2000-04-05 ACE Limited (NYSE: ACE) 8-K

8/6/2019 2000-04-05 ACE Limited (NYSE: ACE) 8-K

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0000950131-00-002417.txt : 200004060000950131-00-002417.hdr.sgml : 20000406

ACCESSION NUMBER: 0000950131-00-002417

CONFORMED SUBMISSION TYPE: 8-KPUBLIC DOCUMENT COUNT: 5CONFORMED PERIOD OF REPORT: 20000403ITEM INFORMATION:FILED AS OF DATE: 20000405

FILER:

COMPANY DATA:COMPANY CONFORMED NAME: ACE LTDCENTRAL INDEX KEY: 0000896159STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331]IRS NUMBER: 000000000FISCAL YEAR END: 1231

FILING VALUES:FORM TYPE: 8-KSEC ACT:SEC FILE NUMBER: 001-11778FILM NUMBER: 594045

BUSINESS ADDRESS:STREET 1: ACE BLDGSTREET 2: 30 WOODBOURNE AVECITY: HAMILTON HM 08 BERMUSTATE: D0BUSINESS PHONE: 8092955200

MAIL ADDRESS:STREET 1: P O BOX HM 1015CITY: HAMITON BERMUDA STATE: D0

8-K1FORM 8-K

SECURITIES AND EXCHANGE COMMISSIONWashington D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 3, 2000

ACE LIMITED(Exact name of registrant as specified in its charter)

Cayman Islands 1-11778 98-0091805(State or other jurisdiction (Commission) (I.R.S. Employer

of Incorporation) File Number) Identification No.)

The ACE Building30 Woodbourne Avenue

Hamilton, Bermuda HM 08(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (441) 295-5200

Not Applicable(Former name or former address, if changed since last report)

http://www.sec.gov/Archives/edgar/data/896159/0000950131-00-00241

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Item 5. Other Events

On April 3, 2000, ACE Limited commenced an offering of FELINE PRIDES (SM).Included as exhibits to this Current Report on Form 8-K are forms of theagreements to be entered into in connection with the offering of the FELINEPRIDES.

"FELINE PRIDES" is a service mark of Merrill Lynch & Co., Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

Dated: April 4, 2000 ACE LIMITED

By: /s/ Christopher Z. Marshall-----------------------------Christopher Z. MarshallChief Financial Officer

EXHIBIT INDEX

ExhibitNumber Description- ------ -----------

99.1 Form of Purchase Contract Agreement between ACE Limited and The Bankof New York, as Purchase Contract Agent

99.2 Form of Pledge Agreement among ACE Limited, The Bank of New York, asCollateral Agent, Custodial Agent and Securities Intermediary, and TheBank of New York, as Purchase Contract Agent

99.3 Form of Income PRIDES (included in Exhibit 99.1 hereto)

99.4 Certificate of the Powers, Designations, Preferences and Rights of the__% Cumulative Redeemable Preferred Shares, Series A, of ACE Limited

99.5 Form of Remarketing Agreement between ACE Limited and Merrill Lynch,Pierce, Fenner & Smith Incorporated, as Remarketing Agent

EX-99.12FORM OF PURCHASE AGREEMENT

================================================================================

ACE LIMITED

AND

THE BANK OF NEW YORK,AS PURCHASE CONTRACT AGENT

__________________

PURCHASE CONTRACT AGREEMENT__________________

Dated as of April . , 2000

================================================================================


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TABLE OF CONTENTS

ARTICLE IDEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1. Definitions...... .................. .................. ......... 1Section 1.2. Compliance Certificates and Opinions........ .................. 9Section 1.3. Form of Documents Delivered to Agent........... ...............10Section 1.4. Acts of Holders; Record Dates............ .................. ...10Section 1.5. Notices.......... .................. .................. .........11Section 1.6. Notice to Holders; Waiver.......... .................. .........12Section 1.7. Effect of Headings and Table of Contents.......... ............12Section 1.8. Successors and Assigns.......... .................. ............12Section 1.9. Separability Clause.......... .................. ...............13Section 1.10. Benefits of Agreement........ .................. ...............13Section 1.11. Governing Law............. .................. ..................13Section 1.12. Legal Holidays......... .................. .................. ...13Section 1.13. Counterparts..... .................. .................. .........13Section 1.14. Inspection of Agreement......... .................. ............13

ARTICLE IICERTIFICATE FORMS

Section 2.1. Forms of Certificates Generally....... .................. ......14Section 2.2. Form of Agent's Certificate of Authentication.. ...............15

ARTICLE IIITHE SECURITIES

Section 3.1. Title and Terms; Denominations..... .................. .........15Section 3.2. Rights and Obligations Evidenced by the Certificates.... ......15Section 3.3. Execution, Authentication, Delivery and Dating.......... ......16Section 3.4. Temporary Certificates.... .................. ..................16Section 3.5. Registration; Registration of Transfer and Exchange........ ...17Section 3.6. Book-Entry Interests......... .................. ...............18Section 3.7. Notices to Holders........... .................. ...............19Section 3.8. Appointment of Successor Clearing Agency.......... ............19Section 3.9. Definitive Certificates...... .................. ...............19Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates...... ......19Section 3.11. Persons Deemed Owners........... .................. ............20Section 3.12. Cancellation..... .................. .................. .........21Section 3.13. Establishment or Reestablishment of Growth PRIDES.......... ...21Section 3.14. Establishment or Reestablishment of Income PRIDES.......... ...22Section 3.15. Transfer of Collateral upon Occurrence of Termination Event...23Section 3.16. No Consent to Assumption........ .................. ............24

ARTICLE IVTHE PREFERRED SHARES

Section 4.1. Payment of Dividend; Rights to Dividends Preserved;Dividend Rate Reset; Notice...................................24

Section 4.2. Notice and Voting............ .................. ...............25

ARTICLE VTHE PURCHASE CONTRACTS

Section 5.1. Purchase of Ordinary Shares........... .................. ......26

Section 5.2. Contract Adjustment Payments.......... .................. ......27Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments....28Section 5.4. Payment of Purchase Price............. .................. ......29Section 5.5. Issuance of Ordinary Shares........... .................. ......33Section 5.6. Adjustment of Settlement Rate............ .................. ...33Section 5.7. Notice of Adjustments and Certain Other Events.......... ......38Section 5.8. Termination Event; Notice.......... .................. .........38Section 5.9. Early Settlement....... .................. .................. ...39Section 5.10. No Fractional Shares............ .................. ............40Section 5.11. Charges and Taxes............ .................. ...............40

ARTICLE VIREMEDIES

Section 6.1. Unconditional Right of Holders to Purchase Ordinary Sharesand to Receive Contract Adjustment Payments....................41

Section 6.2. Restoration of Rights and Remedies........ .................. ...41Section 6.3. Rights and Remedies Cumulative...... .................. .........41Section 6.4. Delay or Omission Not Waiver........... .................. ......42Section 6.5. Undertaking for Costs............ .................. ............42Section 6.6. Waiver of Stay or Extension Laws............. ..................42


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For all purposes of this Agreement, except as otherwise expressly providedor unless the context otherwise requires:

(a) the terms defined in this Article have the meanings assigned to them inthis Article and include the plural as well as the singular; and nouns andpronouns of the masculine gender include the feminine and neuter genders;

(b) all accounting terms not otherwise defined herein have the meaningsassigned to them in accordance with generally accepted accounting principles inthe United States;

(c) the words "herein," "hereof" and "hereunder" and other words of similarimport refer to this Agreement as a whole and not to any particular Article,Section or other subdivision; and

(d) the following terms have the meanings given to them in this Section1.1(d).

"Act" when used with respect to any Holder, has the meaning specified inSection 1.4.

"Affiliate" has the same meaning as given to that term in Rule 405 of theSecurities Act or any successor rule thereunder.

"Agent" means the Person named as the "Agent" in the first paragraph ofthis instrument until a successor Agent shall have become such pursuant to theapplicable provisions of this Agreement, and thereafter "Agent" shall mean suchPerson.

"Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplementalhereto entered into pursuant to the applicable provisions hereof.

"Applicable Market Value" has the meaning specified in Section 5.1.

"Authorized Newspaper" means a daily newspaper, in the English language,customarily published on each day that is a Business Day in The City of NewYork, whether or not published on days that are Legal Holidays, and of generalcirculation in The City of New York. The Authorized Newspaper for the purposesof the Reset Spread Announcement Date, is currently anticipated to be The WallStreet Journal (NYC edition).

"Bankruptcy Code" means title 11 of the United States Code, or any otherlaw of the United States that from time to time provides a uniform system ofbankruptcy laws.

"Beneficial Owner" means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the

books of the Clearing Agency or on the books of a Person maintaining an account

with such Clearing Agency (directly as a Clearing Agency Participant or as anindirect participant, in each case in accordance with the rules of such Clearing

Agency).

"Board of Directors" means the board of directors of the Company or a dulyauthorized committee of that board.

"Board Resolution" means one or more resolutions of the Board of Directors,a copy of which has been certified by the Secretary or an Assistant Secretary ofthe Company to have been duly adopted by the Board of Directors and to be infull force and effect on the date of such certification and delivered to the

Agent.

"Book-Entry Interest" means a beneficial interest in a Global Certificate,ownership and transfers of which shall be maintained and made through bookentries by a Clearing Agency as described in Section 3.6.

"Business Day" means any day other than a Saturday, Sunday or any other dayon which banking institutions and trust companies in The City of New York arepermitted or required by any applicable law to close.

"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).

"Certificate" means an Income PRIDES Certificate or a Growth PRIDESCertificate.

"Clearing Agency" means an organization registered as a "Clearing Agency"pursuant to Section 17A of the Exchange Act that is acting as a depositary forthe Securities and in whose name, or in the name of a nominee of thatorganization, shall be registered a Global Certificate and which shall undertaketo effect book-entry transfers and pledges of the Securities.

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"Clearing Agency Participant" means a broker, dealer, bank, other financial


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institution or other Person for whom from time to time the Clearing Agencyeffects book-entry transfers and pledges of securities deposited with theClearing Agency.

"Closing Price" has the meaning specified in Section 5.1.

"Collateral" has the meaning specified in Section 2.1 of the Pledge Agreement.

"Collateral Agent" means The Bank of New York, a New York bankingassociation, as Collateral Agent under the Pledge Agreement until a successorCollateral Agent shall have become such pursuant to the applicable provisions ofthe Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person

who is then the Collateral Agent thereunder.

"Collateral Substitution" has the meaning specified in Section 3.13.

"Company" means the Person named as the "Company" in the first paragraph ofthis instrument until a successor shall have become such pursuant to theapplicable provision of this Agreement, and thereafter "Company" shall mean suchsuccessor.

"Contract Adjustment Payments" means the fee payable by the Company inrespect of each Purchase Contract, equal to ____% per annum of the Stated Amountin the case of Income PRIDES and ____% per annum of the Stated Amount in thecase of Growth PRIDES, computed on the basis of a 360 day year of twelve 30 day

months, plus any Deferred Contract Adjustment Payments accrued pursuant toSection 5.3.

"Corporate Trust Office" means the principal corporate trust office of the Agent at which, at any particular time, its corporate trust business shall be

administered, which office at the date hereof is located at 101 Barclay Street,Floor 21 West, New York, New York 10286, Attention: Corporate Trust

Administration.

"Current Market Price" has the meaning specified in Section 5.5(a)(8).

"Deferred Contract Adjustment Payments" has the meaning specified inSection 5.3.

"Depositary" means, initially, DTC until another Clearing Agency becomesits successor.

"Dividend Rate" means the percentage rate per annum of the Stated Amount ofthe Preferred Shares at which dividends thereon are payable, if declared.

"DTC" means The Depository Trust Company, the initial Clearing Agency.

"Early Settlement" has the meaning specified in Section 5.9(a).

"Early Settlement Amount" has the meaning specified in Section 5.9(a).

"Early Settlement Date" has the meaning specified in Section 5.9(a).

"Early Settlement Rate" has the meaning specified in Section 5.9(b).

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"Exchange Act" means the Securities Exchange Act of 1934 and any statutesuccessor thereto, in each case as amended from time to time, and the rules andregulations promulgated thereunder.

"Expiration Date" has the meaning specified in Section 1.4.

"Expiration Time" has the meaning specified in Section 5.6(a)(6).

"Failed Remarketing" has the meaning specified in Section 5.4(b).

"Global Certificate" means a Certificate that evidences all or part of theSecurities and is registered in the name of a Depositary or a nominee thereof.

"Growth PRIDES" means the collective rights and obligations of a holder ofa Growth PRIDES Certificate in respect of a 1/20th undivided beneficial interestin a Treasury Security, subject in each case to the Pledge thereof, and therelated Purchase Contract.

"Growth PRIDES Certificate" means a certificate evidencing the rights andobligations of a Holder in respect of the number of Growth PRIDES specified onsuch certificate.

"Growth PRIDES Register" and "Growth PRIDES Registrar" have the respective meanings specified in Section 3.5.

"Holder," when used with respect to a Security, means the Person in whosename the Security evidenced by an Income PRIDES Certificate and/or a Growth


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PRIDES Certificate is registered in the related Income PRIDES Register and/orthe Growth PRIDES Register, as the case may be.

"Income PRIDES" means the collective rights and obligations of a Holder ofan Income PRIDES Certificate in respect of a Preferred Share, subject to thePledge thereof, and the related Purchase Contract.

"Income PRIDES Certificate" means a certificate evidencing the rights andobligations of a Holder in respect of the number of Income PRIDES specified onsuch certificate.

"Income PRIDES Register" and "Income PRIDES Registrar" have the respective meanings specified in Section 3.5.

"Issuer Order" or "Issuer Request" means a written order or request signedin the name of the Company by the Chairman of the Board, the Vice Chairman, thePresident or any Vice President (or other officer performing similar functions)of the Company and delivered to the Agent.

"Junior Securities" has the meaning specified in Section 5.3.

"NYSE" has the meaning specified in Section 5.1.

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"Officer's Certificate" means a certificate signed by the Chairman of theBoard, the Vice Chairman, the President or any Vice President (or other officerperforming similar functions) of the Company and delivered to the Agent.

"One-Month Treasury Bill" means direct obligations of the United States(which may be obligations traded on a when-issued basis only) having a maturitycomparable to the remaining term to maturity of the Preferred Shares, as agreedupon by the Company and the Reset Agent. The rate for the One-Month TreasuryBill will be the bid side rate displayed at 10:00 A.M., New York City time, onthe third Business Day immediately preceding the Purchase Contract SettlementDate in the Telerate system (or if the Telerate system is (a) no longeravailable on the third Business Day immediately preceding the Purchase ContractSettlement Date or (b) in the opinion of the Reset Agent (after consultation

with the Company) no longer an appropriate system from which to obtain suchrate, such other nationally recognized quotation system as, in the opinion ofthe Reset Agent (after consultation with the Company) is appropriate. If suchrate is not so displayed, the rate for the One-Month Treasury Bill shall be, ascalculated by the Reset Agent, the yield to maturity for the One-Month TreasuryBill, expressed as a bond equivalent on the basis of a year of 365 or 366 days,as applicable, and applied on a daily basis, and computed by taking thearithmetic mean of the secondary market bid rates, as of 10:30 A.M., New YorkCity time, on the third Business Day immediately preceding the Purchase ContractSettlement Date, of three leading United States government securities dealersselected by the Reset Agent (after consultation with the Company) (which may

include the Reset Agent or an Affiliate thereof).

"Ordinary Shares" means the ordinary shares, par value US$0.041666667, ofthe Company.

"Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company or an Affiliate and who

shall be reasonably acceptable to the Agent.

"Outstanding Securities," with respect to any Income PRIDES or GrowthPRIDES, means, as of the date of determination, all Income PRIDES or GrowthPRIDES evidenced by Certificates theretofore authenticated, executed anddelivered under this Agreement, except:

(i) If a Termination Event has occurred, (A) Growth PRIDES and (B)Income PRIDES for which the Stated Amount of the related Preferred Sharehas been theretofore deposited with the Agent in trust for the Holders ofsuch Income PRIDES;

(ii) Income PRIDES and Growth PRIDES evidenced by Certificatestheretofore cancelled by the Agent or delivered to the Agent forcancellation or deemed cancelled pursuant to the provisions of thisAgreement; and

(iii) Income PRIDES and Growth PRIDES evidenced by Certificates inexchange for or in lieu of which other Certificates have beenauthenticated, executed on behalf of the Holder and delivered pursuant tothis Agreement, other than any such Certificate in respect of which thereshall have been presented to the Agent proof satisfactory to it that suchCertificate is held by a bona fide purchaser in whose hands the

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Income PRIDES or Growth PRIDES evidenced by such Certificate are validobligations of the Company;


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provided, however, that in determining whether the Holders of the requisitenumber of the Income PRIDES or Growth PRIDES have given any request, demand,authorization, direction, notice, consent or waiver hereunder, Income PRIDES orGrowth PRIDES owned by the Company or any Affiliate of the Company shall bedisregarded and deemed not to be outstanding, except that, in determining

whether the Agent shall be protected in relying upon any such request, demand,authorization, direction, notice, consent or waiver, only Income PRIDES orGrowth PRIDES which a Responsible Officer of the Agent knows to be so ownedshall be so disregarded. Income PRIDES or Growth PRIDES so owned which have beenpledged in good faith may be regarded as Outstanding Securities if the pledgeeestablishes to the satisfaction of the Agent the pledgee's right so to act withrespect to such Income PRIDES or Growth PRIDES and that the pledgee is not theCompany or any Affiliate of the Company.

"Payment Date" means each ___, ___, ___ and ___, commencing ___, 2000.

"Parity Securities" has the meaning specified in Section 5.3.

"Person" means any individual, corporation, limited liability company,partnership, joint venture, association, joint-stock company, trust,unincorporated organization or government or any agency or political subdivisionthereof.

"Permitted Investments" has the meaning set forth in Section 1.1 of thePledge Agreement.

"Pledge" means the pledge under the Pledge Agreement of the PreferredShares or the Treasury Securities, in each case constituting a part of theSecurities.

"Pledge Agreement" means the Pledge Agreement, dated as of the date hereof,by and among the Company, the Collateral Agent and the Agent, on its own behalfand as attorney-in-fact for the Holders from time to time of the Securities.

"Predecessor Certificate" means a Predecessor Income PRIDES Certificate ora Predecessor Growth PRIDES Certificate.

"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDESCertificate means every previous Growth PRIDES Certificate evidencing all or aportion of the rights and obligations of the Company and the Holder under theGrowth PRIDES evidenced thereby; and, for the purposes of this definition, anyGrowth PRIDES Certificate authenticated and delivered under Section 3.10 inexchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDESCertificate shall be deemed to evidence the same rights and obligations of theCompany and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDESCertificate.

"Predecessor Income PRIDES Certificate" of any particular Income PRIDESCertificate means every previous Income PRIDES Certificate evidencing all or aportion of the rights and obligations of the Company and the Holder under the

Income PRIDES evidenced thereby; and, for the purposes of this definition, anyIncome PRIDES Certificate authenticated and delivered

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under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost orstolen Income PRIDES Certificate shall be deemed to evidence the same rights andobligations of the Company and the Holder as the mutilated, destroyed, lost orstolen Income PRIDES Certificate.

"Preferred Shares" means the ___% Cumulative Redeemable Preferred Shares,Series A, no par value per share, of the Company, each having a statedliquidation amount of $50.

"Proceeds" has the meaning set forth in Section 1.1 of the Pledge Agreement.

"Purchase Contract," when used with respect to any Security, means thecontract forming a part of such Security and obligating the Company to (i) selland the Holder of such Security to purchase Ordinary Shares and (ii) pay theHolder Contract Adjustment Payments with respect to the related Income PRIDES orGrowth PRIDES on the terms and subject to the conditions set forth in ArticleFive hereof.

"Purchase Contract Settlement Date" means May ___, 2003.

"Purchase Contract Settlement Fund" has the meaning specified in Section5.5.

"Purchase Price" has the meaning specified in Section 5.1.

"Purchased Shares" has the meaning specified in Section 5.6(a)(6).

"Record Date" for the distribution and Contract Adjustment Payments payable


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on any Payment Date means, as to any Global Certificate, the Business Day nextpreceding such Payment Date, and as to any other Certificate, a day selected bythe Company which shall be more than one Business Day but less than 60 BusinessDays prior to such Payment Date.

"Register" means the Income PRIDES Register and the Growth PRIDES Register.

"Registrar" means the Income PRIDES Registrar and the Growth PRIDESRegistrar.

"Remarketing Agent" has the meaning specified in Section 5.4.

"Remarketing Agreement" means the Remarketing Agreement dated April ____ ,2000 by and among the Company, the Remarketing Agent and the Agent.

"Remarketing Fee" has the meaning specified in Section 5.4.

"Remarketing Underwriting Agreement" has the meaning specified in theRemarketing Agreement.

"Reorganization Event" has the meaning specified in Section 5.6(b).

"Reset Agent" means a nationally recognized investment banking firm chosenby the Company to determine the Reset Rate. It is currently anticipated thatMerrill Lynch, Pierce, Fenner & Smith Incorporated will act in such capacity.

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"Reset Announcement Date" means the tenth (10th) Business Day immediatelypreceding the Purchase Contract Settlement Date.

"Reset Rate" means the dividend rate per annum (to be determined by theReset Agent), equal to the sum of (X) the Reset Spread and (Y) the rate ofinterest on the One-Month Treasury Bill in effect on the third Business Dayimmediately preceding the Purchase Contract Settlement Date, that the PreferredShares should bear in order for the Preferred Shares to have an approximate

market value of 100.5% of their aggregate liquidation amount on the thirdBusiness Day immediately preceding the Purchase Contract Settlement Date;provided, that the Company may limit such Reset Spread to be no higher than

________basis points (___%); and provided, further, that in the event of aFailed Remarketing, the Reset Rate shall be the dividend rate per annum ineffect on the Business Day immediately preceding the Purchase ContractSettlement Date.

"Reset Spread" means a spread amount to be determined by the Reset Agent onthe tenth (10th) Business Day immediately preceding the Purchase ContractSettlement Date.

"Responsible Officer," when used with respect to the Agent, means any

officer of the Agent assigned by the Agent to administer its corporate trust matters.

"Security" means an Income PRIDES or a Growth PRIDES.

"Senior Indebtedness" means indebtedness of any kind of the Company unlessthe instrument under which such indebtedness is incurred expressly provides thatit is on parity with or subordinated in right of payment to the Contract

Adjustment Payments.

"Settlement Rate" has the meaning specified in Section 5.1.

"Stated Amount" means $50.

"Termination Date" means the date, if any, on which a Termination Eventoccurs.

"Termination Event" means the occurrence of any of the following events:(i) at any time on or prior to the Purchase Contract Settlement Date, ajudgment, decree or court order shall have been entered granting relief underthe Bankruptcy Code, adjudicating the Company to be insolvent, or approving asproperly filed a petition seeking reorganization or liquidation of the Companyor any other similar applicable Federal or State law, and, unless such judgment,decree or order shall have been entered within 60 days prior to the PurchaseContract Settlement Date, such decree or order shall have continued undischargedand unstayed for a period of 60 days; or (ii) a judgment, decree or court orderfor the appointment of a receiver or liquidator or trustee or assignee inbankruptcy or insolvency of the Company or of its property, or for the windingup or liquidation of its affairs, shall have been entered, and, unless suchjudgment, decree or order shall have been entered within 60 days prior to thePurchase Contract Settlement Date, such judgment, decree or order shall havecontinued undischarged and unstayed for a period of 60 days, or (iii) at anytime on or prior to the Purchase Contract Settlement Date, the Company shallfile a petition for relief under the Bankruptcy Code, or shall consent to thefiling of a bankruptcy proceeding against it, or shall file a petition or answeror consent seeking reorganization or liquidation under the Bankruptcy Code or


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any other similar applicable Federal or State law, or shall consent to thefiling of any such petition, or shall consent to the appointment of a receiver

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or liquidator or trustee or assignee in bankruptcy or insolvency of it or of itsproperty, or shall make an assignment for the benefit of creditors, or shalladmit in writing its inability to pay its debts generally as they become due.

"Threshold Appreciation Price" has the meaning specified in Section 5.1.

"Threshold Depreciation Price" has the meaning specified in Section 5.1.

"TIA" means the Trust Indenture Act of 1939, as amended, or any successorstatute.

"Trading Day" has the meaning specified in Section 5.1.

"Treasury Security" means a zero coupon U.S. Treasury security (CUSIPNumber __________________) with a principal amount at maturity equal to $1,000and maturing on May ___, 2003.

"Underwriting Agreement" means the Underwriting Agreement dated April ___,2000 between the Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner& Smith Incorporated, Banc of America Securities LLC and Donaldson, Lufkin &Jenrette Securities Corporation.

"Vice President" means any vice president, whether or not designated by anumber or a word or words added before or after the title "vice president."

Section 1.2. Compliance Certificates and Opinions.

Except as otherwise expressly provided by this Agreement, upon anyapplication or request by the Company to the Agent to take any action under anyprovision of this Agreement, the Company shall furnish to the Agent an Officer'sCertificate stating that all conditions precedent, if any, provided for in this

Agreement relating to the proposed action have been complied with and, ifrequested by the Agent, an Opinion of Counsel stating that, in the opinion ofsuch 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 thefurnishing of such documents is specifically required by any provision of this

Agreement relating to such particular application or request, no additionalcertificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition orcovenant provided for in this Agreement shall include:

(1) a statement that the individual signing such certificate or

opinion has read such covenant or condition and the definitions hereinrelating thereto;

(2) a brief statement as to the nature and scope of the examination orinvestigation upon which the statements or opinions contained in suchcertificate or opinion are based;

(3) a statement that, in the opinion of such individual, he or she hasmade such examination or investigation as is necessary to enable suchindividual to express an

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informed opinion as to whether or not such covenant or condition has beencomplied with; and

(4) a statement as to whether, in the opinion of such individual, suchcondition or covenant has been complied with.

Section 1.3. Form of Documents Delivered to Agent.

In any case where several matters are required to be certified by, orcovered by an opinion of, any specified Person, it is not necessary that allsuch matters be certified by, or covered by the opinion of, only one suchPerson, or that they be so certified or covered by only one document, but onesuch Person may certify or give an opinion with respect to some matters and oneor more other such Persons as to other matters, and any such Person may certifyor give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based,insofar as it relates to legal matters, upon a certificate or opinion of, orrepresentations by, counsel, unless such officer knows, or in the exercise ofreasonable care should know, that the certificate or opinion or representations

with respect to the matters upon which his certificate or opinion is based are


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erroneous. Any such certificate or Opinion of Counsel may be based, insofar asit relates to factual matters, upon a certificate or opinion of, orrepresentations by, an officer or officers of the Company stating that theinformation with respect to such factual matters is in the possession of theCompany unless such counsel knows, or in the exercise of reasonable care shouldknow, 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 moreapplications, requests, consents, certificates, statements, opinions or otherinstruments under this Agreement, they may, but need not, be consolidated andform one instrument.

Section 1.4. Acts of Holders; Record Dates.

(a) Any request, demand, authorization, direction, notice, consent, waiveror other action provided by this Agreement to be given or taken by Holders maybe embodied in and evidenced by one or more instruments of substantially similartenor signed by such Holders in person or by agent duly appointed in writing;and, except as herein otherwise expressly provided, such action shall becomeeffective when such instrument or instruments are delivered to the Agent and,

where it is hereby expressly required, to the Company. Such instrument orinstruments (and the action embodied therein and evidenced thereby) are hereinsometimes referred to as the "Act" of the Holders signing such instrument orinstruments. Proof of execution of any such instrument or of a writingappointing any such agent shall be sufficient for any purpose of this Agreementand (subject to Section 7.1) conclusive in favor of the Agent and the Company,if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrumentor writing may be proved in any manner which the Agent deems sufficient.

(c) The ownership of Securities shall be proved by the Income PRIDESRegister or the Growth PRIDES Register, as the case may be.

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(d) Any request, demand, authorization, direction, notice, consent, waiveror other Act of the Holder of any Certificate shall bind every future Holder ofthe same Certificate and the Holder of every Certificate issued upon theregistration of transfer thereof or in exchange therefor or in lieu thereof inrespect of anything done, omitted or suffered to be done by the Agent or theCompany in reliance thereon, whether or not notation of such action is made uponsuch Certificate.

(e) The Company may set any day as a record date for the purpose ofdetermining the Holders of Outstanding Securities entitled to give, make or takeany request, demand, authorization, direction, notice, consent, waiver or otheraction provided or permitted by this Agreement to be given, made or taken byHolders of Securities. If any record date is set pursuant to this paragraph,

the Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES,as the case may be, on such record date, and no other Holders, shall be entitledto take the relevant action with respect to the Income PRIDES or the GrowthPRIDES, as the case may be, whether or not such Holders remain Holders aftersuch record date; provided that no such action shall be effective hereunderunless taken on or prior to the applicable Expiration Date by Holders of therequisite number of Outstanding Securities on such record date. Nothing in thisparagraph shall be construed to prevent the Company from setting a new recorddate for any action for which a record date has previously been set pursuant tothis paragraph (whereupon the record date previously set shall automatically and

with no action by any Person be cancelled and of no effect), and nothing in thisparagraph shall be construed to render ineffective any action taken by Holdersof the requisite number of Outstanding Securities on the date such action istaken. Promptly after any record date is set pursuant to this paragraph, theCompany, at its own expense, shall cause notice of such record date, theproposed action by Holders and the applicable Expiration Date to be given to the

Agent in writing and to each Holder of Securities in the manner set forth inSection 1.6.

With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change

the Expiration Date to any earlier or later day; provided that no such changeshall be effective unless notice of the proposed new Expiration Date is given tothe Agent in writing, and to each Holder of Securities in the manner set forthin Section 1.6, on or prior to the existing Expiration Date. If an ExpirationDate is not designated with respect to any record date set pursuant to thisSection, the Company shall be deemed to have initially designated the 180th dayafter such record date as the Expiration Date with respect thereto, subject toits right to change the Expiration Date as provided in this paragraph.Notwithstanding the foregoing, no Expiration Date shall be later than the 180thday after the applicable record date.

Section 1.5. Notices.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Agreement to be


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made upon, given or furnished to, or filed with:

(1) the Agent by any Holder or by the Company shall be sufficient forevery purpose hereunder (unless otherwise herein expressly provided) ifmade, given, furnished or filed in writing and personally delivered ormailed, first-class postage prepaid, to the

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Agent at The Bank of New York, 101 Barclay Street, Floor 21 West, New York,New York 10286, Attention: Corporate Trust Administration, or at any otheraddress previously furnished in writing by the Agent to the Holders and theCompany; or

(2) the Company by the Agent or by any Holder shall be sufficient forevery purpose hereunder (unless otherwise herein expressly provided) ifmade, given, furnished or filed in writing and personally delivered ormailed, first-class postage prepaid, to the Company at ACE Limited, The ACEBuilding, 30 Woodbourne Avenue, Hamilton HM 08, Bermuda, or at any otheraddress previously furnished in writing to the Agent by the Company; or

(3) the Collateral Agent by the Agent, the Company or any Holder shallbe sufficient for every purpose hereunder (unless otherwise hereinexpressly provided) if made, given, furnished or filed in writing andpersonally delivered or mailed, first-class postage prepaid, addressed tothe Collateral Agent at The Bank of New York, 101 Barclay Street, Floor 21West, New York, New York 10286, Attention: Corporate Trust Administration,or at any other address previously furnished in writing by the CollateralAgent to the Agent, the Company and the Holders.

Section 1.6. Notice to Holders; Waiver.

Where this Agreement provides for notice to Holders of any event, suchnotice shall be sufficiently given (unless otherwise herein expressly provided)if in writing and mailed, first-class postage prepaid, to each Holder affectedby such event, at its address as it appears in the applicable Register, notlater than the latest date, and not earlier than the earliest date, prescribedfor the giving of such notice. 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. Where this Agreement 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 theequivalent of such notice. Waivers of notice by Holders shall be filed with the

Agent, but such filing shall not be a condition precedent to the validity of anyaction taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason ofany other cause it shall be impracticable to give such notice by mail, then suchnotification as shall be made with the approval of the Agent shall constitute a

sufficient notification for every purpose hereunder.

Section 1.7. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are forconvenience only and shall not affect the construction hereof.

Section 1.8. Successors and Assigns.

All covenants and agreements in this Agreement by the Company shall bindits successors and assigns, whether so expressed or not.

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Section 1.9. Separability Clause.

In case any provision in this Agreement or in the Securities shall beinvalid, illegal or unenforceable, the validity, legality and enforceability ofthe remaining provisions hereof and thereof shall not in any way be affected orimpaired thereby.

Section 1.10. Benefits of Agreement.

Nothing in this Agreement or in the Securities, express or implied, shallgive to any Person, other than the parties hereto and their successors hereunderand, to the extent provided hereby, the Holders, any benefits or any legal orequitable right, remedy or claim under this Agreement. The Holders from time totime shall be beneficiaries of this Agreement and shall be bound by all of theterms and conditions hereof and of the Securities evidenced by theirCertificates by their acceptance of delivery of such Certificates.

Section 1.11. Governing Law.

This Agreement and the Securities shall be governed by and construed in


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accordance with the laws of the State of New York.

Section 1.12. Legal Holidays.

In any case where any Payment Date shall not be a Business Day, then(notwithstanding any other provision of this Agreement or the Income PRIDESCertificates or the Growth PRIDES Certificates) payment of the Contract

Adjustment Payments, if any, shall not be made on such date, but such paymentsshall be made on the next succeeding Business Day with the same force and effectas if made on such Payment Date, provided that no interest shall accrue or bepayable by the Company or any Holder for the period from and after any suchPayment Date, except that, if such next succeeding Business Day is in the nextsucceeding calendar year, such payment shall be made on the immediatelypreceding Business Day with the same force and effect as if made on such PaymentDate.

In any case where any Purchase Contract Settlement Date shall not be aBusiness Day, then (notwithstanding any other provision of this Agreement, theIncome PRIDES Certificates or the Growth PRIDES Certificates), the PurchaseContracts shall not be performed on such date, but the Purchase Contracts shallbe performed on the immediately following Business Day with the same force andeffect as if performed on the Purchase Contract Settlement Date.

Section 1.13. Counterparts.

This Agreement may be executed in any number of counterparts by the partieshereto on separate counterparts, each of which, when so executed and delivered,shall be deemed an original, but all such counterparts shall together constituteone and the same instrument.

Section 1.14. Inspection of Agreement.

A copy of this Agreement shall be available at all reasonable times duringnormal business hours at the Corporate Trust Office for inspection by anyHolder.

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ARTICLE IICERTIFICATE FORMS

Section 2.1. Forms of Certificates Generally.

The Income PRIDES Certificates (including the form of Purchase Contractforming part of the Income PRIDES evidenced thereby) shall be in substantiallythe form set forth in Exhibit A hereto, with such letters, numbers or other

marks of identification or designation and such legends or endorsements printed,lithographed or engraved thereon as may be required by the rules of anysecurities exchange on which the Income PRIDES are listed or any depositarytherefor, or as may, consistently herewith, be determined by the officers of the

Company executing such Income PRIDES Certificates, as evidenced by theirexecution of the Income PRIDES Certificates.

The definitive Income PRIDES Certificates shall be printed, lithographed orengraved on steel engraved borders or may be produced in any other manner, allas determined by the officers of the Company executing such Income PRIDESCertificates, consistent with the provisions of this Agreement, as evidenced bytheir execution thereof.

The Growth PRIDES Certificates (including the form of Purchase Contractsforming part of the Growth PRIDES evidenced thereby) shall be in substantiallythe form set forth in Exhibit B hereto, with such letters, numbers or other

marks of identification or designation and such legends or endorsements printed,lithographed or engraved thereon as may be required by the rules of anysecurities exchange on which the Growth PRIDES may be listed or any depositarytherefor, or as may, consistently herewith, be determined by the officers of theCompany executing such Growth PRIDES Certificates, as evidenced by theirexecution of the Growth PRIDES Certificates.

The definitive Growth PRIDES Certificates shall be printed, lithographed orengraved on steel engraved borders or may be produced in any other manner, allas determined by the officers of the Company executing such Growth PRIDESCertificates, consistent with the provisions of this Agreement, as evidenced bytheir execution thereof.

Every Global Certificate authenticated, executed on behalf of the Holdersand delivered hereunder shall bear a legend in substantially the following form:

THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASECONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAMEOF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BEEXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFEROF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OFANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT INTHE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.


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Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company,

notwithstanding that such individuals or any of them have ceased to hold suchoffices prior to the authentication and delivery of such Certificates or did nothold such offices at the date of such Certificates.

No Purchase Contract evidenced by a Certificate shall be valid until suchCertificate has been executed on behalf of the Holder by the manual signature ofan authorized signatory of the Agent, as such Holder's attorney-in-fact. Suchsignature by an authorized signatory of the Agent shall be conclusive evidencethat the Holder of such Certificate has entered into the Purchase Contractsevidenced by such Certificate.

Each Certificate shall be dated the date of its authentication.

No Certificate shall be entitled to any benefit under this Agreement or bevalid or obligatory for any purpose unless there appears on such Certificate acertificate of authentication substantially in the form provided for hereinexecuted by an authorized signatory of the Agent by manual signature, and suchcertificate upon any Certificate shall be conclusive evidence, and the onlyevidence, that such Certificate has been duly authenticated and deliveredhereunder.

Section 3.4. Temporary Certificates.

Pending the preparation of definitive Certificates, the Company shallexecute and deliver to the Agent, and the Agent shall authenticate, execute onbehalf of the Holders, and deliver, in lieu of such definitive Certificates,temporary Certificates which are in substantially the form set forth in Exhibit

A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed,

lithographed or engraved thereon as may be required by the rules of anysecurities exchange on which the Income PRIDES or Growth PRIDES are listed, oras may, consistently herewith, be determined

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by the officers of the Company executing such Certificates, as evidenced bytheir execution of the Certificates.

If temporary Certificates are issued, the Company will cause definitiveCertificates to be prepared without unreasonable delay. After the preparation ofdefinitive Certificates, the temporary Certificates shall be exchangeable fordefinitive Certificates upon surrender of the temporary Certificates at theCorporate Trust Office, at the expense of the Company and without charge to theHolder. Upon surrender for cancellation of any one or more temporaryCertificates, the Company shall execute and deliver to the Agent, and the Agentshall authenticate, execute on behalf of the Holder, and deliver in exchangetherefor, one or more definitive Certificates of like tenor and denominationsand evidencing a like number of Income PRIDES or Growth PRIDES, as the case may

be, as the temporary Certificate or Certificates so surrendered. Until soexchanged, the temporary Certificates shall in all respects evidence the samebenefits and the same obligations with respect to the Income PRIDES or GrowthPRIDES, as the case may be, evidenced thereby as definitive Certificates.

Section 3.5. Registration; Registration of Transfer and Exchange.

The Agent shall keep at the Corporate Trust Office a register (the "IncomePRIDES Register") in which, subject to such reasonable regulations as it mayprescribe, the Agent shall provide for the registration of Income PRIDESCertificates and of transfers of Income PRIDES Certificates (the Agent, in suchcapacity, the "Income PRIDES Registrar") and a register (the "Growth PRIDESRegister") in which, subject to such reasonable regulations as it may prescribe,the Agent shall provide for the registration of the Growth PRIDES Certificatesand transfers of Growth PRIDES Certificates (the Agent, in such capacity, the"Growth PRIDES Registrar").

Upon surrender for registration of transfer of any Certificate at theCorporate Trust Office, the Company shall execute and deliver to the Agent, andthe Agent shall authenticate, execute on behalf of the designated transferee ortransferees, and deliver, in the name of the designated transferee ortransferees, one or more new Certificates of any authorized denominations, liketenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as thecase may be.

At the option of the Holder, Certificates may be exchanged for otherCertificates, of any authorized denominations and evidencing a like number ofIncome PRIDES or Growth PRIDES, as the case may be, upon surrender of theCertificates to be exchanged at the Corporate Trust Office. Whenever anyCertificates are so surrendered for exchange, the Company shall execute anddeliver to the Agent, and the Agent shall authenticate, execute on behalf of theHolder, and deliver the Certificates which the Holder making the exchange isentitled to receive.

All Certificates issued upon any registration of transfer or exchange of aCertificate shall evidence the ownership of the same number of Income PRIDES or


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Growth PRIDES, as the case may be, and be entitled to the same benefits andsubject to the same obligations, under this Agreement as the Income PRIDES orGrowth PRIDES, as the case may be, evidenced by the Certificate surrendered uponsuch registration of transfer or exchange.

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Every Certificate presented or surrendered for registration of transfer orfor exchange shall (if so required by the Agent) be duly endorsed, or beaccompanied by a written instrument of transfer in form satisfactory to theCompany and the Agent duly executed, by the Holder thereof or its attorney dulyauthorized in writing.

No service charge shall be made for any registration of transfer orexchange of a Certificate, but the Company and the Agent may require paymentfrom the Holder of a sum sufficient to cover any tax or other governmentalcharge that may be imposed in connection with any registration of transfer orexchange of Certificates, other than any exchanges pursuant to Sections 3.6 and8.5 not involving any transfer.

Notwithstanding the foregoing, the Company shall not be obligated toexecute and deliver to the Agent, and the Agent shall not be obligated toauthenticate, execute on behalf of the Holder and deliver any Certificatepresented or surrendered for registration of transfer or for exchange on orafter the Business Day immediately preceding the earlier of the PurchaseContract Settlement Date or the Termination Date. In lieu of delivery of a newCertificate, upon satisfaction of the applicable conditions specified above inthis Section and receipt of appropriate registration or transfer instructionsfrom such Holder, the Agent shall (i) if the Purchase Contract Settlement Datehas occurred, deliver the number of Ordinary Shares issuable in respect of thePurchase Contracts forming a part of the Securities evidenced by suchCertificate, (ii) in the case of Income PRIDES, if a Termination Event shallhave occurred prior to the Purchase Contract Settlement Date, transfer theaggregate Stated Amount of the Preferred Shares evidenced thereby, or (iii) inthe case of Growth PRIDES, if a Termination Event shall have occurred prior tothe Purchase Contract Settlement Date, transfer the Treasury Securitiesevidenced thereby, in each case subject to the applicable conditions and inaccordance with the applicable provisions of Article Five hereof.

Section 3.6. Book-Entry Interests.

The Certificates, on original issuance, will be issued in the form of oneor more, fully registered Global Certificates, to be delivered to the Depositaryby, or on behalf of, the Company. Such Global Certificate shall initially beregistered on the books and records of the Company in the name of Cede & Co.,the nominee of the Depositary, and no Beneficial Owner will receive a definitiveCertificate representing such Beneficial Owner's interest in such GlobalCertificate, except as provided in Section 3.9. The Agent shall enter into anagreement with the Depositary if so requested by the Company. Unless and untildefinitive, fully registered Certificates have been issued to Beneficial Owners

pursuant to Section 3.9:

(a) the provisions of this Section 3.6 shall be in full force and effect;

(b) the Company shall be entitled to deal with the Clearing Agency for allpurposes of this Agreement (including the payment of Contract AdjustmentPayments and receiving approvals, votes or consents hereunder) as the Holder ofthe Securities and the sole holder of the Global Certificate(s) and shall haveno obligation to the Beneficial Owners;

(c) to the extent that the provisions of this Section 3.6 conflict with anyother provisions of this Agreement, the provisions of this Section 3.6 shallcontrol; and

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(d) the rights of the Beneficial Owners shall be exercised only through theClearing Agency and shall be limited to those established by law and agreementsbetween such Beneficial Owners and the Clearing Agency and/or the Clearing

Agency Participants. The Clearing Agency will make book-entry transfers amongClearing Agency Participants and receive and transmit payments of Contract

Adjustment Payments to such Clearing Agency Participants.

Section 3.7. Notices to Holders.

Whenever a notice or other communication to the Holders is required to begiven under this Agreement, the Company or the Company's agent shall give suchnotices and communications to the Holders and, with respect to any Securitiesregistered in the name of a Clearing Agency or the nominee of a Clearing Agency,the Company or the Company's agent shall, except as set forth herein, have noobligations to the Beneficial Owners.

Section 3.8. Appointment of Successor Clearing Agency.

If any Clearing Agency elects to discontinue its services as securities


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depositary with respect to the Securities, the Company may, in its solediscretion, appoint a successor Clearing Agency with respect to the Securities.

Section 3.9. Definitive Certificates.

If (i) a Clearing Agency elects to discontinue its services as securitiesdepositary with respect to the Securities and a successor Clearing Agency is notappointed within 90 days after such discontinuance pursuant to Section 3.8, (ii)the Company elects to terminate the book-entry system through the Clearing

Agency with respect to the Securities, or (iii) there shall have occurred and becontinuing a default by the Company in respect of its obligations under one or

more Purchase Contracts, then upon surrender of the Global Certificatesrepresenting the Book-Entry Interests with respect to the Securities by theClearing Agency, accompanied by registration instructions, the Company shallcause definitive Certificates to be delivered to Beneficial Owners in accordance

with the instructions of the Clearing Agency. The Company shall not be liablefor any delay in delivery of such instructions and may conclusively rely on andshall be protected in relying on, such instructions.

Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.

If any mutilated Certificate is surrendered to the Agent, the Company shallexecute and deliver to the Agent, and the Agent shall authenticate, execute onbehalf of the Holder, and deliver in exchange therefor, a new Certificate at thecost of the Holder, evidencing the same number of Income PRIDES or GrowthPRIDES, as the case may be, and bearing a Certificate number notcontemporaneously outstanding.

If there shall be delivered to the Company and the Agent (i) evidence totheir satisfaction of the destruction, loss or theft of any Certificate, and(ii) such security or indemnity at the cost of the Holder as may be required bythem to hold each of them and any agent of any of them harmless, then, in theabsence of notice to the Company or the Agent that such Certificate has beenacquired by a bona fide purchaser, the Company shall execute and deliver to the

Agent, and the Agent shall authenticate, execute on behalf of the Holder, anddeliver to the Holder, in lieu of

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any such destroyed, lost or stolen Certificate, a new Certificate, evidencingthe same number of Income PRIDES or Growth PRIDES, as the case may be, andbearing a Certificate number not contemporaneously outstanding.

Notwithstanding the foregoing, the Company shall not be obligated toexecute and deliver to the Agent, and the Agent shall not be obligated toauthenticate, execute on behalf of the Holder, and deliver to the Holder, aCertificate on or after the Business Day immediately preceding the earlier ofthe Purchase Contract Settlement Date or the Termination Date. In lieu ofdelivery of a new Certificate, upon satisfaction of the applicable conditionsspecified above in this Section and receipt of appropriate registration or

transfer instructions from such Holder, the Agent shall (i) if the PurchaseContract Settlement Date has occurred, deliver the number of Ordinary Sharesissuable in respect of the Purchase Contracts forming a part of the Securitiesevidenced by such Certificate, or (ii) if a Termination Event shall haveoccurred prior to the Purchase Contract Settlement Date, transfer the PreferredShares or the Treasury Securities, as the case may be, evidenced thereby, ineach case subject to the applicable conditions and in accordance with theapplicable provisions of Article Five hereof.

Upon the issuance of any new Certificate under this Section, the Companyand the Agent may require the payment by the Holder of a sum sufficient to coverany tax or other governmental charge that may be imposed in relation thereto andany other expenses (including the fees and expenses of the Agent) connectedtherewith.

Every new Certificate issued pursuant to this Section in lieu of anydestroyed, lost or stolen Certificate shall constitute an original additionalcontractual obligation of the Company and of the Holder in respect of theSecurity evidenced thereby, whether or not the destroyed, lost or stolenCertificate (and the Securities evidenced thereby) shall be at any timeenforceable by anyone, and shall be entitled to all the benefits and be subjectto all the obligations of this Agreement equally and proportionately with anyand all other Certificates delivered hereunder.

The provisions of this Section are exclusive and shall preclude (to theextent lawful) all other rights and remedies with respect to the replacement orpayment of mutilated, destroyed, lost or stolen Certificates.

Section 3.11. Persons Deemed Owners.

Prior to due presentment of a Certificate for registration of transfer, theCompany and the Agent, and any agent of the Company or the Agent, may treat thePerson in whose name such Certificate is registered as the owner of the IncomePRIDES or Growth PRIDES evidenced thereby, for the purpose of receivingdividends on the Preferred Shares, receiving payments of Contract AdjustmentPayments, performance of the Purchase Contracts and for all other purposes


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whatsoever, whether or not any dividends on the Preferred Shares or the Contract Adjustment Payments payable in respect of the Purchase Contracts constituting a

part of the Income PRIDES or Growth PRIDES evidenced thereby shall be overdueand notwithstanding any notice to the contrary, and neither the Company nor the

Agent, nor any agent of the Company or the Agent, shall be affected by notice tothe contrary.

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Notwithstanding the foregoing, with respect to any Global Certificate,nothing herein shall prevent the Company, the Agent or any agent of the Companyor the Agent, from giving effect to any written certification, proxy or otherauthorization furnished by any Clearing Agency (or its nominee), as a Holder,

with respect to such Global Certificate or impair, as between such Clearing Agency and owners of beneficial interests in such Global Certificate, the

operation of customary practices governing the exercise of rights of suchClearing Agency (or its nominee) as Holder of such Global Certificate.

Section 3.12. Cancellation.

All Certificates surrendered for delivery of Ordinary Shares on or afterthe Purchase Contract Settlement Date, upon the transfer of Preferred Shares orTreasury Securities, as the case may be, after the occurrence of a TerminationEvent or pursuant to an Early Settlement, or upon the registration of a transferor exchange of a Security, or a Collateral Substitution or the re-establishmentof an Income PRIDES shall, if surrendered to any Person other than the Agent, bedelivered to the Agent and, if not already cancelled, shall be promptlycancelled by it. The Company may at any time deliver to the Agent forcancellation any Certificates previously authenticated, executed and deliveredhereunder which the Company may have acquired in any manner whatsoever, and allCertificates so delivered shall, upon Issuer Order, be promptly cancelled by the

Agent. No Certificates shall be authenticated, executed on behalf of the Holderand delivered in lieu of or in exchange for any Certificates cancelled asprovided in this Section, except as expressly permitted by this Agreement. Allcancelled Certificates held by the Agent shall be destroyed by the Agent unlessotherwise directed by Issuer Order.

If the Company or any Affiliate of the Company shall acquire anyCertificate, such acquisition shall not operate as a cancellation of suchCertificate unless and until such Certificate is delivered to the Agentcancelled or for cancellation.

Section 3.13. Establishment or Reestablishment of Growth PRIDES.

A Holder may separate the Preferred Shares from the related PurchaseContracts in respect of an Income PRIDES by substituting for such PreferredShares, Treasury Securities in an aggregate principal amount at maturity equalto the aggregate Stated Amount of such Preferred Shares (a "CollateralSubstitution"), at any time from and after the date of this Agreement and on orprior to the fifth Business Day immediately preceding the Purchase Contract

Settlement Date by (a) depositing with the Collateral Agent Treasury Securitieshaving an aggregate principal amount at maturity equal to the aggregate Stated

Amount of the Preferred Shares comprising part of such Income PRIDES and (b)(i)in the event that Contract Adjustment Payments are at a higher rate for GrowthPRIDES than for Income PRIDES, by delivering cash in an amount equal to theexcess, if any, of the Contract Adjustment Payments that would have accruedsince the last Payment Date through the date of substitution on the GrowthPRIDES being created by the Holder over the Contract Payment Adjustments on therelated Income PRIDES over the same period, which amount the Agent shallpromptly remit to the Company, and (ii) transferring the related Income PRIDESto the Agent accompanied by a notice to the Agent, substantially in the form ofExhibit D hereto, stating that the Holder has transferred the relevant amount ofTreasury Securities to the Collateral Agent and requesting that the Agentinstruct the Collateral Agent to release the Preferred Shares underlying suchIncome PRIDES,

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whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit C hereto. Upon receipt of the

Treasury Securities described in clause (a) above and the instruction describedin clause (b) above, in accordance with the terms of the Pledge Agreement, theCollateral Agent will release to the Agent, on behalf of the Holder, PreferredShares having a corresponding aggregate Stated Amount of such Preferred Sharesfrom the Pledge, free and clear of the Company's security interest therein, andupon receipt thereof the Agent shall promptly:

(i) cancel the related Income PRIDES;

(ii) transfer the related Preferred Shares to the Holder; and

(iii) authenticate, execute on behalf of such Holder and deliver aGrowth PRIDES Certificate executed by the Company in accordance withSection 3.3 evidencing the same number of Purchase Contracts as wereevidenced by the cancelled Income PRIDES.


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Holders who elect to separate the Preferred Shares from the relatedPurchase Contract and to substitute Treasury Securities for such PreferredShares, shall be responsible for any fees or expenses payable to the Collateral

Agent for its services as Collateral Agent in respect of the substitution, andthe Company shall not be responsible for any such fees or expenses.

Holders may make Collateral Substitutions only in integral multiples of 20Income PRIDES.

In the event a Holder making a Collateral Substitution pursuant to thisSection 3.13 fails to effect a book-entry transfer of the Income PRIDES or failsto deliver an Income PRIDES Certificate to the Agent after depositing TreasurySecurities with the Collateral Agent, the Preferred Shares constituting a partof such Income PRIDES, and any distributions on such Preferred Share, shall beheld in the name of the Agent or its nominee in trust for the benefit of suchHolder, until such Income PRIDES are so transferred or the Income PRIDESCertificate is so delivered, as the case may be, or, with respect to an IncomePRIDES Certificate, such Holder provides evidence satisfactory to the Companyand the Agent that such Income PRIDES Certificate has been destroyed, lost orstolen, together with any indemnity that may be required by the Agent and theCompany.

Except as described in this Section 3.13, for so long as the PurchaseContract underlying an Income PRIDES remains in effect, such Income PRIDES shallnot be separable into its constituent parts, and the rights and obligations ofthe Holder in respect of the Preferred Shares, and Purchase Contract comprisingsuch Income PRIDES may be acquired, and may be transferred and exchanged, onlyas an Income PRIDES.

Section 3.14. Establishment or Reestablishment of Income PRIDES.

A Holder of a Growth PRIDES may create or recreate Income PRIDES at anytime on or prior to the fifth Business Day immediately preceding the PurchaseContract Settlement Date by (a) depositing with the Collateral Agent PreferredShares, having an aggregate Stated Amount equal to the aggregate principalamount at maturity of the Treasury Securities comprising part of

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the Growth PRIDES and (b) (i) in the event that Contract Adjustment Payments areat a higher rate for Income PRIDES than for Growth PRIDES, by delivering to the

Agent cash in an amount equal to the excess of the Contract Adjustment Paymentsthat would have accrued since the last Payment Date through the date ofsubstitution on the Income PRIDES being recreated by such Holders, over theContract Adjustment Payments that have accrued over the same time period on therelated Growth PRIDES and (ii) transferring the related Growth PRIDES to the

Agent accompanied by a notice to the Agent, substantially in the form of ExhibitD hereto, stating that the Holder has transferred the relevant amount ofPreferred Shares, to the Collateral Agent and requesting that the Agent instruct

the Collateral Agent to release the Treasury Securities underlying such GrowthPRIDES, whereupon the Agent shall promptly give such instruction to theCollateral Agent, substantially in the form of Exhibit C hereto. Upon receipt ofthe Preferred Shares described in clause (a) above and the instruction describedin clause (b) above, in accordance with the terms of the Pledge Agreement, theCollateral Agent will effect the release of the Treasury Securities having acorresponding aggregate principal amount at maturity from the Pledge to the

Agent free and clear of the Company's security interest therein, and uponreceipt thereof the Agent shall promptly:

(i) cancel the related Growth PRIDES;

(ii) transfer the Treasury Securities to the Holder; and

(iii) authenticate, execute on behalf of such Holder and deliver anIncome PRIDES Certificate executed by the Company in accordance withSection 3.3 evidencing the same number of Purchase Contracts as wereevidenced by the cancelled Growth PRIDES.

Holders of Growth PRIDES may establish or reestablish Income PRIDES inintegral multiples of 20 Growth PRIDES for 20 Preferred Shares only.

Except as provided in this Section 3.14, for so long as the PurchaseContract underlying a Growth PRIDES remains in effect, such Growth PRIDES shallnot be separable into its constituent parts and the rights and obligations ofthe Holder of such Growth PRIDES in respect of the Treasury Security andPurchase Contract comprising such Growth PRIDES may be acquired, and may betransferred and exchanged only as a Growth PRIDES.

Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.

Upon the occurrence of a Termination Event and the transfer to the Agent ofthe Preferred Shares or the Treasury Securities, as the case may be, underlyingthe Income PRIDES and the Growth PRIDES pursuant to the terms of the Pledge

Agreement, the Agent shall request transfer instructions with respect to suchPreferred Shares or Treasury Securities, as the case may be, from each Holder by


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written request mailed to such Holder at its address as it appears in the IncomePRIDES Register or the Growth PRIDES Register, as the case may be. Upon book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an IncomePRIDES Certificate or Growth PRIDES Certificate to the Agent with such transferinstructions, the Agent shall transfer the Preferred Shares or TreasurySecurities, as the case may be, underlying such Income PRIDES or Growth PRIDES,as the case may be, to such Holder by book-entry transfer, or other

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appropriate procedures, in accordance with such instructions. In the event aHolder of Income PRIDES or Growth PRIDES fails to effect such transfer ordelivery, the Preferred Shares or Treasury Securities, as the case may be,underlying such Income PRIDES or Growth PRIDES, as the case may be, and anydistributions thereon, shall be held in the name of the Agent or its nominee intrust for the benefit of such Holder, until such Income PRIDES or Growth PRIDESare transferred or the Income PRIDES Certificate or Growth PRIDES Certificate issurrendered or such Holder provides satisfactory evidence that such IncomePRIDES Certificate or Growth PRIDES Certificate has been destroyed, lost orstolen, together with any indemnity that may be required by the Agent and theCompany.

Section 3.16. No Consent to Assumption.

Each Holder of a Security, by acceptance thereof, shall be deemed expresslyto have withheld any consent to the assumption under Section 365 of theBankruptcy Code or otherwise, of the Purchase Contract by the Company, receiver,liquidator or a person or entity performing similar functions, its trustee inthe event that the Company becomes the debtor under the Bankruptcy Code orsubject to other similar state or federal law providing for reorganization orliquidation.

ARTICLE IVTHE PREFERRED SHARES

Section 4.1. Payment of Dividend; Rights to Dividends Preserved; Dividend RateReset; Notice.

A distribution on any Preferred Share which is paid on any Payment Dateshall, subject to receipt thereof by the Agent from the Collateral Agent asprovided by the terms of the Pledge Agreement, be paid to the Person in whosename the Income PRIDES Certificate (or one or more Predecessor Income PRIDESCertificates) of which such Preferred Share is a part is registered at the closeof business on the Record Date for such Payment Date.

Each Income PRIDES Certificate evidencing Preferred Shares delivered underthis Agreement upon registration of transfer of or in exchange for or in lieu ofany other Income PRIDES Certificate shall carry the rights to accumulated andunpaid dividends, and to accumulate dividends, which were carried by thePreferred Shares underlying such other Income PRIDES Certificate.

In the case of any Income PRIDES with respect to which Cash Settlement ofthe underlying Purchase Contract is effected on the Business Day immediatelypreceding the Purchase Contract Settlement Date pursuant to prior notice, or

with respect to which Early Settlement of the underlying Purchase Contract iseffected on an Early Settlement Date, or with respect to which a CollateralSubstitution is effected, in each case on a date that is after any Record Dateand on or prior to the next succeeding Payment Date, dividends on the PreferredShares underlying such Income PRIDES otherwise payable on such Payment Dateshall be payable on such Payment Date notwithstanding such Cash Settlement orEarly Settlement or Collateral Substitution, and such dividends shall, subjectto receipt thereof by the Agent, be payable to the Person in whose name theIncome PRIDES Certificate (or one or more

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Predecessor Income PRIDES Certificates) was registered at the close of businesson the Record Date. Except as otherwise expressly provided in the immediatelypreceding sentence, in the case of any Income PRIDES with respect to which CashSettlement or Early Settlement of the underlying Purchase Contract is effectedon the Business Day immediately preceding the Purchase Contract Settlement Dateor an Early Settlement Date, as the case may be, or with respect to which aCollateral Substitution has been effected, dividends on the related PreferredShares that would otherwise be payable after the Purchase Contract SettlementDate or Early Settlement Date shall not be payable hereunder to the Holder ofsuch Income PRIDES; provided, however, that to the extent that such Holdercontinues to hold the separated Preferred Shares that formerly comprised a partof such Holder's Income PRIDES, such Holder shall be entitled to receive thedividends on such separated Preferred Shares.

The applicable Dividend Rate on the Preferred Shares on and after thePurchase Contract Settlement Date will be reset on the third Business Dayimmediately preceding the Purchase Contract Settlement Date to the Reset Rate(such Reset Rate to be in effect on and after the Purchase Contract SettlementDate). On the Reset Announcement Date, the Reset Spread and the Benchmark Rate


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to be used to determine the Reset Rate will be announced by the Company. On theBusiness Day immediately following the Reset Announcement Date, the PreferredShares Holders will be notified of such Reset Spread and the One-Month TreasuryBill rate by the Company. Such notice shall be sufficiently given to Holders ofPreferred Shares if published in an Authorized Newspaper in The City of NewYork.

Not later than 7 calendar days nor more than 15 calendar days prior to theReset Announcement Date, the Company will notify DTC or its nominee (or anysuccessor Clearing Agency or its nominee) by first-class mail, postage prepaid,to notify the Beneficial Owners or Clearing Agency Participants holding IncomePRIDES or Growth PRIDES, of such Reset Announcement Date and the procedures tobe followed by such Holders of Income PRIDES who intend to settle theirobligation under the Purchase Contract with separate cash on the PurchaseContract Settlement Date.

Section 4.2. Notice and Voting.

Under the terms of the Pledge Agreement, the Agent will be entitled toexercise the voting and any other consensual rights pertaining to the PreferredShares pledged with the Collateral Agent but only to the extent instructed bythe Holders as described below. Upon receipt of notice of any meeting at whichholders of Preferred Shares are entitled to vote or upon any solicitation ofconsents, waivers or proxies of holders of Preferred Shares, the Agent shall, assoon as practicable thereafter, mail to the Holders of Income PRIDES a notice(a) containing such information as is contained in the notice or solicitation,(b) stating that each Holder on the record date set by the Agent therefor(which, to the extent possible, shall be the same date as the record date fordetermining the holders of Preferred Shares entitled to vote) shall be entitledto instruct the Agent as to the exercise of the voting rights pertaining to thePreferred Shares underlying their Income PRIDES and (c) stating the manner in

which such instructions may be given. Upon the written request of the Holders ofIncome PRIDES on such record date, the Agent shall endeavor insofar aspracticable to vote or cause to be voted, in accordance with the instructionsset forth in such requests, the maximum number of Preferred Shares as to whichany particular voting instructions are received. In the absence of specificinstructions from the Holder

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of an Income PRIDES, the Agent shall abstain from voting the Preferred Shareunderlying such Income PRIDES. The Company hereby agrees, if applicable, tosolicit Holders of Income PRIDES to timely instruct the Agent in order to enablethe Agent to vote such Preferred Shares.

ARTICLE VTHE PURCHASE CONTRACTS

Section 5.1. Purchase of Ordinary Shares.

Each Purchase Contract shall, unless an Early Settlement has occurred inaccordance with Section 5.9 hereof, obligate the Holder of the related Securityto purchase, and the Company to sell, on the Purchase Contract Settlement Dateat a price equal to the Stated Amount (the "Purchase Price"), a number of newlyissued Ordinary Shares equal to the Settlement Rate unless, on or prior to thePurchase Contract Settlement Date, there shall have occurred a Termination Event

with respect to the Security of which such Purchase Contract is a part. The"Settlement Rate" is equal to (a) if the Applicable Market Value (as definedbelow) is equal to or greater than $ ___ (the "Threshold Appreciation Price"),

___ Ordinary Shares per Purchase Contract, (b) if the Applicable Market Value isless than the Threshold Appreciation Price, but is greater than $ ___ (the"Threshold Depreciation Price"), the number of Ordinary Shares equal to theStated Amount divided by the Applicable Market Value and (c) if the ApplicableMarket Value is less than or equal to Threshold Depreciation Price, ___ OrdinaryShares per Purchase Contract, in each case subject to adjustment as provided inSection 5.6 (and in each case rounded upward or downward to the nearest1/10,000th of a share). As provided in Section 5.10, no fractional OrdinaryShares will be issued upon settlement of Purchase Contracts.

The "Applicable Market Value" means the average of the Closing Price perOrdinary Share on each of the 20 consecutive Trading Days ending on the thirdTrading Day immediately preceding the Purchase Contract Settlement Date.

The "Closing Price" of the Ordinary Shares on any date of determination means the closing sale price (or, if no closing price is reported, the last

reported sale price) of the Ordinary Shares on the New York Stock Exchange (the"NYSE") on such date or, if the Ordinary Shares are not listed for trading onthe NYSE on any such date, as reported in the composite transactions for theprincipal United States securities exchange on which the Ordinary Shares are solisted, or if the Ordinary Shares are not so listed on a United States nationalor regional securities exchange, as reported by The Nasdaq Stock Market, or, ifthe Ordinary Shares are not so reported, the last quoted bid price for theOrdinary Shares in the over-the-counter market as reported by the NationalQuotation Bureau or similar organization, or, if such bid price is notavailable, the market value of the Ordinary Shares on such date as of 4:00 p.m.,New York City time, as determined by a nationally recognized independent


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investment banking firm retained for this purpose by the Company.

A "Trading Day" means a day on which the Ordinary Shares (A) are notsuspended from trading on any national or regional securities exchange orassociation or over-the-counter market at the close of business and (B) havetraded at least once on the national or regional securities exchange orassociation or over-the-counter market that is the primary market for thetrading of the Ordinary Shares.

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Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptancethereof, irrevocably authorizes the Agent to enter into and perform the relatedPurchase Contract on its behalf as its attorney-in-fact (including the executionof Certificates on behalf of such Holder), agrees to be bound by the terms andprovisions thereof, covenants and agrees to perform its obligations under suchPurchase Contracts, and consents to the provisions hereof, irrevocablyauthorizes the Agent as its attorney-in-fact to enter into and perform thePledge Agreement on its behalf as its attorney-in-fact, and consents to andagrees to be bound by the Pledge of the Preferred Shares or the TreasurySecurities pursuant to the Pledge Agreement; provided that upon a TerminationEvent, the rights of the Holder of such Security under the Purchase Contract maybe enforced without regard to any other rights or obligations. Each Holder of anIncome PRIDES or a Growth PRIDES, by its acceptance thereof, further covenantsand agrees, that, to the extent and in the manner provided in Section 5.4 andthe Pledge Agreement, but subject to the terms thereof, payments in respect ofthe Stated Amount of the Preferred Shares or the Proceeds of the TreasurySecurities on the Purchase Contract Settlement Date shall be paid by theCollateral Agent to the Company in satisfaction of such Holder's obligationsunder such Purchase Contract and such Holder shall acquire no right, title orinterest in such payments.

Upon registration of transfer of a Certificate, the transferee shall bebound (without the necessity of any other action on the part of suchtransferee), under the terms of this Agreement, the Purchase Contractsunderlying such Certificate and the Pledge Agreement and the transferor shall bereleased from the obligations under this Agreement, the Purchase Contractsunderlying the Certificates so transferred and the Pledge Agreement. The Companycovenants and agrees, and each Holder of a Certificate, by its acceptancethereof, likewise covenants and agrees, to be bound by the provisions of thisparagraph.

Section 5.2. Contract Adjustment Payments.

Subject to Section 5.3 herein, the Company shall pay, on each Payment Date,the Contract Adjustment Payments payable in respect of each Purchase Contract tothe Person in whose name such Growth PRIDES Certificate (or one or morePredecessor Growth PRIDES Certificates) is registered at the close of businesson the Record Date next preceding such Payment Date. The Contract AdjustmentPayments will be payable at the office of the Agent in The City of New York

2000-04-05 ACE Limited (NYSE: ACE) 8-K

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Transcript of 2000-04-05 ACE Limited (NYSE: ACE) 8-K