EXECUTION COPY
____________________________________________________
FIRST SUPPLEMENTAL INDENTURE
among
ACE INA HOLDINGS INC.
as Issuer,
ACE LIMITED,
as Guarantor
and
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
Dated as of June 30, 1999
____________________________________________________
TABLE OF CONTENTS
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Page
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ARTICLE 1 Definitions
Section 1.1. Definition of Terms................................... 2
ARTICLE 2 General Terms and Conditions of the Subordinated Notes
Section 2.1. Designation and Principal Amount...................... 7
Section 2.2. Maturity.............................................. 7
Section 2.3. Form and Payment; Minimum Transfer Restriction........ 7
Section 2.4. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depository................. 8
Section 2.5. Interest.............................................. 12
Section 2.6. Right to Proceed...................................... 15
Section 2.7. No Issuance Upon the Exercise of Warrants............. 15
ARTICLE 3 Redemption of the Subordinated Notes
Section 3.1. Redemption............................................ 15
Section 3.2. Optional Redemption by Company........................ 15
Section 3.3. No Sinking Fund....................................... 15
Section 3.4. Mandatory Redemption upon a Qualifying Equity Offering 15
ARTICLE 4Extension of Interest Payment Period
Section 4.1. Extension of Interest Payment Period.................. 16
ARTICLE 5 Expenses
Section 5.1. Payment of Expenses................................... 17
Section 5.2. Payment upon Resignation or Removal................... 17
ARTICLE 6 Subordination
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Section 6.1. Agreement to Subordinate............................... 18
ARTICLE 7 Conversion and Exchange of Subordinated Notes
Section 7.1. Conversion/Exchange Rights............................. 18
ARTICLE 8 Form of Subordinated Notes
Section 8.1. Form of Subordinated Note.............................. 18
ARTICLE 9 Original Issue of Subordinated Notes
Section 9.1. Original Issue of Subordinated Notes................... 19
ARTICLE 10 Remarketing; Reset Rate
Section 10.1. Effectiveness of this Article; Incorporation of
Remarketing Agreement................................. 19
Section 10.2. Determination of Reset Date; Remarketing Procedures.... 19
Section 10.3. Reset of Interest Rate and Maturity Date............... 22
Section 10.4. Renewed Remarketing.................................... 22
Section 10.5. Failed Remarketing..................................... 23
ARTICLE 11 Miscellaneous
Section 11.1. Ratification of Base Indenture; First Supplemental
Indenture Controls..................................... 23
Section 11.2. Trustee Not Responsible for Recitals................... 23
Section 11.3. Governing Law.......................................... 23
Section 11.4. Severability........................................... 23
Section 11.5. Counterparts........................................... 24
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Page
Exhibit A-1 - Form of Subordinated Note
Exhibit A-2 - Form of Replacement Note
Exhibit B - Form of Remarketing Agreement
Exhibit C - Form of Trust Agreement
Exhibit D - Form of Amended and Restated Trust Agreement
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FIRST SUPPLEMENTAL INDENTURE, dated as of June 30, 1999 (the "FIRST
Supplemental Indenture"), among ACE INA Holdings Inc., a Delaware corporation
(the "Company"), ACE Limited, as guarantor (the "Guarantor") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee") under the Indenture dated as of June 15, 1999 between the Company,
the Guarantor and the Trustee (the "Base Indenture" and together with this First
Supplemental Indenture, the "Indenture").
WHEREAS, the Company and the Guarantor executed and delivered the Base
Indenture to the Trustee to provide for the future issuance of the Company's
Securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Base Indenture;
WHEREAS, Section 3.1 of the Base Indenture permits the terms of any series
of Securities to be established in an indenture supplemental to the Base
Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its Auction Rate Reset Subordinated Notes Series A (the "Subordinated
Notes"), the form and substance of such Subordinated Notes and the terms,
provisions and conditions thereof to be set forth as provided in the Base
Indenture and this First Supplemental Indenture;
WHEREAS, ACE RHINOS Trust, a Delaware statutory business trust (the
"Trust"), has offered to Banc of America Securities LLC $400,000,000 aggregate
liquidation amount of its Auction Rate Reset Preferred Securities (the
"Preferred Securities"), representing undivided beneficial interests in the
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the
Guarantor of $12,372,000 aggregate liquidation amount of its Common Securities,
in $412,372,000 aggregate principal amount of the Subordinated Notes;
WHEREAS, pursuant to the terms of the Remarketing and Contingent Purchase
Agreement dated as of June 30, 1999 (the "Remarketing Agreement") by and among
the Guarantor, the Company, the Trust, and Banc of America Securities LLC, as
remarketing agent (the "Remarketing Agent"), the Preferred Securities or,
following any distribution of Subordinated Notes to the holders of Preferred
Securities, such Subordinated Notes, as the case may be, shall, on the
occurrence of a Trigger Event, be remarketed in accordance with the terms hereof
by the Remarketing Agent on the Reset Date; and
WHEREAS, the Company and the Guarantor requested that the Trustee execute
and deliver this First Supplemental Indenture, and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Subordinated Notes, when executed by the Company and
authenticated and delivered by the Trustee, the legal, valid and binding
obligations of the Company, have been performed, and the execution and delivery
of this First Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the
Subordinated Notes by the Holder thereof, and for the purpose of setting forth,
as provided in the Indenture, the form and substance of the Subordinated Notes
and the terms, provisions and conditions thereof, the Company and the Guarantor
covenant and agree with the Trustee as follows:
ARTICLE 1
Definitions
Section 1.1. Definition of Terms. Unless the context otherwise requires:
(1) a term defined in the Base Indenture has the same meaning when used in
this First Supplemental Indenture;
(2) the singular includes the plural as well as vice versa;
(3) a reference to a Section or Article is to a Section or Article of this
First Supplemental Indenture;
(4) headings are for convenience of reference only and do not affect
interpretation; and
(5) the following terms have the meanings given to them in the Trust
Agreement:
Administrative Trustee
Affiliate
Associated Person
Closing Date
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Closing Price
Common Securities
Delaware Trustee
Direct Action
Like Amount
Liquidation Amount
Majority in Liquidation Amount
Mandatory Redemption Date
Mandatory Redemption Price
Ordinary Shares
Person
PORTAL Market
Preferred Securities
Pro Rata
Property Trustee
Purchase Agreement
Qualifying Equity Offering
Reference Corporate Dealer
Remarketing Fee
Replacement Securities
Rule 144A
Secondary Purchase Agreement
Securities Act
Special Event
Trading Day
Trigger Price
(6) the following terms have the meanings given to them in this Section
1.1(f):
"90 Day Period" has the meaning set forth in Section 3.1.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Subordinated Notes that is in arrears for more than one interest
payment period or not paid during any Extension Period, which in either case
shall accrue at the stated rate per annum specified or determined as specified
in such Subordinated Note and compounded quarterly.
"Additional Sums" has the meaning set forth in Section 2.5(f).
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"Additional Taxes" means the sum of any additional taxes, duties and other
governmental changes to which the Trust has become subject from time to time as
a result of a Tax Event.
"Affiliated Bidder" has the meaning set forth in Section 10.2(b).
"Bid" means an irrevocable offer to purchase the aggregate outstanding
principal amount of Subordinated Notes at the Remarketing Price with an Interest
Rate equal to the Bid Rate specified in such Bid and with a Maturity Date on the
Remarketed Maturity Date.
"Bid Rate" means the proposed Interest Rate on the Subordinated Notes
specified in a Bid.
"Business Day" means a day on which banking institutions in New York, New
York and Delaware are not authorized to close and, until the Remarketing
Settlement Date, that is also a London Banking Day.
"Calculation Agent" means Banc of America Securities LLC.
"Date of Determination" has the meaning set forth in Section 2.5(b).
"Dissolution Event" means that pursuant to Section 8.01 of the Trust
Agreement the Trust is to be dissolved in accordance with the Trust Agreement,
and the Subordinated Notes held by the Property Trustee are to be distributed to
the holders of the Trust Securities issued by the Trust Pro Rata in accordance
with the Trust Agreement.
"Expected Reset Date" has the meaning set forth in Section 10.2(a)(i).
"Extension Period" has the meaning set forth in Section 4.1.
"Failed Remarketing" means any event specified as such, at the time so
specified in Article 10 hereof or in Article 6 of the Trust Agreement.
"Final Reset Date" has the meaning set forth in Section 10.2(a)(iii).
"Former Holders" has the meaning set forth in Section 10.2(i)
"Global Subordinated Note" has the meaning set forth in Section 2.4(a)(i).
"Guarantee Trustee" means the Preferred Securities Guarantee Trustee as
defined in the Preferred Securities Guarantee Agreement dated as of June 30,
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1999 between ACE INA Holdings Inc., as Guarantor, and The First National Bank of
Chicago, as Preferred Securities Guarantee Trustee.
"Interest Payment Date" has the meaning set forth in Section 2.5(d).
"Interest Rate" has the meaning set forth in Section 2.5(a).
"LIBOR" means the rate determined by the Calculation Agent as the interest
rate expressed in decimal figures for deposits in the London interbank market
for a period of three months in U.S. Dollars which appears on the Telerate Page
3750 as of 11:00 a.m., London time, on the Date of Determination. If such rate
does not appear on the Telerate Page 3750, the rate on the Date of Determination
will be determined as if the parties had specified the LIBOR-Reference Banks
Rate as the applicable rate.
"LIBOR-Reference Banks Rate" means that the rate will be determined on the
basis of the rates at which deposits in U.S. Dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on the Date of
Determination to prime banks in the London interbank market for a period of
three months commencing two London Banking Days following such Date of
Determination and in the Representative Amount. The Calculation Agent will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the rates quoted
by major banks in New York City, selected by the Calculation Agent, at
approximately 11:00 a.m., New York City time, on the Date of Determination for
loans in U.S. Dollars to leading banks for a period of three months commencing
two London Banking Days following such Date of Determination and in the
Representative Amount.
"London Banking Day" means any day on which dealings in deposits in U.S.
Dollars are transacted in the London interbank market.
"Maturity Date" means September 30, 2002 provided that in the event of a
successful Remarketing of the Subordinated Notes or the Preferred Securities, as
the case may be, the Maturity Date shall be the Remarketed Maturity Date.
"Remarketed Maturity Date" means the later of (i) the first anniversary of
the Remarketing Settlement Date on which Replacement Notes are issued, and (ii)
September 30, 2001.
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"Pre-Remarketing Interest Payment Date" has the meaning set forth in
Section 2.5(b).
"Pre-Remarketing Regular Record Date" has the meaning set forth in Section
2.5(d).
"Redemption Date" shall mean, when used with respect to any Subordinated
Notes to be redeemed, the date fixed for such redemption by or pursuant to this
First Supplemental Indenture.
"Redemption Price" has the meaning set forth in Section 3.1.
"Reference Banks" means, for the purposes of any LIBOR rate, four major
banks in the London interbank market selected by the Calculation Agent.
"Regular Record Date" has the meaning set forth in Section 2.5(e).
"Remarketing" means a remarketing of Subordinated Notes pursuant to Article
10 hereof or Article 6 of the Trust Agreement.
"Remarketing Price" means 100.25% of the aggregate principal amount of the
Subordinated Notes plus accrued and unpaid interest (including Additional
Interest, if any).
"Remarketing Settlement Date" means the third Business Day immediately
following the Reset Date.
"Renewed Remarketing" has the meaning set forth in Section 10.4.
"Replacement Notes" has the meaning set forth in Section 10.2(j).
"Replacement Securities" has the meaning set forth in Section 5(j) of the
Remarketing Agreement.
"Representative Amount" means, for the purposes of any LIBOR rate for which
a Representative Amount is relevant, an amount that is equal to the aggregate
principal amount of all of the Subordinated Notes.
"Reset Date" means any date established as a Reset Date pursuant to Article
10 hereof or Article 6 of the Trust Agreement.
"Reset Rate" has the meaning set forth in Section 1 of the Remarketing
Agreement.
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"Restricted Security" has the meaning set forth in Section 2.4(c).
"Secondary Purchaser" has the meaning set forth in Section 10.2(c).
"Transfer Restriction Termination Date" means the first date on which the
Subordinated Notes (other than Subordinated Notes acquired by the Company or any
Affiliate thereof) may be sold pursuant to Rule 144(k).
"Trigger Event" has the meaning set forth in Section 10.2(a).
"Trust Agreement" means the Amended and Restated Trust Agreement of ACE
RHINOS Trust, a Delaware statutory business trust, dated as of June 30, 1999.
"Trust Securities" means the Preferred Securities and Common Securities of
the Trust.
"U.S. Dollar" means the lawful currency of the United States of America.
"Winning Bid Rate" has the meaning set forth in Section 10.2(b) hereof or
in Section 6.02(b) of the Trust Agreement.
ARTICLE 2
General Terms and Conditions of the Subordinated Notes
Section 2.1. Designation and Principal Amount. There is hereby authorized
a series of Securities designated the "Auction Rate Reset Subordinated Notes
Series A", limited in aggregate principal amount to $412,372,000 (except as
contemplated in Section 3.1(2) of the Base Indenture).
Section 2.2. Maturity. The principal of the Subordinated Notes shall be
due and payable on the Maturity Date.
Section 2.3. Form and Payment; Minimum Transfer Restriction.
(7) Except as provided in Section 2.4, the Subordinated Notes shall be
issued in fully registered certificated form without coupons in denominations of
$100,000 in principal amount and integral multiples of $1,000 thereof.
Principal and interest on the Subordinated Notes issued in certificated form
will be payable by check or wire transfer, the transfer of such Subordinated
Notes will be registrable and such Subordinated Notes will be exchangeable for
Subordinated
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Notes bearing identical terms and provisions at the office or agency of the
Trustee in the Borough of Manhattan, the City of New York; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to the Holder at such address as shall appear in the Securities Register.
Notwithstanding the foregoing, so long as the Holder of any Subordinated Notes
is the Property Trustee, the payment of the principal of and interest (including
any Additional Interest, if any) on such Subordinated Notes held by the Property
Trustee will be made at such place and to such account as may be designated by
the Property Trustee.
(8) A holder of Subordinated Notes may transfer or exchange Subordinated
Notes held by it only in minimum denominations of $100,000 and integral
multiples of $1,000 in excess thereof, and only if such transfer or exchange
does not result in such holder's holding Subordinated Notes in a denomination of
less than $100,000. Any attempted transfer, sale or other disposition of
Subordinated Notes in a denomination of less than $100,000 shall be deemed to be
void and of no legal effect whatsoever.
Section 2.4. Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depository. (a) If distributed to holders of
Preferred Securities in connection with a Dissolution Event, the Subordinated
Notes will be issued in the same form as the Preferred Securities that such
Subordinated Notes replace in accordance with the following procedures.
(1) If the Preferred Securities are held in global form, the
Subordinated Notes shall be presented to the Trustee by the Property
Trustee in exchange for a Security in permanent global form in an aggregate
principal amount equal to the aggregate principal amount of all outstanding
Subordinated Notes (a "Global Subordinated Note"), to be registered in the
name of the Depository, or its nominee, and delivered by the Property
Trustee to the Depository for crediting to the accounts of its participants
pursuant to the instructions of the Administrative Trustees. The Company
upon any such presentation shall execute a Global Subordinated Note in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture. Payments on
the Subordinated Notes issued as a Global Subordinated Note will be made to
the Depository. The Company initially appoints The Depository Trust Company
to act as Depository with respect to the Global Subordinated Note.
(2) If the Preferred Securities are held in certificated form, the
Subordinated Notes shall be presented to the Trustee by the Property
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Trustee and each outstanding Preferred Security certificate will be deemed
to represent a beneficial interest in such Subordinated Note in an
aggregate principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities represented by such Preferred Security certificate.
When the holder of a Preferred Security certificate presents such
certificate for transfer or reissuance, such certificate will be canceled
and a Subordinated Note, registered in the name of such holder or such
holder's transferee, as the case may be, in an aggregate principal amount
equal to the aggregate Liquidation Amount of the canceled certificate, will
be executed by the Company and delivered to the Trustee for authentication
and delivery in accordance with the Indenture. On issue of such
Subordinated Notes, Subordinated Notes with an equivalent aggregate
principal amount that were presented by the Property Trustee to the Trustee
will be deemed to have been canceled.
(9) Any Global Subordinated Note may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Indenture as may be required by the
Depository, by a national securities exchange or by the National Association of
Securities Dealers, Inc. in order for the Subordinated Notes to be tradeable on
the PORTAL Market or as may be required for the Subordinated Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange upon
which the Subordinated Notes may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Subordinated Notes are subject.
(10) Each Subordinated Note that bears or is required to bear the legend
set forth in this Section 2.4(c) (a "Restricted Security") shall be subject to
the restrictions on transfer provided in the legend set forth in this Section
2.4(c), unless such restrictions on transfer shall be waived by the written
consent of the Company, and the Holder of each Restricted Security, by such
Holder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 2.4(c) and in Section 2.4(d), the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
Prior to the Remarketing Settlement Date and after the occurrence of a
Dissolution Event, any certificate evidencing a Subordinated Note shall bear a
legend in substantially the following form, unless otherwise agreed by the
Company (with written notice thereof to the Trustee):
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THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES EVIDENCED HEREBY
EXCEPT (1) TO ACE LIMITED OR ANY AFFILIATE THEREOF, (2) TO NATIONSBANK,
N.A., OR ANY OF ITS AFFILIATES, (3) TO ANY ENTITY SPONSORED OR ORGANIZED
BY, ON BEHALF OF, OR FOR THE PRIMARY USE OF, NATIONSBANK, N.A. OR ANY OF
ITS AFFILIATES OR (4) TO A SECONDARY PURCHASER (AS DEFINED IN THE AMENDED
AND RESTATED TRUST AGREEMENT OF ACE RHINOS TRUST DATED AS OF JUNE 30, 1999
(AS AMENDED FROM TIME TO TIME, THE "TRUST AGREEMENT")) THAT AS OF THE RESET
DATE HAS ENTERED INTO A SECONDARY PURCHASE AGREEMENT (AS DEFINED IN THE
TRUST AGREEMENT) WITH THE TRUST.
On and after the Remarketing Settlement Date and after the occurrence of a
Dissolution Event and prior to the Transfer Restriction Termination Date, any
certificate evidencing a Replacement Note shall bear a legend in substantially
the following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITIES EVIDENCED HEREBY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION)
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO
ACE LIMITED OR ANY SUBSIDIARY THEREOF, OR (B) TO A QUALIFIED
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INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AT THE REQUEST
OF THE HOLDER, THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO THE SALE OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Subordinated Note
or security issued in exchange or substitution therefor (other than Subordinated
Notes acquired by the Company or any Affiliate), may upon surrender of such
Subordinated Note or security for exchange to the Trustee in accordance with the
provisions of this Section 2.4, be exchanged for a new Subordinated Note or
Subordinated Notes, of like tenor and aggregate principal amount, which shall
not bear the restrictive legend required by this Section 2.4(c).
(11) Any Subordinated Note that, prior to the Transfer Restriction
Termination Date, is purchased or owned by the Company or any Affiliate thereof
may not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements thereof that results in such Subordinated Note no longer being a
"restricted security" as defined under Rule 144 under the Securities Act.
(12) Except as provided in (f) below, a Global Subordinated Note may be
transferred, in whole but not in part, only to another nominee of the
Depository, or a successor Depository selected or approved by the Company or to
a nominee of such successor Depository.
(13) If (i) the Depository notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Subordinated Note and no
successor depositary shall have been appointed within 90 days by the Company,
(ii) the Depository, at any time, ceases to be a clearing agency registered
under the Exchange Act at which time the Depository is required to be so
registered to act as such depositary and no successor depositary shall have been
appointed within 90 days by the Company, (iii) the Company, in its sole
discretion, determines that such Global Subordinated Note shall be so
exchangeable or (iv) there shall have occurred an Event of Default with respect
to such Subordinated Notes, the Company will execute and the Trustee, upon
written notice from the Company and receipt of a Company Order, will
authenticate and deliver the Subordinated
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Notes in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Subordinated Notes in exchange for such Global Subordinated
Notes. In addition, upon an Event of Default or if the Company may at any time
determine that the Subordinated Notes shall no longer be represented by a Global
Subordinated Note, in such event the Company will execute and the Trustee, upon
receipt of an Officers' Certificate evidencing such determination by the Company
and an Company Order, will authenticate and make available for delivery the
Subordinated Notes in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Subordinated Note for such Subordinated Notes in definitive
registered form without coupons, in authorized denominations, the Global
Subordinated Note shall be canceled by the Trustee. Such Subordinated Notes
shall be registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Subordinated Notes to the Depository for delivery to the Persons in whose names
such Subordinated Notes are so registered.
Section 2.5. Interest. (a) Interest on the principal amount of each
Subordinated Note will accrue and be payable at a rate (the "Interest Rate") per
annum equal to
(1) from and including the Closing Date to but excluding the earlier
of (A) the Remarketing Settlement Date on which Replacement Notes are
issued and (B) the date such principal amount is paid, LIBOR plus 125 basis
points;
(2) from and including the Remarketing Settlement Date on which
Replacement Notes are issued to but excluding the date such principal
amount is paid, the Winning Bid Rate; and
(3) notwithstanding clauses (i) and (ii) above, if the Company fails
to pay the principal amount on the date such amount becomes due, then from
and including such due date to but excluding the date such principal amount
is paid, the applicable periodic Interest Rate, compounded quarterly, but
only to the extent permitted by applicable law.
Interest that is not paid when due will bear additional interest thereon
compounded quarterly at the applicable periodic Interest Rate specified above
(to the extent permitted by applicable law) in accordance with Section 4.1. The
term
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"interest", as used herein, includes any such Additional Interest unless
otherwise stated.
(14) Until the Remarketing Settlement Date on which Replacement Notes are
issued, interest on the Subordinated Notes will be payable quarterly in arrears
on July 1, October 1, January 1 and April 1 of each year, commencing October 1,
1999, and on such Remarketing Settlement Date (each, a "Pre-Remarketing Interest
Payment Date"), will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from June 30, 1999, to
but excluding the related Pre-Remarketing Interest Payment Date, except as
otherwise described below.
The Interest Rate in effect for the period from and including the Closing
Date to but excluding October 1, 1999 shall be the rate determined by the
Calculation Agent two London Banking Days prior to Closing Date and shall equal
LIBOR plus 125 basis points. The Interest Rate in effect thereafter, for each
quarterly period from and including the immediately preceding Pre-Remarketing
Interest Payment Date to but excluding the applicable Pre-Remarketing Interest
Payment Date, shall be determined by the Calculation Agent two London Banking
Days prior to such immediately preceding Pre-Remarketing Interest Payment Date
(a "Date of Determination") and shall equal LIBOR plus 125 basis points. Prior
to the Remarketing Settlement Date, the amount of interest payable for any
period shall be computed on the basis of a 360-day year and the actual number of
days elapsed in such period. If a Pre-Remarketing Interest Payment Date is not a
Business Day, then such Pre-Remarketing Interest Payment Date will be the next
succeeding Business Day, except if such Business Day is in the next succeeding
calendar month, such Pre-Remarketing Distribution Date will be the immediately
preceding Business Day.
(15) Interest shall be paid to the Person in whose name such Subordinated
Note or any predecessor Subordinated Note is registered on the books and records
of the Company at the close of business on the Regular Record Date for such
interest installment, which shall be fifteen (15) days prior to a Pre-
Remarketing Interest Payment Date (the "Pre-Remarketing Regular Record Date").
(16) From and including the Remarketing Settlement Date on which
Replacement Notes are issued, interest on the Replacement Notes will be
cumulative and payable quarterly in arrears on July 1, October 1, January 1 and
April 1 of each year, commencing on the Remarketing Settlement Date, and on the
Maturity Date (each, an "Interest Payment Date"), will accumulate from the most
recent date to which interest has been paid or, if no interest has been paid,
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from and including the Remarketing Settlement Date, to but excluding the related
Interest Payment Date, except as otherwise described below. From and including
the Remarketing Settlement Date, the amount of interest payable for any
quarterly period shall be computed on the basis of a 360-day year of twelve 30-
day months. Except as provided in the last sentence of this paragraph, from and
including the Remarketing Settlement Date the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed will
be computed on the basis of the actual number of days elapsed per 30-day month.
If an Interest Payment Date is not a Business Day, then such Interest Payment
Date will be postponed to the next succeeding Business Day (and without any
interest or other payment in respect of any such delay).
(17) Interest shall be paid to the Person in whose name the Subordinated
Note or any predecessor Subordinated Note is registered on the books and records
of the Company, at the close of business on the Regular Record Date for such
interest installment, which, in respect of Subordinated Notes of which the
Property Trustee is the Holder and the related Preferred Securities are in book-
entry only form or a Global Subordinated Note, shall be the close of business on
the Business Day next preceding that Interest Payment Date (the "Regular Record
Date"). If the Subordinated Notes are not represented by a Global Subordinated
Note, the Regular Record Date for such interest installment shall be fifteen
(15) days prior to that Interest Payment Date.
(18) In the event that (i) the Property Trustee is the Holder of all of the
outstanding Subordinated Notes, (ii) a Tax Event in respect of the Trust shall
have occurred and be continuing and (iii) the Company shall not have (A)
redeemed the Subordinated Notes pursuant to Section 3.1 or (B) terminated the
Trust pursuant to Section 8.01(iii) of the Trust Agreement, the Company shall
pay to the Trust (or its permitted successors or assigns under the Trust
Agreement) for so long as the Trust (or its permitted successor or assignee) is
the registered holder of the Subordinated Notes, such additional amounts as may
be necessary in order that the amount of distributions (including any Additional
Amounts as defined in the Trust Agreement) then due and payable by the Trust on
the Preferred Securities and Common Securities that at any time remain
outstanding in accord with the terms thereof shall not be reduced as a result of
any Additional Taxes (the "Additional Sums"). Whenever in this Indenture or the
Subordinated Notes there is a reference in any context to the payment of
principal of or interest on the Subordinated Notes, such mention shall be deemed
to include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed
14
as excluding Additional Sums in those provisions hereof where such express
mention is not made; provided that the extension of an interest payment period
pursuant to Section 4.1 on the Subordinated Notes shall not extend the payment
of any Additional Sums that may be due and payable during such interest payment
period.
Section 2.6. Right to Proceed. The Company acknowledges the rights of the
Holders of Preferred Securities under the Trust Agreement to take Direct Action
referred to in Section 3.08(e) thereof and Annex I thereto.
Section 2.7. No Issuance Upon the Exercise of Warrants. The Subordinated
Notes shall not be issuable upon the exercise of warrants.
ARTICLE 3
REDEMPTION OF THE SUBORDINATED NOTES
Section 3.1. Redemption. If at any time a Special Event occurs, the Company
shall have the right (subject to the conditions set forth in the Indenture) at
any time, upon not less than 30 nor more than 60 days notice, to redeem the
Subordinated Notes in whole or in part within the 90 days following the
occurrence of such Special Event (the "90 Day Period") at a redemption price
equal to 100% of the principal amount of the Subordinated Notes plus any accrued
and unpaid interest thereon (including any Additional Interest) to the date of
such redemption (the "Redemption Price"), and, simultaneous with such
redemption, to cause a Like Amount of the Trust Securities to be redeemed by the
Trust at the Mandatory Redemption Price on a Pro Rata basis. The Redemption
Price shall be paid prior to 12:00 noon, New York City time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price prior to the Redemption Date.
Section 3.2. Optional Redemption by Company. Except as provided in Section
3.1, the Subordinated Notes are not entitled to any optional redemption by the
Company.
Section 3.3. No Sinking Fund. The Subordinated Notes are not entitled to
the benefit of any sinking fund.
Section 3.4. Mandatory Redemption upon a Qualifying Equity Offering. If at
any time a Qualifying Equity Offering occurs, the Company shall, upon not
15
less than 30 nor more than 60 days' notice, redeem Subordinated Notes having an
aggregate principal amount equal to the gross proceeds of such Qualifying Equity
Offering (without deduction of any applicable underwriting discounts and
commissions), on the 90th day following the closing of such Qualifying Equity
Offering, and, simultaneous with such redemption, cause a Like Amount of the
Trust Securities to be redeemed by the Trust on a Pro Rata basis at a redemption
price equal to the Redemption Price.
ARTICLE 4
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period. The Company shall have
the right, at any time during the term of the Subordinated Notes, so long as no
Event of Default has occurred and is continuing, from time to time to extend the
interest payment period for the Subordinated Notes (each such deferral period,
an "Extension Period"), during which period the Company shall have the right to
not make payments of interest on any interest payment date, and at the end of
such Extension Period the Company shall pay all interest then accrued and unpaid
thereon (together with Additional Interest thereon, if any, to the extent
permitted by applicable law) to the Person in whose name the Subordinated Note
or any predecessor Subordinated Note is registered on the books and records of
the Company at the close of business on the Regular Record Date for the Interest
Payment Date at the end of such Extension Period; provided that no such
Extension Period shall extend beyond the Mandatory Redemption Date, if the Trust
Securities are at the time outstanding, or the Maturity Date. Upon termination
of any Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, the Company may select a new Extension
Period, subject to the above requirements. No interest including Additional
Interest, if any, shall be due and payable during an Extension Period, except at
the end thereof. The Company shall give the Trustee, the Property Trustee and
the Administrative Trustees notice of its selection of such Extension Period at
least one Business Day prior to the record date for the date the distributions
on the Preferred Securities of the Trust (or if no Preferred Securities are
outstanding, for the date interest on the Subordinated Notes) would have been
payable except for the election to begin such Extension Period. Such notice
shall specify the period selected.
The Trustee shall promptly give notice of the Company's selection of such
Extension Period to the Holders of the outstanding Subordinated Notes.
16
The limitations set forth in the first paragraph of Section 3.11 of the
Base Indenture shall apply during any Extension Period.
ARTICLE 5
EXPENSES
Section 5.1. Payment of Expenses. In connection with the offering, sale and
issuance of the Subordinated Notes to the Trust and in connection with the sale
of the Trust Securities by the Trust, the Company, in its capacity as borrower
with respect to the Subordinated Notes, shall:
(19) pay all costs and expenses relating to the offering, sale and issuance
of the Subordinated Notes and the Trust Securities payable by the Trust pursuant
to the Purchase Agreement and compensation of the Trustee under the Indenture in
accordance with the provisions of Section 6.6 of the Base Indenture;
(20) pay all costs and expenses of the Trust (other than payment in respect
of Trust Securities) (including, but not limited to, costs and expenses relating
to the organization of the Trust; the fees and expenses and indemnities of the
Property Trustee and the Delaware Trustee; the costs and expenses relating to
the operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing, engraving, computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating and travel; telephone and other
telecommunications expenses; and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets);
(21) pay all costs and expenses of the Trust or Property Trustee related to
the enforcement by the Property Trustee of the rights of the holders of the
Preferred Securities;
(22) be primarily liable for any indemnification obligations arising with
respect to the Trust Agreement; and
(23) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
Section 5.2. Payment upon Resignation or Removal. Upon termination of this
First Supplemental Indenture or the Base Indenture or the removal or resignation
of the Trustee pursuant to Section 6.8 of the Base Indenture, the
17
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Trust Agreement or
the removal or resignation of the Delaware Trustee, the Guarantee Trustee or the
Property Trustee, as the case may be, the Company shall pay to the Delaware
Trustee, the Guarantee Trustee or the Property Trustee and their respective
counsel, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE 6
SUBORDINATION
Section 6.1. Agreement to Subordinate. The Company covenants and agrees,
and each Holder of Subordinated Notes issued hereunder, by such Holder's
acceptance thereof likewise covenants and agrees, that (i) all Subordinated
Notes shall rank pari passu in right of payment with respect to any Securities
now or hereafter issued, other than any Securities expressly made senior
pursuant to the terms of such Securities; provided that, notwithstanding the
foregoing, all Subordinated Notes shall rank pari passu in right of payment with
respect to any Securities now or hereafter issued that pursuant to their terms
permit deferral of scheduled payments of principal or interest and (ii) all
Subordinated Notes shall be issued as Securities subject to the provisions of
Article 16 of the Base Indenture and this Article 6.
ARTICLE 7
CONVERSION AND EXCHANGE OF SUBORDINATED NOTES
Section 7.1. Conversion/Exchange Rights. The Subordinated Notes are not
exchangeable for Ordinary Shares at any time, and are not convertible into
shares of common stock of the Company at any time.
ARTICLE 8
FORM OF SUBORDINATED NOTES
Section 8.1. Form of Subordinated Note. The Subordinated Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1. Following the Remarketing, the Replacement Notes shall be
substantially in the form of Exhibit A-2. Each of Exhibit A-1 and Exhibit A-2 is
18
hereby incorporated in and expressly made a part of this First Supplemental
Indenture.
19
ARTICLE 9
ORIGINAL ISSUE OF SUBORDINATED NOTES
Section 9.1. Original Issue of Subordinated Notes. Subordinated Notes in
the aggregate principal amount of $412,372,000 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 Subordinated Notes to or upon the written order of the Company, in
accordance with Section 3.3 of the Base Indenture.
ARTICLE 10
REMARKETING; RESET RATE
Section 10.1. Effectiveness of this Article; Incorporation of Remarketing
Agreement. (a) Sections 10.2 and 10.4 shall become effective if and only if the
Subordinated Notes have been distributed to the Holders of the Trust Securities
prior to Remarketing. Notwithstanding the foregoing, on the Remarketing
Settlement Date (except in the case of a Failed Remarketing), the certificates
representing the Subordinated Notes held by the Property Trustee shall be
exchanged for certificates representing Replacement Notes.
(24) Every Person, by virtue of having become a Holder in accordance with
the terms of this Agreement, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this First Supplemental
Indenture, including the terms of Exhibit B. Exhibit B is hereby incorporated in
and expressly made a part of this First Supplemental Indenture.
Section 10.2. Determination of Reset Date; Remarketing Procedures.
(25) (i) Subject to Section 10.4, if the Closing Price of the Ordinary
Shares on any Trading Day is less than the Trigger Price and the Subordinated
Notes have been distributed to the holders of the Trust Securities (a "Trigger
Event"), the holders of a majority in principal amount of the Subordinated Notes
(the "Requesting Holders") will have the option to require remarketing of the
Subordinated Notes. The Requesting Holders may exercise this option by giving
notice in writing to the Remarketing Agent who shall immediately give notice in
writing to the Company on their behalf (a "Remarketing Notice") at any time
prior to the sixth Business Day following the date such Trigger Event occurs. If
20
the Requesting Holders exercise their option to require the remarketing of the
Subordinated Notes, the Reset Date shall be the sixth Business Day after the
date on which the Remarketing Notice is given by the Remarketing Agent (the
"Expected Reset Date").
(ii) If the Requesting Holders do not exercise their option to
require the remarketing the Subordinated Notes, pursuant to Section
10.2(a)(i) above with respect to any Trigger Event, the Requesting Holders
shall continue to have the option to require the remarketing of the
Subordinated Notes, in accordance with Section 10.2(a)(i) with respect to
any subsequent Trigger Event.
(iii) Notwithstanding Section 10.2(a)(i):
(A) the Guarantor may, by notice to the Remarketing Agent,
direct that the Reset Date be delayed if the Company believes it will
be unable to meet the conditions to Remarketing in the absence of such
a delay; and
(B) the Remarketing Agent may, by notice to the Company,
direct that the Reset Date be delayed if the Remarketing Agent
believes that a Remarketing will not be successful in the absence of
such a delay,
provided that the Guarantor and the Remarketing Agent, in either such
event, will use their reasonable best efforts to establish a delayed Reset
Date that is within five Business Days after the Expected Reset Date, but
in no event later than the 15th Business Day following the date on which
the related Remarketing Notice was delivered, or the 20th Business Day in
the case of a Renewed Remarketing to which the provisions of Section 10.4
apply (as applicable, the "Final Reset Date").
(iv) If the Guarantor and the Remarketing Agent have not agreed, on
or prior to the sixth Business Day preceding the Final Reset Date, to a
Reset Date that is not later than the Final Reset Date, a Failed
Remarketing shall be deemed to have occurred.
(26) The Guarantor shall, by notice to the Remarketing Agent no later than
five Business Days prior to the Reset Date, select and specify five Reference
Corporate Dealers. By 3:00 p.m., New York City time, on the Reset Date, the
Remarketing Agent shall request Bids from such Reference Corporate Dealers. The
Remarketing Agent or an Affiliate or Associated Person thereof (any such
21
person, an "Affiliated Bidder") may, at its option, enter a Bid. The Remarketing
Agent shall disclose to the Guarantor the Bids obtained and determine the lowest
Bid Rate from among the Bids obtained on the Reset Date (the "Winning Bid
Rate"). By approximately 4:30 p.m., New York City time, on the Reset Date, the
Remarketing Agent shall notify the Trustee and the Property Trustee of the
Winning Bid Rate. If on a Reset Date, Bids are not submitted by at least two
Reference Corporate Dealers, or if the lowest Bid submitted would result in a
Winning Bid Rate in excess of the rate permitted by applicable law, such
Remarketing shall be deemed to be a Failed Remarketing on the corresponding
Remarketing Settlement Date. The Winning Bid Rate determined by the Remarketing
Agent, absent manifest error, shall be binding and conclusive upon the holders
of the Subordinated Notes, the Company, the Guarantor and the Trust.
(27) On the Reset Date, the Remarketing Agent shall designate as the
Secondary Purchaser (the "Secondary Purchaser") the Reference Corporate Dealer
providing the Bid containing the Winning Bid Rate. If the Winning Bid Rate is
specified in the Bids submitted by two or more bidders, the Remarketing Agent
shall, in consultation with the Company, designate one of such bidders as the
Secondary Purchaser.
(28) On the Reset Date, the Secondary Purchaser shall enter into a
Secondary Purchase Agreement for the purchase by such Secondary Purchaser at the
Remarketing Price of the aggregate principal amount of Subordinated Notes, with
an Interest Rate equal to the Winning Bid Rate and with a Mandatory Redemption
Date (or, in the case of Subordinated Notes, a Maturity Date) on the Remarketed
Maturity Date.
(29) If a Remarketing has occurred pursuant to this Section 10.2 but
settlement of the purchase and sale of the Subordinated Notes, does not occur on
the corresponding Remarketing Settlement Date, then, unless the provisions of
Section 10.4 with respect to a Renewed Remarketing shall apply, a Failed
Remarketing shall be deemed to occur on such Remarketing Settlement Date.
(30) At the time and in the manner specified in the Secondary Purchase
Agreement, the Secondary Purchaser shall pay to the Remarketing Agent on behalf
of the Holders of the Subordinated Notes, on the Remarketing Settlement Date, an
amount of cash equal to the Remarketing Price.
(31) Unless otherwise agreed among the Remarketing Agent, the Paying Agent
and any Former Holder, the Remarketing Agent shall promptly pay the Remarketing
Price, less the Remarketing Fee, to the Paying Agent, acting solely as agent for
the Former Holders, and the Paying Agent shall pay such
22
amount to the Former Holders in the same manner as is specified in Section 2.7
of the Base Indenture for payments of interest and otherwise herein, except that
the record date therefor shall be the Business Day immediately preceding the
Remarketing Settlement Date.
(32) The obligation of the Remarketing Agent to make payment to the Former
Holders in connection with the Remarketing shall be limited to the extent that
the Secondary Purchaser has delivered the Remarketing Price therefor to the
Remarketing Agent.
(33) Any outstanding Preferred Securities (or, if applicable, the
Subordinated Notes) purchased on the Remarketing Settlement Date shall be deemed
to be transferred to the Secondary Purchaser and shall be replaced in the manner
provided in Section 10.2(j). On and after the Remarketing Settlement Date
(except in the event of a Failed Remarketing), the Company shall make no further
payments to, and the Company shall have no further obligations under First
Supplemental Indenture (or the Indenture) in respect of, the Holders of such
replaced Subordinated Notes (the "Former Holders"), the Company shall only be
obligated to make payments to the Holders of Replacement Notes and the of the
Former Holders shall no longer represent an obligation of the Company, but shall
only represent a right to receive the proceeds of the Remarketing from the
Paying Agent.
(34) The Company shall cause replacement certificates evidencing the
remarketed Subordinated Notes (or, if the Preferred Securities have been
remarketed, reset Subordinated Notes) to be executed by the Company and
authenticated by the Trustee in accordance with the provisions of Section 3.3 of
the Base Indenture (the "Replacement Notes"). The Replacement Notes shall be
delivered to the purchaser or purchasers of the remarketed Subordinated Notes in
accordance with the terms of the Secondary Purchase Agreement.
Section 10.3. Reset of Interest Rate and Maturity Date. From and including
the Remarketing Settlement Date on which Replacement Securities are issued, if
the Subordinated Notes are remarketed pursuant to Article 10 hereof or the
Preferred Securities are remarketed pursuant to Article 6 of the Trust
Agreement, the Interest Rate on the Subordinated Notes shall be the Winning Bid
Rate and the Maturity Date shall be the Remarketed Maturity Date.
Section 10.4. Renewed Remarketing. If a Remarketing has occurred pursuant
to Section 10.2 that would be a Failed Remarketing pursuant to Section 10.2(e),
because the purchase and sale of the Subordinated Notes do not take place on the
corresponding Remarketing Settlement Date, and the reason for such
23
failure shall, in the good faith determination of the Remarketing Agent (made
after consultation with the Guarantor), result from facts or circumstances that
are not due to the action or inaction of the Guarantor, then the provisions of
Section 10.2 shall apply to a second remarketing (a "Renewed Remarketing") of
the Preferred Securities (or, if applicable, the Subordinated Notes), except
that the Expected Reset Date shall be the sixth Business Day following such
corresponding Remarketing Settlement Date; provided however that upon the
occurrence of a Failed Remarketing pursuant to Section 10.2, only one Renewed
Remarketing can occur pursuant to this Section 10.4, and no Renewed Remarketing
shall occur after the Final Reset Date.
Section 10.5. Failed Remarketing. The Remarketing Agent shall give notice
of any Failed Remarketing on the date such Failed Remarketing occurs, or is
deemed to occur, by 4:00 p.m., New York City time, on the date of such Failed
Remarketing, to the Guarantor, the Trustee and the Paying Agent under the
Indenture.
ARTICLE 11
Miscellaneous
Section 11.1. Ratification of Base Indenture; First Supplemental Indenture
Controls. 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. The provisions of this First
Supplemental Indenture shall supersede the provisions of the Base Indenture to
the extent the Base Indenture is inconsistent herewith.
Section 11.2. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
Section 11.3. Governing Law. This First Supplemental Indenture and each
Subordinated Note shall be governed by and construed in accordance with the laws
of the State of New York, as applied to contracts made and performed within the
State of New York, without regard to its principles of conflicts of laws.
24
Section 11.4. Severability. If any provision in the Base Indenture, this
First Supplemental Indenture or in the Subordinated Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 11.5. Counterparts. The parties may sign any number of copies of
this First Supplemental Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. Any signed copy shall be
sufficient proof of this First Supplemental Indenture.
25
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first above written.
ACE INA HOLDINGS INC.
By:____________________________
Name: Peter N. Mear
Title: Secretary
ACE LIMITED, as Guarantor
By:____________________________
Name: Peter N. Mear
Title: Secretary
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By:____________________________
Name: Michael D. Pinzon
Title: Authorized Officer
EXHIBIT A-1
[FORM OF SUBORDINATED NOTE]
IF A DISSOLUTION EVENT HAS OCCURRED, INSERT THE FOLLOWING -THE SECURITY
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES
EVIDENCED HEREBY EXCEPT (1) TO ACE LIMITED OR ANY AFFILIATE THEREOF, (2) TO
NATIONSBANK, N.A., OR ANY OF ITS AFFILIATES, (3) TO ANY ENTITY SPONSORED OR
ORGANIZED BY, ON BEHALF OF, OR FOR THE PRIMARY USE OF, NATIONSBANK, N.A. OR ANY
OF ITS AFFILIATES (4) TO A SECONDARY PURCHASER (AS DEFINED IN THE AMENDED AND
RESTATED TRUST AGREEMENT OF ACE RHINOS TRUST DATED AS OF JUNE 30, 1999 (AS
AMENDED FROM TIME TO TIME, THE "TRUST AGREEMENT")) THAT AS OF THE RESET DATE HAS
ENTERED INTO A SECONDARY PURCHASE AGREEMENT (AS DEFINED IN THE TRUST AGREEMENT)
WITH THE TRUST.
FROM AND AFTER THE REMARKETING SETTLEMENT DATE ON WHICH REPLACEMENT NOTES ARE
ISSUED TO ANY PERSON OTHER THAN THE PROPERTY TRUSTEE, THIS INSTRUMENT SHALL
REPRESENT ONLY THE RIGHT TO RECEIVE THE REMARKETING PRICE, AS PROVIDED IN THE
TRUST AGREEMENT, AND SHALL NO LONGER REPRESENT AN OBLIGATION OF THE COMPANY.
A1-0
No. ________
ACE INA HOLDINGS INC.
AUCTION RATE RESET SUBORDINATED NOTE SERIES A
ACE INA Holdings Inc., a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay the principal sum of ___________
dollars ($___________) on the Maturity Date.
(35) Interest on the principal amount of this Subordinated Note will accrue
and be payable at a rate (the "Interest Rate") per annum equal to
(1) from and including the Closing Date to but excluding the date on
which the principal amount of this Subordinated Note becomes due upon the
maturity, acceleration or redemption thereof, LIBOR plus 125 basis points;
(2) except as provided in clause (iii) below, from and including the
Remarketing Settlement Date on which Replacement Notes are issued to but
excluding the date on which the principal amount of the Subordinated Notes
becomes due upon the maturity, acceleration or redemption thereof, the
Winning Bid Rate; and
(3) if the Company fails to pay the principal amount due upon the
maturity, acceleration or redemption of this Subordinated Notes on the date
such amount becomes due, from and including such due date to but excluding
the date of actual payment by the Company, the applicable periodic Interest
Rate compounded quarterly.
Interest that is not paid when due will bear additional interest thereon
compounded quarterly at the applicable periodic Interest Rate (to the extent
permitted by applicable law).
The term "interest", as used herein, includes any Additional Interest
unless otherwise stated.
(36) Until the Remarketing Settlement Date on which Replacement Notes are
issued, interest on this Subordinated Note will be payable quarterly (subject to
deferral as set forth herein) in arrears on July 1, October 1, January 1 and
April 1 of each year, commencing October 1, 1999, and on such Remarketing
A1-1
Settlement Date (each, a "Pre-Remarketing Interest Payment Date"), will
accumulate from and including the most recent date to which interest has been
paid or, if no interest has been paid, from June 30, 1999, to but excluding the
related Pre-Remarketing Interest Payment Date, except as otherwise described
below.
The Interest Rate in effect for the period from and including the Closing
Date to but excluding October 1, 1999 shall be the rate determined by the
Calculation Agent two London Banking Days prior to the Closing Date and shall
equal LIBOR plus 125 basis points. The Interest Rate in effect thereafter, for
each quarterly period from and including the immediately preceding Pre-
Remarketing Interest Payment Date to but excluding the applicable Pre-
Remarketing Interest Payment Date, shall be determined by the Calculation Agent
two London Banking Days prior to such immediately preceding Pre-Remarketing
Interest Payment Date (a "Date of Determination") and shall equal LIBOR plus 125
basis points. Prior to the Remarketing Settlement Date, the amount of interest
payable for any period shall be computed on the basis of a 360-day and the
actual number of days elapsed in such period. If a Pre-Remarketing Interest
Payment Date is not a Business Day, then such Pre-Remarketing Interest Payment
Date will be the next succeeding Business Day, except if such Business Day is in
the next succeeding calendar month, such Pre-Remarketing Distribution Date will
be the immediately preceding Business Day.
As used herein, "London Banking Day" means any day on which dealings in
deposits in U.S. Dollars are transacted in the London interbank market.
All percentages resulting from any calculations on the Subordinated Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculations will be rounded
to the nearest cent (with one-half cent being rounded upward).
(37) From and including the Remarketing Settlement Date on which
Replacement Notes are issued, interest on the Replacement Notes will be payable
quarterly in arrears on July 1, October 1, January 1 and April 1 of each year,
commencing on the Remarketing Settlement Date, and on the Maturity Date (each,
an "Interest Payment Date"), will accumulate from the most recent date to which
interest has been paid or, if no interest has been paid, from and including the
Remarketing Settlement Date, to but excluding the related Interest Payment Date,
except as otherwise described below. From and including the Remarketing
A1-2
Settlement Date, the amount of interest payable for any period shall be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the last sentence of this paragraph, from and including the Remarketing
Settlement Date the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed will be computed on the
basis of the actual number of days elapsed per 30-day month. If an Interest
Payment Date is not a Business Day, then such Interest Payment Date will be
postponed to the next succeeding Business Day (and without interest or other
payment in respect of any such delay).
(d) Interest shall be paid to the Person in whose name this Subordinated
Note or any predecessor Subordinated Note is registered on the books and records
of the Company at the close of business on the Regular Record Date for such
interest installment, which shall be fifteen (15) days prior to a Pre-
Remarketing Interest Payment Date (the "Pre-Remarketing Regular Record Date").
Notwithstanding the foregoing, so long as the Holder of this Subordinated Note
is the Property Trustee, the payment of the principal of (and premium, if any)
and interest on this Subordinated Note will be made at such place and to such
account as may be designated by the Property Trustee.
The indebtedness evidenced by this Subordinated Note is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all existing and future Senior Indebtedness and the
prior payment of other Securities to the extent provided for in the First
Supplemental Indenture, and this Subordinated Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Subordinated Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination so provided and (c) appoints the Trustee his or her attorney-
in-fact for any and all such purposes. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Subordinated Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by or on
behalf of the Trustee.
A1-3
The provisions of this Subordinated Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
A1-4
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
ACE INA HOLDINGS INC.
By:____________________________
Name:
Title:
Attest:
By: _____________________________
Name:
Title:
A1-5
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designed herein referred to in the
within-mentioned Indenture.
Dated:
[THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By:_________________________
Authorized Officer ]
[THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By: _________________________
as Authentication Agent
By:_________________________
Authorized Officer ]
A1-6
[FORM OF REVERSE OF NOTE]
This Subordinated Note is one of a duly authorized series of Securities of
the Company (herein sometimes referred to as the "Subordinated Notes"),
specified in the Base Indenture, all issued or to be issued in one or more
series under and pursuant to an Indenture dated as of June 15, 1999, duly
executed and delivered between the Company, ACE Limited (the "Guarantor") and
The First National Bank of Chicago, as Trustee (the "Trustee"), as supplemented
by the First Supplemental Indenture dated as of June 30, 1999, between the
Company, the Guarantor and the Trustee (the Base Indenture as so supplemented,
the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company, the
Guarantor and the Holders of the Subordinated Notes. By the terms of the
Indenture, the Subordinated Notes are issuable thereunder in series that may
vary as to amount, date of maturity, rate of interest and in other respects as
provided in the Indenture. This series of Subordinated Notes is limited in
aggregate principal amount as specified in said First Supplemental Indenture and
herein sometimes referred to as the "Subordinated Notes."
Because of the occurrence and continuation of a Special Event, a Qualifying
Equity Offering, in certain circumstances, this Subordinated Note may become due
and payable at the principal amount together with any interest accrued thereon
(including Additional Interest) (the "Redemption Price"). The Redemption Price
shall be paid prior to 12:00 noon, New York City time, on the date of such
redemption or at such earlier time as the Company determines. If the Maturity
Date or any other date fixed for redemption of the Subordinated Notes is not a
Business Day, then payment of the Redemption Price or principal payable on such
date will be made on the next succeeding day that is a Business Day with
interest thereon to the date of payment; provided that the Company may elect to
make such payment on the immediately preceding day that is a Business Day.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Subordinated Notes may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company, the Guarantor and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Subordinated Notes and each other series of
Securities Outstanding and affected, to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or eliminating any
A1-7
of the provisions of the Indenture or of modifying in any manner the rights of
the Holders of such Series of Securities; provided that the Company, the
Guarantor and the Trustee may not, without the consent of the Holder of each
Subordinated Note then Outstanding and affected thereby: (a) change the time of
payment of the principal (or any installment) of any Subordinated Note, or
reduce the principal amount thereof, or reduce the rate or change the time of
payment of interest thereon, or impair the right to institute suit for the
enforcement of any payment on any Subordinated Note when due or (b) reduce the
percentage in principal amount of the Subordinated Notes. The Indenture also
contains provisions providing that prior to the acceleration of the maturity of
any Subordinated Note, the Holders of a majority in aggregate principal amount
of Subordinated Notes may, on behalf of the Holders of all Subordinated Notes,
waive any past default with respect to the Subordinated Notes and its
consequences, except a default (i) in respect of a covenant or provision of the
Indenture or of any Subordinated Note which cannot be modified or amended
without the consent of the Holder of each Outstanding Subordinated Note or (ii)
in the payment of the principal of, any premium or interest (including any
Additional Interest) on, or any Additional Amounts with respect to the
Subordinated Notes.
No reference herein to the Indenture and no provision of this Subordinated
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Subordinated Note at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time during the term of this
Subordinated Note, from time to time, to extend the interest payment period of
such Subordinated Note (each such deferral period an "Extension Period"), during
which periods the Company shall have the right not to make payments of interest
on any interest payment date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest, if any,
thereon to the extent permitted by applicable law) to the Person in whose name
such Subordinated Note or any predecessor Subordinated Note is registered on the
books and records of the Company at the close of business on the Regular Record
Date. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that no Extension Period
shall extend beyond the Mandatory Redemption Date, if the Trust Securities are
at the time outstanding, or the Maturity Date of this Subordinated Note. Upon
the termination of any such Extension Period and upon the payment of all accrued
and unpaid interest and any Additional Interest then due, the Company may elect
to being a new Extension Period.
A1-8
As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Subordinated Note is transferable by the registered
Holder hereof on the Securities Register of the Company, upon surrender of this
Subordinated Note for registration of transfer at the office or agency of the
Trustee in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Subordinated Notes of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Subordinated
Note, the Company, the Guarantor, the Trustee, any paying agent and the
Securities Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Subordinated Note shall be overdue
and notwithstanding any notice of ownership or writing hereon made by anyone
other than the Securities Registrar) for the purpose of receiving payment of or
on account of the principal hereof and premium, if any, and interest due hereon
and for all other purposes, and neither the Company nor the Guarantor nor the
Trustee nor any paying agent nor any Securities Registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Subordinated Note, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or 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 the consideration for the issuance hereof, expressly
waived and released.
The Subordinated Notes of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
thereof. A holder of Subordinated Notes may transfer or exchange Subordinated
Notes held by it only in minimum denominations of $100,000 and integral
multiples of $1,000 in excess thereof, and only if such transfer or exchange
does not result in such holder's holding Subordinated Notes in a denomination of
less than $100,000. Any attempted transfer, sale or other
A1-9
disposition of Subordinated Notes in a denomination of less than $100,000 shall
be deemed to be void and of no legal effect whatsoever.
All terms used in this Subordinated Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SUBORDINATED NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
A1-10
EXHIBIT A-2
[FORM OF REPLACEMENT NOTE]
IF THE NOTE IS TO BE A GLOBAL SUBORDINATED NOTE, INSERT THE FOLLOWING--This
Note is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Note is exchangeable for Subordinated Notes registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Note (other
than a transfer of this Note 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) may be registered except in limited circumstances.
Unless this Note is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer 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.
IF A DISSOLUTION EVENT HAS OCCURRED, INSERT THE FOLLOWING - THE SECURITY
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION)
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO ACE
LIMITED OR ANY AFFILIATE THEREOF OR (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AT THE REQUEST OF THE HOLDER,
THIS LEGEND WILL BE
A2-1
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO THE SALE OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT.
A2-2
No.__________ CUSIP NO.________
ACE INA HOLDINGS INC.
AUCTION RATE RESET SUBORDINATED NOTE SERIES A
REPLACEMENT NOTE
ACE INA Holdings Inc., a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay the principal sum of ____________
dollars ($__________) on the Maturity Date.
Interest on the principal amount of this Subordinated Note will accrue and
be payable at a rate (the "Interest Rate") per annum equal to from and including
the date of issuance to but excluding the date such principal amount is paid,
the Winning Bid Rate, compounded quarterly; and if the Company fails to pay the
principal amount on the date such amount becomes due, then from and including
such due date to but excluding the date such principal amount is paid, the
applicable periodic Interest Rate, compounded quarterly, but only to the extent
permitted by applicable law.
Interest that is not paid when due will bear additional interest thereon
compounded quarterly at the applicable periodic Interest Rate (to the extent
permitted by applicable law).
The term "interest", as used herein, includes any Additional Interest
unless otherwise stated.
From and including the date of issuance, interest on this Replacement Note,
will be payable quarterly in arrears on July 1, October 1, January 1 and April 1
of each year, commencing on the Remarketing Settlement Date, and on the Maturity
Date (each, an "Interest Payment Date"), will accumulate from the most recent
date to which interest has been paid or, if no interest has been paid, from and
including the date of issuance, to but excluding the related Interest Payment
Date, except as otherwise described below. The amount of interest payable for
any period shall be computed on the basis of a 360-day year of twelve 30-day
months. Except as provided in the last sentence of this paragraph, the amount of
interest payable for any period shorter than a full quarterly period for which
interest is computed will be computed on the basis of the actual number of days
elapsed per 30-day month. If an Interest Payment Date is not a Business Day,
A2-3
then such Interest Payment Date will be the next succeeding Business Day (and
without any interest or other payment in respect of any such delay).
Interest shall be paid to the Person in whose name the Subordinated Note or
any predecessor Subordinated Note is registered on the books and records of the
Company at the close of business on the Regular Record Date for such interest
installment, which, in respect of Subordinated Notes of which the Property
Trustee is the Holder and the related Preferred Securities are in book-entry
only form or a Global Subordinated Note, shall be the close of business on the
Business Day next preceding that Interest Payment Date (the "Regular Record
Date"). If the Subordinated Notes are not represented by a Global Subordinated
Note, the Regular Record Date for such interest installment shall be fifteen
(15) days prior to an Interest Payment Date. Notwithstanding the foregoing, so
long as the Holder of this Subordinated Note is the Property Trustee, the
payment of the principal of (and premium, if any) and interest on this
Subordinated Note will be made at such place and to such account as may be
designated by the Property Trustee.
The indebtedness evidenced by this Subordinated Note is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all existing and future Senior Indebtedness and the
prior payment of other Securities to the extent provided for in the First
Supplemental Indenture, and this Subordinated Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Subordinated Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination so provided and (c) appoints the Trustee his or her attorney-
in-fact for any and all such purposes. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Subordinated Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Subordinated Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
A2-4
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
ACE INA HOLDINGS INC.
By:___________________________
Name:
Title:
Attest:
By:__________________________
Name:
Title:
A2-5
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Dated:
[THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By: _________________________
Authorized Officer ]
[THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By: _________________________
as Authentication Agent
By: _________________________
Authorized Officer ]
A2-6
[FORM OF REVERSE OF NOTE]
This Subordinated Note is one of a duly authorized series of Securities of
the Company (herein sometimes referred to as the "Subordinated Notes"),
specified in the Base Indenture (as defined below), all issued or to be issued
in one or more series under and pursuant to an Indenture (the "Base Indenture")
dated as of June 15, 1999, duly executed and delivered between the Company, ACE
Limited (the "Guarantor") and The First National Bank of Chicago, as Trustee
(the "Trustee"), as supplemented by the First Supplemental Indenture dated as of
June 30, 1999, among the Company, the Guarantor and the Trustee (the Base
Indenture as so supplemented, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company, the Guarantor and the Holders of the Subordinated
Notes. By the terms of the Indenture, the Subordinated Notes are issuable
thereunder in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Subordinated Notes is limited in aggregate principal amount as specified in said
First Supplemental Indenture and herein sometimes referred to as the
"Subordinated Notes."
Because of the occurrence and continuation of a Special Event or a
Qualifying Equity Offering in certain circumstances, this Subordinated Note may
become due and payable at the principal amount together with any interest
accrued thereon (including Additional Interest) (the "Redemption Price"). The
Redemption Price shall be paid prior to 12:00 noon, New York City time, on the
date of such redemption or at such earlier time as the Company determines. If
the Maturity Date or any other date fixed for redemption of the Subordinated
Notes is not a Business Day, then payment of the Redemption Price or principal
payable on such date will be made on the next succeeding day that is a Business
Day with interest thereon to the date of payment; provided that the Company may
elect to make such payment on the immediately preceding day that is a Business
Day.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Subordinated Notes may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company, the Guarantor and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Subordinated Notes and each other series of
Securities Outstanding and affected, to execute supplemental indentures for the
A2-7
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of modifying in any manner the rights of
the Holders of such Series of Securities; provided that the Company, the
Guarantor and the Trustee may not, without the consent of the Holder of each
Subordinated Notes then Outstanding and affected thereby: (a) change the time
of payment of the principal (or any installment) of any Subordinated Note, or
reduce the principal amount thereof, or reduce the rate or change the time of
payment of interest thereon, or impair the right to institute suit for the
enforcement of any payment on any Subordinated Note when due or (b) reduce the
percentage in principal amount of the Subordinated Notes. The Indenture also
contains provisions providing that prior to the acceleration of the maturity of
any Subordinated Note, the Holders of a majority in aggregate principal amount
of Subordinated Notes may, on behalf of the Holders of all Subordinated Notes
waive any past default with respect to the Subordinated Notes and its
consequences, except a default (i) in respect of a covenant or provision of the
Indenture or of any Subordinated Note which cannot be modified or amended
without the consent of the Holder of each Outstanding Subordinated Note or (ii)
in the payment of the principal of, any premium or interest (including any
Additional Interest) on, or any Additional Amounts with respect to the
Subordinated Notes.
No reference herein to the Indenture and no provision of this Subordinated
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Subordinated Note at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time during the term of this
Subordinated Note, from time to time, to extend the interest payment period of
such Subordinated Note (each such deferral period an "Extension Period"), during
which periods the Company shall have the right not to make payments of interest
on any interest payment date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest, if any,
thereon to the extent permitted by applicable law) to the Person in whose name
such Subordinated Note or any predecessor Subordinated Note is registered on the
books and records of the Company at the close of business on the Regular Record
Date. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that no Extension Period
shall extend beyond the Mandatory Redemption Date, if the Trust Securities are
at the time outstanding, or the Maturity Date of this Subordinated Note. Upon
the termination of any such Extension Period and upon the payment of all accrued
A2-8
and unpaid interest and any Additional Interest then due, the Company may elect
to being a new Extension Period.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Subordinated Note is transferable by the registered
Holder hereof on the Securities Register of the Company, upon surrender of this
Subordinated Note for registration of transfer at the office or agency of the
Trustee in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Subordinated Notes of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Subordinated
Note, the Company, the Guarantor, the Trustee, any paying agent and the
Securities Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Subordinated Note shall be overdue
and notwithstanding any notice of ownership or writing hereon made by anyone
other than the Securities Registrar) for the purpose of receiving payment of or
on account of the principal hereof and premium, if any, and interest due hereon
and for all other purposes, and neither the Company nor the Guarantor nor the
Trustee nor any paying agent nor any Securities Registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Subordinated Note, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or 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 the consideration for the issuance hereof, expressly
waived and released.
The Subordinated Notes of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of $1,000
thereof. A holder of Subordinated Notes may transfer or exchange Subordinated
Notes held by it only in minimum denominations of $100,000 and integral
multiples of $1,000 in excess thereof, and only if such transfer or exchange
does not result in such holder's holding Subordinated Notes in a
A2-9
denomination of less than $100,000. Any attempted transfer, sale or other
disposition of Subordinated Notes in a denomination of less than $100,000 shall
be deemed to be void and of no legal effect whatsoever.
All terms used in this Subordinated Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SUBORDINATED NOTES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
A2-10
EXHIBIT B
FORM OF REMARKETING AGREEMENT
EXHIBIT C
FORM OF TRUST AGREEMENT
EXHIBIT D
FORM OF AMENDED AND RESTATED TRUST AGREEMENT