EXECUTION COPY
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: Clearing Agency, Clearing Agency Participant, Last Failed
Remarketing; Normal Unit; Purchase Price; Redemption Price; Remarketing
Agent; Remarketing Notice; Remarketing Fee; Remarketing Period;
Separate Notes; Stock Purchase Date; Subsequent Remarketing Date;
Trading Day; 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.
"DTC" has the meaning set forth in Section 2.7.
"GLOBAL NOTE" means a Global Security representing the Notes.
"ISSUE DATE" means March 23, 2004.
"ISSUE PRICE" means 100% of the aggregate principal amount.
"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 as attorney-in-fact for Holders of the Units, and U.S. Bank
Trust National Association, as Collateral Agent, Custodial Agent and Securities
Intermediary.
"PURCHASE CONTRACT AGENT" means U.S. Bank National
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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 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.
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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 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 "INTERESTPAYMENT 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
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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
$825,000,000 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 will be
payable at the Corporate Trust Office or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such
Person's address as it appears on the Register or by wire transfer to
the account maintained in the United States designated by written
notice given ten Business Days prior to the applicable payment date by
such Person.
SECTION 2.8. NOTES NOT CONVERTIBLE OR EXCHANGEABLE.
The Notes will not be convertible or exchangeable for other
securities or property.
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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.
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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.
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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 by complying with such Person's
statutory requirements or by making a declaration of
non-residence or similar claim for exemption but, in either
case, fails to do so, or is liable for such taxes, duties,
levies, assessments or governmental charges in
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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
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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) Unless a Special Event Redemption has occurred, the Company shall
engage, no later than 30 days prior to the Remarketing Date, a nationally
recognized investment bank (the "REMARKETING AGENT") pursuant to a Remarketing
Agreement to be entered into between the Company and the Remarketing Agent, but
providing for remarketing procedures substantially as set forth below, 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 delivering the Purchase Price to the Collateral Agent prior to 5:00
p.m., New York City time, on the thirteenth Business Day immediately preceding
the Stock Purchase Date, which such amount will be paid to the Company on the
Stock Purchase Date in settlement of such Holder's obligations under the
Purchase Contracts. 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 Purchase 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, or the Purchase
Contract Agent, at the Company's request, shall deliver the Remarketing Notice
to Holders of Normal Units and Holders of Separate Notes, of the Remarketing to
take place on the Remarketing Date, and, if necessary, on each Subsequent
Remarketing Date. The Remarketing Notice will include the amount of cash that
must be delivered by Holders of Normal Units that elect not to participate in
the remarketing and the deadline for such delivery, as well as information with
respect to the exercise of 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 the Clearing Agency to notify the Clearing Agency
Participants of the Remarketing by no later than the seventh Business Day
preceding the Remarketing Date.
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(d) The Purchase Contract Agent shall notify, by 10:00 a.m., New York
City time, on the eleventh Business Day immediately preceding the Stock Purchase
Date, the Remarketing Agent and the Collateral Agent of the aggregate principal
amount 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 principal
amount of Separate Notes to be remarketed. No later than 10:00 a.m., New York
City time, on the tenth Business Day 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 will, on the
Remarketing Date, and, if necessary, on each Subsequent 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 suchdate 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 will 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 necessary. If,
in spite of using its reasonable best efforts, the Remarketing Agent fails to
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.
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(i) If a successful Remarketing shall have occurred, the Remarketing
Agent will, on or prior to the third Business Day following the date on which
the Notes were successfully remarketed, 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 related to
the Notes of Holders of Normal Units that were remarketed to the
Collateral Agent, 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
Custodial 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 the benefit of the Holders
of the Normal Units that were remarketed, all determined on a pro rata
basis.
(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 aggregate principal amount of Notes sold in the
Remarketing;
(ii) each purchaser (or the Depository Participant thereof) of the
Reset Rate and the aggregate principal amount 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 office of the Purchase Contract
Agent in the Borough of Manhattan, New York City, or, if the Units do not remain
in book-entry only form, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address as it appears on
the Register or by wire transfer to the account
12
maintained in the United States designated by written notice given ten Business
Days prior to the applicable payment date by such Person.
(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., New York City time, on the Business 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
following 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. The Collateral Agent, for the benefit of the
Company, may exercise its rights as a secured party with respect to such Notes,
including those actions specified in Section 2.19(n) below; provided that, if
upon the Last Failed Remarketing the Collateral Agent exercises such rights for
the benefit of the Company with respect to such Notes, any accumulated and
unpaid interest on such Notes will become payable by the Company to the Purchase
Contract Agent for payment to the Holders of the Normal Units to which such
Notes relate. Such payment will be made by the Company on or prior to 2:00 p.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.
(n) With respect to any Notes which constitute part of Normal Units
which are subject to the Last Failed Remarketing, the Collateral Agent for the
benefit of the Company reserves all of its rights as a secured party with
respect thereto and, subject to applicable law and Section 5.4(e) of the
Purchase Contract Agreement, may, among other things permit the Company to, (A)
retain and cancel such Notes or (B) cause the Notes to be sold, in either case,
in full satisfaction of the Holders' obligations under the 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, 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.
13
(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.
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 delivering their Separate
Notes, together with a notice of such election, substantially in the form of
Exhibit C to the Pledge Agreement, to the Custodial Agent. On the eleventh
Business Day immediately prior to the Stock Purchase Date, by 10:00 a.m., New
York City time, the Custodial Agent shall notify the Remarketing Agent of the
aggregate principal amount of such Separate Notes to be remarketed. The
Custodial 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 Custodial 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 Custodial Agent will
return such Separate Notes to such Holder.
(b) On the tenth Business Day immediately preceding the Stock Purchase
Date, the Custodial Agent at the written direction of the Remarketing Agent will
deliver to the Remarketing Agent for Remarketing all Separate Notes delivered to
the Custodial 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 Custodial
Agent for redelivery to such Holders of such Separate Notes.
14
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 Notes (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 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
15
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 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
16
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.
17
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
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President,
General Counsel and Secretary
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
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.]
X-0
Xx.
XXXXX Xx. 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-2
days prior to such Special Record Date and shall otherwise be payable, all as
more fully provided in the Indenture.
The principal of and the interest on the Notes will be payable
at the Corporate Trust Office or, at the option of the Company, by check mailed
to the address of the Person entitled thereto at such Person's address as it
appears on the Register or by wire transfer to the account maintained in the
United States designated by written notice given ten Business Days prior to the
applicable payment date by such Person.
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-3
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-4
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-5
[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"), limited in aggregate principal amount to
$825,000,000, 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 2.20 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 the First Supplemental Indenture at a specified price on certain dates,
all as specified in
A-6
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 EVENT REDEMPTION" 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 March 17, 2004, 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 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.
A-7
"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 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
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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 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.
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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, 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
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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 under Uniform Gifts to
Minors Act ________________
JT TEN--as joint tenants with rights of (State)
survivorship and not as tenants in common
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:
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(Insert assignee's social security or tax identification number)
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(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 DECREASE IN AMOUNT OF INCREASE STATED AMOUNT OF THE SIGNATURE OF
STATED AMOUNT OF THE IN STATED AMOUNT OF GLOBAL NOTE FOLLOWING AUTHORIZED OFFICER
GLOBAL NOTE THE GLOBAL NOTE SUCH DECREASE/INCREASE OF TRUSTEE DATE
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