EXHIBIT 4.2
TERRA NOVA INSURANCE
(UK) HOLDINGS PLC,
as Issuer
TERRA NOVA (BERMUDA) HOLDINGS LTD.,
as Guarantor
and
THE CHASE MANHATTAN BANK,
as Trustee
___________________
INDENTURE
Dated as of May 18, 1998
___________________
7% Senior Notes
due 2008
TABLE OF CONTENTS
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Page
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RECITALS
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ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions.............................................................. 2
Section 1.02. Other Definitions........................................................ 17
Section 1.03. Compliance Certificates and Opinions..................................... 17
Section 1.04. Form of Documents Delivered to Trustee................................... 18
Section 1.05. Acts of Holders.......................................................... 19
Section 1.06. Notices, Etc., to Trustee, the Issuer Bermuda Holdings................... 20
Section 1.07. Notice of Holders; Waiver................................................ 21
Section 1.08. Conflict of Any Provision of Indenture with Trust Act.................... 21
Section 1.09. Effect of Headings and Table of Contents................................. 22
Section 1.10. Successor and Assigns.................................................... 22
Section 1.11. Separability Clause...................................................... 22
Section 1.12. Benefits of Indenture.................................................... 22
Section 1.13. Governing Law............................................................ 22
Section 1.14. Legal Holidays........................................................... 22
Section 1.15. No Recourse Against Others............................................... 23
Section 1.16. Submission of Jurisdiction; Appointment of Agent for Service of Process.. 23
ARTICLE 2
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The Senior Notes
----------------
Section 2.01. Form and Dating........................................................ 24
Section 2.02. Execution and Authentication........................................... 26
Section 2.03. Senior Note Registrar and Paying Agent................................. 27
Section 2.04. Paying Agent to Hold Money in Trust.................................... 28
Section 2.05. Senior Note Holder Lists............................................... 30
Section 2.06. Transfer and Exchange.................................................. 30
Section 2.07. Replacement Securities................................................. 32
Section 2.08. Outstanding Securities................................................. 33
Section 2.09. Temporary Senior Notes................................................. 33
Section 2.10. Cancellation........................................................... 33
Section 2.11. Interest, Defaulted Interest........................................... 34
Section 2.12. Special Transfer Provisions............................................ 34
PAGE
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Section 2.13. CUSIP and CINS Numbers................................................ 38
ARTICLE 3
---------
Satisfaction and Discharge
---------------------------
Section 3.01. Satisfaction and Discharge of Indenture ............................... 38
Section 3.02. Application of Trust Money ............................................ 40
ARTICLE 4
---------
Defaults and Remedies
---------------------
Section 4.01. Events of Default ..................................................... 40
Section 4.02. Acceleration of Maturity; Rescission .................................. 42
Section 4.03. Collection of Indebtedness and Suits for Enforcement by Trustee ....... 43
Section 4.04. Trustee May File Proofs of Claim ...................................... 44
Section 4.05. Trustee May Enforce Claims Without Possession of Senior Notes ......... 45
Section 4.06. Application of Money Collected ........................................ 45
Section 4.07. Limitation of Suits ................................................... 46
Section 4.08. Unconditional Right of Holders to Receive Principal Premium and Interest 46
Section 4.09. Restoration of Rights and Remedies ..................................... 47
Section 4.10. Rights and Remedies Cumulative ......................................... 47
Section 4.11. Delay or Omission Not Waiver ........................................... 47
Section 4.12. Control by Holders ..................................................... 47
Section 4.13. Waiver of Defaults...................................................... 48
Section 4.14. Undertaking for Costs .................................................. 48
ARTICLE 5
---------
The Trustee
-----------
Section 5.01. Notice of Events of Default ............................................ 49
Section 5.02. Certain Rights of Trustee .............................................. 49
Section 5.03. Not Responsible for Recitals or Issuance of Senior Notes ............... 51
Section 5.04. Trustee and Agents May Hold Senior Notes; collections; etc ............. 52
Section 5.05. Money Held in Trust .................................................... 52
Section 5.06. Compensation and Reimbursement ......................................... 52
Section 5.07. Conflicting Interests .................................................. 53
Section 5.08. Corporate Trustee Required; Eligibility ................................ 53
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Section 5.09. Resignation and Removal; Appointment of Successor ...................... 53
Section 5.10. Acceptance of Appointment of Successor ................................. 55
Section 5.11. Merger, Conversion, Consolidation or Succession to Business ............ 56
Section 5.12. Preferential Collection of Claims Against the Issuer or Bermuda Holdings 56
ARTICLE 6
---------
Holders' Lists And Reports By Trustee
-------------------------------------
Section 6.01. Disclosure of Names and Addresses of Holders ........................... 57
Section 6.02. Reports by Trustee 57
ARTICLE 7
---------
Consolidation, Merger, Conveyance, Transfer Or Lease
----------------------------------------------------
Section 7.01. Bermuda Holdings May Consolidated, Etc., Only on Certain Terms.......... 57
Section 7.02. Successor Substituted .................................................. 58
ARTICLE 8
---------
Supplemental Indentures
-----------------------
Section 8.01. Supplemental Indentures Without Consent of Holders ..................... 59
Section 8.02. Supplemental Indentures with Consent of Holders ........................ 59
Section 8.03. Execution of Supplemental Indentures ................................... 60
Section 8.04. Effect of Supplemental Indentures ...................................... 60
Section 8.05. Conformity with Trust Indenture Act .................................... 61
Section 8.06. Reference in Senior Notes to Supplemental Indentures ................... 61
ARTICLE 9
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Covenants
---------
Section 9.01. Payment of Principal, Premium and Interest............................. 61
Section 9.02. Corporate Existence.................................................... 61
Section 9.03. Payment of Taxes and Other Claims...................................... 62
Section 9.04. Maintenance of Properties; Insurance; Books and
Records; Compliance with Law........................................... 62
Section 9.05. [Intentionally Omitted]................................................ 63
Section 9.06. [Intentionally Omitted]................................................ 63
Section 9.07. [Intentionally Omitted]................................................ 63
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Section 9.08. Liens.................................................................. 63
Section 9.09. [Intentionally Omitted]................................................. 63
Section 9.10. [Intentionally Omitted]................................................. 63
Section 9.11. [Intentionally Omitted]................................................. 63
Section 9.12. [Intentionally Omitted]................................................. 63
Section 9.13. [Intentionally Omitted]................................................. 64
Section 9.14. [Intentionally Omitted]................................................. 64
Section 9.15. [Intentionally Omitted]................................................. 64
Section 9.16. [Intentionally Omitted]................................................. 64
Section 9.17. Additional Amounts..................................................... 64
Section 9.18. Statement as to Compliance; Notice of Default; Provision of............ 65
Financial Statements................................................... 66
Section 9.19. Waiver of Stay; Extension of Usury Law................................. 66
Section 9.20. Waiver of Certain Covenants
ARTICLE 10
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Redemption Of Senior Notes
--------------------------
Section 10.01. Right of Redemption................................................... 67
Section 10.02. Applicability of Article.............................................. 67
Section 10.03. Election to Redeem; Notice to Trustee................................. 67
Section 10.04. Selection by Trustee of Senior Notes to Be Redeemed................... 67
Section 10.05. Notice of Redemption.................................................. 68
Section 10.06. Deposit of Redemption Price........................................... 69
Section 10.07. Senior Notes Payable on Redemption Date............................... 69
Section 10.08. Senior Notes Redeemed in Part......................................... 70
Section 10.09. Optional Redemption................................................... 70
Section 10.10. Tax Redemption........................................................ 70
ARTICLE 11
----------
Defeasance And Covenant Defeasance
----------------------------------
Section 11.01. Option to Effect Defeasance or Covenant Defeasance.................... 71
Section 11.02. Defeasance and Discharge.............................................. 71
Section 11.03. Covenant Defeasance................................................... 72
Section 11.04. Conditions to Defeasance or Covenant Defeasance....................... 72
Section 11.05. Deposited Money and U.S. Government Obligations to be................. 74
Held in Trust; Other Miscellaneous Provisions......................... 75
Section 11.06. Reinstatement
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ARTICLE 12
----------
Guarantee of Senior Notes
------------------------
Section 12.01. Guarantee............................................................. 76
Section 12.02. Execution of Guarantee................................................ 77
Section 12.03. Other Obligations of Bermuda Holdings................................. 77
EXHIBITS
Exhibit A Form of Global Note
Exhibit B Form of Regulation S Global Note
Exhibit C Form of Definitive Senior Note
Exhibit D Form of Notation of Guarantee
Exhibit E Form of Regulation S Transfer Certificate
INDENTURE, dated as of May 18, 1998, between Terra Nova Insurance (UK)
Holdings plc, a public limited company organized under the laws of England and
Wales (hereinafter called the "ISSUER"), Terra Nova (Bermuda) Holdings Ltd., a
company organized under the laws of Bermuda (hereinafter called "BERMUDA
HOLDINGS"), and The Chase Manhattan Bank, a New York banking corporation, as
trustee (hereinafter called the "TRUSTEE").
RECITALS
WHEREAS, the Issuer has duly authorized the issue of its 7% Senior Notes
due 2008 (hereinafter called the "SENIOR NOTES") in an aggregate principal
amount not to exceed $100,000,000 and, to provide the terms and conditions upon
which the Senior Notes are to be authenticated, issued and delivered, the Issuer
has duly authorized the execution and delivery of this Indenture;
WHEREAS, Bermuda Holdings has duly authorized the provision of its full and
unconditional guarantee of the Senior Notes (hereinafter called the "GUARANTEE")
and, to provide the terms and conditions upon which the Guarantee is to be
provided, Bermuda Holdings has duly authorized the execution and delivery of
this Indenture;
WHEREAS, upon the effectiveness of the Exchange Registration Statement (as
defined herein) filed with respect to the Senior Notes, this Indenture will be
subject to, and shall be governed by, the provisions of the Trust Indenture Act
that are required to be part of and govern indentures qualified under the Trust
Indenture Act;
WHEREAS, all acts and things necessary have been done to make the Senior
Notes, when executed by the Issuer and authenticated and delivered hereunder and
duly issued by the Issuer, the valid, binding and legal obligations of the
Issuer, and to make this Indenture a valid agreement of the Issuer in accordance
with its terms;
WHEREAS, all acts and things necessary have been done to make the
Guarantee, when the notation of the Guarantee has been endorsed on the Senior
Notes by Bermuda Holdings and delivered hereunder, the valid, binding and legal
obligation of Bermuda Holdings, and to make this Indenture a valid agreement of
Bermuda Holdings in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Senior
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Senior Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article 1 have the meanings assigned to
them in this Article 1 and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "DOLLARS" shall refer to the lawful currency
of the United States of America;
(f) the words "INCLUDE," "INCLUDED" and "INCLUDING" as used herein shall
be deemed in each case to be followed by the phrase "WITHOUT LIMITATION", if not
expressly followed by such phrase or the phrase "BUT NOT LIMITED TO";
(g) any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.
Certain terms used principally in Articles 2, 9, and 11 are defined in
those Articles.
"ADDITIONAL SUMS" means such additional amounts as may be necessary in
order that the amount of distributions then due and payable by the Issuer on the
outstanding Senior Notes shall not be reduced as a result of any additional
taxes,
2
duties or other governmental charges to which the Issuer has become subject as a
result of an event described in Section 10.10.
"ADJUSTED TREASURY RATE" means, with respect to any Redemption Date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, calculated on the third
Business Day preceding the Redemption Date, plus in each case .20%.
"AFFILIATE" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person (except in cases where substantially
all of the control that would ordinarily be exercisable by virtue of ownership
of stock, other than the election of directors, has been eliminated by
applicable regulatory authorities). For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"BERMUDA HOLDINGS" means the Person named as "BERMUDA HOLDINGS" in the
first paragraph of this instrument, until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"BERMUDA HOLDINGS" shall mean such successor Person. To the extent necessary to
comply with the requirements of the provisions of Sections 310 through 317 of
the Trust Indenture Act as they are applicable to Bermuda Holdings, the term
"BERMUDA HOLDINGS" shall include any other obligor with respect to the Guarantee
for the purposes of complying with such provisions.
"BOARD OF DIRECTORS" means the board of directors of the Issuer or Bermuda
Holdings, as the case may be, or any duly authorized committee of such board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Issuer or Bermuda Holdings, as the case may be,
to have been duly adopted by the Board of Directors of the Issuer or Bermuda
Holdings, as the case may be, and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"BOOK-ENTRY INTERESTS" means any beneficial interest in a Global Note.
3
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York, or
London, England, are authorized or obligated by law, regulation or executive
order to close.
"CAPITAL LEASE OBLIGATION" means, as to any Person, any obligations of such
Person and its Subsidiaries on a consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of such Person's capital
stock and any rights (other than debt securities convertible into or
exchangeable for capital stock), warrants or options to purchase the foregoing
whether now outstanding or issued after the date hereof.
"CEDEL" means Cedel Bank, societe anonyme.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term from the Redemption Date to the Stated Maturity Date of the Senior Notes
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Senior Notes.
"COMPARABLE TREASURY PRICE" means, with respect to any Redemption Date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "COMPOSITE 3:30 P.M. QUOTATIONS FOR U.S.
GOVERNMENT SECURITIES" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Quotation Agent obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
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"CORPORATE TRUST OFFICE" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"CORPORATION" includes corporations, associations, partnerships, companies
and business trusts.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect such
Person or any of its Restricted Subsidiaries against fluctuations in currency
values.
"CUSTODIAN" means Chase Manhattan Bank Luxembourg S.A., as Custodian under
the Deposit and Custody Agreement.
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DEFINITIVE SENIOR NOTE" means any Senior Note substantially in the form of
Exhibit C to this Indenture issued in accordance with this Indenture.
"DEPOSIT AND CUSTODY AGREEMENT" means the Deposit and Custody Agreement,
dated as of May 18, 1998, among the Issuer, Bermuda Holdings, Chase Manhattan
Bank Luxembourg S.A., as Custodian, The Chase Manhattan Bank, as Trustee, and
The Chase Manhattan Bank, as Depositary.
"DEPOSITARY" means The Chase Manhattan Bank, as Depositary under the
Deposit and Custody Agreement.
"DTC" means The Depository Trust Company.
"EUROCLEAR" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"EVENT OF DEFAULT" has the meaning specified in Article4.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means an issue of senior notes of the Issuer with terms
identical to the Senior Notes (except that the Exchange Notes will not bear the
Private Placement Legend or any other legends restricting the transfer thereof,
will contain the alternative paragraph 1(b) appearing on the reverse of the
Senior Notes
5
in the form appearing as Exhibit A hereto and except that interest thereon shall
accrue from the last date on which interest was paid on the Senior Notes or, if
no such interest has been paid, from the date of issuance of the Senior Notes)
to be exchanged for the Senior Notes pursuant to the Exchange Offer.
"EXCHANGE OFFER" means the registered offer by the Issuer to exchange the
Senior Notes for the Exchange Notes pursuant to the Registration Rights
Agreement.
"EXCHANGE REGISTRATION" means a registration of the Senior Notes by the
Issuer under the Securities Act pursuant to and in accordance with the terms of
the Registration Rights Agreement.
"EXCHANGE REGISTRATION STATEMENT" means the registration statement relating
to an Exchange Offer on an appropriate form and all amendments and supplements
to such registration statement, in each case including the prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"FAIR MARKET VALUE" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing
buyer.
"FEDERAL BANKRUPTCY CODE" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
accepted accounting principles in the United States, set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
consistently applied, as in effect from time to time.
"GLOBAL NOTES" means, collectively, the Restricted Global Note and the
Regulation S Global Note substantially in the forms of Exhibit A and Exhibit B
to this Indenture.
"GLOBAL RECEIPTS" means, collectively, the Restricted Global Receipt and
the Regulation S Global Receipt.
6
"GUARANTEE" means the full and unconditional guarantee by Bermuda Holdings
of the Senior Notes, the notation of which is endorsed on the Senior Notes,
substantially in the form of Exhibit D to this Indenture.
"GUARANTEED DEBT" of any Person means, without duplication, all
Indebtedness of any other Person guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (1) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (2) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling such other Person to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (3) to
supply funds to, or in any other manner invest in, such other Person (including
any agreement to pay for property or services to be acquired by such other
Person irrespective of whether such property is received or such services are
rendered), (4) to maintain working capital or equity capital of such other
Person, or otherwise to maintain the net worth, solvency or other financial
condition of the debtor, or (5) otherwise to assure a creditor of such other
Person against loss; provided that the term "GUARANTEE" shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business, or any obligation or liability of such other Person in respect of
leasehold interests assigned by such other Person to any other Person.
"HOLDER" means (a) in the case of any Definitive Senior Note, the Person in
whose name such Definitive Senior Note is registered in the Senior Note Register
and (b) in the case of a Global Note, the Custodian, or its nominee, or any
successor custodian to whom the Global Note is transferred.
"INDEBTEDNESS" means, with respect to any Person, without duplication, (1)
all obligations of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade payables and other accrued
current liabilities incurred in the ordinary course of business, if, and to the
extent, any of the foregoing would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, (2) all obligations of such Person
evidenced by bonds, notes, debentures or other similar instruments, if, and to
the extent, any of the foregoing would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, (3) all obligations
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even if the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but excluding trade
accounts payable arising in the ordinary course of business, (4) all Capital
Lease Obligations of such Person, (5) all obligations referred to in (but not
excluded from) clause (1), (2), (3) or (4) above
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of other Persons and all dividends of other Persons, the payment of which is
secured by (or for which the holder of such obligations has an existing right,
contingent or otherwise, to be secured by) any Lien, upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such obligation, (6) all Guaranteed Debt of such Person, (7) all Redeemable
Capital Stock issued by such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends,
(8) all obligations under Currency Agreements or Interest Swap Obligations of
such Person, (9) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing insurance obligations
entered into in the ordinary course of business of such Person to the extent
that such letters of credit are not drawn upon, or if and to the extent drawn
upon, such drawing is reimbursed not later than the 30th Business Day following
a demand for reimbursement following payment on the letter of credit), and (10)
any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses(1) through (9)
above. Indebtedness shall not include obligations under insurance, reinsurance
or retrocession contracts entered into in the ordinary course of business. For
purposes hereof, the "MAXIMUM FIXED REPURCHASE PRICE" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Indenture, and if such price is based upon, or
measured by, the Fair Market Value of such Redeemable Capital Stock, such Fair
Market Value shall be determined in good faith by the board of directors of the
issuer of such Redeemable Capital Stock.
"INDENTURE" means this instrument as originally executed (including all
exhibits and schedules hereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof.
"INSURANCE BUSINESS" means any business consisting principally of the
ownership or issuance of or entry into insurance policies or reinsurance or
retrocession contracts that have not expired or the ownership or operation of
any other similar assets of an insurer or reinsurer, or any interest therein,
which is related to the general business of Bermuda Holdings and its
Subsidiaries, and would be reflected on the balance sheet of Bermuda Holdings
prepared in accordance with GAAP. Without limiting the foregoing, the term
"INSURANCE BUSINESS" shall include a direct or indirect ownership interest in a
Person which issues insurance policies, reinsurance or retrocession contracts or
similar products
8
or performs investment, management, administrative or similar services related
or adaptable to the business of Bermuda Holdings or one or more of its
Subsidiaries, so long as such ownership interest would be reflected on the
balance sheet of Bermuda Holdings prepared in accordance with GAAP.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Senior Notes.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant to
any interest rate swap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in interest rates.
"ISSUE DATE" means the date on which Senior Notes are originally issued
under this Indenture.
"ISSUER" means the Person named as the "ISSUER" in the first paragraph of
this instrument, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "ISSUER" shall mean such
successor Person. To the extent necessary to comply with the requirements of
the provisions of Sections 310 through 317 of the Trust Indenture Act as they
are applicable to the Issuer, the term "ISSUER" shall include any other obligor
with respect to the Senior Notes for the purposes of complying with such
provisions.
"LIEN" means any mortgage, charge, pledge, lien, security interest or other
encumbrance of any kind.
"MAKE-WHOLE AMOUNT" means, in connection with any optional redemption of
any Senior Notes, the excess, if any, of (i) the sum, as determined by a
Quotation Agent of the present values of the principal amount of such Senior
Notes, together with scheduled payments of interest from the redemption date to
the Stated Maturity of the Senior Notes, in each case discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, over (ii) 100% of the
principal amount of the Senior Notes to be redeemed.
"MATURITY" when used with respect to any Senior Note means the date on
which the principal of (and premium, if any) and interest on such Senior Note
becomes due and payable as therein provided, whether at Stated Maturity or
redemption date and whether by declaration of acceleration call for redemption
or otherwise.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
9
"NON-RECOURSE INDEBTEDNESS" means Indebtedness (a) as to which neither
Bermuda Holdings nor any of its Subsidiaries (other than the Person incurring
such Non-Recourse Indebtedness) (i) provides credit support (including any
undertaking, agreement or instrument that would constitute Indebtedness), (ii)
is directly or indirectly liable, or (iii) constitutes the lender; and (b) no
default with respect to which (including any rights that the holders thereof may
have to take enforcement action against such Person incurring such Non-Recourse
Indebtedness) would permit (upon notice, lapse of time or both) any holder of
any other Indebtedness of Bermuda Holdings or any of its Subsidiaries (other
than the Person incurring such Non-Recourse Indebtedness) to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its Stated Maturity.
"OFFICERS' CERTIFICATE" means a certificate signed by (1) the Chairman, a
Vice Chairman, the President, a Vice President, the Treasurer or a director (or
equivalent officers) of Bermuda Holdings or the Issuer, as the case may be, and
(2) the Secretary or an Assistant Secretary of Bermuda Holdings or the Issuer,
as the case may be, and delivered to the Trustee; provided, however, that such
certificate may be signed by two of the officers or directors listed in clause
(1) above in lieu of being signed by one of such officers or directors listed in
such clause (1) and one of the officers listed in clause (2) above.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel
for Bermuda Holdings or the Issuer, as the case may be. Each such opinion shall
include the statements provided for in Section 314(e) of the Trust Indenture Act
to the extent applicable.
"ORDER" means a written order signed in the name of the Issuer or Bermuda
Holdings, as the case may be (1) by its Chairman, a Vice Chairman, its
President, a Vice President, its Treasurer or a director (or equivalent
officers), and (2) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the officers or directors
listed in clause (1) above in lieu of being signed by one of such officers or
directors listed in such clause (1) and one of the officers listed in clause (2)
above.
"OUTSTANDING" when used with respect to the Senior Notes means, as of the
date of determination, all Senior Notes theretofore authenticated and delivered
under this Indenture, except:
(i) Senior Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
10
(ii) Senior Notes, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Issuer or Bermuda
Holdings) in trust or set aside and segregated in trust by the Issuer or
Bermuda Holdings (if the Issuer or Bermuda Holdings shall act as its own
Paying Agent) for the Holders of such Senior Notes; provided that, if such
Senior Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Senior Notes, except to the extent provided in Section 11.02 and
Section 11.03 with respect to which Bermuda Holdings has effected
defeasance or covenant defeasance as provided in Article 11; and
(iv) Senior Notes in exchange for or in lieu of which other Senior
Notes have been authenticated and delivered pursuant to this Indenture,
other than any such Senior Notes in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Senior Notes
are held by a bona fide purchaser in whose hands the Senior Notes are valid
obligations of the Issuer and Bermuda Holdings;
provided, however, that, in determining whether the Holders of the requisite
principal amount of Outstanding Senior Notes have given any request, demand,
authorization, notice, direction, consent or waiver hereunder, Senior Notes
owned by the Issuer, Bermuda Holdings, any other obligor upon the Senior Notes
or any Affiliate of the Issuer, Bermuda Holdings or such other obligor shall be
disregarded and deemed not to be Outstanding solely for purposes of such
determination, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, notice,
direction, consent or waiver, only Senior Notes which the Trustee knows to be so
owned shall be so disregarded. Senior Notes so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Senior Notes and that the pledgee is not the Issuer or Bermuda Holdings or any
other obligor upon the Senior Notes or any Affiliate of Bermuda Holdings or such
other obligor.
"PERMITTED LIENS" means (1) Liens securing Indebtedness pursuant to any
credit agreement or credit facility that is permitted by the terms of the
Indenture to be outstanding; (2) Liens in favor of Bermuda Holdings or any
Restricted Subsidiary; (3) Liens on property of a Person existing at the time
such Person is merged into or consolidated with Bermuda Holdings or any
Restricted Subsidiary of Bermuda Holdings, provided that such Liens were not
incurred in connection with, or in contemplation of, such merger or
consolidation and such Liens do not
11
extend to any assets of Bermuda Holdings or any of its Restricted Subsidiaries
other than the assets of the Person so merged into or consolidated with Bermuda
Holdings or such Restricted Subsidiary; (4) Liens on property existing at the
time of acquisition thereof by Bermuda Holdings or any Restricted Subsidiary of
Bermuda Holdings; provided that such Liens were not incurred in connection with,
or in contemplation of, such acquisition and do not extend to any assets of
Bermuda Holdings or any of its Restricted Subsidiaries other than the property
so acquired; (5) Liens to secure the performance of statutory obligations,
surety or appeal bonds or performance bonds, or landlords', carriers',
warehousemen's, mechanics', suppliers', materialmen's or other like Liens, in
any case incurred in the ordinary course of business and with respect to amounts
not yet delinquent or being contested in good faith by appropriate process of
law, if a reserve or other appropriate provision, if any, as is required by GAAP
shall have been made therefor; (6) Liens existing on the date of the Indenture;
(7) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (8) Liens with respect to obligations under
Currency Agreements or Interest Swap Obligations and other similar agreements or
arrangements designed to protect Bermuda Holdings or any of its Restricted
Subsidiaries against fluctuations in the value of Investments of Bermuda
Holdings and its Restricted Subsidiaries, in each case to the extent permitted
hereunder; (9) Liens incurred in the ordinary course of business of Bermuda
Holdings or any Subsidiary of Bermuda Holdings with respect to obligations
permitted under the Indenture that do not exceed $10,000,000 in principal amount
in the aggregate at any one time outstanding; and (10) Liens on assets of
Unrestricted Subsidiaries that secure Non-Recourse Indebtedness (to the extent
permitted under the Indenture) of Unrestricted Subsidiaries.
"PERSON" means any individual, corporation, limited or general partnership,
limited liability company, joint venture, association, joint stock company,
trust, fund, unincorporated organization or government or any agency or
political subdivision thereof.
"PRINCIPAL INSURANCE SUBSIDIARY" means: (i) the Subsidiaries of Bermuda
Holdings in existence on the Issue Date; (ii) any other insurance company
Subsidiary of Bermuda Holdings that becomes a "SIGNIFICANT SUBSIDIARY" as
defined in Regulation S-X, as promulgated by the Commission; and (iii) any other
Subsidiary of Bermuda Holdings that may succeed, by merger, consolidation or
otherwise, to all or substantially all of the business of one or more of such
persons as specified in (i) and (ii) above.
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"QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.
"QUOTATION AGENT" means the Reference Treasury Dealer appointed by the
Issuer.
"REDEEMABLE CAPITAL STOCK" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or otherwise, is, or upon the happening of an event or passage of time would be
required to be, redeemed on or prior to the final Stated Maturity of the Senior
Notes or is redeemable at the option of the holder thereof at any time prior to
such final Stated Maturity, or is convertible into or exchangeable for debt
securities at any time prior to such final Stated Maturity.
"REDEMPTION DATE", when used with respect to any Senior Notes to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Senior Notes to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REFERENCE TREASURY DEALER" means, at any time, (i) ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation and its respective successors ("DLJ") and two
additional Primary Treasury Dealers (as defined below) selected by DLJ;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in ▇▇▇ ▇▇▇▇ ▇▇▇▇ (▇ "▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇
will substitute therefor another Primary Treasury Dealer unless DLJ has ceased
to be a Primary Treasury Dealer in which case the Issuer shall substitute
therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury
Dealer selected by the Indenture Trustee after consultation with the Company, it
being understood that the Trustee shall under no circumstances have any duty or
responsibility to select any such other Primary Treasury Dealer, and should it
select such Primary Treasury Dealer, shall have no liability for any such
selection, except for its gross negligence or bad faith, in selecting such
Primary Treasury Dealer.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any prepayment date, the arithmetic average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) furnished in writing to the Indenture Trustee by such
Quotation Agent at 5:00 p.m., New York City time, on the third Business Day
preceding such redemption date.
13
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of May 18, 1998, between the Issuer, Bermuda Holdings and ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and certain permitted assigns specified
therein.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
means the May 1 or November 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"REGULATION S DEFINITIVE SENIOR NOTE" means a Definitive Senior Note issued
in exchange for an interest in the Regulation S Global Note.
"REGULATION S GLOBAL NOTE" means the Regulation S Global Note substantially
in the form of Exhibit B to this Indenture.
"REQUEST" means a written request signed in the name of the Issuer or
Bermuda Holdings, as the case may be, (1) by its Chairman, a Vice Chairman, its
President, a Vice President, its Treasurer or a director (or equivalent
officers) and (2) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the officers or directors
listed in clause (1) above in lieu of being signed by one of such officers or
directors listed in such clause (1) and one of the officers listed in clause (2)
above.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer assigned to the Corporate Trust Administration of the Trustee or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers or assigned by the Trustee to
administer corporate trust matters at its Corporate Trust Office and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
"RESTRICTED DEFINITIVE SENIOR NOTE" means a Definitive Senior Note issued
in exchange for an interest in the Restricted Global Note.
"RESTRICTED GLOBAL NOTE" means the Restricted Global Note substantially in
the form of Exhibit A to this Indenture.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary that is not an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation and its successors.
14
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR NOTES" means (a) the Global Notes, substantially in the form of
Exhibit A to this Indenture, (b) Definitive Senior Notes, substantially in the
form of Exhibit B to this Indenture, issued in accordance with this Indenture or
(c) of any Exchange Notes to be issued and exchanged for (a) or (b) above
pursuant to the Registration Rights Agreement and this Indenture. For purposes
of this Indenture, all Senior Notes and Exchange Notes shall vote as one series
of Senior Notes under this Indenture.
"SPECIAL RECORD DATE" means a date fixed by the Trustee for the payment of
any Defaulted Interest.
"STATED MATURITY" means, when used with respect to any Indebtedness or any
installment of principal or of interest thereon, the date specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of principal or of interest is due and payable.
"SUBSIDIARY" means any Person, a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by Bermuda
Holdings or by one or more other Subsidiaries, or by Bermuda Holdings and one or
more other Subsidiaries.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
and as in force at the date as of which this instrument was executed, except as
provided in Section 8.05.
"TRUSTEE" means the Person named as the "TRUSTEE" in the first paragraph of
this instrument, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "TRUSTEE" shall mean
such successor Trustee.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository
15
receipt; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal of or interest
on the U.S. Government Obligation evidenced by such depository receipt.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution;
but only to the extent that such Subsidiary: (a) is designated an Unrestricted
Subsidiary prior to formation or creation; (b) has total assets at the time of
formation or creation with a Fair Market Value not exceeding $1,000; (c) has no
Indebtedness other than Non-Recourse Indebtedness; (d) is not party to any
agreement, contract, arrangement or understanding with Bermuda Holdings or any
Restricted Subsidiary of Bermuda Holdings unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to
Bermuda Holdings or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of Bermuda Holdings; (e) is a
Person with respect to which neither Bermuda Holdings nor any of its Restricted
Subsidiaries has any direct or indirect obligation (x) to subscribe for
additional Capital Stock or (y) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified levels of operating
results; and (f) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Bermuda Holdings or any of its Restricted
Subsidiaries. Any such designation by the Board of Directors shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
Bermuda Holdings as of such date. The Board of Directors of Bermuda Holdings
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of Bermuda Holdings of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if no Default or Event of Default would be in existence
following such designation.
"VOTING STOCK" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or
16
classes shall have or might have voting power by reason of the happening of any
contingency).
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
principal amount of such Indebtedness into (b) the total of the product obtained
by multiplying (i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly-Owned Subsidiaries of such Person.
Section 1.02. Other Definitions
Defined in
Term Section
---------------------------------------------------------------- ---------
"ACT"........................................................... 1.5
"ADDITIONAL AMOUNTS"............................................ 9.17
"AGENT MEMBERS"................................................. 2.05
"COVENANT DEFEASANCE"........................................... 11.2
"DEFAULTED INTEREST"............................................ 2.11
"DEFEASANCE".................................................... 11.2
"INCORPORATED PROVISION"........................................ 1.8
"NOTICE OF DEFAULT"............................................. 4.1
"REGULATION S GLOBAL RECEIPT"................................... 2.1
"RESTRICTED GLOBAL RECEIPT"..................................... 2.1
"SENIOR NOTE REGISTER".......................................... 2.5
"SENIOR NOTE REGISTRAR"......................................... 2.3
"SURVIVING ENTITY".............................................. 7.1
Section 1.03. Compliance Certificates and Opinions. Upon any application or
request by the Issuer or Bermuda Holdings to the Trustee to take any action
under any provision of this Indenture, the Issuer or Bermuda Holdings shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent,
17
if any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion (other than the certificates required by
Section 9.18(a)) with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.04. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Issuer or Bermuda Holdings
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
the certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or
18
representations by, an officer or officers of the Issuer or Bermuda Holdings
stating that the information with respect to such factual matters is in the
possession of the Issuer or Bermuda Holdings, unless such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.05. Acts of Holders (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such request, demand, authorization, direction, notice, consent,
waiver or other action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Issuer and Bermuda Holdings. Such instrument or instruments
(and the request, demand, authorization, direction, notice, consent, waiver or
other action embodied therein and evidenced thereby) are herein sometimes
referred to as the "ACT" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee, the
Issuer and Bermuda Holdings, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Definitive Senior Notes shall be proved by the Senior
Note Register.
(d) If the Issuer or Bermuda Holdings shall solicit from the Holders of
Senior Notes any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Issuer or Bermuda Holdings, as the case may be, may, at
its option, by or pursuant to a Board Resolution, fix in advance a record date
for the determination of such Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Issuer
or Bermuda Holdings, as the case may be, shall have no obligation to do so.
Notwithstanding Section 316(c) of the Trust Indenture Act, any such record date
shall be the record date specified in or pursuant to such Board Resolution,
which
19
shall be a date not more than 30 days prior to the first solicitation of Holders
generally in connection therewith and no later than the date such solicitation
is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record of Senior Notes at the close of
business on such record date shall be deemed to be Holders of Senior Notes for
the purposes of determining whether Holders of the requisite proportion of
Senior Notes then outstanding have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for this purpose the Senior Notes then outstanding shall be computed as of
such record date; provided that no such request, demand, authorization,
direction, notice, consent, waiver or other Act by the Holders on such record
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Senior Notes shall bind every future Holder of
the same Senior Notes or the Holder of every Senior Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, suffered or omitted to be done by the Trustee, any
Paying Agent or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Senior Notes.
Section 1.06. Notices, Etc., to Trustee, the Issuer Bermuda Holdings. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:
(a) the Trustee by any Holders, any representative or the Issuer or
Bermuda Holdings shall be sufficient for every purpose hereunder if made, given,
furnished or delivered in writing or mailed, first-class postage prepaid, or by
facsimile, to or with the Trustee at its Corporate Trust Office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; or
(b) the Issuer by the Trustee, any representative or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or delivered in writing or mailed, first-
class postage prepaid, or by facsimile, to the Issuer at Terra Nova House, ▇▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Great Britain, Attention: Company Secretary,
20
facsimile number (▇▇▇-▇▇-▇▇▇) ▇▇▇-▇▇▇▇, or at any other address or facsimile
number furnished in writing to the Trustee by the Issuer; or
(c) Bermuda Holdings by the Trustee, any representative or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or delivered in writing or mailed,
first-class postage prepaid, or by facsimile, to Bermuda Holdings at ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇:
Company Secretary, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, or at any other address or
facsimile number furnished in writing to the Trustee by Bermuda Holdings.
Section 1.07. Notice of Holders; Waiver. Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder of Definitive Senior Notes affected by such
event at his address as it appears in the Senior Note Register or at the address
provided by such Holder in writing to the Trustee not later than the latest date
and not earlier than the earliest date prescribed for the giving of such notice
(or, in the case of the Holder of a Global Note, to the Custodian at Chase
Manhattan Bank Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇:
Corporate Trust Department). In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail notice of any event as
required by any provisions of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. Conflict of Any Provision of Indenture with Trust Act. If and
to the extent that any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by Sections 310 to 318 of the Trust Indenture
Act, inclusive, or conflicts with any provision (an "INCORPORATED PROVISION")
required by or deemed to be included in this Indenture by operation of such
Trust Indenture
21
Act Sections, such imposed duties or incorporation provision of the Trust
Indenture Act shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, such provision of the Trust Indenture Act shall be deemed to apply to
this Indenture as so modified or excluded, as the case may be, if this Indenture
shall then be qualified under the Trust Indenture Act.
Section 1.09. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.10. Successor and Assigns. All covenants and agreements in this
Indenture by the Issuer, Bermuda Holdings and the Trustee shall bind its
respective successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause. In case any provision in this In
denture or in the Senior 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 1.12. Benefits of Indenture. Nothing in this Indenture or in the
Senior Notes, express or implied, shall give to any Person (other than the
parties hereto and their successors hereunder, any Paying Agent and the Holders)
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.13. Governing Law. This Indenture and the Senior Notes shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof.
Section 1.14. Legal Holidays. In any case where any Interest Payment Date,
any date established for payment of Defaulted Interest pursuant to Section 2.11
or any Maturity with respect to any Senior Note shall not be a Business Day,
then (notwithstanding any other provisions of this Indenture or of the Senior
Notes) payment of the principal of, or any premium and interest on the Senior
Notes (and any Additional Amounts payable in respect thereof, need not be made
on such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date or date established for
payment of Defaulted Interest pursuant to Section 2.11 or Maturity, and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date or date established for payment of Defaulted Interest
pursuant to Section 2.11 or Maturity, as the case may be, to the next succeeding
Business Day.
22
SECTION 1.15. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Issuer, Bermuda Holdings or any subsidiary of
Bermuda Holdings shall not have any liability for any payment of the principal
of, or premium, if any, or interest on, any of the Senior Notes, or any other
obligations of the Issuer or Bermuda Holdings under the Senior Notes, the
Guarantee or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting any of
the Senior Notes waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Senior Notes.
SECTION 1.16. Submission of Jurisdiction; Appointment of Agent for
Service of Process. Each of the Issuer and Bermuda Holdings hereby appoints CT
Corporation System acting through its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ as its authorized agent (the "AUTHORIZED AGENT") upon which process may be
served in any legal action or proceeding against it with respect to its
obligations under this Indenture, the Senior Notes or any Guarantee, as the case
may be, instituted in any federal or state court in the Borough of Manhattan,
The City of New York, by the Holder of any Senior Notes and agrees that service
of process upon such authorized agent, together with written notice of said
service to the Issuer and Bermuda Holdings by the person serving the same
addressed as provided in Section 1.06, shall be deemed in every respect
effective service of process upon the Issuer or Bermuda Holdings, as the case
may be, in any such legal action or proceeding, and each of the Issuer and
Bermuda Holdings hereby irrevocably submits to the non-exclusive jurisdiction of
any such court in respect of any such legal action or proceeding. Such
appointment shall be irrevocable until this Indenture has been satisfied and
discharged in accordance with Article 3 hereof. Notwithstanding the foregoing,
the Issuer and Bermuda Holdings reserve the right to appoint another person
located or with an office in the Borough of Manhattan, The City of New York,
selected in its discretion, as a successor Authorized Agent, and upon acceptance
of such appointment by such a successor the appointment of the prior Authorized
Agent shall terminate. If for any reason CT Corporation System ceases to be able
to act as the Authorized Agent or to have an address in the Borough of
Manhattan, The City of New York, the Issuer and Bermuda Holdings will appoint a
successor Authorized Agent in accordance with the preceding sentence. Each of
the Issuer and Bermuda Holdings further agrees to take any and all action,
including the filing of any and all documents and instruments as may be
necessary to continue such designation and appointment of such agent in full
force and effect until this Indenture has been satisfied and discharged in
accordance with Article 3 hereof. Service of process upon the Authorized Agent
addressed to it at he address set forth above, as such address may be changed
within the Borough of Manhattan, The City of New York by notice given by the
Authorized Agent to the Trustee, together with written notice of such service
mailed or delivered to the Issuer and Bermuda Holdings shall be
23
deemed, in every respect, effective service of process on the Issuer and Bermuda
Holdings, respectively.
ARTICLE 2
THE SENIOR NOTES
SECTION 2.01. Form and Dating. (a)(i) The Global Notes shall be
substantially in the form of Exhibit A and Exhibit B, and the Trustee's
certificate of authentication shall be substantially in the form set forth in
such exhibits, which are hereby incorporated in and expressly made a part of
this Indenture and (ii) the Definitive Senior Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit C,
which is hereby incorporated in and expressly made a part of this Indenture;
provided that with respect to clauses (i) and (ii) above, Exchange Notes (A)
shall contain the alternative Paragraph 1(b) appearing on the reverse thereof,
and (B) shall not contain the Private Placement Legend. The notation of
Guarantee endorsed on the Senior Notes shall be substantially in the form of
Exhibit D, which is hereby incorporated in and expressly made a part of this
Indenture. The Global Notes and the Definitive Senior Notes may have notations,
legends or endorsements required by law, governmental rule or regulation, stock
or other securities exchange rule, depositary rule or usage agreements to which
the Issuer or Bermuda Holdings is subject, if any, or usage (provided that any
such notation, legend or endorsement is approved by the Issuer or Bermuda
Holdings). The Issuer or Bermuda Holdings shall furnish any such legend not
contained in Exhibit A, Exhibit B or Exhibit C to the Trustee in writing. The
Global Notes and each Definitive Senior Note shall be dated the date of its
authentication. The terms of the Global Notes and of the Definitive Senior Notes
set forth in Exhibit A, Exhibit B and Exhibit C, respectively, are part of the
terms of this Indenture.
The Senior Notes are being offered and sold by the Issuer pursuant to the
Purchase Agreement. The Senior Notes will be initially issued as one or more
global notes without coupons in bearer form. Transfer of the Global Notes shall
be by physical delivery. The Global Notes authenticated under this Indenture
shall be deposited with Chase Manhattan Bank Luxembourg S.A., as custodian
thereof (the "CUSTODIAN"), for the benefit of The Chase Manhattan Bank, as
depositary (the "DEPOSITARY") pursuant to the terms of the Deposit and Custody
Agreement. The aggregate principal amount of the Global Notes may from time to
time be increased or decreased by adjustments made in the records of the
Trustee.
24
With respect to the Senior Notes being issued or sold in reliance on
Regulation S of the Securities Act, the Depositary will issue one or more global
receipts representing a 100% interest in the underlying Regulation S Global Note
(the "REGULATION S GLOBAL RECEIPTS"), which will be delivered and registered in
the name of DTC or its nominee pursuant to the terms of the Deposit and Custody
Agreement for the accounts of Cedel and Euroclear.
With respect to the Senior Notes being issued or sold to "QUALIFIED
INSTITUTIONAL BUYERS" (as defined in Rule 144A under the Securities Act ("RULE
144A"), the Depositary will issue one or more global receipts representing a
100% interest in the underlying Restricted Global Note (the "RESTRICTED GLOBAL
RECEIPTS", and together with the Regulation S Global Receipts, the "GLOBAL
RECEIPTS"), which will be delivered and registered in the name of DTC or its
nominee pursuant to the terms of the Deposit and Custody Agreement.
(b) Restrictive Legends. Unless and until a Senior Note is exchanged for
an Exchange Note in connection with an effective Exchange Registration pursuant
to the Registration Rights Agreement and except as provided in Section 2.08, the
Restricted Global Note and each Restricted Definitive Senior Note shall bear the
following legend (the "PRIVATE PLACEMENT LEGEND") on the face thereof:
THIS SENIOR NOTE 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 WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SENIOR NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THIS SENIOR NOTE
EXCEPT, (A) TO BERMUDA HOLDINGS OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL
25
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, OR (D) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. [WITH RESPECT TO ANY
RESTRICTED DEFINITIVE SENIOR NOTE: IN CONNECTION
WITH ANY TRANSFER OF THIS SENIOR NOTE WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THE CERTIFICATE TO THE
TRUSTEE ON THE REVERSE HEREOF.] AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES"
AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS SENIOR NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
SECTION 2.02. Execution and Authentication. Two directors, or a director
and the Secretary, shall sign the Senior Notes for the Issuer by manual or
facsimile signature. Two directors, or a director and the Secretary, shall sign
the notation of Guarantee, to be endorsed on the Senior Notes by Bermuda
Holdings, for Bermuda Holdings by manual or facsimile signature. The signatures
required hereby may in each case be the manual signature of any person duly
delegated by a director or the Secretary, as the case may be.
If an officer (including a director, Secretary or Assistant Secretary)
whose signature is on a Senior Note no longer holds that office at the time the
Trustee authenticates the Senior Note, the Senior Note shall be valid
nevertheless.
26
A Senior Note shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Senior Note. The
signature shall be conclusive evidence that the Senior Note has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver the (a) Global Notes for
original issue in an aggregate principal amount at maturity not in excess of
$100,000,000, and (b) Exchange Notes for issue only in an Exchange Offer
pursuant to the Registration Rights Agreement, for a like principal amount of
Global Notes exchanged pursuant thereto, in each case upon a written order
signed by a director or Secretary of the Issuer and a director or Assistant
Secretary of Bermuda Holdings. Such order shall specify the principal amount of
the Global Notes to be authenticated and the date on which the original issue of
the Global Notes are to be authenticated and shall further provide instructions
concerning delivery of the Global Notes. The aggregate principal amount of
Senior Notes outstanding at any time may not exceed that amount, except as
provided in Section 2.07 hereof. Each Global Note shall be dated the date of its
authentication, shall bear interest from the applicable date and shall be
payable on the dates specified on the face of the form of Global Notes set forth
as Exhibit A and Exhibit B hereto. Each Definitive Senior Note shall be dated
the date of its authentication, shall bear interest from the applicable date and
shall be payable on the dates specified on the face of the form of Definitive
Senior Note set forth in Exhibit C hereto.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Issuer and Bermuda Holdings to authenticate the Senior Notes. Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Senior Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Senior Note Registrar or Paying
Agent.
SECTION 2.03. Senior Note Registrar and Paying Agent. The Issuer will
maintain in the City of New York, an office or agency where Senior Notes may be
presented or surrendered for payment (the "PAYING AGENT"), where Senior Notes
may be surrendered for registration of transfer or exchange (the "SENIOR NOTE
REGISTRAR") and where notices and demands to or upon the Issuer in respect of
the Senior Notes and this Indenture may be served. Until otherwise designated by
the Issuer, such office or agency in The City of New York shall be the office
maintained by the Trustee for such purpose. The Issuer will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Issuer shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust
27
Office, and the Issuer hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Issuer may from time to time designate one or more other offices or
agencies (in or outside The City of New York) where the Senior Notes may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
an office or agency in The City of New York for such purposes. The Issuer will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such office or agency.
The Issuer shall enter into an appropriate agency agreement with any Senior
Note Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the Trust Indenture Act. The agreement
shall implement the provisions of this Indenture that relate to such agent. The
Issuer shall notify the Trustee of the name and address of any such agent. The
Issuer may change any Paying Agent, Senior Note Registrar, co-registrar or
transfer agent without prior notice to any holder of Senior Notes. If the Issuer
fails to maintain a Senior Note Registrar or Paying Agent, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant to
Section 5.06.
The Issuer initially appoints the Trustee as Senior Note Registrar and
Paying Agent in connection with the Senior Notes.
SECTION 2.04. Paying Agent to Hold Money in Trust. If the Issuer shall at
any time act as its own Paying Agent, it will, by 10:00 a.m. (New York City
time) on or before each due date of the principal of and any premium and
interest on the Senior Notes (and any Additional Amounts payable by the Issuer
or Bermuda Holdings in respect thereof), segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any premium and interest on the Senior Notes (and any Additional Amounts
payable by the Issuer or Bermuda Holdings in respect thereof) so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Issuer shall have one or more Paying Agents for the Senior
Notes, it will, at least one Business Day before such due date of the principal
of and any premium and interest on the Senior Notes (and any Additional Amounts
payable by the Issuer or Bermuda Holdings in respect thereof), deposit with a
Paying Agent a sum in same day funds (or New York Clearing House funds if such
deposit is made prior to the date on which such deposit is required to be
28
made) sufficient to pay the principal and any premium and interest to become due
on the Senior Notes (and any Additional Amounts payable by the Issuer or Bermuda
Holdings in respect thereof), such sum to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest on the Senior Notes
and (unless such Paying Agent is the Trustee) the Issuer will promptly notify
the Trustee of such action or any failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of the principal of and any
premium and interest on the Senior Notes (and any Additional Amounts payable by
the Issuer or Bermuda Holdings in respect thereof) in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Issuer or Bermuda
Holdings (or any other obligor upon the Senior Notes) in the making of any
payment of principal and any premium and interest on the Senior Notes (and any
Additional Amounts payable by the Issuer or Bermuda Holdings in respect
thereof);
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and obligations of
such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by an order of
the Issuer direct any Paying Agent to pay, to the Trustee all sums held in trust
by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Issuer or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuer, in trust for the payment of the principal of and any premium and
interest on the Senior Notes (and any Additional Amounts payable by the Issuer
or
29
Bermuda Holdings in respect thereof) and remaining unclaimed for two years after
such principal and any premium and interest on the Senior Notes (and any
Additional Amounts payable by the Issuer or Bermuda Holdings in respect thereof)
has become due and payable shall be paid to the Issuer or Bermuda Holdings upon
Request by the Issuer or Bermuda Holdings, as the case may be; and the Holder of
such Senior Note shall thereafter, as an unsecured general creditor, look only
to the Issuer or Bermuda Holdings for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Issuer as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer cause to be published once, in The
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer or
Bermuda Holdings.
SECTION 2.05. Senior Note Holder Lists. The Trustee, or such other person
designated by the Issuer, shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of Definitive Senior Notes, if any (the "SENIOR NOTE REGISTER"). If the
Trustee is not the Senior Note Registrar, the Issuer or Bermuda Holdings shall
furnish to the Trustee, in writing on or before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of Definitive Senior Notes, if any.
SECTION 2.06. Transfer and Exchange. The Global Notes shall be exchanged
by the Issuer (with authentication by the Trustee) for one or more Definitive
Senior Notes, if (i) the Custodian notifies the Issuer, Bermuda Holdings and the
Trustee that it is unwilling or unable to continue as Custodian and no successor
Custodian has been appointed by the Issuer within 90 days of such notification,
(ii) the Depositary notifies the Issuer, Bermuda Holdings and the Trustee that
it is unwilling or unable to continue as Depositary and no successor Depositary
has been appointed by the Issuer or Bermuda Holdings within 90 days of such
notification, (iii) DTC notifies the Issuer, Bermuda Holdings and the Depositary
that it is unwilling or unable to continue as holder with respect to the Global
Receipts or if at any time it ceases to be a clearing agency under the Exchange
Act and, in either case, a successor to DTC registered as a clearing agency
under the Exchange Act is not appointed by the Issuer or Bermuda Holdings within
90 days of such notification, (iv) the Issuer or Bermuda Holdings determines
that Definitive Senior Notes shall be issued, or (v) the Holder requests the
issuance of Definitive Senior Notes after the occurrence of an Event of
30
Default; provided, however, that no Regulation S Definitive Senior Note may be
issued prior to June 28, 1998.
Members of, or participants in, the DTC ("AGENT MEMBERS") shall have no
rights under this Indenture with respect to any Global Receipt held on their
behalf by the Depositary, or the Trustee as its custodian, or under the Global
Receipt, and the Depositary may be treated by the Issuer, Bermuda Holdings, the
Trustee and any agent of the Issuer, Bermuda Holdings, or the Trustee as the
absolute owner of such Global Receipt for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, Bermuda
Holdings, the Trustee or any agent of the Issuer, Bermuda Holdings or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Senior Note.
Whenever all of a Global Note is exchanged for one or more Definitive
Senior Notes, such Global Note shall be surrendered by the Holder thereof to the
Trustee for cancellation. Whenever a part of the Global Notes is exchanged for
one or more Definitive Senior Notes (which shall be in denominations of $1,000
or integral multiples thereof), the Global Note shall be surrendered by the
Holder thereof to the Trustee who shall cause an adjustment to be made to such
Global Note such that the principal amount of such Global Notes will be equal to
the portion of such Global Notes not exchanged and shall thereafter return such
Global Notes to such Holder. Definitive Senior Notes issued in exchange for the
Global Notes or any portion thereof shall be registered in such names as the
Depositary shall instruct the Trustee based on the instructions of DTC, as
requested by the Issuer. The Global Notes may not be exchanged other than as
provided in this Section 2.06.
Definitive Senior Notes shall be transferable only upon the surrender of a
Definitive Senior Note for registration of transfer. When a Definitive Senior
Note is presented to the Senior Note Registrar or a co-registrar with a request
to register a transfer, the Senior Note Registrar shall register the transfer as
requested if its requirements for such transfers are met. When Definitive Senior
Notes are presented to the Senior Note Registrar or a co-registrar with a
request to exchange them for an equal principal amount of Definitive Senior
Notes of other denominations, the Senior Note Registrar shall make the exchange
as requested if the same requirements are met. To permit registration of
transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate Definitive Senior Notes at the Senior Note Registrar's or co-
registrar's request.
31
The Holder of the Global Note may increase the principal amount of the
Global Note held by it by surrendering any Definitive Senior Note registered in
its name to the Senior Note Registrar for cancellation, provided that no
Definitive Senior Note shall be so surrendered during the period beginning on
the Record Date and ending on the corresponding Interest Payment Date. Upon
surrender of such Definitive Senior Note, the Senior Note Registrar shall
forward such Definitive Senior Note to the Trustee for cancellation and the
Trustee shall cause an adjustment to be made to such Global Note to increase the
principal amount at maturity of such Global Note by an amount equal to the
principal amount at maturity of the Definitive Senior Note surrendered for
cancellation.
The Issuer shall not be required to make and the Senior Note Registrar need
not register transfers or exchanges of Definitive Senior Notes selected for
redemption (except, in the case of Definitive Senior Notes to be redeemed in
part, the portion thereof not to be redeemed) or any Definitive Senior Notes for
a period of 15 days before a selection of Definitive Senior Notes to be
redeemed.
Prior to the due presentation for registration of transfer of any
Definitive Senior Note, the Issuer, the Trustee, the Paying Agent, the Senior
Note Registrar or any co-registrar shall deem and treat the person in whose name
a Definitive Senior Note is registered as the absolute owner of such Definitive
Senior Note for the purpose of receiving payment of principal of and interest on
such Definitive Senior Note and for all other purposes whatsoever, whether or
not such Definitive Senior Note is overdue, and none of the Issuer, the Trustee,
the Paying Agent, the Senior Note Registrar or any co-registrar shall be
affected by notice to the contrary.
The Issuer may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section 2.06.
All Senior Notes issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Senior Notes surrendered upon such transfer
or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Definitive Senior
Note is surrendered to the Senior Note Registrar, if a mutilated Global Note is
surrendered to the Issuer, or if the Holder of a Senior Note claims that the
Senior Note has been lost, destroyed or wrongfully taken, the Issuer shall
issue, and the Trustee shall authenticate, a replacement Senior Note in such
form as the Senior Note mutilated, lost, destroyed or wrongfully taken, if the
Holder satisfies any reasonable requirements of the Trustee, the Senior Note
Registrar or the Issuer. If
32
required by the Trustee, the Senior Note Registrar or the Issuer, such Holder
shall furnish an indemnity bond sufficient in the judgment of the Issuer, the
Senior Note Registrar and the Trustee to protect the Issuer, Bermuda Holdings,
the Trustee, the Paying Agent, the Senior Note Registrar and any co-registrar
from any loss which any of them may suffer if a Security is replaced. The
Issuer, the Senior Note Registrar and the Trustee may charge the Holder for
their expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the Issuer.
SECTION 2.08. Outstanding Securities. If a Senior Note is replaced
pursuant to Section 2.07 hereof, it ceases to be Outstanding unless the Trustee
and the Issuer receive proof satisfactory to them that the replaced Senior Note
is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date, money sufficient to pay all
principal and interest payable on that date with respect to the Senior Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date such Senior Notes (or portions thereof) cease to be outstanding
and interest on them ceases to accrue, as the case may be.
SECTION 2.09. Temporary Senior Notes. Until Definitive Senior Notes are
ready for delivery, the Issuer and Bermuda Holdings may prepare and the Trustee
shall authenticate temporary Senior Notes. Temporary Senior Notes shall be
substantially in the form of Definitive Senior Notes but may have variations
that the Issuer and Bermuda Holdings consider appropriate for temporary Senior
Notes. Without unreasonable delay, the Issuer and Bermuda Holdings shall prepare
and the Trustee shall authenticate Definitive Senior Notes and deliver them in
exchange for temporary Senior Notes.
SECTION 2.10. Cancellation. The Issuer at any time may deliver Senior
Notes to the Trustee for cancellation. The Senior Notes Registrar and the Paying
Agent shall forward to the Trustee any Senior Notes surrendered to them for
registration of transfer, exchange, purchase or payment. The Trustee (and no one
else) shall cancel all Senior Notes surrendered for registration of transfer,
exchange, purchase, payment or cancellation and shall dispose of cancelled
Senior Notes as the Issuer directs. The Issuer may not issue new Senior Notes to
replace Senior Notes it has redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Senior Notes in place of
cancelled Senior Notes other than pursuant to the terms of this Indenture.
33
SECTION 2.11. Interest, Defaulted Interest. Interest on the Senior Notes
shall accrue from May 18, 1998 at the rate set forth in Exhibit A, Exhibit B and
Exhibit C. If the Issuer defaults in a payment of interest on the Senior Notes,
the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) in any lawful manner. The Issuer may pay the
defaulted interest in the case of a Global Note, to the Trustee, which shall, in
accordance with Section 3.01 of the Deposit and Custody Agreement, distribute
such payments, on behalf of the Custodian and the Depositary to DTC or its
nominee, and in the case of any Definitive Senior Note, to the Holder of such
Definitive Senior Note on a subsequent Special Record Date. The Issuer shall fix
or cause to be fixed any such Special Record Date and payment date and shall
promptly mail to each holder of Senior Notes and the Trustee a notice that
states the special record date, if any, the payment date and the amount of
defaulted interest to be paid.
The Issuer may make payment of any defaulted interest in any other lawful
manner not inconsistent with the requirements (if applicable) of any securities
exchange on which the Senior Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Issuer to the Trustee
of the proposed payment pursuant to this paragraph, such manner of payment shall
be deemed practicable by the Trustee.
SECTION 2.12. Special Transfer Provisions. Unless and until a Senior Note
is exchanged for an Exchange Note in connection with an effective Exchange
Registration pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Restricted Definitive Senior
Note or an interest in a Restricted Global Note to a QIB (excluding Non-U.S.
Persons):
(i) If the Senior Note to be transferred consists of (x) a
Restricted Definitive Senior Note, the Registrar shall register the
transfer if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Senior Note stating, or has
otherwise advised the Issuer and the Registrar in writing, that the sale
has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Senior Note stating, or has otherwise advised the Issuer and the Registrar
in writing, that it is purchasing the Senior Note for its own account or an
account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuer and
Bermuda Holdings
34
as it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (y) an interest in a Restricted
Global Note, the transfer of such interest may be effected only through the
book entry system maintained by the DTC.
(ii) If the proposed transferee is an Agent Member, and the Senior
Note to be transferred consists of Restricted Definitive Senior Notes, upon
receipt by the Registrar of the documents referred to in clause (i) and
instructions given in accordance with DTC's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Restricted Global Note in an amount
equal to the principal amount of the Restricted Definitive Senior Note to
be transferred and the Trustee shall cancel the Restricted Definitive
Senior Note so transferred.
(b) Transfers of Interests in the Regulation S Global Note prior to June
28, 1998. The following provisions shall apply with respect to registration of
any proposed transfer of interests in the Regulation S Global Note prior to June
28, 1998:
(i) The Registrar shall register the transfer of any interest in the
Regulation S Global Note prior to June 28, 1998 (x) if the proposed
transferee is a Non-U.S. Person and the proposed transferor has delivered
to the Issuer a certificate substantially in the form of Exhibit E hereto
or (y) if the proposed transferee is a QIB and the proposed transferor has
advised the Issuer and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who has
advised the Issuer and the Registrar in writing, that it is purchasing the
Senior Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance of Rule 144A and acknowledges that it has received
such information regarding the Issuer and Bermuda Holdings as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A. The Registrar shall not be responsible for transfers
within a Global Note in connection with which the principal amount of such
Global Note is not being increased or decreased.
35
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause(i)(y) above and
instructions given in accordance with DTC's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Restricted Global Note, in an
amount equal to the principal amount of the Regulation S Global Note to be
transferred, and the Trustee shall decrease the amount of the Regulation S
Global Note in a like amount.
(c) Transfers of Interests in the Regulation S Global Note or Regulation S
Definitive Senior Notes to U.S. Persons after June 28, 1998. The following
provision shall apply with respect to any transfer of interests in the
Regulation S Global Note or Regulation S Definitive Senior Notes to U.S. Persons
after June 28, 1998: The Registrar shall register the transfer of any such
Senior Note without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of Senior Notes to a Non-U.S. Person:
(i) Prior to June 28, 1998, the Registrar shall register any pro
posed transfer of a Senior Note to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit E hereto from the proposed
transferor.
(ii) On and after June 28, 1998, the Registrar shall register any
proposed transfer to any Non-U.S. Person (x) if the Senior Note to be
transferred is a Restricted Definitive Senior Note or an interest in the
Restricted Global Note, upon receipt of a certificate substantially in the
form of Exhibit E from the proposed transferor or (y) if the Senior Note to
be transferred is a Regulation S Definitive Senior Note or an interest in
the Regulation S Global Note, without requiring any additional
certification. The Registrar shall not be responsible for any transfers
within a Global Note in connection with which the principal amount of such
Global Note is not being increased or decreased.
(iii) (A) If the proposed transferor is an Agent Member holding a
beneficial interest in the Restricted Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with DTC's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of the Restricted Global Note in an amount equal to
the principal amount of the beneficial interest in the Restricted Global
36
Note to be transferred and (B) if the proposed transferee is an Agent
Member, upon receipt by the Registrar of instructions given in accordance
with DTC's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the Regulation S Global Note in an amount equal to the principal amount of
the Restricted Definitive Senior Note or the Restricted Global Note, as the
case may be, to be transferred, and the Trustee shall cancel the Definitive
Senior Note, if any, so transferred or decrease the amount of the
Restricted Global Note, as the case may be,
(e) Private Placement Legend. Upon the transfer, exchange or replacement of
Senior Notes not bearing the Private Placement Legend, the Registrar shall
deliver Senior Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Senior Notes bearing the Private Placement
Legend, other than in connection with the exchange of Exchange Notes for Senior
Notes, the Registrar shall deliver only Senior Notes that bear the Private
Placement Legend unless either (i) the circumstances contemplated by paragraph
(d)(ii) of this Section 2.12 exists or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Senior Note bearing the Private
Placement Legend, each Holder of such a Senior Note acknowledges the
restrictions on transfer of such Senior Note set forth in this Indenture and in
the Private Placement Legend and agrees that it will transfer such Senior Note,
only as provided in this Indenture. The Registrar shall not register a transfer
of any Senior Note unless such transfer complies with the restrictions on
transfer of such Senior Note set forth in this Indenture. In connection with any
transfer of Senior Notes, each Holder agrees by its acceptance of the Senior
Notes to furnish the Registrar or the Issuer such certifications, legal opinions
or other information as the Issuer may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
the Registrar shall not be required to determine (but may rely on a
determination made by the Issuer with respect to) the sufficiency of any such
certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.06 or this Section 2.12 in
accordance with its customary procedures. The Issuer shall have the right to
inspect and make copies of all such letters, notices or other written
37
communications at any reasonable time upon the giving of reasonable notice to
the Registrar.
In connection with any transfer of Senior Notes, the Trustee, the Registrar
and the Issuer or Bermuda Holdings shall be entitled to receive, shall be under
no duty to inquire into, may conclusively presume the correctness of, and shall
be fully protected in relying upon the certificate, opinions and other
information referred to herein (or in the forms provided herein, attached hereto
or to the Senior Notes, or otherwise) received from any Holder and any
transferee of any Senior Notes regarding the validity, legality and due
authorization of any such transfer, the eligibility of the transferee to receive
such Senior Notes and any other facts and circumstances related to such
transfer.
SECTION 2.13. CUSIP and CINS Numbers. The Issuer in issuing the Senior
Notes may use "CUSIP" and "CINS" numbers (if then generally in use), and the
Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices
of redemption or exchange as a convenience to holders; provided that any such
notice shall state that no representation is made as the correctness of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Senior Notes.
ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.01. Satisfaction and Discharge of Indenture. This Indenture
shall, upon request of the Issuer and Bermuda Holdings, cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Senior Notes herein expressly provided for) and the Trustee, on demand of and at
the expense of the Issuer and Bermuda Holdings, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(a) either:
(i) all Senior Notes theretofore authenticated and delivered (other
than (A) Senior Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.07 and (B) Senior Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer or Bermuda Holdings and
thereafter repaid to the Issuer or Bermuda Holdings or discharged from
38
such trust, as provided in Section 2.04) have been delivered to the Trustee
for cancellation; or
(ii) all such Senior Notes not theretofore delivered to the Trustee
for cancellation,
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within
one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Issuer,
and the Issuer or Bermuda Holdings, in the case of Section 3.01(a)(ii)(A),
Section 3.01(a)(ii)(B) or Section 3.01(a)(ii)(C) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose an amount of money or U.S. Government Obligations sufficient to pay
and discharge the entire indebtedness on such Senior Notes not theretofore
delivered to the Trustee for cancellation, for principal and any premium and
interest (and any Additional Amounts payable by the Issuer or Bermuda Holdings
in respect thereof) to the date of such deposit (in the case of Senior Notes
which have become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(b) the Issuer and Bermuda Holdings have paid or caused to be paid all
other sums payable hereunder by the Issuer and Bermuda Holdings;
(c) such satisfaction and discharge shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Issuer or Bermuda Holdings is a
party or by which the Issuer or Bermuda Holdings is bound; and
(d) the Issuer and Bermuda Holdings have each delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel stating that (1) all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with and (2) such satisfaction and discharge will
not result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Issuer or
Bermuda Holdings, as the case may be, is a party or by which the Issuer or
Bermuda Holdings, as the case may be, is bound.
39
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 5.06 and, if money shall
have been deposited with the Trustee pursuant to this Section 3.01, the
obligations of the Trustee under Sections 2.04 and 3.02 shall survive.
SECTION 3.02. Application of Trust Money. Subject to the provisions of
Section 2.04, all money deposited with the Trustee pursuant to Section 3.01
shall be held in trust and applied by it, in accordance with the provisions of
the Senior Notes and this Indenture, to the payment, either directly or through
any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal of and any
premium and interest on the Senior Notes (and any Additional Amounts payable by
the Issuer or Bermuda Holdings in respect thereof) for whose payment such money
has been deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 3.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuer's and Bermuda Holdings' obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 3.01; provided that if the Issuer or Bermuda Holdings has made any
payment of principal of, and any premium and interest on, any Senior Notes (and
any Additional Amounts payable by the Issuer or Bermuda Holdings in respect
thereof) because of the reinstatement of its obligations, the Issuer or Bermuda
Holdings shall be subrogated to the rights of the Holders of such Senior Notes
to receive such payment for the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 4
DEFAULTS AND REMEDIES
SECTION 4.01. Events of Default. "EVENT OF DEFAULT," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether or not it shall be voluntary or involuntary or be
effected by the operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation or any administrative or governmental
body):
(a) default in the payment of interest on any Senior Note when the same
becomes due and payable and the continuance of such default for a period of 30
days; or
40
(b) default in the payment of the principal of and any premium on any
Senior Note at its Maturity, upon acceleration, optional redemption, required
purchase or otherwise; or
(c) default in the performance, or breach, of any covenant or agreement
of the Issuer or Bermuda Holdings hereunder (other than a default in the
performance, or breach, of a covenant or agreement that is specifically dealt
with in clauses (a), (b) and (h) in this Section 4.01), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Issuer or Bermuda Holdings, as the case may
be, by the Trustee or to the Issuer or Bermuda Holdings, as the case may be, and
the Trustee by the holders of at least 25% in principal amount of the
Outstanding Senior Notes, a written notice specifying such default or breach and
stating that such notice is a "NOTICE OF DEFAULT" hereunder; or
(d) (1) an event of default shall have occurred under any mortgage,
bond, indenture, loan agreement or other document evidencing any issue of
Indebtedness of Bermuda Holdings or any Restricted Subsidiary for money borrowed
(or the payment of which is guaranteed by Bermuda Holdings or any of its
Restricted Subsidiaries), which issue has an aggregate outstanding principal
amount of not less than $10,000,000, and such default shall have resulted in
such Indebtedness becoming, whether by declaration or otherwise, due and payable
prior to the date on which it would otherwise become due and payable or (2) a
default in any payment when due at final Stated Maturity of any such
Indebtedness outstanding in an aggregate principal amount of not less than
$10,000,000 and, in each case, 10 Business Days shall have elapsed after such
event during which period such event shall not have been cured or rescinded or
such Indebtedness shall not have been satisfied; or
(e) final judgments or orders are rendered against Bermuda Holdings, the
Issuer or any Restricted Subsidiary by a court or regulatory agency of competent
jurisdiction which require the payment in money, either individually or in an
aggregate amount, that is more than $10,000,000 (other than any judgment to the
extent a reputable non-affiliated insurance company has accepted liability) and
such judgment or order shall not be discharged and either (1) any creditor shall
have commenced an enforcement proceeding upon such judgment or order, which
enforcement proceeding shall have remained unstayed for a period of 10 days, or
(2) a period of 60 days during which a stay of enforcement shall not be in
effect shall have elapsed following the date on which any period for appeal has
expired; or
41
(f) a decree or order is entered by a court having jurisdiction (1) for
relief in respect of the Issuer, Bermuda Holdings or any Principal Insurance
Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy
Code or any other federal or state bankruptcy, insolvency, reorganization or
similar law or (2) adjudging the Issuer, Bermuda Holdings or any Principal
Insurance Subsidiary bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Issuer, Bermuda
Holdings or any Principal Insurance Subsidiary under the Federal Bankruptcy Code
or any other applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Issuer, Bermuda Holdings or any Principal Insurance Subsidiary
or of any substantial part of any of their properties, or ordering the winding
up or liquidation of any of their affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or
(g) the Issuer, Bermuda Holdings or any Principal Insurance Subsidiary
institutes a voluntary case or proceeding under the Federal Bankruptcy Code or
any other applicable federal or state law or any other case or proceedings to be
adjudicated bankrupt or insolvent, or the Issuer, Bermuda Holdings or any
Principal Insurance Subsidiary consents to the entry of a decree or order for
relief in respect of the Issuer, Bermuda Holdings or any Principal Insurance
Subsidiary in any involuntary case or proceeding under the Federal Bankruptcy
Code or any other applicable federal or state law or to the institution of
bankruptcy or insolvency proceedings against the Issuer, Bermuda Holdings or any
Principal Insurance Subsidiary, or the Issuer, Bermuda Holdings or any Principal
Insurance Subsidiary files a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Code or any other
applicable federal or state law, or consents to the filing of any such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of any
of the Issuer, Bermuda Holdings or any Principal Insurance Subsidiary or of any
substantial part of its property, or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts generally as they
become due or takes corporate action in furtherance of any such action; or
(h) default in the performance or breach of the provisions of Article 7.
SECTION 4.02 Acceleration of Maturity; Rescission. If an Event of Default
(other than an Event of Default specified in Section 4.01(f) or Section 4.01(g)
occurs and is continuing, the Trustee or the Holders of at least 25% of the
principal amount of the Outstanding Senior Notes, by written notice to the
Issuer (and to the Trustee if such notice is given by the Holders), may, and the
Trustee at the request of such Holders shall, declare all unpaid principal of,
and any premium
42
and accrued interest on, all the Senior Notes (and any Additional Amounts
payable in respect thereof) to be due and payable immediately. Notwithstanding
the foregoing, in the event of an Event of Default specified in Section 4.01(f)
-------
or Section 4.01(g), the amounts described above shall by such fact itself become
-------
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
After a declaration of acceleration, but before a judgment or decree for
payment of the money due has been obtained by the Trustee, the Holders of at
least a majority in aggregate principal amount of the Outstanding Senior Notes,
by written notice to the Issuer and the Trustee, may annul such declaration if
(a) the Issuer or Bermuda Holdings has paid or deposited with the Trustee a sum
sufficient to pay (1) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, (2) all overdue interest on all Senior
Notes, (3) the principal of and premium, if any, on any Senior Notes which have
become due and otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Senior Notes, and (4) to the extent that
payment of such interest is lawful, interest upon overdue interest at the rate
borne by the Senior Notes; and (b) all Events of Default, other than the non-
payment of principal of the Senior Notes which have become due solely by such
declaration of acceleration, have been waived as provided in Section 4.13 or
----
cured. No such recision shall affect any subsequent default or impair any right
consequent thereon.
SECTION 4.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. Each of the Issuer and Bermuda Holdings covenants that if:
(a) default is made in the payment of any interest on any Senior Note when
such interest becomes due and payable and such default continues for a period of
30 days, or
(b) default is made in the payment of the principal of and any premium on
any Senior Note at the Maturity thereof,
the Issuer or Bermuda Holdings will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Senior Notes, the whole amount then due and
payable on such Senior Notes for principal and interest (and any Additional
Amounts payable by the Issuer or Bermuda Holdings in respect thereof) and, to
the extent that payment of such interest shall be legally enforceable, interest
on overdue installments of interest at the rate borne by the Senior Notes; and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
43
If the Issuer or Bermuda Holdings fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Issuer, Bermuda Holdings or any other obligor upon
the Senior Notes or the Guarantee and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Issuer,
Bermuda Holdings or any other obligor upon the Senior Notes or the Guarantee,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture by such appropriate private or judicial proceedings
as the Trustee shall deem most effectual to protect and enforce such rights.
SECTION 4.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer, Bermuda Holdings or any other obligor upon the Senior Notes or the
Guarantee or the property of the Issuer, Bermuda Holdings or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Senior Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Issuer or Bermuda Holdings for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and any
premium and interest (and any Additional Amounts payable by the Issuer or
Bermuda Holdings in respect thereof) owing and unpaid in respect of the Senior
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and
44
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 5.06.
----
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any proposal,
plan of reorganization, arrangement, adjustment or composition or other similar
arrangement affecting the Senior Notes or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 4.05. Trustee May Enforce Claims Without Possession of Senior
Notes. All rights of action and claims under this Indenture or the Senior Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Senior Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name and as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Senior Notes in respect of which such
judgment has been recovered.
SECTION 4.06. Application of Money Collected. Any money, securities or
other property collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
and interest (and any Additional Amounts payable by the Issuer or Bermuda
Holdings in respect thereof), upon presentation of the Senior Notes and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 5.06;
----
SECOND: To the payment of the amounts then due and unpaid
upon the Senior Notes for principal or any premium and interest
(and any Additional Amounts payable by the Issuer or Bermuda
Holdings in respect thereof), in respect of which or for the
benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due
and payable on such Senior Notes for principal or any premium and
interest (and any Additional Amounts payable by the Issuer or
Bermuda Holdings in respect thereof); and
45
THIRD: The balance, if any, to the Issuer or Bermuda Holdings.
SECTION 4.07. Limitation of Suits. No Holder of any Senior Notes shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or the Senior Notes, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Senior Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in the Trustee's own
name;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Senior Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture except in the manner provided in
this Indenture and for the equal and ratable benefit of all the Holders.
SECTION 4.08. Unconditional Right of Holders to Receive Principal Premium
and Interest. Notwithstanding any other provision in this Indenture or any
provision of the Senior Notes, the Holder of any Senior Note shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and any premium and (subject to Section 2.11) interest on such Senior Note
(and any Additional Amounts payable by the Issuer or Bermuda Holdings in respect
thereof) on the respective due dates expressed in such Senior Note (or, in the
case of redemption, on the Redemption Date) and to institute suit for the
enforcement
46
of any such payment, and such rights shall not be impaired or affected without
the consent of such Holder.
SECTION 4.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case the Issuer, Bermuda Holdings, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 4.10. Rights and Remedies Cumulative. Except as provided in
Section 2.07, no right or remedy herein conferred upon or reserved to the
----
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 4.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Senior Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article 4 or by law to the Trustee or to
-
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 4.12. Control by Holders. The Holders of not less than a majority
in principal amount of the Outstanding Senior Notes shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture or expose the Trustee to personal liability, and
(b) subject to the provisions of Section 315 of the Trust Indenture Act,
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
47
SECTION 4.13. Waiver of Defaults. The Holders of not less than a majority
in aggregate principal amount of the Outstanding Senior Notes by notice to the
Trustee may on behalf of the Holders of all the Senior Notes waive any existing
or past Default or Event of Default hereunder and its consequences, except a
Default or Event of Default:
(a) in the payment of the principal of and any premium or interest on any
Senior Note,
(b) in respect of a covenant or provision hereof which under Article 8
-
cannot be modified or amended without the consent of the Holder of each
Outstanding Senior Note affected, or
(c) in respect of a covenant or provision hereof which under Article 8
-
cannot be modified or amended without the consent of the Holders of a greater
percentage in principal amount of, or all of, the Outstanding Senior Notes.
The Holders of not less than the percentage in principal amount of Outstanding
Senior Notes specified in Article 8 may on behalf of the Holders of all the
-
Senior Notes waive any past Default or Event of Default hereunder and its
consequences arising under a covenant or provision specified in Section 4.13(b).
-------
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 4.14. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Senior Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant, in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 4.14 shall not apply to
----
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Senior Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or any premium or interest on any
Senior Note on or after the respective Stated Maturities expressed in such
Senior Note (or, in the case of redemption, on or after the Redemption Date).
48
ARTICLE 5
THE TRUSTEE
SECTION 5.01. Notice of Events of Default. Within 60 days after the
occurrence of any Event of Default, the Trustee shall transmit by mail to (a)
all Holders of Definitive Senior Notes, as their names and addresses appear in
the Senior Note Register or at the addresses provided by Holders in writing to
the Trustee, and (b) the Holder of the Global Note(s), at Chase Manhattan Bank
Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: Corporate Trust
Department, notice of such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of or any
premium and interest on any Senior Note (and any Additional Amounts payable by
the Issuer or Bermuda Holdings in respect thereof), the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
SECTION 5.02. Certain Rights of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the period when an Event of Default is continuing:
(i) the Trustee is required to perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations
shall be implied in this Indenture that are adverse to the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; provided
that the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this Section 5.02(c) does not limit the effect of Section
-------
5.02(b);
-------
49
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 4.12; and
----
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 5.02.
----
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense, including such reasonable advances as may be requested by
the Trustee.
(f) Subject to the foregoing Sections 5.02(a), 5.02(b), 5.02(c), 5.02(d)
------- ------- ------- -------
and 5.02(e):
-------
(i) The Trustee may rely and shall be protected in acting or in
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document. Any request or
direction of the Issuer or Bermuda Holdings mentioned herein shall be
sufficiently evidenced by a Request or Order of the Issuer or Bermuda
Holdings and any resolution by the Board of Directors of the Issuer or
Bermuda Holdings may be sufficiently evidenced by a Board Resolution.
(ii) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. In addition, in
determining the compliance of the Issuer or Bermuda Holdings with the
financial covenants set forth herein, the Trustee may rely on the
certificate delivered to the Trustee pursuant to Section 9.18(a).
-------
50
(iii) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(iv) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers.
(v) The Trustee may consult with counsel, accountants or other
experts and any advice of such counsel, accountants or other experts shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good faith and in
accordance with such advice.
(vi) The Trustee shall not be deemed to have notice of any Default
hereunder, except for Events of Default described in Paragraphs (a), (b) or
(c) of Section 4.01 (only to the extent that the Trustee acts as the Paying
----
Agent), unless the Trustee shall be specifically notified by a writing
delivered to it of such Default by the Issuer, Bermuda Holdings, the Paying
Agent (to the extent the Trustee is not acting as the Paying Agent) or by
the Holders of at least 25% in aggregate principal amount of the
Outstanding Senior Notes, and in the absence of such notice so delivered,
the Trustee may conclusively assume that there is no Default except as
aforesaid.
SECTION 5.03. Not Responsible for Recitals or Issuance of Senior Notes.
The recitals contained herein and in the Senior Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Issuer
and Bermuda Holdings, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or the Senior Notes. The Trustee shall not be
accountable for the use or application by the Issuer or Bermuda Holdings of
Senior Notes or the proceeds thereof, except that the Trustee represents that it
is duly authorized to execute and deliver this Indenture, authenticate the
Senior Notes and perform its obligations hereunder. The Trustee agrees that at
the time of the filing of a Statement of Eligibility and Qualification on Form
T-1 ("FORM T-1"), the Trustee shall deliver an officer's certificate stating
that the information supplied to the Issuer and Bermuda Holdings in connection
with the filing of the Exchange Registration Statement is true and accurate,
subject to the qualifications to be set forth therein.
SECTION 5.04. Trustee and Agents May Hold Senior Notes; collections; etc.
The Trustee and any Paying Agent, Senior Note Registrar or other agent of
51
the Issuer or Bermuda Holdings, in its individual or any other capacity, may
become the owner or pledgee of Senior Notes with the same rights it would have
if it were not the Trustee, Paying Agent, Senior Note Registrar or such other
agent and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may
otherwise deal with the Issuer or Bermuda Holdings and receive, collect, hold
and retain collections from the Issuer or Bermuda Holdings with the same rights
it would have if it were not Trustee, Paying Agent, Senior Note Registrar or
such other agent.
SECTION 5.05. Money Held in Trust. All moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust hereunder for
the purposes for which they were received and need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Issuer or Bermuda Holdings.
SECTION 5.06. Compensation and Reimbursement. The Issuer and Bermuda
Holdings covenant and agree:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee and each of its officers, directors,
employees, agents and counsel for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on their part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The obligation of the Issuer and Bermuda Holdings under this Section 5.06
----
to compensate the Trustee and to pay and reimburse the Trustee for such
expenses, disbursements and advances shall constitute additional Indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture.
52
As security for the performance of the obligation of the Issuer and Bermuda
Holdings under this Section 5.06, the Trustee shall have a claim prior to the
----
Senior Notes upon all money, securities or other property held or collected by
the Trustee as such and the Senior Notes are hereby subordinated to such claim.
If the Trustee incurs expenses or renders services after an Event of
Default specified in Section 4.01(f) or Section 4.01(g) occurs, the expenses and
------- -------
the compensation for the services are intended to constitute expenses of
administration under the Federal Bankruptcy Code and any other applicable
federal or state bankruptcy law.
SECTION 5.07. Conflicting Interests. The Trustee shall comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 5.08. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be eligible to act as Trustee under
Section 310(a)(1) of the Trust Indenture Act and which shall have a combined
capital and surplus of at least $50,000,000 and have its Corporate Trust Office
located in The City of New York (or if its Corporate Trust Office shall not be
located in The City of New York, the Issuer shall, pursuant to Section 2.03,
----
maintain an office or agency in The City of New York where the Senior Notes may
be presented or surrendered and notices and demands hereunder may be made or
served) to the extent there is such an institution eligible and willing to
serve. If such corporation publishes reports of condition at least annually
pursuant to law or to the requirements of federal, state, territorial or
District of Columbia supervising or examining authority, then, for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article 5.
-
SECTION 5.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article 5 shall become effective until the acceptance of
-
appointment by the successor Trustee under Section 5.10, at which time the
----
retiring Trustee shall be fully discharged from its obligations hereunder.
(b) The Trustee may resign at any time by giving written notice thereof to
the Issuer. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor Trustee by written instrument executed by authority of the
Board of Directors of the Issuer, a copy of which shall be delivered to the
resigning Trustee and a copy to the successor Trustee. If an instrument of
53
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may, or any Holder who has been a bona fide Holder of a Senior Note for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of a
majority in principal amount of the Outstanding Senior Notes, delivered to the
Trustee and the Issuer.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act after written request therefor by the
Issuer or by any Holder who has been a bona fide Holder of a Senior Note
for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 5.08 and
shall fail to resign after written request therefor by the Issuer or by any
Holder who has been a bona fide Holder of a Senior Note for at least six
months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Issuer by a Board Resolution may remove the Trustee,
or (ii) subject to Section 4.14, the Holder of any Senior Note who has been a
----
bona fide Holder of a Senior Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Issuer,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Senior Notes delivered to the
Issuer and the retiring Trustee, the successor Trustee so appointed shall,
forthwith
54
upon its acceptance of such appointment in accordance with Section 5.10, become
----
the successor Trustee and supersede the successor Trustee appointed by the
Issuer. If no successor Trustee shall have been so appointed by the Issuer or
the Holders of the Senior Notes and so accepted appointment, the Holder of any
Senior Note who has been a bona fide Holder for at least six months may on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first class mail, postage prepaid, (i) to the Holders of
Definitive Senior Notes as their names and addresses appear in the Senior Note
Register, or (ii) to the Holder of the Global Note at Chase Manhattan Bank
Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: Corporate Trust
Department. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 5.10. Acceptance of Appointment of Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; provided, however, that the retiring Trustee shall
continue to be entitled to the benefit of Section 5.06(c); but, on request of
-------
the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Issuer shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article 5.
-
Upon acceptance of appointment by any successor Trustee as provided in this
Section 5.10, the Issuer shall give notice thereof to the Holders of the Senior
----
Notes, by mailing such notice to the Holders of Definitive Senior Notes as their
names and addresses appear on the Senior Note Register, or (b) the Holder of the
Global Note at Chase Manhattan Bank Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: Corporate Trust Department. If the acceptance of
55
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 5.09. If the Issuer fails to give such notice within 10
----
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be given at the expense of the Issuer.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Senior Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Senior Notes so authenticated with the same
effect as if such successor Trustee had itself authenticated such Senior Notes.
SECTION 5.12. Preferential Collection of Claims Against the Issuer or
Bermuda Holdings. If and when the Trustee shall be or become a creditor of the
Issuer or Bermuda Holdings (or any other obligor under the Senior Notes or the
Guarantee), the Trustee shall be subject to the provisions of Section 311(b) of
the Trust Indenture Act regarding the collection of claims against the Issuer or
Bermuda Holdings (or any such other obligor).
ARTICLE 6
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 6.01. Disclosure of Names and Addresses of Holders. Every Holder
of Senior Notes, by receiving and holding the same, agrees with the Issuer,
Bermuda Holdings and the Trustee that neither the Issuer, Bermuda Holdings nor
the Trustee or any agent of either of them shall be held accountable by reason
of the disclosure of any information as to the names and addresses of the
Holders in accordance with Section 312 of the Trust Indenture Act, regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 312 of the Trust Indenture Act.
56
SECTION 6.02. Reports by Trustee. Within 60 days after May 15 of each year
commencing with the first May 15 after the first issuance of Senior Notes, the
Trustee shall transmit by mail to all Holders of Definitive Senior Notes, as
their names and addresses appear in the Senior Note Register, or (b) the Holder
of the Global Note, at Chase Manhattan Bank Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: Corporate Trust Department, as provided in Trust
Indenture Act Section 313(c), a brief report dated as of such May 15 if required
by Trust Indenture Act Section 313(a).
ARTICLE 7
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.01. Bermuda Holdings May Consolidated, Etc., Only on Certain
Terms. After the Issue Date, Bermuda Holdings shall not consolidate with or
merge with or into any other Person, or, directly or indirectly, sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
assets in one or more related transactions to any Person or group of affiliated
Persons unless, at the time and after giving effect thereto:
(a) (i) Bermuda Holdings shall be the continuing corporation, or (ii) the
Person (if other than Bermuda Holdings) formed by such consolidation, or into
which Bermuda Holdings is merged or the Person that acquires by sale,
assignment, transfer, lease, conveyance or other disposition the assets of
Bermuda Holdings, substantially as an entirety (the "SURVIVING ENTITY"), is a
corporation duly organized and validly existing under the laws of the United
States of America, the United Kingdom, Bermuda, the Republic of Ireland,
Barbados, the Channel Islands, the Cayman Islands or any other jurisdiction that
is not materially adverse to the holders of the Senior Notes and shall, in the
case of clause (2), expressly assume, by supplemental indenture hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the Trustee,
all the obligations of Bermuda Holdings under the Guarantee and this Indenture;
(b) immediately before and after such transaction, giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(c) immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth (after giving pro forma effect to such
transaction but not including the effect of any purchase accounting adjustments
or the accrual of deferred tax liabilities resulting from the transaction) of
Bermuda Holdings (or the Surviving Entity if Bermuda Holdings is not the
continuing obligor with respect to the Guarantee under this Indenture) is at
least equal to the
57
Consolidated Net Worth of Bermuda Holdings immediately before such transaction;
(d) if any of the property or assets of Bermuda Holdings would there upon
become subject to any Lien, the outstanding Senior Notes shall be secured
equally and ratably with (or prior to) the obligation or liability secured by
such Lien, unless Bermuda Holdings could create such Lien hereunder without
equally and ratably securing the Senior Notes; and
(e) Bermuda Holdings has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
transfer or lease and such supplemental indenture, if one is required by this
Section 7.01, comply with this Section 7.01 and that all conditions precedent
---- ----
herein provided for relating to such transaction have been complied with.
SECTION 7.02. Successor Substituted. Upon any consolidation or merger or
any sale, assignment, transfer, lease or conveyance or other disposition of all
or substantially all of the assets of Bermuda Holdings in accordance with
Section 7.01, the successor Person formed by such consolidation or into which
----
Bermuda Holdings is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, Bermuda Holdings under this
Indenture with the same effect as if such successor Person had been named as
Bermuda Holdings herein. When a successor assumes all the obligations of its
predecessor under this Indenture and the Senior Notes, the predecessor will be
released from those obligations, provided that in the case of a transfer by
lease, the predecessor corporation shall not be released from the payment of
principal and interest on the Senior Notes.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders, the Issuer and Bermuda Holdings, each when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto in form
satisfactory to the Trustee, for any of the following purposes:
(a) to cure any ambiguity or to correct any provision herein which may be
defective or in consistent with any other provision herein;
58
(b) to provide for the assumption of Bermuda Holding's obligations to
Holders of the Senior Notes in the case of a merger or consolidation;
(c) to secure the Senior Notes pursuant to the requirements of Section
7.01;
----
(d) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act,
as contemplated by Section 8.05 or otherwise;
----
(e) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(f) to make any other change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights of
any Holder under this Indenture or the Senior Notes.
SECTION 8.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Senior Notes (including consents obtained in connection with a
tender offer or exchange offer for the Senior Notes), by Act of such Holders
delivered to the Issuer and the Trustee, the Issuer and Bermuda Holdings, each
when authorized by a Board Resolution, and the Trustee may enter into one or
more indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Indenture
or of waiving or modifying in any manner the rights of the holders under this
Indenture; provided, however, that no such supplemental indenture, amendment or
waiver shall without the consent of the Holder of each Outstanding Senior Note
affected thereby:
(i) change the Stated Maturity or the principal of, or any
installment of interest on, or change the obligation of the Issuer or
Bermuda Holdings to pay any Additional Amount with respect to, any Senior
Note or reduce the principal amount thereof or the rate of interest thereon
or any provision relating to redemption price of Senior Notes or the
periods during which redemption may be effected, or change the coin or
currency in which the principal of any Senior Note or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date); or
(ii) reduce the percentage in principal amount of the Outstanding
Senior Notes, the consent of whose Holders is required for any such
59
supplemental indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture;
or
(iii) modify any of the provisions of this Section 8.02, Section 4.13
---- ----
or Section 9.20, except to increase any such percentage or to provide that
----
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Senior Note affected thereby.
It shall not be necessary for any Act of Holders under this Section 8.02 to
----
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article 8 or the modifications thereby of the trusts created by this
-
Indenture, the Trustee shall be entitled to receive, and (subject to Section
315(a) through 315(d) of the Trust Indenture Act and Section 5.02 hereof) shall
----
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which adversely affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
SECTION 8.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article 8, this Indenture shall be modified in
-
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Senior Notes theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 8.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article 8 shall conform to the requirements
-
of the Trust Indenture Act as then in effect.
SECTION 8.06. Reference in Senior Notes to Supplemental Indentures. Senior
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article 8 may, and shall if required by the Issuer
-
and Bermuda Holdings, bear a notation in form approved by the Issuer and Bermuda
Holdings as to any matter provided for in such supplemental indenture. If the
Issuer and Bermuda Holdings shall so determine, new Senior Notes so modified as
to conform, in the opinion of the Issuer and Bermuda Holdings, to any such
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supplemental indenture may be prepared and executed by the Issuer and shall be
authenticated and delivered by the Trustee in exchange for Outstanding Senior
Notes.
ARTICLE 9
COVENANTS
SECTION 9.01. Payment of Principal, Premium and Interest. The Issuer will
duly and punctually pay the principal of and any premium and interest on the
Senior Notes (and any Additional Amounts payable in respect thereof) in
accordance with the terms of the Senior Notes and this Indenture. Principal and
interest (and any Additional Amounts payable in respect thereof) shall be
considered paid on the date due if the Paying Agent (other than the Issuer)
holds on that date money sufficient to pay all principal and interest (and any
Additional Amounts payable in respect thereof) then due.
The Issuer shall pay interest on overdue principal and, to the extent
lawful, interest on overdue installments of interest, at the rate per annum set
forth in the Senior Notes.
SECTION 9.02. Corporate Existence. Subject to Article 7, each of the
-
Issuer and Bermuda Holdings shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and that of
each Subsidiary of the Issuer and Bermuda Holdings and the corporate rights
(charter and statutory), corporate licenses and corporate franchises of the
Issuer and Bermuda Holdings and its Subsidiaries, except where a failure to do
so, singly or in the aggregate, would not have a material adverse effect upon
the business, prospects, assets, conditions (financial or otherwise) or results
of operations of Bermuda Holdings and its Subsidiaries taken as a whole
determined on a consolidated basis in accordance with GAAP; provided that
neither the Issuer nor Bermuda Holdings shall be required to preserve any such
existence (except of Bermuda Holdings), right, license, or franchise if the
Board of Directors of the Issuer, Bermuda Holdings, or of the Subsidiary
concerned, shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Issuer, Bermuda Holdings or such
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 9.03. Payment of Taxes and Other Claims. Bermuda Holdings will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon it or any Subsidiary or upon the income, profits or
61
property of Bermuda Holdings or any of its Subsidiaries and (b) all material
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a Lien upon the property of Bermuda Holdings or any of its Subsidiaries
that could produce a material adverse effect on the consolidated financial
condition of Bermuda Holdings (in the good faith judgment of management of
Bermuda Holdings); provided, however, that Bermuda Holdings shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and in respect of which
appropriate reserves (in the good faith judgment of management of Bermuda
Holdings) are being maintained in accordance with GAAP.
SECTION 9.04. Maintenance of Properties; Insurance; Books and Records;
Compliance with Law. (a) Bermuda Holdings shall cause all properties owned by or
leased to it or any Subsidiary of Bermuda Holdings and used or useful in the
conduct of its business or the business of such Subsidiary to be maintained and
kept in normal condition, repair and working order, ordinary wear and tear
excepted; provided that nothing in this Section 9.04 shall prevent Bermuda
----
Holdings or any Subsidiary of Bermuda Holdings from discontinuing the use,
operation or maintenance of any of such properties, or disposing of any of them,
if such discontinuance or disposal is, in the judgment of the Board of Directors
of Bermuda Holdings or the Subsidiary concerned, or of any officer (or other
agent employed by Bermuda Holdings or any Subsidiary of Bermuda Holdings) of
Bermuda Holdings or such Subsidiary having managerial responsibility for any
such property, desirable in the conduct of the business of Bermuda Holdings or
any Subsidiary of Bermuda Holdings and if such discontinuance or disposal is not
adverse in any material respect to the Holders of the Senior Notes.
(b) Bermuda Holdings shall provide or cause to be provided, for itself and
any Subsidiaries of Bermuda Holdings, insurance (including appropriate self-
insurance) against loss or damage of the kinds customarily insured against by
corporations similarly situated and owning like properties in the same general
areas in which Bermuda Holdings or such Subsidiaries operate.
(c) Bermuda Holdings shall and shall cause each of its Subsidiaries to
keep proper and true books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and business
of Bermuda Holdings and each Subsidiary of Bermuda Holdings, and reflect on its
financial statements adequate accruals and appropriations to reserves, all in
accordance with GAAP consistently applied to Bermuda Holdings and its
Subsidiaries taken as a whole.
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(d) Bermuda Holdings shall and shall cause each of its Subsidiaries to
comply with all statutes, laws, ordinances or government rules and regulations
to which it is subject, except where a failure to do so, singly or in the
aggregate, is not likely to have a materially adverse effect upon the business,
prospects, assets or condition (financial or otherwise) or results of operations
of Bermuda Holdings and its Subsidiaries taken as a whole.
SECTION 9.05. [Intentionally Omitted]
SECTION 9.06. [Intentionally Omitted]
SECTION 9.07. [Intentionally Omitted]
SECTION 9.08. Liens. Bermuda Holdings will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien securing Indebtedness (other than Permitted Liens) on
any property or asset now owned or hereafter acquired, or on any income or
profits therefrom or assign or convey any right to receive income therefrom,
unless all payments due under the Senior Notes and hereunder are secured on an
equal and ratable basis with (or prior to) the obligations so secured until such
time as such obligations are no longer secured by a Lien.
SECTION 9.09. [Intentionally Omitted]
SECTION 9.10. [Intentionally Omitted]
SECTION 9.11. [Intentionally Omitted]
SECTION 9.12. [Intentionally Omitted]
SECTION 9.13. [Intentionally Omitted]
SECTION 9.14. [Intentionally Omitted]
SECTION 9.15. [Intentionally Omitted]
SECTION 9.16. [Intentionally Omitted]
Section 9.17. Additional Amounts. All payments made by the Issuer under the
Senior Notes, and all payments made by Bermuda Holdings pursuant to the
Guarantee, will be made without deduction or withholding, for or on account of,
any and all present and future taxes, duties, assessments, or governmental
charges of whatever nature unless the deduction or withholding of such taxes,
63
duties, assessments or governmental charges is then required by law. If any
deduction or withholding for or on account of any present or future taxes,
assessments or other governmental charges of the United Kingdom, Bermuda or any
relevant jurisdiction or any political subdivision or taxing authority thereof
or therein (the "RELEVANT JURISDICTION") shall at any time be required in
respect of any amounts to be paid by the Issuer under the Senior Notes or
Bermuda Holdings pursuant to the Guarantee, the Issuer or Bermuda Holdings, as
the case may be, will pay such additional amounts ("ADDITIONAL AMOUNTS") as may
be necessary in order that the net amounts received by a Holder of Senior Notes
after such deduction or withholding shall be not less than the amounts specified
in the Senior Notes to which the Holder of the Senior Notes is entitled;
provided, however, that the Issuer or Bermuda Holdings shall not be required to
make any payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such Holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such Holder, if such holder is an
estate, nominee, trust, partnership or corporation) otherwise than merely by the
holding of the Senior Notes or the receipt of amounts payable in respect of the
Senior Notes, and any Relevant Jurisdiction or such holder being subject to the
jurisdiction of any Relevant Jurisdiction, including, without limitation, such
holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident thereof or being or having
been present or engaged in trade or business therein or having had a permanent
establishment therein or (ii) the presentation of the Senior Notes (where
presentation is required) for payment on a date more than 30 days after the date
on which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later, except to the extent that
the holder would have been entitled to Additional Amounts had the Senior Notes
been presented on the last day of such period of 30 days;
(b) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the Holder of the Senior Notes
or, if different, the beneficial owner of the interest payable on the Senior
Notes with a timely request of the Issuer addressed to such Holder or beneficial
owner to provide information, documents or other evidence concerning the
nationality, residence, identity or connection with the taxing jurisdiction of
such Holder or beneficial owner which is required or imposed by a statute,
treaty, regulation or administrative practice of the taxing jurisdiction as a
precondition to exemption from all or part of such tax, assessment or
governmental charge;
64
(c) payments in respect of Definitive Senior Notes issued at the request
of the Holder (including on or after the occurrence of an Event of Default); or
(d) any combination of items (a), (b) and (c) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, the Senior Notes to any holder who is a
fiduciary or partnership or other than the sole beneficial owner of such payment
to the extent that a beneficiary or settlor with respect to such fiduciary or
member of such partnership or beneficial owner would not have been entitled to
any Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of the Senior Notes.
SECTION 9.18. Statement as to Compliance; Notice of Default; Provision of
Financial Statements. (a) Each of the Issuer and Bermuda Holdings will deliver
to the Trustee, within 120 days after the end of each fiscal year ending after
the date hereof, a certificate of its principal executive officer, principal
financial officer or principal accounting officer stating whether, to such
officer's knowledge, each of the Issuer and Bermuda Holdings, respectively, is
in compliance with all covenants and conditions to be complied with by it under
this Indenture. For purposes of this Section 9.18, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) If a default has occurred and is continuing, or if the Trustee, any
Holder or the trustee for or the holder of any other evidence of Indebtedness of
the Issuer and Bermuda Holdings (other than Indebtedness in the aggregate
principal amount of less than $5,000,000) gives any notice or takes any other
action with respect to a claimed default, the Issuer shall deliver to the
Trustee an Officers' Certificate specifying such Default, notice or other action
within five Business Days of its occurrence.
(c) Bermuda Holdings shall supply without cost to each holder of the
Senior Notes, and file with the Trustee within 15 days after Bermuda Holdings is
required to file the same with the Commission, copies of the annual reports and
quarterly reports and of the information, documents and other reports which
Bermuda Holdings may be required to file with the Commission pursuant to
Sections 13(a), 13(c) or 15(d) of the Exchange Act; and
(d) Whether or not Bermuda Holdings is required to file with the
Commission such reports and other information referred to in Section 9.18(c),
Bermuda Holdings shall file with the Commission and the Trustee such reports and
information and furnish without cost to each Holder of Senior Notes all
65
financial information that would be required to be contained in a filing
referred to in Section 9.18(c). Bermuda Holdings shall also make such reports
available to prospective purchasers of the Senior Notes, securities analysts and
broker-dealers upon their written request. Bermuda Holdings shall also file
with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information,
documents and reports with respect to compliance by Bermuda Holdings with the
conditions and covenants of this Indenture as may be required from time to time
by such rules and regulations.
Section 9.19. Waiver of Stay; Extension of Usury Law. Each of the Issuer
and Bermuda Holdings covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and each of the Issuer and Bermuda
Holdings (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
Section 9.20. Waiver of Certain Covenants Bermuda Holdings or the Issuer
may omit in any particular instance to comply with any covenant or condition set
forth in Sections 9.08 and 9.18 if, before or after the time for such
compliance, the Holders of not less than a majority in aggregate principal
amount of the Senior Notes at the time Outstanding shall, by Act of such
Holders, waive such compliance in such instance with such covenant or condition.
No such waiver shall extend to or affect such covenant or condition except to
the extent so expressly waived, and, until such waiver shall become effective,
the obligations of Bermuda Holdings and the Issuer and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE 10
Redemption of Senior Notes
Section 10.01. Right of Redemption. The Issuer shall have the right to
redeem the Senior Notes, in whole or in part, at any time and from time to time,
subject to the receipt of any consent required under the terms of any
Indebtedness of the Issuer which may be outstanding from time to time.
66
Section 10.02. Applicability of Article. Redemption of Senior Notes at the
election of the Issuer or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article 10.
Section 10.03. Election to Redeem; Notice to Trustee. The election of the
Issuer to redeem any Senior Notes pursuant to Section 10.01 shall be evidenced
by a Board Resolution. In case of such redemption, the Issuer shall, at least 60
days prior to the Redemption Date fixed by it (unless a shorter notice period
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Senior Notes to be redeemed.
Section 10.04. Selection by Trustee of Senior Notes to Be Redeemed. If less
than all of the Senior Notes are to be redeemed, the particular Senior Notes or
portions thereof to be redeemed shall be selected not more than 60 days and not
less than 30 days prior to the Redemption Date by the Trustee, from the
Outstanding Senior Notes not previously called for redemption on a pro rata
basis, by lot or by any other method the Trustee shall deem fair and appropriate
and in compliance with the requirements of such principal national securities
exchange, if any, on which the Senior Notes are listed or, if the Senior Notes
are not so listed, on a pro rata basis, by lot or by any other method the
Trustee shall deem fair and appropriate, provided that the amounts to be
redeemed shall be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Issuer, the Custodian and the Senior
Note Registrar in writing of the Senior Notes selected for redemption and, in
the case of any Senior Notes selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Senior Notes shall relate, in the case
of any Senior Note redeemed or to be redeemed only in part, to the portion of
the principal amount of such Senior Note which has been or is to be redeemed.
Section 10.05. Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Senior Notes to be redeemed at
the Redemption Prices specified in Section 10.09.
All notices of redemption shall state:
(a) the Redemption Date;
67
(b) the Redemption Price including, in connection with an optional
redemption pursuant to Section 10.09, the estimated Make-Whole Amount due in
connection with such redemption (calculated as if the date of such notice were
the date of the prepayment) and setting forth the details of such calculation of
Make-Whole Amount;
(c) if less than all Outstanding Senior Notes are to be redeemed, the
identification (and, if the case of a Senior Note to be redeemed in part, the
principal amount) of the particular Senior Notes to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due and
payable upon each such Senior Note or portion thereof, and that (unless the
Issuer shall default in payment of the Redemption Price) interest thereon shall
cease to accrue on and after said date;
(e) the place or places where such Senior Notes are to be surrendered
for payment of the Redemption Price;
(f) that Senior Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(g) the CUSIP number or numbers, if any, relating to such Senior Notes,
but that no representation is made as to the correctness or accuracy of the
CUSIP number listed in such notice or printed on the Senior Notes and that
reliance may be placed only on the other identification numbers printed on the
Senior Notes;
(h) in the case of a Definitive Senior Note to be redeemed in part, the
principal amount of such Senior Note to be redeemed and that after the
Redemption Date upon surrender of such Definitive Senior Note, a new Definitive
Senior Note or Definitive Senior Notes in the aggregate principal amount equal
to the unredeemed portion thereof will be issued; and
(i) in the case of a Global Note to be redeemed in part, the principal
amount of such Global Note to be redeemed and that after the Redemption Date
upon surrender of such Global Note a new Global Note in principal amount equal
to the unredeemed portion will be issued or an adjustment will be made to the
existing Global Note such that the aggregate principal amount of the Global Note
will equal the unredeemed portion of the Global Note;
Notice of redemption of Senior Notes to be redeemed at the election of the
Issuer shall be given by the Issuer or, at its request, by the Trustee in the
name and at the expense of the Issuer. Failure to give notice or any defect in
the notice to any Holder shall not affect the validity of the notice to any
other Holder.
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Section 10.06. Deposit of Redemption Price. On or prior to any Re
Redemption Date, the Issuer shall deposit with the Trustee or with a Paying
Agent (or, if the Issuer is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04) an amount of money in same-day funds (or
New York Clearing House funds if such deposit is made prior to the applicable
Redemption Date) sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Senior Notes or portions thereof which are to be redeemed on that date.
Section 10.07. Senior Notes Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Senior Notes to be redeemed
shall, subject to the provisions of Section 10.03, on the Redemption Date,
become due and payable at the Redemption Price therein specified and from and
after such date (unless the Issuer shall default in the payment of the
Redemption Price and accrued interest) such Senior Notes shall cease to bear
interest. Upon surrender of any such Senior Note for redemption in accordance
with said notice, such Senior Note shall be paid by the Issuer at the Redemption
Price together with accrued interest to the Redemption Date; provided, however,
that installments of interest on any Definitive Senior Notes whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Definitive Senior Notes, or one or more predecessor Definitive Senior
Notes, registered as such on the relevant Regular Record Dates according to the
terms and the provisions of Section 2.05.
If any Senior Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Redemption Date at the rate
borne by such Senior Note.
Section 10.08. Senior Notes Redeemed in Part. Any Senior Note which is to
be redeemed only in part shall be surrendered at the office or agency of the
Issuer maintained for such purpose pursuant to Section 2.05 (with, if the
Issuer, the Senior Note Registrar or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Issuer, the
Senior Note Registrar or the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing). Upon surrender of a Definitive Senior Note
that is redeemed in part, the Issuer shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Definitive Senior Note without
service charge, a new Definitive Senior Note or Definitive Senior Notes, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Definitive Senior Note so surrendered. Upon surrender of a Global Note that
is redeemed in part, the Paying Agent shall forward the Global Note to the
Trustee who shall
69
reduce the principal amount of such Global Note to an amount equal to the
unredeemed portion of the Global Note surrendered.
Section 10.09. Optional Redemption. (a) The Senior Notes are subject to
redemption at a Redemption Price equal to 100% of the principal amount, together
with accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on relevant Regular Record Dates to receive interest due on an
Interest Payment Date) as provided in the Indenture, plus the Make-Whole Amount,
if any, with respect to such Senior Notes.
Three Business Days prior to such prepayment, the Issuer or Bermuda
Holdings shall give notice to the Quotation Agent requesting the Quotation Agent
to provide a quote of the Comparable Treasury Price and the Quotation Agent
shall provide such quotation to the Issuer on or before one Business Day prior
to such prepayment.
One Business Day prior to such prepayment, the Quotation Agent, the Issuer
or Bermuda Holdings shall give notice to the Indenture Trustee specifying the
calculation of the Make-Whole Amount as of the Redemption Date.
(b) The Senior Notes are not subject to redemption through operation of a
sinking fund.
Section 10.10. Tax Redemption. The Senior Notes may be redeemed at the
option of the Issuer, in whole but not in part, upon not less than 30 nor more
than 60 days' notice, at any time at a redemption price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest to the date fixed for
redemption if (a) the Issuer is required to issue Definitive Senior Notes (other
than upon the request of a holder of Book-Entry Interests following an Event of
Default) after using all reasonable efforts to avoid having to issue such
Definitive Senior Notes and the Issuer is or would be so required in the absence
of any applicable tax treaty on the next succeeding Interest Payment Date to pay
Additional Amounts with respect to any of the Senior Notes, or (b) the Issuer or
Bermuda Holdings is or would be so required in the absence of any applicable tax
treaty on the next succeeding Interest Payment Date to pay Additional Amounts
with respect to the Senior Notes and, in either case, the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Issuer.
The Issuer or Bermuda Holdings will also pay, or make available for
payment, to holders of Senior Notes on the redemption date any Additional
Amounts (as described, but subject to the exceptions referred to, in Section
9.17) resulting from the payment of such Redemption Price.
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ARTICLE 11
Defeasance and Covenant Defeasance
Section 11.01. Option to Effect Defeasance or Covenant Defeasance Each of
the Issuer and Bermuda Holdings may, at its option by Board Resolution, at any
time, elect to have either Section 11.02 or Section 11.03 be applied to all
Outstanding Senior Notes upon compliance with the conditions set forth below in
this Article 11.
Section 11.02. Defeasance and Discharge. Upon the Issuer's or Bermuda
Holdings' exercise under Section 11.01 of the option applicable to this Section
11.02, each of the Issuer and Bermuda Holdings shall be deemed to have been
discharged from its obligations with respect to all Outstanding Senior Notes and
the Guarantee on the date the conditions set forth below are satisfied
(hereinafter, "DEFEASANCE"). For this purpose, such defeasance means that the
Issuer and Bermuda Holdings shall be deemed to have paid and discharged the
entire indebtedness represented by the Outstanding Senior Notes and the
Guarantee, which shall thereafter be deemed to be "OUTSTANDING" only for the
purposes of Section 11.05 and the other sections of this Indenture referred to
in Section 11.02(a) and Section 11.02(b) below, and the Guarantee, and to have
satisfied all other obligations under such Senior Notes, the Guarantee and this
Indenture (and the Trustee, on demand of and at the expense of the Issuer and
Bermuda Holdings, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Outstanding Senior Notes to
receive solely from the trust fund described in Section 11.05 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Senior Notes (and any Additional Amounts payable in
respect thereof) when such payments are due, or on the Redemption Date, as the
case may be, (b) the Issuer's obligations with respect to such Senior Notes
under Section 2.05, Section 2.04, Section 2.06, Section 2.07, Section 2.12 and
Section 2.13, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuer's and Bermuda Holdings' obligations in
connection therewith, (d) this Article 11, and (e) the obligations of the Issuer
and Bermuda Holdings to pay any Additional Amounts. Subject to compliance with
this Article 11 each of the Issuer and Bermuda Holdings may exercise its option
under this Section 11.02 notwithstanding the prior exercise of its option under
Section 11.03 with respect to the Senior Notes.
SECTION 11.03. Covenant Defeasance. Upon the Issuer's or Bermuda Holdings'
exercise under Section 11.01 of the option applicable to this Section 11.03,
each of the Issuer and Bermuda Holdings, and, if applicable, the Trustee and
each Holder of Senior Notes, shall be released from its obligations under the
71
covenants contained in Article 7, Sections 9.02 through 9.04, Section 9.08 and
Section 9.18 inclusive, with respect to the Outstanding Senior Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Senior Notes shall thereafter be deemed to be
not "OUTSTANDING" for the purposes of any request, demand, authorization,
direction, notice, consent, waiver or other Act of Holders (and the consequences
of any thereof) in connection with such covenants, but shall continue to be
deemed "OUTSTANDING" for all other purposes hereunder (it being understood that
such Senior Notes shall not be deemed Outstanding for financial accounting
purposes). For this purpose, such covenant defeasance means that, with respect
to the Outstanding Senior Notes, the Issuer and Bermuda Holdings may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an Event
of Default under Section 4.01(b) or 4.01(h), but, except as specified above, the
remainder of this Indenture and such Senior Notes shall be unaffected thereby.
SECTION 11.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 11.02 or
Section 11.03 to the Outstanding Senior Notes:
(a) The Issuer or Bermuda Holdings shall irrevocably have deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Senior Notes, (1) cash
in U.S. Dollars in an amount, or (2) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, cash in U.S. Dollars in an amount, or (3) a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge the
principal of (and premium, if any) and interest on the Outstanding Senior Notes
on the Stated Maturity or on the applicable Optional Redemption Date, as the
case may be, of such principal or installment of principal of and any premium
and interest on the Senior Notes; provided that the Trustee shall have been
irrevocably instructed by the Issuer or Bermuda Holdings in writing to apply
such money or the proceeds of such U.S. Government Obligations to said payments
with respect to the Senior Notes. For this purpose, "U.S. GOVERNMENT
OBLIGATIONS" means securities that are (x) direct obligations of the United
States of America for the timely payment of which its full faith and
72
credit is pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depository
receipt;
(b) In the case of an election under Section 11.02, the Issuer shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (1) the Issuer has
received from, or there has been published by, the Internal Revenue Service a
ruling or (2) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the Outstanding Senior Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(c) In the case of an election under Section 11.03, the Issuer shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that the Holders of the
Outstanding Senior Notes will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not occurred;
(d) No Default or Event of Default with respect to the Senior Notes
shall have occurred and be continuing on the date of such deposit or, insofar as
Section 4.01(f) or Section 4.01(g)) is concerned, at any time in the period
ending on the 91st day after the date of such deposit;
(e) Such election under Section 11.02 or Section 11.03 shall not result
in a breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which Bermuda Holdings is a party
or by which Bermuda Holdings is bound;
73
(f) In the case of an election under either Section 11.02 or Section
11.03, the Issuer shall have delivered to the Trustee an Opinion of Counsel to
the effect that after the 91st day following deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(g) In the case of an election under either Section 11.02 or Section
11.03, the Issuer shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Issuer or Bermuda Holdings pursuant to its
election under Section 11.02 or Section 11.03 was not made by the Issuer or
Bermuda Holdings with the intent of preferring the Holders over other creditors
of the Issuer or Bermuda Holdings or with the intent of defeating, hindering,
delaying or defrauding creditors of the Issuer or Bermuda Holdings or others;
and
(h) The Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent provided for relating to either the defeasance under
Section 11.02 or the covenant defeasance under Section 11.04 (as the case may
be) have been complied with as contemplated by this Section 11.03.
SECTION 11.05. Deposited Money and U.S. Government Obligations to be Held
in Trust; Other Miscellaneous Provisions. Subject to the provisions of Section
2.04, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 11.05, the "TRUSTEE") pursuant to Section 11.04 in
respect of the Outstanding Senior Notes shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Senior Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Senior Notes of all sums due and to become due
thereon in respect of principal and any premium and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Issuer or Bermuda Holdings shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 11.04 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Senior
Notes.
Anything in this Article 11 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuer or Bermuda Holdings from time to time upon
Issuer Request any money or U.S. Government Obligations held by it as provided
74
in Section 11.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
11.04) are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
SECTION 11.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or U.S. Government Obligations in accordance
with Section 11.02 or Section 11.03 as the case may be, by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuer's and Bermuda Holdings'
obligations under this Indenture and the Senior Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.02 or
Section 11.03 as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 11.02 or Section
11.03, as the case may be; provided, however, that, if the Issuer makes any
payment of principal of or any premium and interest on any Senior Note following
the reinstatement of its obligations, the Issuer and Bermuda Holdings shall be
subrogated to the rights of the Holders of such Senior Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 12
Guarantee of Senior Notes
SECTION 12.01. Guarantee. Bermuda Holdings hereby irrevocably and fully and
unconditionally guarantees to each Holder of a Senior Note authenticated and
delivered by the Trustee the due and punctual payment of the principal of and
any premium and interest on such Senior Note (and any Additional Amounts payable
in respect thereof), when and as the same shall become due and payable, whether
at the Stated Maturity, by declaration of acceleration, call for redemption or
otherwise, in accordance with the terms of such Senior Note and of this
Indenture. Bermuda Holdings hereby agrees that its obligations hereunder shall
be as if it were a principal debtor and not merely a surety, and shall be
absolute and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any Senior Note or this
Indenture, any failure to enforce the provisions of any Senior Note or this
Indenture, any waiver, modification or indulgence granted to the Issuer with
respect thereto, by the Holder of any Senior Note or the Trustee, any merger or
consolidation by the Issuer or any sale, lease or other disposition of all or
substantially all of the assets of the Issuer, or any other circumstances which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor;
75
provided, however, that, notwithstanding the foregoing, no such waiver,
modification or indulgence shall, without the consent of Bermuda Holdings,
increase the principal amount of a Senior Note or the interest rate thereon or
increase any premium payable upon redemption thereof. Bermuda Holdings hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of merger or bankruptcy of the Issuer, any right to require a
proceeding first against the Issuer, the benefit of discussion, protest or
notice with respect to any Senior Note or the indebtedness evidenced thereby and
all demands whatsoever, and covenants that this Guarantee will not be discharged
with respect to any Senior Note except by payment in full of the principal
thereof and any premium and interest thereon (and any Additional Amounts payable
in respect thereof) or as provided in Article 11. Bermuda Holdings further
agrees that, as between Bermuda Holdings, on the one hand, and the Holders and
the Trustee, on the other hand, the Maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 4 hereof for the purposes of
this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby.
Bermuda Holdings shall be subrogated to all rights of each Holder of Senior
Notes against the Issuer in respect of any amounts paid to such Holder by
Bermuda Holdings pursuant to the provisions of this Guarantee; provided,
however, that Bermuda Holdings shall not be entitled to enforce, or to receive
any payments arising out of or based upon, such right of subrogation until the
principal of and any premium and interest on (and any Additional Amounts payable
in respect thereof) shall have been paid in full.
No past, present or future stockholder, officer, director, employee or
incorporator of Bermuda Holdings shall have any personal liability under the
Guarantee set forth in this Section 12.01 by reason of his or its status as such
stockholder, officer, director, employee or incorporator.
The Guarantee set forth in this Section 12.01 shall not be valid or become
obligatory for any purpose with respect to a Senior Note until the certificate
of authentication on such Senior Note shall have been signed by or on behalf of
the Trustee.
SECTION 12.02. Execution of Guarantee. To evidence its guarantee to the
Holders specified in Section 12.01, Bermuda Holdings hereby agrees to execute
the notation of the Guarantee in substantially the form set forth in Exhibit D
to be endorsed on each Senior Note authenticated and delivered by the Trustee.
Bermuda Holdings hereby agrees that its Guarantee set forth in Section 12.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Senior Note a notation of such Guarantee. Each such notation of the
Guarantee
76
shall be signed on behalf of Bermuda Holdings, by any two duly authorized
officers, prior to the authentication of the Senior Note on which it is
endorsed, and the delivery of such Senior Note by the Trustee, after the due
authentication thereof by the Trustee hereunder, shall constitute due delivery
of the Guarantee on behalf of Bermuda Holdings. Such signatures upon the
notation of the Guarantee may be manual or facsimile signatures of any present,
past or future duly authorized officers and may be imprinted or otherwise
reproduced below the notation of the Guarantee, and in case any such authorized
officer who shall have signed the notation of the Guarantee shall cease to be
such duly authorized officer before the Senior Note on which such notation is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Issuer, such Senior Note nevertheless may be authenticated and
delivered or disposed of as though the person who signed the notation of the
Guarantee had not ceased to be such duly authorized officer of Bermuda Holdings.
SECTION 12.03. Other Obligations of Bermuda Holdings The obligations of
Bermuda Holdings pursuant to this Section 12 shall be in addition to, and not
exclusive of, the other obligations of Bermuda Holdings set forth elsewhere in
this Indenture. For purposes of the Guarantee, such other obligations shall be
deemed to be included in this Section 12.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and attested, all as of the date first above written.
TERRA NOVA INSURANCE (UK)
HOLDINGS PLC
By:___________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
Attest:_________________________
Name:
Title:
TERRA NOVA (BERMUDA) HOLDINGS LTD.
By:___________________________
77
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice-President, Secretary
and General Counsel
Attest:_________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:______________________________
Name:
Title:
Attest:_________________________
Name:
Title:
EXHIBIT A
[FORM OF FACE OF RESTRICTED GLOBAL NOTE]
THIS NOTE IS A RESTRICTED GLOBAL NOTE WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO.
TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% Senior Notes due 2008
Guaranteed by
TERRA NOVA (BERMUDA) HOLDINGS LTD.
Terra Nova Insurance (UK) Holdings plc, a public limited company organized
under the laws of England and Wales, promises to pay to the bearer upon
surrender hereof the principal sum of U.S. $100,000,000 (less the principal
amount, if any, of any outstanding Regulation S Global Note and any outstanding
Definitive Senior Notes evidencing such Notes, as reflected in the records of
the Trustee hereinafter referred to), on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998.
This Global Note is fully and unconditionally guaranteed as to the payment
of principal and any premium and interest (and any Additional Amounts payable in
respect thereof), when and as the same shall become due and payable, in
accordance with the terms of this Global Note and of the Indenture, by Terra
Nova (Bermuda) Holdings Ltd., a company organized under the laws of Bermuda.
Additional provisions of this Restricted Global Note are set forth on the
other side of this Global Note.
Dated: May 18, 1998
TERRA NOVA INSURANCE (UK)
HOLDINGS PLC
By:_____________________________
By:_____________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Chase Manhattan Bank
as Trustee, certifies
that this is the Restricted Global Note
referred to in the Indenture.
______________________________
Authorized Officer
2
[REVERSE SIDE OF RESTRICTED GLOBAL NOTE]
TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% Senior Notes due 2008
Guaranteed by
TERRA NOVA (BERMUDA) HOLDINGS LTD.
1. Interest
--------
(a) Terra Nova Insurance (UK) Holdings plc, a public limited company
organized under the laws of England and Wales (such company, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
"ISSUER"), promises to pay interest on the principal amount of this Note to the
bearer at the rate per annum shown above. Terra Nova (Bermuda) Holdings Ltd., a
company organized under the laws of Bermuda (such company, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
"BERMUDA HOLDINGS"), irrevocably and fully and unconditionally guarantees this
Note as to the payment of principal, and any premium and interest (and any
Additional Amounts payable in respect thereof), when and as the same shall
become due and payable.
[(b) The principal of this Note shall mature on May 15, 2008. Interest on
this Note shall accrue at the rate of 7% per annum and is payable semiannually
in arrears on May 15 and November 15 of each year, commencing on November 15,
1998. In the event that the Exchange Offer (as defined in the Indenture) has not
been consummated or a Shelf Registration Statement (as defined in the Indenture)
has not been declared effective on or prior to November 18, 1998, then
additional interest shall accrue at a rate of 0.25% per annum from November 18,
1998, and shall be payable in cash semiannually in arrears on May 15 and
November 15 of each year, commencing on May 15, 1999. If such Exchange Offer has
not been consummated or such Shelf Registration Statement has not been declared
effective on or prior to February 18, 1999, the rate per annum at which such
additional interest shall accrue shall increase from 0.25% to 0.50% per annum
from February 18, 1999, and shall be payable in cash semi-annually in arrears on
May 15 and November 15 of each year, commencing May 15, 1999. The accrual of
additional interest shall cease upon the consummation of such Exchange Offer or
the effectiveness of such Shelf Registration Statement.]/1/
_________________________
/1/ To be included in Senior Notes which are not Exchange Notes.
1
[(b) Interest on this Note shall accrue from the most recent date to which
interest has been paid on the Note for which this Note was exchanged or, if no
interest has been paid on such Note, from May 18, 1998, at the rate of 7% per
annum and shall be payable in cash semiannually in arrears on May 15 and
November 15 of each year, commencing on November 15, 1998. There shall also be
payable in respect of this Note all additional interest that may have accrued on
the Note for which this Note was exchanged (as calculated in accordance with the
terms of such Note) pursuant to the Exchange Offer or otherwise pursuant to a
Registration of such Note, such additional interest to be payable at the same
time and in the same manner as the periodic interest on this Note.]/2/
(c) Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Issuer shall pay interest at the applicable interest rate on
the Notes on overdue principal, interest (to the extent lawful) or premium, if
any, on demand.
2. Additional Amounts
------------------
All payments made by the Issuer on this Note, and all payments made by
Bermuda Holdings pursuant to the Guarantee, shall be made without deduction or
withholding, for or on account of, any and all present and future taxes, duties,
assessments, or governmental charges of whatever nature unless the deduction or
withholding of such taxes, duties, assessments or governmental charges is then
required by law. If any deduction or withholding for or on account of any
present or future taxes, assessments or other governmental charges of the United
Kingdom, Bermuda or any relevant jurisdiction or any political subdivision or
taxing authority thereof or therein (the "RELEVANT JURISDICTION") shall at any
time be required in respect of any amounts to be paid by the Issuer under this
Note or Bermuda Holdings under the Guarantee, the Issuer or Bermuda Holdings, as
the case may be, shall pay or cause to be paid such additional amounts
("ADDITIONAL AMOUNTS") as may be necessary in order that the net amounts
received by a holder of this Note after such deduction or withholding shall be
not less than the amounts specified in this Note to which the holder of this
Note is entitled; provided, however, that the Issuer or Bermuda Holdings, as
applicable, shall not be required to make any payment of Additional Amounts for
or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such holder, if such holder is an
____________________________
/2/ To be included in Exchange Notes.
2
estate, nominee, trust, partnership or corporation), otherwise than merely by
the holding of this Note or the receipt of amounts payable in respect of this
Note, and any Relevant Jurisdiction or such holder being subject to the
jurisdiction of any Relevant Jurisdiction, including, without limitation, such
holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident thereof or being or having
been present or engaged in trade or business therein or having had a permanent
establishment therein or (ii) the presentation of this Note (where presentation
is required) for payment on a date more than 30 days after the date on which
such payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later, except to the extent that the holder would
have been entitled to Additional Amounts had this Note been presented on the
last day of such period of 30 days;
(b) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the holder of this Note or, if
different, the beneficial owner of the interest payable on this Note with a
timely request of the Issuer addressed to such holder or beneficial owner to
provide information, documents or other evidence concerning the nationality,
residence, identity or connection with the taxing jurisdiction of such holder or
beneficial owner which is required or imposed by a statute, treaty, regulation
or administrative practice of the taxing jurisdiction as a precondition to
exemption from all or part of such tax, assessment or governmental charge;
(c) payments in respect of Definitive Senior Notes issued at the request
of the holder (including on or after the occurrence of an Event of Default); or
(d) any combination of items (a), (b) and (c) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Note to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor with respect to such fiduciary or member of
such partnership or beneficial owner would not have been entitled to any
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.
3. Method of Payment
-----------------
The Issuer through the Paying Agent shall pay interest on this Note to the
bearer of this Note or as instructed in writing by the bearer of this Note. The
bearer of this Note must surrender this Note to the Paying Agent to collect
principal payments. The Issuer shall pay principal and interest in money of the
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ that at the time of payment is legal tender for payment
of public and private debts.
4. Paying Agent and Registrar
--------------------------
Initially, The Chase Manhattan Bank, a New York banking corporation (the
"TRUSTEE"), will act as Paying Agent and Senior Note Registrar. The Issuer may
appoint and change any Paying Agent, Senior Note Registrar, co-registrar or
transfer agent without prior notice. The Issuer may act as Paying Agent, Senior
Note Registrar, co-registrar or transfer agent to the bearer of this Note.
5. Indenture
---------
The Issuer issued this Note under an Indenture, dated as of May 18, 1998
(the "INDENTURE"), between the Issuer, Bermuda Holdings and the Trustee. The
terms of this Note include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
------
77aaa- 77bbbb) as in effect on the date of the Indenture (the "ACT"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. This Note is subject to all such terms, and the
bearer of this Note is referred to the Indenture and the Act for a statement of
those terms.
This Note is a senior unsecured obligation of the Issuer limited to
$100,000,000 aggregate principal amount at maturity (subject to Section 2.7 of
the Indenture).
6. Optional Redemption
-------------------
(a) This Note is subject to redemption in whole or in part, of any time
and from time to time, upon not less than 30 nor more than 60 days' notice, in
an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price
equal to 100% of the principal amount, together with accrued and unpaid interest
to the Redemption Date, as provided in the Indenture, plus the Make-Whole
amount, if any.
(b) This Note is not subject to redemption through operation of a sinking
fund.
7. Tax Redemption
--------------
This Note may be redeemed at the option of the Issuer, in whole but not
in part, upon not less than 30 nor more than 60 days' notice, at any time at a
redemption price equal to the principal amount thereof plus accrued and unpaid
4
interest to the date fixed for redemption if (a) the Issuer is required to issue
Definitive Senior Notes (other than upon the request of a holder of Book-Entry
Interests following an Event of Default) after using all reasonable efforts to
avoid having to issue such Definitive Senior Notes and the Issuer is or would be
so required in the absence of any applicable tax treaty on the next succeeding
Interest Payment Date to pay Additional Amounts with respect to any of the
Senior Notes, or (b) the Issuer or Bermuda Holdings is or would be so required
in the absence of any applicable tax treaty on the next succeeding Interest
Payment Date to pay Additional Amounts with respect to the Senior Notes and, in
either case, the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures available to the Issuer.
The Issuer or Bermuda Holdings shall also pay, or make available for
payment, to the bearer of this Note on the redemption date any Additional
Amounts resulting from the payment of such redemption price.
8. Notice of Redemption
--------------------
Notice of redemption shall be mailed not less than 30 nor more than 60 days
prior to the Redemption Date to the bearer of this Note at Chase Manhattan Bank
Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at any other address
provided to the Trustee in writing by the bearer of this Note.
9. Denominations; Transfer; Exchange
---------------------------------
This Note is in bearer form without coupons. This Note is in an aggregate
principal amount of $100,000,000 (less the principal amount, if any, of any
outstanding Regulation S Global Notes and any outstanding Definitive Senior
Notes evidencing such Notes, as reflected in the records of the Trustee)
(subject to adjustment as provided in the Indenture). The bearer of this Note
may only transfer or exchange this Note in accordance with the Indenture.
10. Persons Deemed Owners
---------------------
The bearer of this Note will be treated as the owner of it for all
purposes.
11. Defeasance and Covenant Defeasance.
----------------------------------
The Indenture contains provisions for defeasance at any time, upon
compliance by the Issuer and Bermuda Holdings with certain conditions set forth
in the Indenture, of (a) the entire indebtedness of the Issuer and Bermuda
Holdings with respect to this Note and (b) certain restrictive covenants and the
related defaults and Events of Default.
5
12. Amendment, Waiver
-----------------
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer, Bermuda Holdings and the Trustee with the consent of the holders of a
majority in aggregate principal amount of the Senior Notes outstanding at the
time of amendment or modification. The Indenture also contains provisions
permitting the holders of specified percentages in aggregate principal amount of
the Senior Notes at any time outstanding, on behalf of the holders of all the
Senior Notes, to waive compliance by the Issuer and Bermuda Holdings with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by or on behalf of
the holder of this Note shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Senior Note issued in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.
13. Defaults and Remedies
---------------------
This Note has the Events of Default as set forth in Section 4.1 of the
Indenture. If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the Senior Notes, subject to
certain limitations, may declare all the Senior Notes to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
and shall result in the Senior Notes being due and payable immediately upon the
occurrence of such Events of Default.
Holders of Senior Notes may not enforce the Indenture or the Senior Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Senior Notes unless it receives reasonable indemnity or
security. Subject to certain limitations, holders of a majority in principal
amount of the Senior Notes may direct the Trustee in its exercise of any trust
or power. The holders of a majority in principal amount of the Senior Notes
then outstanding by written notice to the Trustee may rescind a declaration of
acceleration if the rescission is prior to a judgment or decree for payment and
if all Events of Default have been cured or waived except nonpayment of
principal and interest that has been due solely because of the acceleration.
The Trustee may withhold from holders of Senior Notes notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in the interest of the holders. The above
description of Events of Default and remedies is qualified by reference, and
subject in its entirety, to the more complete description thereof contained in
the Indenture.
14. Trustee Dealings with the Issuer or Bermuda Holdings
----------------------------------------------------
6
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of this Note and may otherwise deal with and collect obligations owed to
it by the Issuer or Bermuda Holdings or their Affiliates and may otherwise deal
with the Issuer or Bermuda Holdings or their Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Senior Note Registrar or
such other agent may do the same with like rights.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Issuer,
Bermuda Holdings or any Subsidiary of Bermuda Holdings shall not have any
liability for any payment of the principal of, or premium, if any, or interest
on, any of the Notes or any other obligations of the Issuer or Bermuda Holdings
under this Note, the Guarantee or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting
this Note, the bearer of this Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of this Note.
16. Authentication
--------------
This Note shall not be valid until an authorized officer of the Trustee (or
an authenticating agent) manually signs the certificate of authentication on the
other side of this Note.
17. Governing Law
-------------
The internal laws of the State of New York shall govern the Indenture and
this Note without regard to conflict of law provisions thereof.
The Issuer will furnish to the bearer of this Note upon written request and
without charge to the holder a copy of the Indenture which has in it the text of
this Global Note in larger type. Requests may be made to:
Terra Nova Insurance (UK) Holdings plc
Attention: Company ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Great Britain
7
EXHIBIT B
[FORM OF FACE OF REGULATION S GLOBAL NOTE]
THIS NOTE IS A REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO.
TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% Senior Notes due 2008
Guaranteed by
TERRA NOVA (BERMUDA) HOLDINGS LTD.
Terra Nova Insurance (UK) Holdings plc, a public limited company organized
under the laws of England and Wales, promises to pay to the bearer upon
surrender hereof the principal sum of U.S. $0 (or such other amount as reflected
in the records of Trustee), on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998.
This Global Note is fully and unconditionally guaranteed as to the payment
of principal and any premium and interest (and any Additional Amounts payable in
respect thereof), when and as the same shall become due and payable, in
accordance with the terms of this Global Note and of the Indenture, by Terra
Nova (Bermuda) Holdings Ltd., a company organized under the laws of Bermuda.
Additional provisions of this Regulation S Global Note are set forth on the
other side of this Global Note.
Dated:________________________
TERRA NOVA INSURANCE (UK)
HOLDINGS PLC
By:_______________________________
By:_______________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Chase Manhattan Bank,
as Trustee, certifies
that this is the Regulation S Global Note
referred to in the Indenture.
______________________________
Authorized Officer
2
[REVERSE SIDE OF REGULATION S GLOBAL NOTE]
TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% Senior Notes due 2008
Guaranteed by
TERRA NOVA (BERMUDA) HOLDINGS LTD.
1. Interest
--------
(a) Terra Nova Insurance (UK) Holdings plc, a public limited company
organized under the laws of England and Wales (such company, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
"ISSUER"), promises to pay interest on the principal amount of this Note to the
bearer at the rate per annum shown above. Terra Nova (Bermuda) Holdings Ltd., a
company organized under the laws of Bermuda (such company, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
"BERMUDA HOLDINGS"), irrevocably and fully and unconditionally guarantees this
Note as to the payment of principal, and any premium and interest (and any
Additional Amounts payable in respect thereof), when and as the same shall
become due and payable.
[(b) The principal of this Note shall mature on May 15, 2008. Interest on
this Note shall accrue at the rate of 7% per annum and is payable semiannually
on May 15 and November 15 of each year, commencing on November 15, 1998. In the
event that the Exchange Offer (as defined in the Indenture) has not been
consummated or a Shelf Registration Statement (as defined in the Indenture) has
not been declared effective on or prior to November 18, 1998, then additional
interest shall accrue at a rate of 0.25% per annum from November 18, 1998, and
shall be payable in cash semiannually in arrears on May 15 and November 15 of
each year, commencing on May 15, 1999. If such Exchange Offer has not been
consummated or such Shelf Registration Statement has not been declared effective
on or prior to February 18, 1999, the rate per annum at which such additional
interest shall accrue shall increase from 0.25% to 0.50% per annum from February
18, 1999, and shall be payable in cash semi-annually in arrears on May 15 and
November 15 of each year, commencing May 15, 1999. The accrual of additional
interest shall cease upon the consummation of such Exchange Offer or the
effectiveness of such Shelf Registration Statement.]/3/
___________________________
/3/ To be included in Senior Notes which are not Exchange Notes.
[(b) Interest on this Note shall accrue from the most recent date to which
interest has been paid on the Note for which this Note was exchanged or, if no
interest has been paid on such Note, from May 18, 1998, at the rate of 7% per
annum and shall be payable in cash semiannually in arrears on May 15 and
November 15 of each year, commencing on November 15, 1998. There shall also be
payable in respect of this Note all additional interest that may have accrued on
the Note for which this Note was exchanged (as calculated in accordance with the
terms of such Note) pursuant to the Exchange Offer or otherwise pursuant to a
Registration of such Note, such additional interest to be payable at the same
time and in the same manner as the periodic interest on this Note.]/4/
(c) Interest will be computed on the basis of a 360-day year of twelve 30-
day months. The Issuer shall pay interest at the applicable interest rate on
the Notes on overdue principal, interest (to the extent lawful) or premium, if
any, on demand.
2. Additional Amounts
------------------
All payments made by the Issuer on this Note, and all payments made by
Bermuda Holdings pursuant to the Guarantee, shall be made without deduction or
withholding, for or on account of, any and all present and future taxes, duties,
assessments, or governmental charges of whatever nature unless the deduction or
withholding of such taxes, duties, assessments or governmental charges is then
required by law. If any deduction or withholding for or on account of any
present or future taxes, assessments or other governmental charges of the United
Kingdom, Bermuda or any relevant jurisdiction or any political subdivision or
taxing authority thereof or therein (the "RELEVANT JURISDICTION") shall at any
time be required in respect of any amounts to be paid by the Issuer under this
Note or Bermuda Holdings under the Guarantee, the Issuer or Bermuda Holdings, as
the case may be, shall pay or cause to be paid such additional amounts
("ADDITIONAL AMOUNTS") as may be necessary in order that the net amounts
received by a holder of this Note after such deduction or withholding shall be
not less than the amounts specified in this Note to which the holder of this
Note is entitled; provided, however, that the Issuer or Bermuda Holdings, as
applicable, shall not be required to make any payment of Additional Amounts for
or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such holder, if such holder is an
estate, nominee, trust, partnership or corporation), otherwise than merely by
the
____________________________
/4/ To be included in Exchange Notes.
2
holding of this Note or the receipt of amounts payable in respect of this Note,
and any Relevant Jurisdiction or such holder being subject to the jurisdiction
of any Relevant Jurisdiction, including, without limitation, such holder (or
such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or
having been a citizen or resident thereof or being or having been present or
engaged in trade or business therein or having had a permanent establishment
therein or (ii) the presentation of this Note (where presentation is required)
for payment on a date more than 30 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later, except to the extent that the holder would have
been entitled to Additional Amounts had this Note been presented on the last day
of such period of 30 days;
(b) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the holder of this Note or, if
different, the beneficial owner of the interest payable on this Note with a
timely request of the Issuer addressed to such holder or beneficial owner to
provide information, documents or other evidence concerning the nationality,
residence, identity or connection with the taxing jurisdiction of such holder or
beneficial owner which is required or imposed by a statute, treaty, regulation
or administrative practice of the taxing jurisdiction as a precondition to
exemption from all or part of such tax, assessment or governmental charge;
(c) payments in respect of Definitive Senior Notes issued at the request
of the holder (including on or after the occurrence of an Event of Default); or
(d) any combination of items (a), (b) and (c) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Note to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent that a beneficiary or settlor with respect to such fiduciary or member of
such partnership or beneficial owner would not have been entitled to any
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.
3. Method of Payment
-----------------
The Issuer through the Paying Agent shall pay interest on this Note to the
bearer of this Note or as instructed in writing by the bearer of this Note. The
bearer of this Note must surrender this Note to the Paying Agent to collect
principal payments. The Issuer shall pay principal and interest in money of the
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ that at the time of payment is legal tender for payment
of public and private debts.
4. Paying Agent and Registrar
--------------------------
Initially, The Chase Manhattan Bank, a New York banking corporation (the
"TRUSTEE"), will act as Paying Agent and Senior Note Registrar. The Issuer may
appoint and change any Paying Agent, Senior Note Registrar, co-registrar or
transfer agent without prior notice. The Issuer may act as Paying Agent, Senior
Note Registrar, co-registrar or transfer agent to the bearer of this Note.
5. Indenture
---------
The Issuer issued this Note under an Indenture, dated as of May 18, 1998
(the "INDENTURE"), between the Issuer, Bermuda Holdings and the Trustee. The
terms of this Note include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
------
77aaa- 77bbbb) as in effect on the date of the Indenture (the "ACT"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. This Note is subject to all such terms, and the
bearer of this Note is referred to the Indenture and the Act for a statement of
those terms.
This Note is a senior unsecured obligation of the Issuer limited to
$100,000,000 aggregate principal amount at maturity (subject to Section 2.7 of
the Indenture).
6. Optional Redemption
-------------------
(a) This Note is subject to redemption in whole or in part, of any time
and from time to time, upon not less than 30 nor more than 60 days' notice, in
an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price
equal to 100% of the principal amount, together with accrued and unpaid interest
to the Redemption Date, as provided in the Indenture, plus the Make-Whole
amount, if any.
(b) This Note is not subject to redemption through operation of a sinking
fund.
7. Tax Redemption
--------------
This Note may be redeemed at the option of the Issuer, in whole but not in
part, upon not less than 30 nor more than 60 days' notice, at any time at a
redemption price equal to the principal amount thereof plus accrued and unpaid
4
interest to the date fixed for redemption if (a) the Issuer is required to issue
Definitive Senior Notes (other than upon the request of a holder of Book-Entry
Interests following an Event of Default) after using all reasonable efforts to
avoid having to issue such Definitive Senior Notes and the Issuer is or would be
so required in the absence of any applicable tax treaty on the next succeeding
Interest Payment Date to pay Additional Amounts with respect to any of the
Senior Notes, or (b) the Issuer or Bermuda Holdings is or would be so required
in the absence of any applicable tax treaty on the next succeeding Interest
Payment Date to pay Additional Amounts with respect to the Senior Notes and, in
either case, the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures available to the Issuer.
The Issuer or Bermuda Holdings shall also pay, or make available for
payment, to the bearer of this Note on the redemption date any Additional
Amounts resulting from the payment of such redemption price.
8. Notice of Redemption
--------------------
Notice of redemption shall be mailed not less than 30 nor more than 60 days
prior to the Redemption Date to the bearer of this Note at Chase Manhattan Bank
Luxembourg S.A., ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or at any other address
provided to the Trustee in writing by the bearer of this Note.
9. Denominations; Transfer; Exchange
---------------------------------
This Note is in bearer form without coupons. This Note is in an aggregate
principal amount of $0 (or such other amount as reflected in the records of the
Trustee) (subject to adjustment as provided in the Indenture). The bearer of
this Note may only transfer or exchange this Note in accordance with the
Indenture.
10. Persons Deemed Owners
---------------------
The bearer of this Note will be treated as the owner of it for all
purposes.
11. Defeasance and Covenant Defeasance.
----------------------------------
The Indenture contains provisions for defeasance at any time, upon
compliance by the Issuer and Bermuda Holdings with certain conditions set forth
in the Indenture, of (a) the entire indebtedness of the Issuer and Bermuda
Holdings with respect to this Note and (b) certain restrictive covenants and the
related defaults and Events of Default.
12. Amendment, Waiver
-----------------
5
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer, Bermuda Holdings and the Trustee with the consent of the holders of a
majority in aggregate principal amount of the Senior Notes outstanding at the
time of amendment or modification. The Indenture also contains provisions
permitting the holders of specified percentages in aggregate principal amount of
the Senior Notes at any time outstanding, on behalf of the holders of all the
Senior Notes, to waive compliance by the Issuer and Bermuda Holdings with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by or on behalf of
the holder of this Note shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Senior Note issued in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.
13. Defaults and Remedies
---------------------
This Note has the Events of Default as set forth in Section 4.1 of the
Indenture. If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the Senior Notes, subject to
certain limitations, may declare all the Senior Notes to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
and shall result in the Senior Notes being due and payable immediately upon the
occurrence of such Events of Default.
Holders of Senior Notes may not enforce the Indenture or the Senior Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Senior Notes unless it receives reasonable indemnity or
security. Subject to certain limitations, holders of a majority in principal
amount of the Senior Notes may direct the Trustee in its exercise of any trust
or power. The holders of a majority in principal amount of the Senior Notes
then outstanding by written notice to the Trustee may rescind a declaration of
acceleration if the rescission is prior to a judgment or decree for payment and
if all Events of Default have been cured or waived except nonpayment of
principal and interest that has been due solely because of the acceleration.
The Trustee may withhold from holders of Senior Notes notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in the interest of the holders. The above
description of Events of Default and remedies is qualified by reference, and
subject in its entirety, to the more complete description thereof contained in
the Indenture.
14. Trustee Dealings with the Issuer or Bermuda Holdings
----------------------------------------------------
6
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of this Note and may otherwise deal with and collect obligations owed to
it by the Issuer or Bermuda Holdings or their Affiliates and may otherwise deal
with the Issuer or Bermuda Holdings or their Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Senior Note Registrar or
such other agent may do the same with like rights.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Issuer,
Bermuda Holdings or any Subsidiary of Bermuda Holdings shall not have any
liability for any payment of the principal of, or premium, if any, or interest
on, any of the Notes or any other obligations of the Issuer or Bermuda Holdings
under this Note, the Guarantee or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting
this Note, the bearer of this Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of this Note.
16. Authentication
--------------
This Note shall not be valid until an authorized officer of the Trustee (or
an authenticating agent) manually signs the certificate of authentication on the
other side of this Note.
17. Governing Law
-------------
The internal laws of the State of New York shall govern the Indenture and
this Note without regard to conflict of law provisions thereof.
The Issuer will furnish to the bearer of this Note upon written request and
without charge to the holder a copy of the Indenture which has in it the text of
this Global Note in larger type. Requests may be made to:
Terra Nova Insurance (UK) Holdings plc
Attention: Company ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Great Britain
7
EXHIBIT C
[FORM OF FACE OF DEFINITIVE SENIOR NOTE]
THIS SENIOR NOTE IS A SENIOR NOTE WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO.
TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% Senior Notes due 2008
Guaranteed by
TERRA NOVA (BERMUDA) HOLDINGS LTD.
Terra Nova Insurance (UK) Holdings plc, a public limited company organized
under the laws of England and Wales, promises to pay to _________, or registered
assigns, the principal sum of U.S. ____________, on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing November 15,
1998.
This Senior Note is fully and unconditionally guaranteed as to the payment
of principal and any premium and interest (and any Additional Amounts payable in
respect thereof), when and as the same shall become due and payable, in
accordance with the terms of this Senior Note and of the Indenture by Terra Nova
(Bermuda) Holdings Ltd., a company organized under the laws of Bermuda.
Additional provisions of this Definitive Senior Note are set forth on the
other side of this Definitive Senior Note.
Dated: _________, ____
TERRA NOVA INSURANCE (UK)
HOLDINGS PLC
By:
________________________
By: ________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Chase Manhattan Bank,
as Trustee, certifies
that this is one of the Senior Notes
referred to in the Indenture.
_____________________________
Authorized Officer
2
[FORM OF REVERSE SIDE OF DEFINITIVE SENIOR NOTE]
TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% Senior Notes due 2008
Guaranteed by
TERRA NOVA (BERMUDA) HOLDINGS LTD.
1. Interest
--------
(a) Terra Nova Insurance (UK) Holdings plc, a public limited company
organized under the laws of England and Wales (such company, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
"ISSUER"), promises to pay interest on the principal amount of this Senior Note
to the bearer at the rate per annum shown above. Terra Nova (Bermuda) Holdings
Ltd., a company organized under the laws of Bermuda (such company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called "BERMUDA HOLDINGS"), irrevocably and fully and unconditionally guarantees
this Senior Note as to the payment of principal, and any premium and interest
(and any Additional Amounts payable in respect thereof), when and as the same
shall become due and payable.
[(b) The principal of this Senior Note shall mature on May 15, 2008.
Interest on this Senior Note shall accrue at the rate of 7% per annum and is
payable semiannually in arrears on May 15 and November 15 of each year,
commencing on November 15, 1998. In the event that the Exchange Offer (as
defined in the Indenture) has not been consummated or a Shelf Registration
Statement (as defined in the Indenture) has not been declared effective on or
prior to November 18, 1998, then additional interest shall accrue at a rate of
0.25% per annum from November 18, 1998, and shall be payable in cash
semiannually in arrears on May 15 and November 15 of each year, commencing on
May 15, 1999. If such Exchange Offer has not been consummated or such Shelf
Registration Statement has not been declared effective on or prior to February
18, 1999, the rate per annum at which such additional interest shall accrue
shall increase from 0.25% to 0.50% per annum from February 18, 1999, and shall
be payable in cash semi-annually in arrears on May 15 and November 15 of each
year, commencing May 15, 1999. The accrual of additional interest shall cease
upon the
consummation of such Exchange Offer or the effectiveness of such Shelf
Registration Statement.] /5/
[(b) Interest on this Senior Note shall accrue from the most recent date to
which interest has been paid on the Senior Note for which this Senior Note was
exchanged or, if no interest has been paid on such Senior Note, from May 18,
1998, at the rate of 7% per annum and shall be payable in cash semiannually in
arrears on May 15 and November 15 of each year, commencing on November 15, 1998.
There shall also be payable in respect of this Senior Note all additional
interest that may have accrued on the Senior Note for which this Senior Note was
exchanged (as calculated in accordance with terms of such Senior Note) pursuant
to the Exchange Offer or otherwise pursuant to a Registration of such Senior
Note, such additional interest to be payable at the same time and in the same
manner as the periodic interest on this Senior Note.] /6/
(c) Interest will be computed on the basis of a 360-day year of twelve 30-
day months. The Issuer shall pay interest at the applicable interest rate on
the Senior Notes, on overdue principal, interest (to the extent lawful) or
premium, if any, on demand.
2. Additional Amounts
------------------
All payments made by the Issuer on this Senior Note, and all payments made
by Bermuda Holdings pursuant to the Guarantee, shall be made without deduction
or withholding, for or on account of, any and all present and future taxes,
duties, assessments, or governmental charges of whatever nature unless the
deduction or withholding of such taxes, duties, assessments or governmental
charges is then required by law. If any deduction or withholding for or on
account of any present or future taxes, assessments or other governmental
charges of the United Kingdom, Bermuda or any relevant jurisdiction or any
political subdivision or taxing authority thereof or therein (the "RELEVANT
JURISDICTION") shall at any time be required in respect of any amounts to be
paid by the Issuer under this Senior Note or Bermuda Holdings under the
Guarantee, the Issuer or Bermuda Holdings, as the case may be, shall pay or
cease to be paid such additional amounts ("ADDITIONAL AMOUNTS") as may be
necessary in order that the net amounts received by a holder of this Senior Note
after such deduction or withholding shall be not less than the amounts specified
in this Senior Note to which the holder of this Senior Note is entitled;
provided, however, that the Issuer
__________________________
/5/ To be included in Senior Notes which are not Exchange Notes.
/6/ To be included in Exchange Notes.
2
or Bermuda Holdings, as applicable, shall not be required to make any payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such holder, if such holder is an
estate, nominee, trust, partnership or corporation), otherwise than merely by
the holding of this Senior Note or the receipt of amounts payable in respect of
this Senior Note, and any Relevant Jurisdiction or such holder being subject to
the jurisdiction of any Relevant Jurisdiction, including, without limitation,
such holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident thereof or being or having
been present or engaged in trade or business therein or having had a permanent
establishment therein or (ii) the presentation of this Senior Note (where
presentation is required) for payment on a date more than 30 days after the date
on which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later, except to the extent that
the holder would have been entitled to Additional Amounts had this Senior Note
been presented on the last day of such period of 30 days;
(b) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the holder of this Senior Note
or, if different, the beneficial owner of the interest payable on this Senior
Note with a timely request of the Issuer addressed to such holder or beneficial
owner to provide information, documents or other evidence concerning the
nationality, residence, identity or connection with the taxing jurisdiction of
such holder or beneficial owner which is required or imposed by a statute,
treaty, regulation or administrative practice of the taxing jurisdiction as a
precondition to exemption from all or part of such tax, assessment or
governmental charge;
(c) payments in respect of Definitive Senior Notes issued at the request of
the holder (including on or after the occurrence of an Event of Default); or
(d) any combination of items (a), (b) and (c) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, this Senior Note to any holder who is a
fiduciary or partnership or other than the sole beneficial owner of such payment
to the extent that a beneficiary or settlor with respect to such fiduciary or
member of such partnership or beneficial owner would not have been entitled to
any Additional
3
Amounts had such beneficiary, settlor, member or beneficial owner been the
holder of this Senior Note.
3. Method of Payment
-----------------
The Issuer through the Paying Agent shall pay interest on this Senior Note
to the registered holder of this Senior Note or as instructed in writing by such
holder of this Senior Note. The holder of this Senior Note must surrender this
Senior Note to the Paying Agent to collect principal payments. The Issuer shall
pay principal and interest in money of the United States of America that at the
time of payment is legal tender for payment of public and private debts.
4. Paying Agent and Registrar
--------------------------
Initially, The Chase Manhattan Bank, a New York banking corporation (the
"TRUSTEE"), will act as Paying Agent and Senior Note Registrar. The Issuer may
appoint and change any Paying Agent, Senior Note Registrar, co-registrar or
transfer agent without prior notice. The Issuer may act as Paying Agent, Senior
Note Registrar, co-registrar or transfer agent to the holder of this Note.
5. Indenture
---------
The Issuer issued this Senior Note under an Indenture, dated as of May 18,
1998 (the "INDENTURE"), between the Issuer, Bermuda Holdings and the Trustee.
The terms of this Senior Note include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the
------
"ACT"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. This Senior Note is subject to all such
terms, and holders of the Senior Notes are referred to the Indenture and the Act
for a statement of those terms.
The Senior Notes are senior unsecured obligations of the Issuer limited to
$100,000,000 aggregate principal amount at maturity (subject to Section 2.7 of
the Indenture).
6. Optional Redemption
-------------------
(a) This Senior Note is subject to redemption in whole or in part, of any
time and from time to time, upon not less than 30 nor more than 60 days' notice,
in an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price
equal to 100% of the principal amount, together with accrued and unpaid
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interest to the Redemption Date, as provided in the Indenture, plus the Make-
Whole amount, if any.
(b) This Senior Note is not subject to redemption through operation of a
sinking fund.
7. Tax Redemption
--------------
This Senior Note may be redeemed at the option of the Issuer, in whole but
not in part, upon not less than 30 nor more than 60 days' notice, at any time at
a redemption price equal to the principal amount thereof plus accrued and unpaid
interest to the date fixed for redemption if the Issuer or Bermuda Holdings is
or would be so required in the absence of any applicable tax treaty on the next
succeeding Interest Payment Date to pay Additional Amounts with respect to the
Senior Notes and, in either case, the payment of such Additional Amounts cannot
be avoided by the use of any reasonable measures available to the Issuer.
The Issuer or Bermuda Holdings shall also pay, or make available for
payment, to holders of the Senior Notes on the redemption date any Additional
Amounts resulting from the payment of such redemption price.
8. Notice of Redemption
--------------------
Notice of redemption shall be mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each holder of the Senior Notes at the addresses
provided to the Trustee in writing by the holders of such Senior Notes on the
date of issuance of such Senior Notes or on the dates of any subsequent transfer
of such Senior Notes or at any address provided to the Trustee in writing by
such holders. Senior Notes in denominations larger than $1,000 of principal
amount at maturity may be redeemed in part but only in whole multiples of $1,000
at maturity. In the event of a redemption of less than all of the Senior Notes,
the Senior Notes for redemption will be chosen by the Trustee in accordance with
the Indenture. If any Senior Note is redeemed subsequent to a record date with
respect to any interest payment date specified above and or prior to such
interest payment date, then any accrued interest will be paid to the holder of
the Senior Note at the close of business on such record date. If money
sufficient to pay the redemption price of and accrued interest on all Senior
Notes (or portions thereof) to be redeemed on the redemption date is deposited
with the Paying Agent on or before the redemption date and certain other
conditions are satisfied, on and after such date interest ceases to accrue on
such Senior Notes (or such portions thereof) called for redemption.
9. Denominations; Transfer; Exchange
---------------------------------
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This Senior Note is in registered form without coupons. The holder of this
Senior Note may only transfer or exchange this Senior Note in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Senior Notes selected for redemption
(except, in the case of a Senior Note to be redeemed in part, the portion of the
Senior Note need not be redeemed) or any Senior Notes for a period of 15 days
before a selection of Senior Notes to be redeemed.
10. Persons Deemed Owners
---------------------
The registered holder of this Senior Note will be treated as the owner of
it for all purposes.
11. Defeasance and Covenant Defeasance.
----------------------------------
The Indenture contains provisions for defeasance at any time, upon
compliance by the Issuer and Bermuda Holdings with certain conditions set forth
in the Indenture, of (a) the entire indebtedness of the Issuer and Bermuda
Holdings with respect to this Senior Note and (b) certain restrictive covenants
and the related defaults and Events of Default.
12. Amendment, Waiver
-----------------
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer, Bermuda Holdings and the Trustee with the consent of the holders of a
majority in aggregate principal amount of the Senior Notes outstanding at the
time of amendment or modification. The Indenture also contains provisions
permitting the holders of specified percentages in aggregate principal amount of
the Senior Notes at any time outstanding, on behalf of the holders of all the
Senior Notes, to waive compliance by the Issuer and Bermuda Holdings with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by or on behalf of
the holder of this Senior Note shall be conclusive and binding upon such holder
and upon all future holders of this Senior Note and of any Senior Note issued in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Senior Note.
13. Defaults and Remedies
---------------------
This Senior Note has the Events of Default as set forth in Section 4.1 of
the Indenture. If an Event of Default occurs and is continuing, the Trustee or
the
6
holders of at least 25% in principal amount of the Senior Notes, subject to
certain limitations, may declare all the Senior Notes to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
and shall result in the Senior Notes being due and payable immediately upon the
occurrence of such Events of Default.
Holders of Senior Notes may not enforce the Indenture or the Senior Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Senior Notes unless it receives reasonable indemnity or
security. Subject to certain limitations, holders of a majority in principal
amount of the Senior Notes may direct the Trustee in its exercise of any trust
or power. The holders of a majority in principal amount of the Senior Notes
then outstanding by written notice to the Trustee may rescind a declaration of
acceleration if the rescission is prior to a judgment or decree for payment and
if all Events of Default have been cured or waived except nonpayment of
principal and interest that has been due solely because of the acceleration.
The Trustee may withhold from holders of Senior Notes notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in the interest of the holders. The above
description of Events of Default and remedies is qualified by reference, and
subject in its entirety, to the more complete description thereof contained in
the Indenture.
14. Trustee Dealings with the Issuer or Bermuda Holdings
----------------------------------------------------
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of this Senior Note and may otherwise deal with and collect obligations
owed to it by the Issuer or Bermuda Holdings or their Affiliates and may
otherwise deal with the Issuer or Bermuda Holdings or their Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Senior Note
Registrar or such other agent may do the same with like rights.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Issuer,
Bermuda Holdings or any Subsidiary of Bermuda Holdings shall not have any
liability for any payment of the principal of, or premium, if any, or interest
on, any of the Senior Notes or any other obligations of the Issuer or Bermuda
Holdings under this Senior Note, the Guarantee or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting this Senior Note, the bearer of this Senior Note waives and releases
all such liability. The waiver and release are part of the consideration for
the issuance of this Senior Note.
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16. Authentication
--------------
This Senior Note shall not be valid until an authorized officer of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Senior Note.
17. Governing Law
-------------
The internal laws of the State of New York shall govern the Indenture and
this Senior Note without regard to conflict of law provisions thereof.
The Issuer will furnish to the holder of this Note upon written request and
without charge to the holder a copy of the Indenture which has in it the text of
this Global Note in larger type. Requests may be made to:
Terra Nova Insurance (UK) Holdings plc
Attention: Company ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Great Britain
8
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
___________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
___________________________________________________________________________
the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing _____________________ attorney to transfer said
Senior Note on the books of the Issuer with full power of substitution in the
premises.
[THE FOLLOWING PROVISIONS TO BE INCLUDED
ON ALL RESTRICTED DEFINITIVE SENIOR NOTES]
In connection with any transfer of this Senior Note occurring prior to the
date of an effective Registration, the undersigned confirms that without
utilizing any general solicitation or general advertising that:
[Check One]
[_](a) This Senior Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
[_](b) This Senior Note is being transferred in an offshore transaction
in compliance with Rule 904 of the Securities Act of 1933, as
amended.
or
[_](c) This Senior Note is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Senior Note and the
Indenture.
If none of the foregoing boxes is checked the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the
9
Holder hereof unless and until the conditions to any such transfer or
registration set forth herein and in Section 2.12 of the Indenture shall have
been satisfied.
Date:
____________ ____________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Senior
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "QUALIFIED
INSTITUTIONAL BUYER" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance an
Rule 144A and acknowledges that it has received such information regarding the
Issuer and Bermuda Holdings as the undersigned has requested pursuant to Rule
144A or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
_______________ ______________________________
NOTICE: To be executed by an
executive officer
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EXHIBIT D
[FORM OF NOTATION OF GUARANTEE]
TERRA NOVA (BERMUDA) HOLDINGS LTD., a company duly organized and existing
under the laws of Bermuda (herein called "BERMUDA HOLDINGS," which term includes
any successor Person under the Indenture (the "INDENTURE") referred to in the
Global Note on which this notation is endorsed), has irrevocably, fully and
unconditionally guaranteed, pursuant to the terms of the Guarantee contained in
Article 12 of the Indenture, the due and punctual payment of the principal of
and any premium and interest on this Global Note (and any Additional Amounts
payable in respect thereof), when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of this Global Note and
the Indenture.
All payments pursuant to this Guarantee shall be made without withholding
or deduction for, or on account of, any present and future taxes, duties,
assessments or governmental charges of whatever nature unless the deduction or
withholding of such taxes, duties, assessments or governmental charges is then
required by law. If any such taxes, duties, assessments or governmental charges
are required by the U.K., Bermuda or any Relevant Jurisdiction or any political
subdivision or taxing authority thereof or therein to be withheld or deducted,
Bermuda Holdings will pay such Additional Amounts (as defined in the Indenture)
as will result (after deduction of such taxes, duties, assessments or
governmental charges and any additional taxes, duties, assessments or
governmental charges payable in respect of such) in the payment to each holder
of a Senior Note of the amounts which would have been payable in respect of the
Guarantee thereof had no such withholding or deduction been required, subject to
certain exceptions as set forth in Section 9.17 of the Indenture.
The obligations of Bermuda Holdings to the holders of the Senior Notes and
to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article 12 of the Indenture, and reference is hereby made to such
Article and Indenture for the precise terms of the Guarantee.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Global Note upon which this notation of the
Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
Capitalized terms used but not defined herein are used herein as defined in
the Indenture.
TERRA NOVA (BERMUDA) HOLDINGS LTD.
By:________________________________
By:________________________________
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EXHIBIT E
[Name of Transferor]
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
___________, ____
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
RE: TERRA NOVA INSURANCE (UK) HOLDINGS PLC
7% SENIOR NOTES DUE 2008 (THE "SENIOR NOTES")
Dear Sirs:
In connection with our proposed sale of U.S.$_________ aggregate principal
amount of the Senior Notes, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended, and, accordingly, we represent that:
(1) the offer of the Senior Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting an our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Issuer are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters
covered hereby. Terms used in this certificate have the meanings set forth in
Regulation S.
Very truly yours,
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