XL CAPITAL LTD TO THE BANK OF NEW YORK, AS TRUSTEE FOURTH SUPPLEMENTAL INDENTURE DATED AS OF MAY 7, 2007 SENIOR DEBT SECURITIES SUPPLEMENT TO INDENTURE DATED AS OF JUNE 2, 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOURTH SUPPLEMENTAL INDENTURE, dated as of May 7, 2007 (the “Fourth Supplemental Indenture”), by and between XL CAPITAL LTD, a Cayman Islands exempted limited company (the “Company”), having its principal office at XL House, One Bermudiana Road, Hamilton HM11, Bermuda, and THE BANK OF NEW YORK, a New York banking corporation, having a Corporate Trust Office at 101 Barclay Street, Floor 8 West, New York, New York 10286, as trustee (the “TRUSTEE”), under the Indenture.

 

WHEREAS, the Company and the Trustee have as of June 2, 2004 entered into an Indenture (the “Base indenture”) providing for the issuance by the Company from time to time of its senior debt securities;

 

WHEREAS, the Company and the Trustee have executed that certain First Supplemental Indenture, dated as of August 23, 2004, and that certain Second Supplemental Indenture, dated as of November 12, 2004, pursuant to which the Company issued a series of its 5.25% Senior Notes due 2014 (“2014 Securities”) and a series of its 6.375% Senior Notes due 2024 (“2024 Securities”) under the Base Indenture and provided for certain additional provisions of such 2014 Securities and 2024 Securities;

 

WHEREAS, the Company and the Trustee have executed that certain Third Supplemental Indenture, dated as of December 9, 2005, pursuant to which the Company issued a series of its 5.25% Senior Notes due 2011 (the “Securities”) under the Base Indenture;

 

WHEREAS, pursuant to Section 9.01(11) of the Base Indenture, the Company and the Trustee may enter into supplemental indentures to establish the form or terms of securities of any series as permitted by Sections 2.01 and 3.01 of the Base Indenture;

 

WHEREAS, the Company desires to issue another series of senior debt securities under the Base Indenture, and has duly authorized the creation and issuance of such series of senior debt securities and the execution and delivery of this Fourth Supplemental Indenture to modify the Base Indenture and provide certain additional provisions as hereinafter described (the Base Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and this Fourth Supplemental Indenture, is hereinafter referred to as the “Indenture”);

 

WHEREAS, the Company and the Trustee deem it advisable to enter into this Fourth Supplemental Indenture for the purposes of establishing the terms of such series of senior debt securities and providing for the rights, obligations and duties of the Trustee with respect to such series of senior debt securities;

 

WHEREAS, the execution and delivery of this Fourth Supplemental Indenture has been authorized by a resolution of the Board of Directors of the Company or a duly authorized committee thereof;

 

WHEREAS, concurrently with the execution hereof, the Company has delivered an Officers’ Certificate and has caused its counsel to deliver to the Trustee an Opinion of Counsel; and

 

WHEREAS, all conditions and requirements of the Base Indenture necessary to make this Fourth Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto and the execution and delivery thereof have been in all respects duly authorized by the parties hereto.

 

NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the mutual premises and agreements herein contained, the Company and the Trustee covenant and agree, for the equal and proportionate benefit of all Holders of the 2027 Securities (as defined below), as follows:

 

 

 

Section 1.1                      Definition of Terms.

 

Unless otherwise provided herein or unless the context otherwise requires:

 

(a)           a term defined in the Base Indenture has the same meaning when used in this Fourth Supplemental Indenture;

 

(b)           a term defined anywhere in this Fourth Supplemental Indenture has the same meaning throughout;

 

(c)           the singular includes the plural and vice versa;

 

(d)           headings are for convenience of reference only and do not affect interpretation; and

 

(e)           the following terms have the meanings given to them in this Section 1.1(e):

 

“Additional Amounts” has the meaning set forth in Section 2.13(b).

 

“Comparable Treasury Issue” means the United States Treasury security selected as having a maturity comparable to the remaining term of the 2027 Securities to be redeemed that would be used, at the time of selection and under customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 2027 Securities.

 

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or if the Trustee obtains fewer that four Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations.

 

“Depositary” has the meaning set forth in Section 2.7.

 

“Designated Subsidiary” means any present or future consolidated subsidiary of the Company that is a regulated insurance company, the assets of which constitute at least 20% of the Company’s consolidated assets.

 

“Global Note” means a Global Security representing the 2027 Securities.

 

“Issue Date” means May 7, 2007.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day before the Redemption Date.

 

“Reference Treasury Dealers” means Goldman, Sachs & Co., with respect to the Senior Notes, and its respective successors and any other primary Treasury dealer the Company selects.  If any of the foregoing ceases to be a primary U.S. government securities dealer in New York City, the Company must substitute another primary Treasury dealer.

 

 

“Relevant Date” means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the Trustee on or prior to such due date, it means the first date on which, the full amount of such moneys having been so received and being available for payment to Holders, notice to that effect shall have been duly given to the Holders of the 2027 Securities.

 

“Tax Event” means if the Company determines that, as a result of (1) any change in, or amendment to, the law or treaties (or any regulations or rulings promulgated thereunder), including the enactment of any legislation or the publication of any regulatory determination, of the Cayman Islands, Bermuda or any other jurisdiction from or through which the Company makes a payment on the 2027 Securities or in which the Company generally becomes subject to taxation; or (2) any change in, or amendment to, a position regarding the application, administration or interpretation of such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) (each of the foregoing in clauses (1) and (2), a “Change In Tax Law”), the Company is, or on the next Interest Payment Date in respect of the 2027 Securities would be, required to pay Additional Amounts with respect to the 2027 Securities as described under Section 2.13(b), and such obligation cannot be avoided by taking commercially reasonable measures available to the Company.  The Change in Tax Law must become effective on or after May 7, 2007.  In the case of a successor entity, the Change in Tax Law must become effective after the date that such successor entity first becomes an obligor on the 2027  Securities (unless the Change in Tax Law had already occurred prior to such date, but on or after May 7, 2007, with respect to the original entity).

 

“Treasury Rate” means, with respect to any Redemption Date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming 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.  The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

 

 

 

Section 2.1                      Designation of Series.

 

Pursuant to the terms hereof and Sections 2.01 and 3.01 of the Base Indenture, the Company hereby creates a series of its senior debt securities designated as the 6.25% Senior Notes due 2027 (the “2027 Securities”), which 2027 Securities shall be deemed “Securities” for all purposes under the Indenture.

 

Section 2.2                      Form of 2027 Securities.

 

The definitive form of the 2027 Securities shall be substantially in the form set forth in Exhibit A attached hereto, which is incorporated herein and made part hereof (and the 2027 Securities shall be referred to as the “Notes” in Exhibit A).

 

The Final Maturity of the 2027 Securities shall be May 15, 2027.

 

Section 2.3                      Interest and Interest Rate Reset.

 

(a)           The 2027 Securities will bear interest from the Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to maturity or early redemption, as the case may be, at the rate of 6.25% per annum payable semi-annually on November 15 and May 15 of each year, commencing on November 15, 2007, to the persons in whose names the 2027 Securities were registered at the close of business on the preceding November 1 and May 1, respectively.

 

 

 

(b)           Interest on the 2027 Securities will be computed on the basis of a 360-day year comprised of twelve 30-day months.  The amount of interest payable for any period shorter than a full semi-annual period for which interest is computed will be computed on the basis of the actual number of days elapsed in the 180-day period.

 

Section 2.4                      Limit on Amount of 2027 Securities.

 

(a)           The 2027 Securities initially will be limited in aggregate principal amount to $325,000,000 and may, upon execution of this Fourth Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said 2027 Securities in accordance with a Company Order.

 

(b)           The Company may issue from time to time, without giving notice to or seeking the consent of the Holders of the 2027 Securities, additional notes having the same terms as the 2027 Securities (except for the initial public offering price, first Interest Payment Date and the Issue Date).  Any such additional notes, together with the 2027 Securities, will constitute a single series of Securities under the Indenture.

 

Section 2.5                      Nature of 2027 Securities/Minimum Denomination.

 

(a)           The 2027 Securities shall constitute senior, unsecured and unsubordinated obligations of the Company and shall rank pari passu with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding.

 

(b)           The 2027 Securities shall be issuable only in registered form and without coupons in denominations of $1,000 and any integral multiples thereof.

 

Section 2.6                      No Sinking Fund.

 

The 2027 Securities do not have the benefit of any mandatory redemption or sinking fund obligation and are not redeemable at the option of the Holders.

 

Section 2.7                      Issuance of 2027 Securities and Payment.

 

(a)           The 2027 Securities, on original issuance, shall be issued in the form of one fully registered Global Note registered in the name of The Depository Trust Company, as Depositary (the “Depositary”), or its nominee, and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the 2027 Securities represented thereby (or such other accounts as they may direct).

 

(b)           The payment of principal of and the interest on the 2027 Securities will be payable at the Corporate Trust Office or, at the option of the Company, by check mailed to each Holder at its address set forth in the Security Register; provided however, that if a Holder has given wire transfer instructions to the Company and the Paying Agent and Security Registrar at least ten Business Days prior to the applicable payment date, payment of principal of and the interest on the 2027 Securities will be payable by wire transfer of immediately available funds to the account specified in such instructions.

 

Section 2.8                      2027 Securities Not Convertible or Exchangeable.

 

The 2027 Securities will not be convertible or exchangeable for other securities or property.

 

 

Section 2.9                      Redemption.

 

Pursuant to Section 3.01(6) and Section 11.01 of the Base Indenture, so long as any of the 2027 Securities are Outstanding, the following provisions shall be applicable to the 2027 Securities:

 

(a)           The 2027 Securities will be redeemable, in whole at any time or in part from time to time, at the Company’s option, at a redemption price equal to accrued and unpaid interest on the principal amount of the 2027 Securities being redeemed to the Redemption Date plus the greater of:  (A) 100% of the principal amount of the 2027 Securities to be redeemed, and (B) the sum of the present values of the remaining scheduled payments of principal and interest on the 2027 Securities to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points.

 

(b)           If a Tax Event occurs and is continuing, the Company may, at its option, redeem the 2027 Securities in whole, but not in part, at any time at a redemption price equal to 100% of the principal amount of the 2027 Securities, plus accrued and unpaid interest, if any, to the Redemption Date and Additional Amounts, if any, then due or that will become due on the date fixed for redemption as a result of such redemption.  Installments of interest on 2027 Securities which are due and payable on or prior to a Redemption Date will be payable to Holders of the 2027 Securities registered as such at the close of business on the relevant record dates.

 

(c)           (i) Notwithstanding Section 11.04 of the Base Indenture, any notice of redemption pursuant to Section 2.9(a) or (b) shall (i) be sufficient if instead of setting forth a specific price with respect to the Redemption Price, it sets forth the manner of calculation thereof and (ii) be mailed to the Holders not less than 30 nor more than 60 days prior to the Redemption Date.

 

(ii)           Notwithstanding the foregoing, in case of a Tax Event redemption, no such notice of redemption will be given (a) earlier than 90 days prior to the earliest date on which the payor would be obliged to make such payment or withholding if a payment in respect of 2027 Securities by it were then due and (b) unless at the time such notice is given, such obligation to pay such Additional Amounts remains in effect.  Prior to the publication or mailing of any notice of redemption of 2027 Securities pursuant to the foregoing, the Company will deliver to the Paying Agent (a) an Officers’ Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that any factual conditions precedent to the Company’s right so to redeem have been satisfied and (b) a legal opinion of an outside nationally recognized tax counsel to the effect that the circumstances referred to in this clause (ii) and the circumstances described in the definition of “Tax Event” exist.

 

Section 2.10                                Guarantees.

 

The 2027 Securities will not be guaranteed by any third party.

 

Section 2.11                                Place of Payment.

 

The Paying Agent for the 2027 Securities shall initially be the Trustee, and the Place of Payment for the 2027 Securities shall initially be the Corporate Trust Office, which as of the date hereof for such purpose is located at 101 Barclay Street, Floor 8 West, New York, New York 10286.  The Company may from time to time designate one or more additional offices or agencies where 2027 Securities may be presented or surrendered for payment.

 

 

Section 2.12                                Events of Default.

 

The following shall constitute additional Events of Default pursuant to Section 5.01 of the Base Indenture with respect to the 2027 Securities with the same effect as if expressly set forth in such Section 5.01:

 

(a)           default by the Company under any instrument or instruments under which there is or may be secured or evidenced any of the Company’s indebtedness (other than the 2027 Securities) having an outstanding principal amount of $50,000,000 (or its equivalent in any other currency or currencies) or more, individually or in the aggregate, that has caused the holders thereof to declare such indebtedness to be due and payable prior to its stated maturity, unless such declaration has been rescinded within 30 days;

 

(b)           default by the Company in the payment when due of the principal of or premium, if any, on any bond, debenture, note or other evidence of the Company’s indebtedness, in each case for money borrowed, or in the payment of principal or premium, if any, under any mortgage, indenture, agreement or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness of the Company for money borrowed, which default for payment of principal or premium, if any, is in an aggregate principal amount exceeding $50,000,000 (or its equivalent in any other currency or currencies), if such default shall continue unremedied or unwaived for more than 30 days after the expiration of any grace period or extension of the time for payment applicable thereto;

 

(c)           default in the payment of any Additional Amounts payable with respect to interest on any 2027 Securities, when such Additional Amounts become due and payable, and continuance of such default for a period of 30 days; and

 

(d)           default in the payment of any Additional Amounts payable with respect to any principal of or premium, if any, on any 2027 Securities, when such Additional Amounts become due and payable either at maturity, upon any redemption, by declaration of acceleration or otherwise.

 

In addition, with respect to the 2027 Securities, the reference to “60 days” in Section 5.01(1) of the Base Indenture shall be amended to be “30 days” with respect to the 2027 Securities.

 

The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any Event of Default or any event which, after notice or lapse of time or both, would constitute an Event of Default.

 

Section 2.13                                Covenants.

 

The 2027 Securities shall be entitled to the benefit of each of the covenants in Article Ten of the Base Indenture and the following additional covenants (each of which shall be deemed to be a provision of the Indenture and, when referred to as a provision of the Indenture, shall be identified by reference to the Section number that is set forth immediately preceding the covenant):

 

(a)           SECTION 10.09.  Limitation On Liens On Stock Of Designated Subsidiaries.  The Company covenants that, so long as any 2027 Securities are outstanding, the Company will not, nor will the Company permit any Designated Subsidiary to, create, assume, incur, guarantee or otherwise permit to exist any indebtedness evidenced by notes, debentures, bonds or similar instruments that is secured by any mortgage, pledge, lien, security interest or other encumbrance upon any shares of Capital Stock of any Designated Subsidiary (whether such shares of stock are now owned or hereafter acquired) without effectively providing concurrently that the 2027 Securities will be secured equally and ratably with such indebtedness for at least the time period such other indebtedness is so secured.

 

 

(b)           SECTION 10.10.  Additional Amounts.  All amounts payable (whether in respect of principal, interest or otherwise) in respect of the 2027 Securities will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, levies, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the Cayman Islands or Bermuda or any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, levies, assessments or governmental charges is required by law.  In that event, the Company will pay, or cause to be paid, such additional amounts as may be necessary in order that the net amounts receivable by a Holder after such withholding or deduction (including any withholding or deduction on such payment of additional amounts) shall equal the respective amounts that would have been receivable by such Holder had no such withholding or deduction been required (“Additional Amounts”), except that no such Additional Amounts shall be payable in relation to any payment (including a payment made in connection with a redemption) in respect of any of the 2027 Securities (a) to, or to a third party on behalf of, a Person who would be able to avoid such withholding or deduction by complying with such Person’s statutory requirements or by making a declaration of non-residence or similar claim for exemption but, in either case, fails to do so, or is liable for such taxes, duties, levies, assessments or governmental charges in respect of such 2027 Security by reason of his having some connection with (including, without limitation, being a citizen of, being incorporated or engaged in a trade or business in, or having a residence or principal place of business or other presence in) the Cayman Islands or Bermuda, as the case may be, other than (i) the mere holding of such 2027 Security; (ii) the receipt of principal, interest or other amount in respect of such 2027 Security; or (iii) the mere enforcement of rights with respect to such 2027 Security; (b) presented for payment more than 30 days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to such Additional Amounts on presenting the same for payment on or before the expiration of such period of 30 days; (c) to a fiduciary, a partnership or person who is not the beneficial owner of a 2027 Security, if and to the extent that, as a result of an applicable tax treaty, no Additional Amounts would have been payable had the beneficiary, partner or beneficial owner owned the 2027 Security directly; (d) on account of any inheritance, gift, estate, personal property, stamp, sales or transfer or similar taxes, duties, levies, assessments or similar governmental charges; or (e) on account of any taxes, duties, levies, assessments or governmental charges that are payable otherwise than by withholding from payments in respect of such 2027 Security.

 

In the event that payments in respect of the 2027 Securities are subject to withholding or deduction for or on account of any taxes, the Company will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the relevant taxing jurisdiction in accordance with applicable law.  The Company will use commercially reasonable efforts to obtain certified copies of tax receipts evidencing the payment of any taxes so deducted or withheld from each relevant taxing jurisdiction imposing such taxes and will use commercially reasonable efforts to provide or make available such certified copies (or other documentary evidence establishing the payment of such taxes) to each Holder.

 

If the Company becomes subject generally at any time to any taxing jurisdiction other than or in addition to the Cayman Islands or Bermuda, or makes a payment on the 2027 Securities from any jurisdiction other than or in addition to the Cayman Islands or Bermuda, references in this Section 10.10 to the Cayman Islands and Bermuda shall be read and construed as references to such other jurisdiction(s) and/or to the Cayman Islands and Bermuda.

 

Any reference in the Indenture to principal, premium or interest in respect of the 2027 Securities, any redemption amount and any other amounts in the nature of principal shall be deemed also to refer to any Additional Amounts that may be payable under the Indenture, and the express mention of the payment of Additional Amounts (if applicable) in any provision hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.

 

 

Except as otherwise provided in or pursuant to the Indenture, if the 2027 Securities require the payment of Additional Amounts, at least 30 days prior to each date on which any payments under or with respect to the 2027 Securities are due and payable (unless such obligation to pay Additional Amounts arises shortly before or after the 30th day prior to such date, in which case it shall be promptly thereafter) the Company or its designee shall furnish to the Trustee, the Registrar and the Paying Agent an Officers’ Certificate stating the fact that Additional Amounts will be payable, the amounts so payable, and any other information to enable the Trustee or such Paying Agent to pay such Additional Amounts to Holders on the payment date.

 

The Company will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery or registration of any 2027 Securities or any other document or instrument referred to therein (other than a transfer of the 2027 Securities), or the receipt of any payments with respect to the 2027 Securities, excluding any such taxes, charges or similar levies imposed by any jurisdiction outside the Cayman Islands or Bermuda in which a Paying Agent is located, other than those resulting from, or required to be paid in connection with, the enforcement of the 2027 Securities, the Indenture or any other such document or instrument following the occurrence of any Event of Default with respect to the 2027 Securities.

 

Section 2.14                                Non-Applicability of Certain Sections.

 

Sections 11.08, 11.09 and 11.10 of the Base Indenture shall not apply to the 2027 Securities.

 

 

 

Section 3.1                      Appointment of Trustee.

 

Pursuant and subject to the Indenture, the Company and the Trustee hereby constitute the Trustee as trustee to act on behalf of the Holders of the 2027 Securities, and as the principal Paying Agent and Security Registrar for the 2027 Securities, effective upon execution and delivery of this Fourth Supplemental Indenture.  By execution, acknowledgment and delivery of this Fourth Supplemental Indenture, the Trustee hereby accepts appointment as Trustee, Paying Agent and Security Registrar with respect to the 2027 Securities, and agrees to perform such trusts upon the terms and conditions set forth in the Indenture and in this Fourth Supplemental Indenture.

 

Section 3.2                      Rights, Powers, Duties and Obligations of the Trustee.

 

Any rights, powers, duties and obligations by any provisions of the Indenture conferred or imposed upon the Trustee shall, insofar as permitted by law, be conferred or imposed upon and exercised or performed by the Trustee with respect to the 2027 Securities.

 

 

 

Section 4.1                      Application of Fourth Supplemental Indenture.

 

Each and every term and condition contained in this Fourth Supplemental Indenture that modifies, amends or supplements the terms and conditions of the Base Indenture with respect to the 2027 Securities shall apply only to the 2027 Securities created hereby and not to any past or future series of Securities issued under the Base Indenture.

 

 

Section 4.2                      Benefits of Fourth Supplemental Indenture.

 

Nothing contained in this Fourth Supplemental Indenture shall or shall be construed to confer upon any person other than a Holder of the 2027 Securities, the Company and the Trustee any right or interest to avail itself or himself, as the case may be, of any benefit under any provision of the Base Indenture or this Fourth Supplemental Indenture.

 

Section 4.3                      Amendment of Fourth Supplemental Indenture.

 

The Company and the Trustee, at any time and from time to time, may amend, modify or supplement this Fourth Supplemental Indenture in accordance with the provisions of Article Nine of the Base Indenture.

 

Section 4.4                      Effective Date.

 

This Fourth Supplemental Indenture shall be effective as of the date first above written and upon the execution and delivery hereof by each of the parties hereto.

 

Section 4.5                      Governing Law; Waiver of Jury Trial; Submission to Jurisdiction; Judgment Currency.

 

THIS FOURTH SUPPLEMENTAL INDENTURE AND EACH 2027 SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS FOURTH SUPPLEMENTAL INDENTURE, THE 2027 SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

The Company and the Trustee hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in the Borough of Manhattan in New York City for the purposes of all legal proceedings arising out of or relating to the Indenture.  The Company and the Trustee irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  The Company hereby designates and appoints CT Corporation System, 111 Eighth Avenue, New York, New York 10011, as its authorized agent upon which process may be served in any legal suit, action or proceeding arising out of or relating to the Indenture which may be instituted in any federal or state court in the Borough of Manhattan, The City of New York, New York, and agrees that service of process upon such agent, and written notice of said service to the Company by the Person serving the same, shall be deemed in every respect effective service of process upon the Company in any such suit, action or proceeding and further designates its domicile, the domicile of CT Corporation System specified above and any domicile CT Corporation System may have in the future as its domicile to receive any notice hereunder (including service of process).  If for any reason CT Corporation System (or any successor agent for this purpose) shall cease to act as agent for service of process as provided above, the Company will promptly appoint a successor agent for this purpose reasonably acceptable to the Trustee.  The Company agrees to take any and all actions as may be necessary to maintain such designation and appointment of such agent in full force and effect.

 

The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the requisite amount of the Required Currency with the Judgment Currency on the New York

 

Banking Day preceding the day on which a final unappealable judgment is given and (b) its obligations under the Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with clause (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under the Indenture.  For purpose of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York or a day on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to be closed.

 

Section 4.6                      Counterparts.

 

This Fourth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 4.7                      Ratification of Base Indenture.

 

The Base Indenture, as supplemented by this Fourth Supplemental Indenture, is in all respects ratified and confirmed, and this Fourth Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided.

 

Section 4.8                      Validity and Sufficiency.

 

The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fourth Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company.

 

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed as a deed by their respective officers hereunto duly authorized, all as of the day and year first above written.

 

XL CAPITAL LTD, as Issuer

By:  /s/ Kirstin Romann Gould                     Name:  Kirstin Romann Gould         Title:    Executive Vice President, General                      Counsel Corporate Affairs and                      Secretary

 

 

 

 

 

 

[If the Note is a Global Note, insert - THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES, INCLUDING THE PAYMENT OF PRINCIPAL AND INTEREST.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE (I) BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR (II) BY A NOMINEE OF THE DEPOSITARY OR THE DEPOSITARY TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

 

[If the Depository is The Depository Trust Company, insert - UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

 

 

No.   CUSIP No. $_______________

 

 

 

 

 

XL CAPITAL LTD, an exempted limited company duly organized and existing under the laws of the Cayman Islands (the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to __________________ the principal sum of ________________ United States dollars (U.S.$______________) [If the Note is a Global Note, insert - , as such amount may be increased or decreased as set forth on the Schedule of Increases or Decreases in Global Note annexed hereto,] on May 15, 2027 (such date is hereinafter referred to as the “Stated Maturity”), and to pay interest thereon, from May 7, 2007, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, at the rate of 6.25% per annum to, but excluding, the relevant Interest Payment Date, until the Stated Maturity or early redemption.

 

Interest on this Note initially shall be payable semi-annually in arrears on November 15 and May 15 of each year (each, an “Interest Payment Date”), commencing November 15, 2007 through and including the Stated Maturity or early redemption.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the November 1 and May 1, respectively (whether or not a Business Day) preceding the relevant Interest Payment Date.

 

Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date and shall otherwise be payable, all as more fully provided in the Indenture.

 

Principal of and the interest on the Notes will be payable at the Corporate Trust Office, or, at the option of the Company, by check mailed to each Holder at its address set forth in the Security Register; provided however, that if a Holder has given wire transfer instructions to the Company and the Paying Agent and Security Registrar at least ten Business Days prior to the applicable payment date, principal of and the interest on the Notes will be payable by wire transfer of immediately available funds to the account specified in such instructions.

 

Interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months.  The amount of interest payable for any period shorter than a full semi-annual period for which interest is computed will be computed on the basis of the actual number of days elapsed in the 180-day period.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if fully set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by the manual signature of one of its authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

IN WITNESS WHEREOF, the Company has caused this Note to be executed and delivered as a deed.

 

Dated:

 

 

XL CAPITAL LTD

By:  _____________________________         Name:         Title:

By:  _____________________________         Name:        Title:

 

 

 

This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.

 

The Bank of New York, as Trustee

By:  _________________________                      Authorized Officer

 

 

 

 

 

This Note is one of a duly authorized issue of securities of the Company designated as its “6.25% Senior Notes due 2027” (herein sometimes referred to as the “Notes”), initially limited in aggregate principal amount to $325,000,000, issued under and pursuant to an Indenture, dated as of June 2, 2004 (the “Base Indenture”), duly executed and delivered, between the Company and The Bank of New York, as Trustee (the “Trustee”), and a Fourth Supplemental Indenture, dated as of May 7, 2007 (the “Fourth Supplemental Indenture”), between the Company and the Trustee (such Base Indenture as amended and supplemented by the Fourth Supplemental Indenture, the “INDENTURE”), to which the Indenture and all subsequent indentures supplemental thereto relating to the Notes reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.

 

The Notes are issuable only in registered form without coupons, in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series so issued are exchangeable for a like aggregate principal amount of Notes of a different authorized denomination, as requested by the Holder surrendering the same.

 

The Notes will be redeemable, in whole at any time or in part from time to time, at the Company’s option, at a redemption price equal to the accrued and unpaid interest on the principal amount of the Notes being redeemed to the Redemption Date plus the greater of:  (A) 100% of the principal amount of the Notes to be redeemed, and (B) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points, as provided in, and subject to the terms of, the Indenture.

 

If a Tax Event occurs and is continuing, the Company may, at its option, redeem the Notes in whole, but not in part, at any time at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the Redemption Date and Additional Amounts, if any, then due or that will become due on the Redemption Date as a result of the redemption, as provided in, and subject to the terms of, the Indenture.

 

No sinking fund is provided for the Notes.

 

The Notes shall constitute the senior, unsecured and unsubordinated obligations of the Company and shall rank equally in right of payment with all existing and future senior, unsecured and unsubordinated obligations of the Company.

 

In the case of an Event of Default described in Section 5.01(5) or 5.01(6) of the Indenture, all unpaid principal of and accrued interest and Additional Amounts on the Notes then Outstanding shall be due and payable immediately without any declaration or other act on the part of the Trustee or the Holders of any Notes.  In the case of all other Events of Default, if any such Event of Default shall occur and be continuing, the principal of all of the Notes, together with accrued interest to the date of declaration, may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding and affected thereby.  The Indenture also contains, with certain exceptions as therein provided, provisions permitting Holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding, on behalf of the Holders of all the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note or such other Note.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless (i) such Holder shall have previously given the Trustee written notice of a continuing Event of De-

 

fault, (ii) the Holders of not less than 25% in principal amount of the Notes that are Outstanding shall have made a written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity satisfactory to it, (iii) the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity, and (iv) the Trustee shall not have received from the Holders of a majority in principal amount of the Notes that are Outstanding a direction inconsistent with such written request during such 60-day period.  The foregoing shall not apply to any suit instituted by any Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable on the Security Register upon surrender of this Note for registration of transfer at the Corporate Trust Office of the Trustee or at such other office or agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New York (which shall initially be an office or agency of the Trustee), or at such other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees by the Security Registrar.  No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentation of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner thereof for all purposes, whether or not such Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

No recourse for the payment of the principal of (and premium, if any on) or interest on this Note and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of consideration for the issue hereof, expressly waived and released.

 

[If Note is a Global Note, insert - This Note is a Global Note and is subject to the provisions of the Indenture relating to Global Notes, including the limitations in Section 2.03 of the Base Indenture on transfers and exchanges of Global Notes.]

 

THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

All capitalized terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

 

Additional abbreviations may also be used though not on the above list.

 

 

FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:

 

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(Insert assignee’s social security or tax identification number)

 

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(Insert address and zip code of assignee)

 

and irrevocably appoints ________________ agent to transfer this Note on the Security Register.  The agent may substitute another to act for him or her.

 

Dated:

 

Signed:

 

Signature Guarantee:

 

(Sign exactly as your name appears on the other side of this Note)

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“Stamp”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

 

The following increases or decreases in this Global Note have been made:

 

 

Amount of Decrease in Stated Amount of the Global Note	Amount of Increase in Stated Amount of the Global Note	Stated Amount of the Global Note Following Such Decrease/Increase	Signature of Authorized Officer of Trustee	Date