is paid or made available for payment; provided that any
principal and installment of interest which is overdue shall bear
interest (to the extent that payment of such interest is enforceable
under applicable law) at the Initial Interest Rate up to but excluding
the Reset Date, if any, and thereafter at the Reset Rate, from the dates
such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand. Interest on the Notes
initially shall be payable quarterly in arrears on February 15, May 15,
August 15 and November 15 of each year (each, an "INTEREST PAYMENT
DATE"), commencing May 15, 2004, through and including May 15, 2007 and
then semi-annually in arrears on the Interest Payment Dates of May 15 and
November 15 of each year, commencing November 15, 2007, until the
principal thereof is paid or made available for payment. The Regular
Record Date shall be the 15th calendar day (whether or not a Business
Day) prior to the relevant Interest Payment Date.
(b) The amount of interest payable for any period on any
Interest Payment Date will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter than a
full quarterly or semi-annual period, as applicable, for which interest
is computed will be computed on the basis of the actual number of days
elapsed in such a 90-day or 180-day period, as applicable. In the event
that any date on which interest is payable on the Notes is not a Business
Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such
Business Day is 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 such date.
Section 2.4. Limit on Amount of Notes.
The Notes will be limited in aggregate principal amount to
$750,000,000 (which amount may be increased by up to $825,000,000 in the event
the Option to Purchase Additional Units is exercised) and may, upon execution of
this First Supplemental Indenture, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes in accordance with a Company Order.
Section 2.5. Nature of Notes/Minimum Denomination
(a) The Notes shall constitute senior, unsecured and
unsubordinated obligations of the Company and shall rank pari passu with
all other unsecured and unsubordinated indebtedness of the Company from
time to time outstanding.
(b) The Notes shall be issuable only in registered form and
without coupons in denominations of $1,000 and any integral multiples
thereof except that an interest in a Note held as part of a Normal Unit
represents an ownership interest of 1/40th, or 2.5%, of a Note in
aggregate principal amount of $1,000 and will therefore correspond to the
stated amount of $25 per Normal Unit.
Section 2.6. No Sinking Fund.
The Notes do not have the benefit of any sinking fund obligation
and, subject to Section 2.21 hereof are not redeemable at the option of the
Holders.
Section 2.7. Issuance of Notes and Payment.
(a) The Notes, on original issuance, shall be issued in the
form of (i) one or more definitive, fully registered Notes registered
initially in the name of U.S. Bank National Association, as Purchase
Contract Agent and (ii) with respect to any Notes that are no longer a
component of Normal Units and released from the lien of the Pledge
Agreement, one fully registered Global Note registered in the name of The
Depository Trust Company ("DTC"), as Depositary, or its nominee, and
deposited with the Trustee, as custodian for DTC, for credit by DTC to
the respective accounts of beneficial owners of the Separate Notes
represented thereby (or such other accounts as they may direct).
(b) The principal of and the interest on the Notes shall be
payable at the office or agency of the Company maintained for that
purpose in any coin or currency of the United States of America that at
the time of payment is legal tender for the payment of public or private
debts; provided that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall
appear in the Security Register or by wire transfer to an account
appropriately designated by the Holder entitled thereto.
Section 2.8. Notes Not Convertible or Exchangeable.
The Notes will not be convertible or exchangeable for other
securities or property.
Section 2.9. Global Note.
(a) DTC shall serve as the initial Depositary for the Global
Note.
(b) Unless and until it is exchanged for definitive Notes in
accordance with the terms of the Base Indenture, a Global Note may be
transferred, in whole but not in part, only to another nominee of the
Depositary, or to a successor Depositary selected or approved by the
Company or to a nominee of such successor Depositary.
Section 2.10. Defeasance. The defeasance provisions of Sections 4.03 and
4.04 of the Base Indenture shall not apply to the Notes.
Section 2.11. Redemption.
Pursuant to Section 301(6) and Section 1101 of the Base Indenture,
so long as any of the Notes are Outstanding, the following provisions shall be
applicable to the Notes:
(a) If certain events specified in EXHIBIT A attached hereto
shall occur and be continuing, the Company may, at its option, redeem the
Notes then Outstanding in whole (but not in part) at any time at the
redemption price and in accordance with the terms and conditions set
forth in EXHIBIT A.
(b) Notwithstanding Section 1104 of the Indenture, notice of
redemption shall (i) be sufficient if instead of setting forth a specific
price with respect to the Redemption Price, it sets forth the manner of
calculation thereof and (ii) shall be mailed to the Holders not less than
30 nor more than 60 days prior to the redemption date.
Section 2.12. Listing.
In the event that the Notes become separately traded from the
Normal Units to the extent that applicable exchange listing requirements are
met, the Company covenants and agrees to use commercially reasonable efforts to
cause such Notes to be listed on the securities exchange on which the Normal
Units are then listed.
Section 2.13. Remarketing.
The Notes may be remarketed at a specified price on certain dates,
all as specified in EXHIBIT A and Section 2.19 of this First Supplemental
Indenture, in Section 5.4(b) of the Purchase Contract Agreement and in Section
4.5(d) of the Pledge Agreement and the remarketing procedures set forth in such
sections shall apply to the Notes.
Section 2.14. Guarantees.
The Notes will not be guaranteed by any third party.
Section 2.15. Place of Payment.
The Paying Agent for the Notes shall initially be the Trustee, and
the Place of Payment for the Notes shall initially be the Corporate Trust
Office, which as of the date hereof for such purpose is located at 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. The Company may from time to
time designate one or more additional offices or agencies where Notes may be
presented or surrendered for payment.
Section 2.16. Events of Default.
The following shall constitute additional Events of Default
pursuant to Section 501 of the Base Indenture with respect to the Notes with the
same effect as if expressly set forth in such Section 501:
(a) default by the Company under any instrument or instruments
under which there is or may be secured or evidenced any of the Company's
indebtedness (other than the Notes) having an outstanding principal
amount of $50,000,000 (or its equivalent in any other currency or
currencies) or more, individually or in the aggregate, that has caused
the holders thereof to declare such indebtedness to be due and payable
prior to its stated maturity, unless such declaration has been rescinded
within 30 days;
(b) default by the Company in the payment when due of the
principal or premium, if any, of any bond, debenture, note or other
evidence of the Company's indebtedness, in each case for money borrowed,
or in the payment of principal or premium, if any, under any mortgage,
indenture, agreement or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness of the Company
for money borrowed, which default for payment of principal or premium, if
any, is in an aggregate principal amount exceeding $50,000,000 (or its
equivalent in any other currency or currencies), if such default shall
continue unremedied or unwaived for more than 30 days after the
expiration of any grace period or extension of the time for payment
applicable thereto;
(c) default in the payment of any Additional Amounts payable
with respect to interest on any Notes, when such Additional Amounts
become due and payable, and continuance of such default for a period of
30 days;
(d) default in the payment of any Additional Amounts payable
with respect to any principal of or premium, if any, on any Notes, when
such Additional Amounts become due and payable either at maturity, upon
any redemption, by declaration of acceleration or otherwise; and
(e) default in the payment of the Put Price on the Notes
following the exercise of the Put Right by any Holder of Notes on the
date that such payment is due and payable.
In addition, with respect to the Notes, the reference to "60 days" in
Section 501(1) of the Base Indenture shall be amended to be "30 days" with
respect to the Notes.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice of any Event of Default or any event which,
after notice or lapse of time or both, would constitute an Event of Default.
Section 2.17. Covenants.
The Notes shall be entitled to the benefit of each of the covenants in
Article Ten of the Base Indenture and the following additional covenants (which
shall be deemed to be a provision of the Indenture and, when referred to as a
provision of the Indenture, shall be identified by reference to the Section
number that is set forth immediately preceding the covenant):
SECTION 1008. LIMITATION ON LIENS ON STOCK OF DESIGNATED
SUBSIDIARIES. The Company covenants that, so long as any Notes are
outstanding, the Company will not, nor will the company permit any
Designated Subsidiary to, create, assume, incur, guarantee or
otherwise permit to exist any indebtedness evidenced by notes,
debentures, bonds or similar instruments, which is secured by any
mortgage, pledge, lien, security interest or other encumberance
upon any shares of Capital Stock of the Company or any Designated
Subsidiary (whether such shares of stock are now owned or
hereafter acquired) without effectively providing concurrently
that the Notes will be secured equally and ratably with such
indebtedness for at least the time period such other indebtedness
is so secured.
"DESIGNATED SUBSIDIARY" means any present or future consolidated
subsidiary of the Company that is a regulated insurance company,
the assets of which constitute at least 20% of the Company's
consolidated assets.
SECTION 1009. ADDITIONAL AMOUNTS.
All amounts payable (whether in respect of principal,
interest or otherwise) in respect of the Notes will be made free
and clear of and without withholding or deduction for or on
account of any present or future taxes, duties, levies,
assessments or governmental charges of whatever nature imposed or
levied by or on behalf of the Cayman Islands or Bermuda or any
political subdivision thereof or any authority or agency therein
or thereof having power to tax, unless the withholding or
deduction of such taxes, duties, levies, assessments or
governmental charges is required by law. In that event, the
Company will pay, or cause to be paid, such additional amounts as
may be necessary in order that the net amounts receivable by a
Holder after such withholding or deduction (including any
withholding or deduction on such payment of additional amounts)
shall equal the respective amounts that would have been receivable
by such Holder had no such withholding or deduction been required
("ADDITIONAL AMOUNTS"), except that no such Additional Amounts
shall be payable in relation to any payment in respect of any of
the Notes (a) to, or to a third party on behalf of, a Person who
would be able to avoid such withholding or deduction but for a
failure to satisfy any applicable statutory certification,
information or documentation requirements concerning the
nationality, residence or identity of such Person or to make a
declaration of non-residence or similar claim for exemption which,
in either case, is required as a precondition to exemption, or is
liable for such taxes, duties, levies, assessments or governmental
charges in respect of such Note by reason of his having some
connection with (including, without limitation, being a citizen
of, being incorporated or engaged in a trade or business in, or
having a residence or principal place of business or other
presence in) the Cayman Islands or Bermuda, as the case may be,
other than (i) the mere holding of such Note or (ii) the receipt
of principal, interest, or other amount in respect of such Note;
(b) presented for payment more than 30 days after the Relevant
Date, except to the extent that the relevant Holder would have
been entitled to such Additional Amounts on presenting the same
for payment on or before the expiry of such period of 30 days; (c)
on account of any inheritance, gift, estate, personal property,
sales or transfer or similar taxes, duties, levies, assessments or
similar governmental charges; or (d) on account of any taxes,
duties, levies, assessments or governmental charges that are
payable otherwise than by withholding from payments in respect of
such Note.
If the Company becomes subject generally at any time to any
taxing jurisdiction other than or in addition to the Cayman
Islands and Bermuda, references in this section to the Cayman
Islands and Bermuda shall be read and construed as references to
such other jurisdiction(s) and/or to the Cayman Islands and
Bermuda.
Any reference in the Indenture to principal, premium or
interest in respect of the Notes, any redemption amount and any
other amounts in the nature of principal, shall be deemed also to
refer to any Additional Amounts that may be payable under the
Indenture, and the express mention of the payment of Additional
Amounts (if applicable) in any provision hereof shall not be
construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to the
Indenture, if the Notes require the payment of Additional Amounts,
at least 30 days prior to each date on which any payments under or
with respect to the Notes are due and payable (unless such
obligation to pay Additional Amounts arises shortly before or
after the 30th day prior to such date, in which case it shall be
promptly thereafter) the Company, or its designee shall furnish to
the Trustee, the Registrar and the Paying Agent an Officers'
Certificate stating the fact that Additional Amounts will be
payable, the amounts so payable, and any other information to
enable the Trustee or such Paying Agent to pay such Additional
Amounts to Holders on the payment date.
The Company will pay any present or future stamp, court or
documentary taxes, or any other excise or property taxes, charges
or similar levies which arise
in any jurisdiction from the execution, delivery or registration
of any Notes or any other document or instrument referred to
therein (other than a transfer of the Notes), or the receipt of
any payments with respect to the Notes, excluding any such taxes,
charges or similar levies imposed by any jurisdiction outside the
Cayman Islands or Bermuda in which a Paying Agent is located,
other than those resulting from, or required to be paid in
connection with, the enforcement of the Notes, the Indenture or
any other such document or instrument following the occurrence of
any Event of Default with respect to the Notes.
Section 2.18. Non-Applicability of Certain Sections.
Sections 1108, 1109 and 1110 of the Base Indenture shall not apply
to the Notes.
Section 2.19. REMARKETING.
(a) At least 30 days prior to the Remarketing Date, the Company
shall engage a nationally recognized investment bank (the "REMARKETING
AGENT") pursuant to a Remarketing Agreement to be entered into between
the Company and the Remarketing Agent to sell the Notes of Holders of
Normal Units, other than Holders that have elected not to participate in
the remarketing pursuant to the procedures set forth in paragraph (b)
below, and holders of Separate Notes that have elected to participate in
the remarketing pursuant to the procedures set forth in Section 2.20
below and in Section 4.5(d) of the Pledge Agreement.
(b) The Pledged Notes comprising part of Normal Units and the
Separate Notes of holders of Separate Notes that have elected to
participate in the Remarketing shall be remarketed by the Remarketing
Agent on the Remarketing Date, and, if necessary, on each Subsequent
Remarketing Date. A Holder of Normal Units may elect not to participate
in a Remarketing and retain the Notes underlying such Normal Units by
notifying the Purchase Contract Agent of such election and paying the
Purchase Price to the Purchase Contract Agent not later than 10:00 a.m.
on the thirteenth Business Day immediately preceding the Stock Purchase
Date, which such amount will be applied in direct settlement of such
Holder's obligations under the Purchase Contracts on the Stock Purchase
Date. On the tenth Business Day immediately preceding the Stock Purchase
Date, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will deliver the Pledged Notes of such Holders to the Purchase
Contract Agent. A Holder of Normal Units that has not settled the related
Purchase Contract through a Cash Settlement or an Early Settlement
pursuant to Sections 5.4(a) and 5.9 of the Purchase Contract Agreement or
by electing not to participate in the Remarketing pursuant to this
paragraph (b) and Section 5.4(b)(iv) of the Purchast Contract Agreement
shall be deemed to have elected to participate in the Remarketing.
(c) No later than 10:00 a.m. (New York City time) on the
seventh Business Day preceding the Remarketing Date, the Company shall
deliver the Remarketing Notice to Holders of Normal Units and Holders of
Separate Notes, which notice shall include the amount of cash that must
be delivered by Holders of Normal Units that elect not to participate in
the remarketing, including the dates associated therewith, and the
deadline
for such delivery as well as information with respect to the Put Right.
If such Normal Units or Separate Notes are held in global form, the
Company, or the Purchase Contract Agent, at the Company's request, will
cause DTC (or any successor Clearing Agency) to notify, directly or
indirectly, the Clearing Agency Participants of the Remarketing and of
the procedures that must be followed in connection with the Remarketing
by no later than the seventh Business Day preceding the Remarketing Date.
(d) The Purchase Contract Agent shall notify, by 10:00 a.m.,
New York City time, on the eleventh Business Date immediately preceding
the Stock Purchase Date, the Remarketing Agent and the Collateral Agent
of the aggregate number of Notes of Normal Units Holders to be
remarketed. On the the eleventh Business Day immediately preceding the
Stock Purchase Date, no later than by 10:00 a.m. New York City time,
pursuant to the terms of the Pledge Agreement, the Custodial Agent will
notify the Remarketing Agent of the aggregate number of Separate Notes to
be remarketed. On the tenth Business Date immediately preceding the Stock
Purchase Date, the Collateral Agent and the Custodial Agent, pursuant to
the terms of the Pledge Agreement, will deliver for Remarketing to the
Remarketing Agent all Notes to be remarketed.
(e) The right of each Holder of Notes to have its Notes
tendered for purchase will be limited to the extent that (i) the
Remarketing Agent conducts a Remarketing pursuant to the terms of the
Remarketing Agreement, (ii) the Notes included in the Remarketing have
not been called for redemption upon the occurrence of a Special Event;
(iii) the Remarketing Agent is able to find a purchaser or purchasers for
the remarketed Notes at a Reset Rate such that the aggregate value of
such remarketed Notes is equal to 100.25% of the Remarketing Value and
(iv) such purchaser or purchasers deliver the purchase price therefor to
the Remarketing Agent.
(f) Upon receipt of the notice provided above in paragraph (d)
from the Purchase Contract Agent and the Custodial Agent and such Notes
from the Collateral Agent and the Custodial Agent, the Remarketing Agent
shall, on the Remarketing Date, use its reasonable best efforts to (i)
establish a rate of interest that, in the opinion of the Remarketing
Agent, will, when applied to the outstanding Notes, enable the then
current aggregate market value of the Notes to have a value equal to
100.25% of the Remarketing Value as of the Remarketing Date or as of any
Subsequent Remarketing Date, as the case may be (the "RESET RATE") and
(ii) sell such Notes on such date at a price equal to 100.25% of the
Remarketing Value.
(g) If, in spite of using its reasonable best efforts, the
Remarketing Agent cannot establish the Reset Rate and remarket the Notes
included in the remarketing at a price equal to 100.25% of the
Remarketing Value on the Remarketing Date, the Remarketing Agent shall
again attempt to establish the Reset Rate and remarket the Notes included
in the remarketing at a price equal to 100.25% of the Remarketing Value
on each Subsequent Remarketing Date. If the Remarketing Agent cannot
remarket the Notes included in the remarketing at a price equal to
100.25% of the Remarketing Value on or before 4:00 p.m., New York City
time, on the third Business Day immediately preceding the Stock Purchase
Date, the remarketing will be deemed to have failed (the "LAST FAILED
REMARKETING").
(h) On the Remarketing Date and any Subsequent Remarketing
Date, the Remarketing Agent shall advise the Company, by telephone, of
any successful or unsuccessful Remarketing as soon as practicable after
such determination.
(i) If a successful Remarketing shall have occurred, the
Remarketing Agent will, in accordance with the Purchase Contract
Agreement and the Remarketing Agreement:
(i) deduct and retain for itself the Remarketing Fee;
(ii) pay the proceeds from such successful Remarketing to
the Collateral Agent related to the Notes of Holders of Normal
Units that were remarketed which, for the benefit of the Company,
will thereupon apply such proceeds, in accordance with the Pledge
Agreement in direct settlement of the Holders' obligations under
the Purchase Contracts;
(iii) if any Separate Notes were remarketed, remit to the
Collateral Agent for payment to the Holders of such Separate Notes
sold in the Remarketing the remaining proceeds from such
successful Remarketing attributable to the Separate Notes; and
(iv) if there remain any proceeds from such successful
Remarketing, after the application of such proceeds as set forth
in clauses (i) through (iii) of this sentence, then remit such
remaining proceeds to the Purchase Contract Agent for payment to
the Holders of the Normal Units that were remarketed, on a pro
rata basis, in accordance with the Remarketing Agreement.
(j) If a successful Remarketing occurs, the Remarketing Agent
shall, as soon as practicable on the Remarketing Date or on the
Subsequent Remarketing Date, as the case may be, in the case of the
Company, and by approximately 4:30 p.m. (New York City time) on the
Trading Day following the Remarketing Date, or the Subsequent Remarketing
Date, as the case may be, advise, by telephone:
(i) the Depositary and the Company of the Reset Rate
determined in the Remarketing and the number of Notes sold in the
Remarketing;
(ii) each purchaser (or the Depository Participant
thereof) of the Reset Rate and the number of remarketed Notes such
purchaser is to purchase; and
(iii) each purchaser to give instructions to its
Depository Participant to pay the purchase price on the date of
settlement for such Remarketing in same day funds against delivery
of the remarketed Notes purchased through the facilities of DTC.
(k) Any distribution to Holders of excess funds and interest
described in this Section 2.19 shall be payable at the Corporate Trust
Office maintained for that purpose or, at the option of the Holder or the
holder of Separate Notes, as applicable, by check mailed to the address
of the Person entitled thereto at such address as it appears on the
relevant Register or by wire transfer to an account specified by the
Holder or the holder of Separate Notes, as applicable.
(l) If a failed remarketing occurs, the Remarketing Agent and
the Company, as applicable, shall take the following actions:
(i) the Remarketing Agent shall notify by telephone the
Company and the Depositary that a failed remarketing has occurred;
(ii) The Company will cause a notice of failed
remarketing to be published by 9:00 a.m. on the day following such
failed remarketing; and
(iii) The Company will release this information by means
of Bloomberg and Reuters (or any successor or equivalent
newswires) newswires.
(m) The Remarketing Agent shall remit, within three Business
Days after the Last Failed Remarketing, the Pledged Notes that were to be
remarketed to the Collateral Agent and the Separate Notes that were to be
remarketed to the Custodial Agent.
(n) If any Notes are delivered to the Company upon a Last
Failed Remarketing in full satisfaction of the Holder's obligation under
the related Purchase Contracts, any accumulated and unpaid interest on
such Notes will become payable by the Company to the Purchase Contract
Agent for payment to the Holder of the Normal Units to which such Notes
relate. Such payment will be made by the Company on or prior to 11:00
a.m., New York City time, on the Stock Purchase Date in lawful money of
the United States by certified or cashier's check or wire transfer in
immediately available funds payable to or upon the order of the Purchase
Contract Agent. Upon the occurrence of a Last Failed Remarketing, the
Company will retain and dispose of the Pledged Notes of all Holders in
satisfaction of the Holders' obligations under the related Purchase
Contracts.
(o) In the event of a Last Failed Remarketing, the interest
rate payable on the Notes will not be reset.
(p) In accordance with DTC's normal procedures, on the date of
settlement of such Remarketing or the Stock Purchase Date, as applicable,
the transactions described above with respect to each Note remarketed in
the Remarketing shall be executed through DTC, and the accounts of the
respective Depository Participants shall be debited and credited and such
remarketed Notes delivered by book entry as necessary to effect purchases
and sales of such remarketed Notes. DTC shall make payment in accordance
with its normal procedures.
(q) The Remarketing Agent is not obligated to purchase any
Notes that otherwise would remain unsold in the Remarketing. Neither the
Company nor the Remarketing Agent shall be obligated in any case to
provide funds to make payment upon tender of the Notes for Remarketing.
(r) Under the Remarketing Agreement, the Company, in its
capacity as issuer of the Notes, shall be liable for, and shall pay, any
and all costs and expenses incurred in connection with the Remarketing,
other than the Remarketing Fee.
(s) The settlement procedures set forth herein, including
provisions for payment by purchasers of the remarketed Notes in the
Remarketing, shall be subject to modification to the extent required by
DTC or if the book-entry system is no longer available for the remarketed
Notes at the time of the Remarketing, to facilitate the Remarketing of
the remarketed Notes in certificated form, and shall provide for the
authentication and delivery of Notes in a principal amount equal to the
unremarketed portion of such Notes. In addition, the Remarketing Agent
may modify the settlement procedures set forth herein in order to
facilitate the settlement process.
(t) If the Reset Date shall be a date that is other than the
Stock Purchase Date (but in no event may it be later that the Stock
Purchase Date), the Company shall nonetheless pay to the Holders of the
Normal Units and the Separate Notes participating in the remarketing an
interest payment on the Notes for the period from and including the
Payment Date immediately preceding the Stock Purchase Date to but
excluding the Stock Purchase Date at the Coupon Rate.
Section 2.20. OPTIONAL REMARKETING.
(a) On or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date but no earlier than the sixteenth
Business Day immediately preceding the Stock Purchase Date, holders of
Separate Notes may elect to have their Separate Notes remarketed by
Transferring their Separate Notes and delivering a notice of such
election, substantially in the form of Exhibit C to the Pledge Agreement,
to the Collateral Agent. On the eleventh Business Day immediately prior
to the Stock Purchase Date, by 10:00 a.m., New York City time, the
Collateral Agent shall notify the Remarketing Agent of the number of such
Separate Notes to be remarketed. The Collateral Agent will hold such
Separate Notes in an account separate from the Collateral Account. A
holder of Separate Notes electing to have its Separate Notes remarketed
will also have the right to withdraw such election by written notice to
the Collateral Agent, substantially in the form of Exhibit D to the
Pledge Agreement, on or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date, upon which notice the Collateral Agent
will return such Separate Notes to such holder.
(b) On the tenth Business Day immediately preceding the Stock
Purchase Date, the Collateral Agent at the written direction of the
Remarketing Agent will deliver to the Remarketing Agent for Remarketing
all Separate Notes delivered to the Collateral Agent pursuant to Section
4.5(d) of the Pledge Agreement and not withdrawn pursuant to the terms
thereof prior to such date. If the holder of the Separate Notes delivers
only such notice but not the Separate Notes subject to such notice, then
none of such holder's Separate Notes shall be included in the
Remarketing. Once the holder of Separate Notes elects to participate in
the Remarketing, such Separate Notes will be remarketed in the
Remarketing, unless such notice is properly withdrawn. In accordance with
Section 4.5(d) of the Pledge Agreement, upon the occurrence of a Last
Failed Remarketing, the
Remarketing Agent will promptly return such Separate Notes to the
Collateral Agent for redelivery to such holders of such Separate Notes.
Section 2.21. PUT RIGHT.
Any Remarking Notice delivered pursuant to Section 2.19(c) hereof
shall include information relating to the Put Right provided for in this Section
2.21. In the case of the Last Failed Remarketing, the Holders of Notes that
remain outstanding and that are not Pledged Noes (as defined in the Pledge
Agreement) will have the right to put on June 14, 2007 (the "Put Right") their
Notes to the Company for an amount equal to the principal amount of the Notes,
plus accrued and unpaid interest to June 14, 2007 (the "Put Price"), by
providing notice to the Company on or prior to the date set forth in the
Remarketing Notice and by following the the procedures for delivery of such
Notes to be set forth therein. The Put Price shall be due and payable by the
Company upon receipt of the Notes from the Holders that have exercised their Put
Right, on June 14, 2007.
ARTICLE III
APPOINTMENT OF THE TRUSTEE FOR THE NOTES
Section 3.1. Appointment of Trustee.
Pursuant and subject to the Indenture, the Company and the Trustee
hereby constitute the Trustee as trustee to act on behalf of the Holders of the
Notes, and as the principal Paying Agent and Security Registrar for the Notes,
effective upon execution and delivery of this First Supplemental Indenture. By
execution, acknowledgment and delivery of this First Supplemental Indenture, the
Trustee hereby accepts appointment as trustee, Paying Agent and Security
Registrar with respect to the Notes, and agrees to perform such trusts upon the
terms and conditions set forth in the Indenture and in this First Supplemental
Indenture.
Section 3.2. Rights, Powers, Duties and Obligations of the Trustee.
Any rights, powers, duties and obligations by any provisions of
the Indenture conferred or imposed upon the Trustee shall, insofar as permitted
by law, be conferred or imposed upon and exercised or performed by the Trustee
with respect to the Notes.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Application of First Supplemental Indenture.
Each and every term and condition contained in the First
Supplemental Indenture that modifies, amends or supplements the terms and
conditions of the Base Indenture shall apply only to the Notes created hereby
and not to any future series of Securities issued under the Base Indenture.
Section 4.2. Benefits of First Supplemental Indenture.
Nothing contained in this First Supplemental Indenture shall or
shall be construed to confer upon any person other than a Holder of the Notes,
the Company and the Trustee any right or interest to avail itself or himself, as
the case may be, of any benefit under any provision of the Base Indenture or
this First Supplemental Indenture.
Section 4.3. Amendment of First Supplemental Indenture.
The Company, when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may amend, modify or supplement this
First Supplemental Indenture in accordance with the provisions of Article Nine
of the Base Indenture.
Section 4.4. Effective Date.
This First Supplemental Indenture shall be effective as of the
date first above written and upon the execution and delivery hereof by each of
the parties hereto.
Section 4.5. Governing Law; Submission to Jurisdiction; Judgment
Currency.
THIS FIRST SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Trustee hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in the Borough of Manhattan in
New York City for the purposes of all legal proceedings arising out of or
relating to the Indenture. The Company and the Trustee irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. The Company hereby designates and appoints CT
Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
authorized agent upon which process may be served in any legal suit, action or
proceeding arising out of or relating to the Indenture which may be instituted
in any federal or state court in the Borough of Manhattan, The City of New York,
New York, and agrees that service of process upon such agent, and written notice
of said service to the Company by the Person serving the same, shall be deemed
in every respect effective service of process upon the Company in any such suit,
action or proceeding and further designates its domicile, the domicile of CT
Corporation System specified above and any domicile CT Corporation System may
have in the future as its domicile to receive any notice hereunder (including
service of process). If for any reason CT Corporation System (or any successor
agent for this purpose) shall cease to act as agent for service of process as
provided above, the Company will promptly appoint a successor agent for this
purpose reasonably acceptable to the Trustee. The Company agrees to take any and
all actions as may be necessary to maintain such designation and appointment of
such agent in full force and effect.
The Company agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due (the "REQUIRED CURRENCY") into
a currency in which a judgment will be
rendered (the "JUDGMENT CURRENCY"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the requisite amount of the Required Currency with the
Judgment Currency on the New York Banking Day preceding the day on which a final
unappealable judgment is given and (b) its obligations under the Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with clause (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under the Indenture. For purpose of the foregoing, "NEW YORK BANKING
DAY" means any day except a Saturday, Sunday or a legal holiday in The City of
New York or a day on which banking institutions in The City of New York are
authorized or obligated by law, regulation or executive order to be closed.
Section 4.6. Tax Treatment.
The Company agrees, and by acceptance of a beneficial ownership
interest in the Notes, each beneficial holder of Notes will be deemed to have
agreed (1) to treat the acquisition of a Normal Unit as the acquisition of the
Note and the Purchase Contract constituting the Normal Unit and to allocate the
purchase price of the Normal Unit between the Note and the Purchase Contract as
$25 and $0, respectively and (2) to treat the Notes as indebtedness for United
States federal income tax purposes.
Section 4.7. Counterparts.
This First Supplemental Indenture 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.
Section 4.8. Ratification of Base Indenture.
The Base Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Base Indenture in the manner
and to the extent herein and therein provided.
Section 4.9. Validity and Sufficiency.
The Trustee shall not be responsible in any manner whatsoever for
or in respect of the validity or sufficiency of this First Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
are made solely by the Company.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first above written.
XL CAPITAL LTD, as Issuer
-------------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
-------------------------------------------
Name:
Title:
EXHIBIT A TO FIRST SUPPLEMENTAL INDENTURE
FORM OF NOTE
[If the Note is a Global Note, insert - THIS NOTE IS A GLOBAL NOTE
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY, WHICH MAY BE TREATED
BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS
NOTE FOR ALL PURPOSES, INCLUDING THE PAYMENT OF PRINCIPAL AND INTEREST.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN
THE INDENTURE, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY.]
[If the Depository is The Depository Trust Company, insert -
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
No. CUSIP No.
00000XXX0
$______________
XL CAPITAL LTD
2.53% SENIOR NOTE DUE 2009
XL CAPITAL LTD, an exempted limited company duly organized and
existing under the laws of the Cayman Islands (the "COMPANY", which term
includes any successor Person under the Indenture hereinafter referred to)
, for value received, hereby promises to pay to , the principal
sum of ________________ United States dollars (U.S.$______________) [If the Note
is a Global Note, insert - , as such amount may be increased or decreased as set
forth on the Schedule of Increases or Decreases in Global Note annexed hereto,]
on May 15, 2009 (such date is hereinafter referred to as the "STATED MATURITY"),
and to pay interest thereon, from March 23, 2004, or from the most recent
Interest Payment Date (as defined below) for which interest has been paid or
duly provided for, initially at the rate of 2.53% per annum (the "INITIAL
INTEREST RATE") up to, but excluding, the Reset Date; provided that in the event
a Failed Remarketing occurs, this Note shall continue to bear interest at the
Initial Interest Rate until the principal of the Notes is paid or made available
for payment.
In the event the Notes are successfully remarketed pursuant to the
Indenture, the Purchase Contract Agreement and the Remarketing Agreement, this
Note shall bear interest at the Reset Rate, from and including the Reset Date to
the date on which principal hereof is paid or made available for payment;
provided that any principal and installment of interest which is overdue shall
bear interest (to the extent that payment of such interest is enforceable under
applicable law) at the Initial Interest Rate up to but excluding the Reset Date,
if any, and thereafter at the Reset Rate, from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand. Interest on this Note initially shall be payable quarterly in
arrears on February 15, May 15, August 15 and November 15 of each year (each, an
"INTEREST PAYMENT DATE"), commencing May 15, 2004 through and including May 15,
2007, and then semi-annually in arrears on the Interest Payment Dates of May 15
and November 15 of each year, commencing on November 15, 2007, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be, the 15th calendar day
(whether or not a Business Day) prior to the relevant Interest Payment Date.
Any such interest not so punctually paid or duly provided for will
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 Note (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 of
which shall be given to Holders of Securities of this series not less than 10
A-1
days prior to such Special Record Date and shall otherwise be payable, all as
more fully provided in the Indenture.
Payments of principal shall be made upon the surrender of this
Note at the Corporate Trust Office of the Trustee, or at such other office or
agency of the Company as may be designated by the Company for such purpose in
the Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, by Dollar check drawn on, or transfer to, a
Dollar account. Payments of interest on this Note may be made by Dollar check,
drawn on a Dollar account, mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register, or, upon written
application by the Holder to the Security Registrar setting forth wire
instructions not later than the tenth Business Day prior to the applicable
Payment Date, by wire transfer to a Dollar account.
The amount of interest payable for any period on any Interest
Payment Date shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. Except as provided in the following sentence, the amount
of interest payable for any period shorter than a full quarterly or semi-annual
period, as applicable, for which interest is computed will be computed on the
basis of the actual number of days elapsed in such a 90-day or 180-day period,
as applicable. In the event that any date on which interest is payable on the
Notes is not a Business Day, then payment of interest payable on such date will
be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is 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 such date.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if fully set forth at this place.
Unless the certificate of authorization hereon has been executed
by the Trustee referred to on the reverse hereof by the manual signature of one
of its respective authorized signatories, this Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
[Remainder of Page Intentionally Left Blank; Signature Pages
Follow]
A-2
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered under its corporate seal.
Dated:
XL CAPITAL LTD
By:________________________________
Name:
Title:
[Corporate Seal]
Attest:____________________________
Name:
Title:
A-3
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
U.S. Bank National Association, as Trustee
By:____________________________
Authorized Officer
A-4
[FORM OF REVERSE]
This Note is one of a duly authorized issue of securities of the
Company designated as its "2.53% Senior Notes due 2009" (herein sometimes
referred to as the "NOTES"), initially limited in aggregate principal amount to
$750,000,000 (which amount may be increased by up to $75,000,000 in the event
the Option to Purchase Additional Units is exercised), issued and to be issued
under and pursuant to an Indenture, dated as of January 23, 2003 (the "BASE
INDENTURE"), duly executed and delivered between the Company and U.S. Bank
National Association, as Trustee (the "TRUSTEE"), and a First Supplemental
Indenture, dated as of March 23, 2004 (the "First Supplemental Indenture"),
between the Company and the Trustee (such Base Indenture as amended and
supplemented by the First Supplemental Indenture, the "INDENTURE"), to which
Indenture and all subsequent indentures supplemental thereto relating to the
Notes reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered.
The Notes are issuable only in registered form without coupons, in
denominations of $1,000 and any integral multiple thereof except that an
interest in a Note held as part of a Normal Unit represents an ownership
interest of 1/40th, or 2.5%, of a Note in aggregate principal amount of $1,000
and will therefore correspond to the stated amount of $25 per Normal Unit. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series so issued are exchangeable for a like aggregate principal
amount of Notes of a different authorized denomination, as requested by the
Holder surrendering the same.
The Notes were initially issued as components of the Company's
6.50% Equity Security Units that are in the form of Normal Units, each such
Normal Unit initially consisting of (a) a stock purchase contract (each, a
"PURCHASE CONTRACT") under which (i) the holder will agree to purchase from the
Company on May 15, 2007, a specified number of newly issued Class A Ordinary
Shares, par value $0.01 per share, of the Company and (ii) the Company will pay
to the holder quarterly contract adjustment payments and (b) a 1/40, or 2.5%,
ownership interest in a Note of $1,000 principal amount. In accordance with the
terms of the Purchase Contract Agreement, on their initial issuance, the Notes
were pledged by the Purchase Contract Agent, on behalf of the holders of the
Normal Units, to U.S. Bank Trust National Association, as collateral agent,
custodial agent and securities intermediary (the "COLLATERAL AGENT"), pursuant
to the Pledge Agreement, dated as of March 23, 2004 (the "PLEDGE AGREEMENT"),
among the Company, the Purchase Contract Agent and the Collateral Agent, to
secure such holders' obligations to purchase Class A Ordinary Shares of the
Company under the Purchase Contracts.
The Notes that are a component of Normal Units or that so elect
under Section 2.19 of the Supplemental Indenture will be subject to Remarketing
and, in the case of the Last Failed Remarketing, the Collateral Agent for the
benefit of the Company reserves all of its rights as a secured party of the
Pledged Notes with respect thereto and, subject to applicable law and Section
5.4 of the Purchase Contract Agreement, may, among other things, permit the
Company to cause the Notes to be sold or to retain and cancel such Notes, in
either case, in full satisfaction of the Holders' obligations under the Purchase
Contracts. Pursuant to the Remarketing Agreement, the Remarketing Agent shall
use its reasonable best efforts to remarket the Notes that are included in
Normal Units and the Separate Notes included pursuant to Section 2.20 of
A-5
the First Supplemental Indenture at a specified price on certain dates, all as
specified in Section 2.19 of the First Supplemental Indenture and in Section
5.4(b) of the Purchase Contract Agreement.
If a Special Event (as herein defined) shall occur and be
continuing, the Company may, at its option, redeem the Notes then Outstanding in
whole (but not in part) at any time ("SPECIAL EVENT REDEMPTION") at the
Redemption Price (as herein defined). If such Special Event Redemption occurs
prior to the earlier of a successful remarketing pursuant to Section 5.4 of the
Purchase Contract Agreement and May 15, 2007, the Redemption Price payable with
respect to the Notes pledged to the Collateral Agent under the Pledge Agreement
will be paid to the Collateral Agent on the Special Event Redemption Date on or
prior to 12:00 p.m., New York City time, by wire transfer in immediately
available funds at such place and at such account as may be designated by the
Collateral Agent in exchange for the Notes pledged to the Collateral Agent. In
such event, the Collateral Agent shall apply such Redemption Price pursuant to
the terms of the Purchase Contract Agreement and the Pledge Agreement.
Notice of any redemption (which notice will be irrevocable) will
be mailed at least 30 days but not more than 60 days before the date of
redemption (the "SPECIAL EVENT REDEMPTION DATE") to each registered Holder of
Notes to be redeemed at its registered address as more fully provided in the
Indenture. Unless the Company defaults in payment of the Redemption Price, on
and after the Special Event Redemption Date interest shall cease to accrue on
such Notes. Notwithstanding the foregoing, in case of a Special Event Redemption
for a Tax Event, no such notice of redemption will be given (a) earlier than 90
days prior to the earliest date on which the payor would be obligated to make
such payment or withholding if a payment in respect of Notes by it were then due
and (b) unless at the time such notice is given, such obligation to pay such
Additional Amounts remains in effect. Prior to the publication or mailing of any
notice of redemption of Notes pursuant to the foregoing, the Company will
deliver to the Paying Agent (a) an Officer's Certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that any factual conditions precedent to the Company's right so to
redeem have been satisfied and (b) a legal opinion of an outside nationally
recognized tax counsel to the effect that the circumstances referred to below in
"Tax Event" exist.
"QUOTATION AGENT" means Xxxxxxx, Xxxxx & Co. or any of its
successors or any other primary U.S. government securities dealer in New York
City selected by the Company.
"ACCOUNTING REDEMPTION EVENT" means the receipt, at any time prior
to the earlier of the date of any successful remarketing of the Notes pursuant
to the Purchase Contract Agreement and the Remarketing Agreement and the Stock
Purchase Date, by the audit committee of the Board of Directors of the Company
or a written report in accordance with Statement on Auditing Standards ("SAS")
No. 97, "Amendment to SAS No. 50--Reports on the Application of Accounting
Principles," from the Company's independent auditors, provided at the request of
management of the Company, to the effect that, as a result of any change in
accounting rules applicable to the Company or interpretations thereof after the
date of the Supplemental Indenture, the Company must either (i) account for the
Purchase Contracts as derivatives under SFAS 133 (or any successor accounting
standard) or (ii) account for the Units
A-6
using the if-converted method under SFAS 128 (or any successor accounting
standard), and that such accounting treatment will cease to apply upon
redemption of the Notes.
"REDEMPTION PRICE" means, for each Note, whether or not included
in a Normal Unit, the greater of (a) the principal amount of the Note and (b)
the product of (i) the principal amount of such Note and (ii) a fraction whose
numerator is the Treasury Portfolio Purchase Price (as herein defined) and whose
denominator is the applicable Special Event Redemption Principal Amount (as
herein defined).
"SPECIAL EVENT" means either an Accounting Redemption Event or a
Tax Event.
"TAX EVENT" means a determination by the Company that, as a result
(1) any change in, or amendment to, the law or treaties (or any regulations or
rulings promulgated thereunder) of the Cayman Islands, Bermuda or any other
jurisdiction in which the Company generally becomes subject to taxation; or (2)
any change in position regarding the application, administration or
interpretation of such laws, treaties, regulations or rulings (including a
holding, judgment or order by a court of competent jurisdiction) (each of the
foregoing clauses (1) and (2), a "CHANGE IN TAX LAW"), the Company is, or on the
next Interest Payment Date would be, required to pay more than DE MINIMIS
Additional Amounts (as defined in Section 1009 of the Indenture) and such
obligations cannot be avoided by taking commercially reasonable measures
available to the Company. The Change in Tax Law must become effective after
March 17, 2004. In the case of a successor entity, the Change in Tax Law must
become effective after the date that such successor entity first becomes an
obligor on the Notes (unless the Change in Tax Law had already occurred prior to
such date, but occurring after March 17, 2004, with respect to the original
entity).
"SPECIAL EVENT REDEMPTION PRINCIPAL AMOUNT" means (i) in the case
of a Special Event Redemption Date occurring prior to a successful remarketing
of the Notes pursuant to the Purchase Contract Agreement, the aggregate
principal amount of Notes included in Normal Units on such date, and (ii) in the
case of a Special Event Redemption Date occurring after a successful remarketing
of the Notes pursuant to the Purchase Contract Agreement or the Stock Purchase
Date, the aggregate principal amount of the Notes.
"TREASURY PORTFOLIO" means: (i) if a Special Event Redemption
occurs prior to a successful remarketing of the Notes pursuant to the provisions
of the Purchase Contract Agreement, a portfolio (A) of zero coupon U.S. Treasury
securities consisting of principal or interest strips of U.S. Treasury
securities that mature on or prior to May 15, 2007 in an aggregate amount equal
to the applicable Special Event Redemption Principal Amount and (B) with respect
to each scheduled Interest Payment Date on the Notes that occurs after the
Special Event Redemption Date and on or before May 15, 2007, interest or
principal strips of U.S. Treasury securities that mature on or prior to such
Interest Payment Date in an aggregate amount equal to the aggregate interest
payment that would be due on the applicable Special Event Redemption Principal
Amount on such date if the interest rate of the Notes were not reset on the
Reset Date, and (ii) solely for purposes of determining the Treasury Portfolio
Purchase Price in the case of a Special Event Redemption Date occurring after a
successful remarketing of the Notes pursuant to the Purchase Contract Agreement
or May 15, 2007, a portfolio (A) of zero coupon U.S. Treasury securities
consisting of principal or interest strips of U.S. Treasury securities that
mature on or
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prior to May 15, 2009 in an aggregate amount equal to the applicable Special
Event Redemption Principal Amount and (B) with respect to each scheduled
Interest Payment Date on the Notes that occurs after the Special Event
Redemption Date and on or before May 15, 2009, interest or principal strips of
U.S. Treasury securities that mature on or prior to such Interest Payment Date
in an aggregate amount equal to the aggregate interest payment that would be due
on the applicable Special Event Redemption Principal Amount of the Notes
Outstanding on the Special Event Redemption Date.
"TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate
price quoted by a primary U.S. government securities dealer in New York City to
the Quotation Agent on the third Business Day immediately preceding the Special
Event Redemption Date for the purchase of the Treasury Portfolio for settlement
on the Special Event Redemption Date.
The Notes shall constitute the senior, unsecured and
unsubordinated obligations of the Company and shall rank equally in right of
payment with all existing and future senior, unsecured and unsubordinated
obligations of the Company.
In the event of the Last Failed Remarketing, any Holder of Notes
that remain outstanding on May 15, 2007 and that are not subject to the pledge
of the Pledge Agreement, shall have the benefit of the Put Right set forth in
Section 2.21 of the First Supplemental Indenture.
No sinking fund is provided for the Notes.
In the event of a redemption of the Notes, the Company will not be
required (a) to register the transfer or exchange of Notes for a period of 15
days immediately preceding the selection of Notes for redemption or (b) to
register the transfer or exchange of any Note, or portion thereof, called for
redemption.
In the case of an Event of Default described in Section 501(5) or
501(6) of the Indenture, all unpaid principal of and accrued interest and
Additional Amounts on the Notes then Outstanding shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders of any Notes. In the case all other Events of Default, if such Event
of Default shall occur and be continuing, the principal of all of the Notes,
together with accrued interest to the date of declaration, may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the written consent of the Holders of not less than a majority
in principal amount of the Securities at the time Outstanding and affected
thereby. The Indenture also contains, with certain exceptions as therein
provided, provisions permitting Holders of not less than a majority in principal
amount of the Securities of any series at the time Outstanding, on behalf of the
Holders of all the Securities of such series, 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 Note shall
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be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note or such other Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless (i) such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, (ii) the Holders of
not less than 25% in principal amount of the Notes that are Outstanding shall
have made a written request to the Trustee to institute proceedings in respect
of such Event of Default as Trustee and offered the Trustee indemnity
satisfactory to it, (iii) the Trustee shall not have received from the Holders
of a majority in principal amount of the Notes that are Outstanding a direction
inconsistent with such request, and (iv) the Trustee shall have failed to
institute any such proceeding for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
any Holder of this Note for the enforcement of any payment of principal hereof,
or any premium of interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, places 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 Note is registrable on the Security
Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office of the Trustee or at such other office or agency of the
Company as may be designated by it for such purpose in the Borough of Manhattan,
The City of New York (which shall initially be an office or agency of the
Trustee), or at such other offices or agencies as the Company may designate,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Security Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Security Registrar. 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 recover any tax or
other governmental charge payable in connection therewith.
Prior to due presentation of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered, as the owner thereof
for all purposes, whether or not such Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse for the payment of the principal (and premium, if any)
or interest on this Note and no recourse under or upon any obligation, covenant
or agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
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employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of consideration for the issue hereof, expressly waived and released.
The Company agrees, and by acceptance of a beneficial ownership
interest in the Notes, each beneficial holder of Notes will be deemed to have
agreed (1) to treat the acquisition of a Normal Unit as the acquisition of the
Note and the Purchase Contract constituting the Normal Unit and to allocate the
purchase price of the Normal Unit between the Note and the Purchase Contract as
$25 and $0, respectively and (2) to treat the Notes as indebtedness for United
States federal income tax purposes.
[If Note is a Global Note, insert - This Note is a Global Note and
is subject to the provisions of the Indenture relating to Global Notes,
including the limitations in Section 203 of the Base Indenture on transfers and
exchanges of Global Notes.]
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All capitalized terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT- ______ Custodian _______
(Cust) (Minor)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with rights of under Uniform Gifts to
survivorship and not as tenants in common Minors Act ________________
(State)
Additional abbreviations may also be used though not on the above list.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(Insert assignee's social security or
tax identification number)
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoint agent to transfer this Note on the Security Register.
The agent may substitute another to act for him or her.
Dated:
Signed:
Signature Guarantee:
(Sign exactly as your name appears on the other side of this Note)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Amount of Amount of
Decrease in Increase in Stated Amount of Signature of
Stated Amount Stated Amount the Global Note Authorized
of the Global of the Global Following Such Officer of
Note Note Decrease/Increase Trustee Date
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