Document:

Exhibit 4.2

 

	
 
    

 

 

FIRST SUPPLEMENTAL INDENTURE

 

by and among

 

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD,

as Issuer,

 

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG,

as Guarantor

 

and

 

THE BANK OF NEW YORK MELLON,

as Trustee

 

 

Dated as of October 29, 2015

 

 

$500,000,000

 

Allied World Assurance Company Holdings, Ltd

 

4.35% Senior Notes due 2025

 

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I.   DEFINITIONS
    	
2
    
	
 
    	
 
    
	
Section 1.1.
    	
Definitions
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II.   GENERAL TERMS AND CONDITIONS OF THE 2025 SENIOR NOTES
    	
3
    
	
 
    	
 
    
	
Section 2.1.
    	
Title
    	
3
    
	
Section 2.2.
    	
Principal Amount
    	
3
    
	
Section 2.3.
    	
Payment of Principal   and Interest
    	
3
    
	
Section 2.4.
    	
Optional Redemption
    	
4
    
	
Section 2.5.
    	
Redemption for Changes   in Withholding Taxes
    	
5
    
	
Section 2.6.
    	
Additional Amounts
    	
6
    
	
Section 2.7.
    	
Additional Covenant
    	
6
    
	
Section 2.8.
    	
Form, Currency and   Denominations
    	
6
    
	
Section 2.9.
    	
Global Securities
    	
7
    
	
Section 2.10.
    	
Ranking
    	
7
    
	
Section 2.11.
    	
Miscellaneous
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE III.   MISCELLANEOUS PROVISIONS
    	
8
    
	
 
    	
 
    
	
Section 3.1.
    	
Ratification and   Incorporation of Original Indenture
    	
8
    
	
Section 3.2.
    	
Counterparts
    	
8
    
	
Section 3.3.
    	
Governing Law
    	
8
    
	
Section 3.4.
    	
Headings
    	
8
    
	
 
    	
 
    	
 
    
	
EXHIBIT A
    	
Form of Senior   Note
    	
 
    

 

 

FIRST SUPPLEMENTAL INDENTURE

 

This First Supplemental Indenture, dated as of October 29, 2015 (the “Supplemental Indenture”), to the Indenture, dated as of October 29, 2015 (as heretofore amended and supplemented, the “Original Indenture”), by and among ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD, a Bermuda exempted company (the “Company”), as issuer, having its principal executive office located at 27 Richmond Road, Pembroke HM 08, Bermuda, ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG, a Swiss corporation (the “Guarantor”), as guarantor, having its principal executive office located at Gubelstrasse 24, Park Tower, 15th Floor, 6300 Zug, Switzerland and THE BANK OF NEW YORK MELLON, a New York banking corporation, not in its individual capacity but solely as trustee (the “Trustee”), having its corporate trust office located at 101 Barclay Street, Floor 7 East, New York, New York 10286, is effective upon the execution hereof by the parties hereto.

 

RECITALS

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee the Original Indenture providing for the issuance from time to time of its senior unsecured debentures, notes or other evidences of indebtedness (the “Securities”), unlimited as to principal amount;

 

WHEREAS, the Guarantor has heretofore executed and delivered to the Trustee the Original Indenture providing for the issuance of the Guaranty and indemnity provided for therein and as set forth in the Senior Debt Securities Guarantee Agreement, dated as even date herewith (the “Guarantee Agreement”) in respect of the Securities;

 

WHEREAS, the Original Indenture is incorporated herein by this reference;

 

WHEREAS, Section 3.1 of the Original Indenture provides that, with respect to any series of Securities to be authenticated and delivered under the Original Indenture, the terms of such series of Securities shall be established by (i) a Board Resolution and Officers’ Certificate or (ii) one or more indentures supplemental to the Original Indenture;

 

WHEREAS, the Company desires to create, under the Original Indenture, a new series of Securities to be known as its 4.35% Senior Notes due 2025 (the “2025 Senior Notes”), the form and substance of such notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Supplemental Indenture;

 

WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture and to make it a valid and binding agreement of the Company in accordance with its terms, have been done or performed; and

 

WHEREAS, the Original Indenture, as supplemented by this Supplemental Indenture, is herein called the “Indenture”.

 

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guarantor and the Trustee mutually covenant and agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.1.                                 Definitions.

 

The following defined terms used herein shall have the meanings specified below.  Capitalized terms used herein without definition shall have the respective meanings assigned to such terms in the Original Indenture.

 

“Consolidated Net Worth” in respect of any Person means the total of the amounts shown on the balance sheet of such Person and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the end of the most recent fiscal quarter of such Person ending at least 45 days prior to the taking of any action for the purpose of which the determination is being made, as (i) the par or stated value of all outstanding Capital Stock of such Person plus (ii) paid-in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus, less any accumulated deficit.

 

“Designated Subsidiary” means any present or future consolidated Subsidiary (other than the Company) of the Company or the Guarantor, the Consolidated Net Worth of which constitutes at least 20% of the Consolidated Net Worth of the Guarantor.

 

“Interest Payment Date” means, with respect to the 2025 Senior Notes only, April 29 and October 29 of each year, commencing April 29, 2016.

 

“Regular Record Date” means, with respect to the 2025 Senior Notes only, the close of business on April 14 or October 14, as the case may be (whether or not a Business Day), immediately preceding each Interest Payment Date.

 

“Taxing Jurisdiction” means each of (A) Bermuda or such other jurisdiction in which the Company (or any successors) may be organized or any political subdivision or taxing authority thereof or therein, (B) the jurisdiction of the Company’s principal executive offices or any political subdivision or taxing authority thereof or therein, (C) Switzerland or such other jurisdiction in which the Guarantor (or any successors) may be organized or any political subdivision or taxing authority thereof or therein, and (D) the jurisdiction of the Guarantor’s principal executive offices or any political subdivision or taxing authority thereof or therein.

 

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ARTICLE II.

 

GENERAL TERMS AND CONDITIONS OF THE 2025 SENIOR NOTES

 

There is hereby established a new series of Securities under the Original Indenture with the following terms:

 

Section 2.1.                                 Title.

 

The title of the series is “4.35% Senior Notes due 2025”.

 

Section 2.2.                                 Principal Amount.

 

There are to be issued by the Company, and authenticated and delivered by the Trustee on the date hereof $500,000,000 aggregate principal amount of 2025 Senior Notes, and such principal amount of 2025 Senior Notes may be increased from time to time pursuant to Section 3.1 of the Original Indenture.  All 2025 Senior Notes need not be issued on the same date and such series may be reopened at any time, without the consent of any Holder, for issuances of additional 2025 Senior Notes, unlimited in principal amount, upon delivery by the Company to the Trustee of either an Officers’ Certificate or an indenture supplemental to the Indenture, setting forth the original issuance date of such additional 2025 Senior Notes.  The terms of any such additional 2025 Senior Notes will be identical (except as to denomination and the date from which interest shall accrue) to the terms of the 2025 Senior Notes initially issued, authenticated and delivered on the date hereof.  Any such additional 2025 Senior Notes will, together with the previously issued 2025 Senior Notes, constitute a single series of Securities under the Indenture.

 

Section 2.3.                                 Payment of Principal and Interest.

 

(a)                                 The principal of the 2025 Senior Notes shall be due on October 29, 2025, subject to the provisions of the Original Indenture relating to acceleration of maturity.  The 2025 Senior Notes will bear interest from October 29, 2015, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at a rate of 4.35% per annum, payable semi-annually in arrears on April 29 and October 29 of each year, commencing on April 29, 2016, and at Maturity.  The Company will pay interest to the Persons in whose names the 2025 Senior Notes are registered on the Regular Record Date for such Interest Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

(b)                                 If any Interest Payment Date falls on a day that is not a Business Day at the applicable Place of Payment, the interest payment will be postponed to the next day that is a Business Day at such Place of Payment, and no interest on such payment will accrue for the period from and after such Interest Payment Date.  If the maturity date of the 2025 Senior Notes falls on a day that is not a Business Day at the applicable Place of Payment, the payment of interest and principal may be made on the next succeeding Business Day at such Place of Payment, and no interest on such payment will accrue for the period from and after the maturity date.  Interest payments for the 2025 Senior Notes will include accrued interest from and including the date of issue or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, the Interest Payment Date or the date of maturity, as the case may be.

 

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(c)                                  Payment of the principal and interest due at maturity of the 2025 Senior Notes shall be made upon surrender of the 2025 Senior Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the 2025 Senior Notes shall be paid in United States Dollars.  Payments of principal of or interest on the 2025 Senior Notes will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the payee with a bank located in the United States.

 

Section 2.4.                                 Optional Redemption.

 

(a)                                 The 2025 Senior Notes will be redeemable, at the option of the Company, at any time or from time to time in whole or in part, on not less than 30 nor more than 60 days’ prior notice to the Holders of the 2025 Senior Notes, on any date prior to their maturity.

 

The Redemption Price for any redemption of 2025 Senior Notes before July 29, 2025 (3 months prior to the maturity date) (other than a Tax Redemption) shall be equal to the greater of (i) 100% of the principal amount of the 2025 Senior Notes to be redeemed and (ii) the Discounted Present Value of the 2025 Senior Notes to be redeemed, plus in each case accrued and unpaid interest on the principal amount of the 2025 Senior Notes being redeemed to, but excluding, the Redemption Date.

 

The Redemption Price for any redemption of 2025 Senior Notes on or after July 29, 2025 (3 months prior to the maturity date) shall be equal to 100% of the principal amount of the 2025 Senior Notes to be redeemed, plus accrued and unpaid interest on such principal amount of such 2025 Senior Notes to, but excluding, the Redemption Date.

 

Installments of interest on the 2025 Senior Notes for which the Redemption Date is after a Regular Record Date and on or before the following Interest Payment Date shall be payable to the Holders of such 2025 Senior Notes registered as such at the close of business on the Regular Record Date therefor.

 

As used herein:

 

“Discounted Present Value” of any 2025 Senior Note subject to optional redemption shall be equal to the sum of the present values of the remaining scheduled payments of principal and interest (excluding interest accrued to the Redemption Date) on such 2025 Senior Note discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 35 basis points.

 

“Treasury Rate” means, with respect to any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15 (519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the 2025 Senior Notes to be redeemed (the “Remaining Life”), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be

 

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determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.  The Treasury Rate will be calculated on the third Business Day preceding the Redemption Date.

 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the Remaining Life.

 

“Comparable Treasury Price” means (i) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

 

“Independent Investment Banker” means Barclays Capital Inc. and Credit Suisse Securities (USA) LLC and their respective successors or, if both firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company.

 

“Reference Treasury Dealer” means each of (i) Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., and a Primary Treasury Dealer (defined herein) selected by Wells Fargo Securities, LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company will substitute another Primary Treasury Dealer and (ii) any two other Primary Treasury Dealers selected by the Independent Investment Banker after consultation with the Company.

 

“Reference Treasury Quotation” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, 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 Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

 

(b)                                 If less than all of the 2025 Senior Notes are to be redeemed, the 2025 Senior Notes to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee by lot; provided that if the Senior Notes are in global form, interests in such Senior Notes will be selected for redemption by the applicable depository in accordance with its standard procedures.

 

Section 2.5.                                 Redemption for Changes in Withholding Taxes.

 

The 2025 Senior Notes will be redeemable (a “Tax Redemption”), at the option of the Company, at any time as a whole but not in part, on not less than 30 nor more than 60 days’ prior notice to the Holders of the 2025 Senior Notes, on any date prior to their maturity, at 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption

 

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Date, in the event that the Company or the Guarantor has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the 2025 Senior Notes, any Additional Amounts as a result of: (i) a change in or an amendment to the laws (including any regulations or rulings promulgated thereunder) of a Taxing Jurisdiction, which change or amendment (A) in the case of the Company or the Guarantor, is announced after October 29, 2015 and (B) in the case of any successor to the Company or the Guarantor, is announced after the date such successor assumes the Company’s or the Guarantor’s obligations under the 2025 Senior Notes and the Indenture; or (ii) any change in or amendment to any official position regarding the application, administration, interpretation or enforcement of such laws, regulations or rulings (including a holding by a court of a competent jurisdiction or by a taxing authority) of a Taxing Jurisdiction, which change or amendment (A) in the case of the Company or the Guarantor, is announced after October 29, 2015 and (B) in the case of any successor to the Company or the Guarantor is announced after the date such successor assumes the Company’s or the Guarantor’s obligations under the 2025 Senior Notes and the Indenture, and, in each case, the Company or the Guarantor, as applicable, cannot avoid such obligation by taking reasonable measures available to it.  Installments of interest on the 2025 Senior Notes for which the Redemption Date is after a Regular Record Date and on or before the following Interest Payment Date shall be payable to the Holders of such 2025 Senior Notes registered as such at the close of business on the Regular Record Date therefor.

 

Before the Company publishes or mails any notice of redemption of the 2025 Senior Notes, pursuant to the preceding paragraph, it will deliver to the Trustee an Officers’ Certificate to the effect that the Company or the Guarantor, as applicable, cannot avoid its obligation to pay Additional Amounts by taking reasonable measures available to it (consistent with practices and interpretations generally followed or in effect at the time such measures could be taken) and an Opinion of Counsel stating that there is a substantial probability that the Company or the Guarantor, as applicable, would be obligated to pay Additional Amounts as a result of a change in tax laws or regulations or the application or interpretation of such laws or regulations.

 

Section 2.6.                                 Additional Amounts.

 

Section 10.4 of the Original Indenture relating to payment of Additional Amounts shall apply to the 2025 Senior Notes.

 

Section 2.7.                                 Additional Covenant.

 

In addition to the covenants set forth in Article 10 of the Original Indenture, the following covenant shall be added to Article 10 with respect to the Senior Notes:

 

(a)                                 Equivalent Guarantee.  If any direct or indirect parent company of the Company guarantees the Company’s outstanding 7.50% senior notes due 2016 or 5.50% senior notes due 2020, equivalent guarantees will be provided with respect to the Senior Notes so long as such other notes are so guaranteed.

 

Section 2.8.                                 Form, Currency and Denominations.

 

The 2025 Senior Notes shall be issued in fully registered form, without coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The 2025 Senior

 

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Notes will be issued in substantially the form set forth in Exhibit A hereto.  The Depositary with respect to the 2025 Senior Notes shall be The Depository Trust Company.

 

Section 2.9.                                 Global Securities.

 

(a)                                 The 2025 Senior Notes will be issued in the form of one or more global Securities registered in the nominee name of the Depositary, which shall be Cede & Co.  Except under the circumstances set forth in Section 3.5 of the Original Indenture, the global Securities will not be exchangeable for, and will not otherwise be issuable as, 2025 Senior Notes in definitive form.  Owners of beneficial interests in such a global Security will not be considered the registered owners or Holders of 2025 Senior Notes for any purpose.

 

(b)                                 No global Security representing a 2025 Senior Note shall be exchangeable, except for another global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee.  Payment of principal of, any premium or interest on, and any Additional Amounts in respect of, any 2025 Senior Note in global form shall be made to the registered Holder thereof.

 

Section 2.10.                          Ranking.

 

The 2025 Senior Notes will represent the Company’s direct, unsecured obligations and will rank equally with (i) the Company’s 7.50% Senior Notes due 2016 issued pursuant to the Indenture dated as of July 26, 2006, as supplemented, by and between the Company and the Trustee, (ii) the 5.50% Senior Notes due 2020 issued pursuant to the Indenture dated as of November 15, 2010,  as supplemented, by and between the Company and the Trustee and (iii) the Company’s other existing and future unsubordinated senior indebtedness.  The Guarantee will rank equally with the Guarantor’s liability of its guarantees of (i) the Company’s 7.50% Senior Notes due 2016 issued pursuant to the Indenture dated as of July 26, 2006, as supplemented, by and between Company and the Trustee and (ii) the 5.50% Senior Notes due 2020 issued pursuant to the Indenture dated as of November 15, 2010,  as supplemented, by and between the Company and the Trustee and all other similar guarantee agreements issued by the Guarantor as direct, unsecured and unsubordinated obligations.

 

Section 2.11.                          Miscellaneous.

 

The Company is not obligated to redeem or purchase any 2025 Senior Notes pursuant to any sinking fund or analogous provision.  The 2025 Senior Notes will not be convertible into shares of Common Stock of the Company and/or exchangeable for other securities.  The amount of payments of principal with respect to the 2025 Senior Notes shall not be determined with reference to an index, formula or other method or methods.  No 2025 Senior Notes are issuable upon the exercise of warrants.  Each of Section 4.2(2) of the Original Indenture relating to defeasance and Section 4.2(3) of the Original Indenture relating to covenant defeasance shall apply to the 2025 Senior Notes, and the covenants subject to Section 4.2(3) and Section 10.6 of the Original Indenture shall include the covenants set forth in, and made applicable to the 2025 Senior Notes by, Section 2.7 of this Supplemental Indenture.

 

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ARTICLE III.

 

MISCELLANEOUS PROVISIONS

 

Section 3.1.                                 Ratification and Incorporation of Original Indenture.

 

As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture as supplemented by this Supplemental Indenture shall be read, taken and construed as one and the same instrument.

 

Section 3.2.                                 Counterparts.

 

This Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of this Supplemental Indenture and signature pages for all purposes.

 

Section 3.3.                                 Governing Law.

 

This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and performed in said state.

 

Section 3.4.                                 Headings.

 

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, each of the Company and the Guarantor has executed this Supplemental Indenture by the signature of its authorized officers, and the Trustee has caused this Supplemental Indenture to be executed in its corporate name by its authorized officers, each as of the date above written.

 

	
ALLIED   WORLD ASSURANCE COMPANY HOLDINGS, LTD, as Issuer 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Jonathan Lee
    	
 
    	
Witnessed by: 
    
	
 
    	
Name: Jonathan   Lee
    	
 
    	
 
    
	
 
    	
Title: Senior Vice   President, Finance
    	
 
    	
/s/ Michelle F. Furqan
    
	
 
    	
 
    	
Name: Michelle   F. Furqan
    
	
 
    	
 
    	
Title: Assistant   Corporate Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ALLIED   WORLD ASSURANCE COMPANY HOLDINGS, AG, AS GUARANTOR 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Thomas A.   Bradley
    	
 
    	
 
    
	
 
    	
Name: Thomas A.   Bradley
    	
 
    	
 
    
	
 
    	
Title: Executive Vice   President & Chief Financial Officer
    	
 
    	
 
    

 

[Signature Page to First Supplemental Indenture]

 

 

	
THE   BANK OF NEW YORK MELLON, not in its individual capacity but   solely as Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Francine   Kincaid
    	
 
    	
 
    
	
 
    	
Name: Francine   Kincaid
    	
 
    	
 
    
	
 
    	
Title: Vice   President
    	
 
    	
 
    

 

[Signature Page to First Supplemental Indenture]

 

 

EXHIBIT A

 

[Legend to be removed if the 2025 Senior Note is not represented by a global note]  [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND SUCH PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.]

 

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
 4.35% SENIOR NOTE DUE 2025

 

	
No.
    	
CUSIP No.: 01959E AC2
    

 

	
Principal Amount:
    	
 
    	
$500,000,000
    
	
 
    	
 
    	
 
    
	
Regular Record Date:
    	
 
    	
April 14 or October 14, as the case may   be, immediately preceding each Interest Payment Date
    
	
 
    	
 
    	
 
    
	
Original Issue Date:
    	
 
    	
October 29, 2015
    
	
 
    	
 
    	
 
    
	
Maturity Date:
    	
 
    	
October 29, 2025
    
	
 
    	
 
    	
 
    
	
Interest Payment Dates:
    	
 
    	
April 29 and October 29
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
4.35% per annum
    
	
 
    	
 
    	
 
    
	
Authorized Denomination:
    	
 
    	
$2,000, or any integral multiple of $1,000 in excess   thereof
    

 

Allied World Assurance Company Holdings, Ltd, a Bermuda exempted company (the “Company”, which term includes any successor company under the Indenture referred to below),

 

 

for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of FIVE HUNDRED MILLION UNITED STATES DOLLARS ($500,000,000) on the Maturity Date shown above, and to pay interest thereon from October 29, 2015, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above (including the Maturity Date), commencing on April 29, 2016, at the rate of 4.35% per annum until the principal hereof is paid or duly provided for.

 

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (including the Maturity Date) will, as provided in the Indenture, be paid to the Person in whose name this Senior Note is registered at the close of business on the Regular Record Date as specified above next preceding each Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Senior Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest established by notice given by or on behalf of the Company to the Holders of Senior Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Senior Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

 

Payments of interest on this Senior Note will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for this Senior Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on this Senior Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day, with the same force and effect as if made on the date the payment was originally payable.  A “Business  Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed.

 

Payment of the principal of and interest due on the Maturity Date of this Senior Note shall be made upon surrender of this Senior Note at the Corporate Trust Office of the Trustee.  The principal of and interest on this Senior Note shall be paid in Dollars.  Payments of interest will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto at such address as shall appear in the Security Register or (ii) by wire transfer to an account maintained by the payee with a bank located in the United States.

 

This security is one of a duly authorized issue of debt securities of the Company (herein called the “Securities”), fully and unconditionally guaranteed pursuant to a Senior Debt Securities Guarantee Agreement as to payments of principal, premium, if any, and interest by Allied World Assurance Company Holdings, AG, a Swiss corporation, as guarantor (the “Guarantor,” which term includes any successor guarantor under the Indenture), all issued or to be issued under and pursuant to an Indenture, dated as of October 29, 2015, as supplemented (the “Indenture”), among the Company, the Guarantor and The Bank of New York Mellon, a New York banking corporation, not in its individual capacity but solely as trustee (the “Trustee,”

 

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which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto relating to this security (including, without limitation, the First Supplemental Indenture, dated as of October 29, 2015, among the Company, the Guarantor and the Trustee) reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Securities issued thereunder and of the terms upon which said Securities are, and are to be, authenticated and delivered.  The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Indenture or any indenture supplemental thereto.  This security is one of a series designated on the face as 4.35% Senior Notes due 2025 (the “Senior Notes”), initially issued in aggregate principal amount to $500,000,000, subject to increase as provided in Section 3.1 of the Indenture.  Capitalized terms used herein for which no definition is provided herein shall have the respective meanings ascribed thereto in the Indenture.

 

The Senior Notes are unsecured and unsubordinated obligations of the Company.  Under the Indenture, the Company covenants that if any direct or indirect parent company of the Company guarantees the Company’s outstanding 7.50% senior notes due 2016 or 5.50% senior notes due 2020, equivalent guarantees will be provided with respect to the Senior Notes so long as such other notes are so guaranteed.  The Company’s obligation to pay the principal of, premium, if any, and interest on and Additional Amounts, if any, in respect of the Senior Notes is fully and unconditionally guaranteed on an unsecured and unsubordinated basis by the Guarantor pursuant to Article 15 of the Indenture.

 

While this Senior Note is represented by one or more global notes registered in the name of DTC or its nominee, the Company will cause payments of principal of, premium, if any, and interest on this Senior Note to be made to DTC or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by, DTC or its nominee, and otherwise in accordance with such agreements, regulations and procedures.

 

The Senior Notes will not have a sinking fund.

 

The Senior Notes will be redeemable, at the option of the Company, at any time as a whole or from time to time in part, on not less than 30 nor more than 60 days’ prior notice to the Holders of the Senior Notes, on any date prior to their maturity.  The Redemption Price for any redemption of Senior Notes before July 29, 2025 (other than a Tax Redemption) shall be equal to the greater of (i) 100% of the principal amount of the Senior Notes to be redeemed and (ii) the Discounted Present Value of the Senior Notes to be redeemed, plus in each case accrued and unpaid interest on the principal amount of such Senior Notes to, but excluding, the Redemption Date.  The Redemption Price for any redemption of Senior Notes on or after July 29, 2025 shall be equal to 100% of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest on such principal amount of such Senior Notes to, but excluding, the Redemption Date.  Installments of interest on the Senior Notes for which the Redemption Date is after a Regular Record Date and on or before the following Interest Payment Date shall be payable to the Holders of such Senior Notes registered as such at the close of business on the Regular Record Date therefor.

 

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As used herein:

 

“Discounted Present Value” of any Senior Note subject to optional redemption (other than a Tax Redemption) shall be equal to the sum of the present values of the remaining scheduled payments of principal and interest (excluding interest accrued to the Redemption Date) on such Senior Note discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 35 basis points.

 

“Treasury Rate” means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15 (519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining term of the Senior Notes to be redeemed (the “Remaining Life”), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.  The Treasury Rate will be calculated on the third Business Day preceding the Redemption Date.

 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the Remaining Life.

 

“Comparable Treasury Price” means (i) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

 

“Independent Investment Banker” means Barclays Capital Inc. and Credit Suisse Securities (USA) LLC and their respective successors or, if both firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company.

 

“Reference Treasury Dealer” means each of (i) Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., and a Primary Treasury Dealer (defined herein) selected by Wells Fargo Securities, LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company will substitute another Primary Treasury Dealer and (ii) any two other Primary Treasury Dealers selected by the Independent Investment Banker after consultation with the Company.

 

4

 

“Reference Treasury Quotation” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, 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 Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

 

If less than all of the Senior Notes are to be redeemed as provided above, the Senior Notes to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, by lot; provided that if the Senior Notes are in global form, interests in such Senior Notes will be selected for redemption by the applicable depository in accordance with its standard procedures.

 

The Senior Notes will be redeemable (a “Tax Redemption”), at the option of the Company, at any time as a whole but not in part, on not less than 30 nor more than 60 days’ prior notice to the Holders of the Senior Notes, on any date prior to their maturity, at 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date, in the event that the Guarantor has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the Senior Notes, any Additional Amounts as a result of: (i) a change in or an amendment to the laws (including any regulations or rulings promulgated thereunder) of a Taxing Jurisdiction, which change or amendment, (A) in the case of the Guarantor, is announced after October 29, 2015 and (B) in the case of any successor to the Guarantor, is announced after the date such successor assumes the Guarantor’s obligations under the Senior Notes and the Indenture; or (ii) any change in or amendment to any official position regarding the application, administration, interpretation or enforcement of such laws, regulations or rulings (including a holding by a court of competent jurisdiction or by a taxing authority) of a Taxing Jurisdiction, which change or amendment (A) in the case of the Guarantor, is announced after October 29, 2015 and (B) in the case of any successor to the Guarantor, is announced after the date such successor assumes the Guarantor’s obligations under the Senior Notes and the Indenture, and, in each case, the Guarantor cannot avoid such obligation by taking reasonable measures available to it.  Installments of interest on the Senior Notes for which the Redemption Date is after a Regular Record Date and on or before the following Interest Payment Date shall be payable to the Holders of such Senior Notes registered as such at the close of business on the Regular Record Date therefor.

 

The Indenture also contains provisions for defeasance at any time of the entire indebtedness of the Senior Notes and the Guarantee of the Guarantor with respect thereto or of certain restrictive covenants of the Company and the Guarantor with respect to the Senior Notes, in each case, upon compliance with certain conditions set forth in the Indenture.

 

If an Event of Default with respect to the Senior Notes shall occur and be continuing, the principal of the Senior Notes may be declared due and payable in the manner, with the effect and subject to the conditions 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 Guarantor and the rights of the Holders of the Securities of each series issued under the Indenture at any time by the Company, the Guarantor and the Trustee with the consent of the Holders of not less than a

 

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majority in aggregate principal amount of the Securities of each series at the time Outstanding affected thereby.  The Indenture also contains provisions permitting the Holders of not less than a majority in principal amount of the Senior Notes at the time Outstanding, on behalf of the Holders of all Senior Notes, to waive compliance by the Company or the Guarantor, as applicable, 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 Senior Note shall be conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior 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 and Additional Amounts, if any, in respect of this Senior Note at the times, place 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 Senior Note is registrable in the Security Register, upon surrender of this Senior Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Senior Notes, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees.  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 cover any tax or other governmental charge or certain other expenses payable in connection therewith.

 

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

 

The Senior Notes are issuable only in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Senior Notes are exchangeable for a like aggregate principal amount of Senior Notes of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Senior Note or Notes to be exchanged at the office or agency of the Company.

 

This Senior Note shall be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and performed in said state.

 

The proceeds of the offering of this Senior Note shall be used exclusively outside of Switzerland.

 

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Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by its authorized representatives as of the date set forth below.

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
Attest:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Allied World Assurance Company Holdings, Ltd 4.35% Senior Note Due 2025]

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the 4.35% Senior Notes due 2025 referred to in the within-mentioned Indenture.

 

	
 
    	
 
    	
THE BANK OF NEW   YORK MELLON, not in its individual capacity but solely as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized   SignatoryExhibit 4.3

 

	
 
    

 

 

SENIOR DEBT SECURITIES GUARANTEE AGREEMENT

 

between

 

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG,

 

as Guarantor,

 

and

 

THE BANK OF NEW YORK MELLON,

 

as Guarantee Trustee

 

dated as of

 

October 29, 2015

 

	
 
    

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS
    	
1
    
	
SECTION 1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II   TRUST INDENTURE ACT
    	
3
    
	
SECTION 2.1
    	
Trust Indenture Act:   Application
    	
3
    
	
SECTION 2.2
    	
List of Holders
    	
3
    
	
SECTION 2.3
    	
Reports by the   Guarantee Trustee
    	
3
    
	
SECTION 2.4
    	
Evidence of Compliance   with Conditions Precedent
    	
3
    
	
SECTION 2.5
    	
Events of Default;   Waiver
    	
4
    
	
SECTION 2.6
    	
Event of Default;   Notice
    	
4
    
	
SECTION 2.7
    	
Conflicting Interests
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE III   POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
    	
4
    
	
SECTION 3.1
    	
Powers and Duties of   the Guarantee Trustee
    	
4
    
	
SECTION 3.2
    	
Certain Rights of the   Guarantee Trustee
    	
6
    
	
SECTION 3.3
    	
Indemnity
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   GUARANTEE TRUSTEE
    	
8
    
	
SECTION 4.1
    	
Guarantee Trustee;   Eligibility
    	
8
    
	
SECTION 4.2
    	
Appointment, Removal   and Resignation of Guarantee Trustees
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE V   GUARANTEE
    	
9
    
	
SECTION 5.1
    	
Guarantee
    	
9
    
	
SECTION 5.2
    	
Waiver of Notice and   Demand
    	
9
    
	
SECTION 5.3
    	
Obligations Not Affected
    	
9
    
	
SECTION 5.4
    	
Rights of Holders
    	
10
    
	
SECTION 5.5
    	
Guarantee of Payment   and Reinstatement
    	
10
    
	
SECTION 5.6
    	
Subrogation
    	
11
    
	
SECTION 5.7
    	
Independent Obligations
    	
11
    
	
SECTION 5.8
    	
Net Payments
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   RANKING
    	
12
    
	
SECTION 6.1
    	
Ranking
    	
12
    
	
SECTION 6.2
    	
Pari Passu Guarantees
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   TERMINATION
    	
12
    
	
SECTION 7.1
    	
Termination
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   MISCELLANEOUS
    	
13
    
	
SECTION 8.1
    	
Successors and Assigns
    	
13
    
	
SECTION 8.2
    	
Amendments
    	
13
    
	
SECTION 8.3
    	
Notices
    	
13
    
	
SECTION 8.4
    	
Benefit
    	
14
    
	
SECTION 8.5
    	
Governing Law; Waiver   of Jury Trial
    	
14
    

 

i

 

	
SECTION 8.6
    	
Interpretation
    	
15
    
	
SECTION 8.7
    	
Submission to   Jurisdiction
    	
15
    
	
SECTION 8.8
    	
Judgment Currency
    	
16
    
	
SECTION 8.9
    	
Counterparts
    	
16
    
	
SECTION 8.10
    	
Guarantee Trustee’s   Disclaimer
    	
17
    

 

ii

 

SENIOR DEBT SECURITIES GUARANTEE AGREEMENT

 

This SENIOR DEBT SECURITIES GUARANTEE AGREEMENT (this “Guarantee Agreement” or this “Guarantee”), dated as of October 29, 2015, is executed and delivered by ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG, a Swiss company (the “Guarantor”), having its principal executive offices at Lindenstrasse 8, 6340 Baar, Zug, Switzerland, and THE BANK OF NEW YORK MELLON, a New York banking corporation (“BNY Mellon”), not in its individual capacity but solely as the Guarantee trustee (the “Guarantee Trustee”), having its Corporate Trust Office located at 101 Barclay Street, Floor 7 East, New York, New York 10286, for the benefit of the Holders (as defined herein) from time to time of the Senior Notes (as defined herein) issued by Allied World Assurance Holdings, Ltd., a Bermuda exempted company (the “Issuer”).

 

WHEREAS, pursuant to the Senior Indenture, dated as of October 29, 2015 (the “Original Indenture”), as supplemented by the First Supplemental Indenture (the “Supplemental Indenture”), dated as of October 29, 2015 (together with the Original Indenture, the “Indenture”), each among the Issuer, the Guarantor and BNY Mellon, as trustee thereunder (in such capacity, the “Trustee”), the Issuer is issuing $500,000,000 aggregate principal amount of its 4.35% Senior Notes due 2025 (the “Senior Notes”).

 

WHEREAS, as incentive for the Holders (as defined in the Indenture) of the Senior Notes to purchase such Senior Notes, the Guarantor desires irrevocably and unconditionally, to guarantee the obligations of the Issuer under the Indenture pursuant to, as provided by and in connection with the Indenture (including Section 15.1 thereto).

 

NOW, THEREFORE, in consideration of the purchase by the Holders of the Senior Notes, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of such Holders.

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1  Definitions

 

As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings.  Capitalized terms used herein without definition shall have the respective meanings assigned to such terms in the Indenture as in effect on the date hereof.

 

“Additional Amounts” means any additional amounts which are required hereby or by the terms of the Senior Notes, under circumstances specified herein or therein, to be paid by the Guarantor in respect of certain taxes, assessments or other governmental charges imposed on Holders of Senior Notes specified herein and therein and which are owing to such Holders.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; provided, however, that an Affiliate of the Guarantor shall not be deemed to include the

 

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Issuer.  For the purpose of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authorized Officer” means, when used with respect to any Person, the Chairman of the Board of Directors, a Vice Chairman, the President, the Vice President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Chief Investment Officer, the Chief Accounting Officer, the General Counsel, the Secretary or an Assistant Secretary, of such Person.

 

“Event of Default” means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement; provided, however, that, except with respect to a payment default, the Guarantor shall have received notice of default and shall not have cured such default within 90 days after receipt of such notice.

 

“Guarantee Trustee” means BNY Mellon, not in its individual capacity but solely as Guarantee Trustee, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Guarantee Trustee.

 

“Guarantor Board Resolution” means a copy of one or more resolutions, certified by the Secretary or an Assistant Secretary of the Guarantor to have been duly adopted by the Board of Directors of the Guarantor and to be in full force and effect on the date of such certification.

 

“Indenture” has the meaning set forth in the preamble hereto.

 

“List of Holders” has the meaning specified in Section 2.2(a).

 

“Officers’ Certificate” means, with respect to any Person, a certificate signed by two Authorized Officers of such Person, at least one of which is a principal executive, principal financial or principal accounting officer, and is delivered to the Guarantee Trustee.  Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee shall include:

 

(a)  a statement that each officer signing the Officers’ Certificate has read such covenant or condition and the definitions relating thereto;

 

(b)  a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based;

 

(c)  a statement that, in the opinion of such officer, such officer has made such examination or investigation as is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(d)  a statement as to whether or not, in the opinion of such officer, such condition or covenant has been complied with.

 

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“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof, or any other entity of whatever nature.

 

“Responsible Officer” means, with respect to the Guarantee Trustee, any vice president, any assistant vice president, director, managing director, associate or any trust officer or any other officer of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject, in each case who shall have responsibility for the administration of the Senior Indenture.

 

“Senior Notes” has the meaning set forth in the recitals hereto.

 

“Successor Guarantee Trustee” means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.1.

 

ARTICLE II

 

TRUST INDENTURE ACT

 

SECTION 2.1  Trust Indenture Act:  Application

 

(a)  This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions.

 

(b)  If and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

(c)  This Guarantee Agreement is being entered into pursuant to, as provided by and in connection with the Indenture (including Section 15.1 thereto), which has been qualified under the Trust Indenture Act.

 

SECTION 2.2  List of Holders

 

(a)  The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee

 

(1)  semi-annually with respect to the Senior Notes not later than May 1 and November 1 of the year or upon such other dates as are set forth in or pursuant to the Board Resolution or the Supplemental Indenture in respect of the Senior Notes, a list, in each case in such form as the Guarantee Trustee may reasonably require, of the names and addresses of Holders as of the applicable date, and

 

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(2)  at such other times as the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished,

 

provided, however, that so long as the Guarantor Trustee is the Security Registrar no such list shall be required to be furnished.

 

(b)  The Guarantee Trustee shall comply with its obligations under Section 312(b) of the Trust Indenture Act.

 

SECTION 2.3  Reports by the Guarantee Trustee

 

(1)  Within 60 days after May 15 of each year commencing with May 15, 2016, if required by Section 313(a) of the Trust Indenture Act, the Guarantee Trustee shall transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report dated as of such May 15 with respect to any of the events specified in said Section 313(a) which may have occurred since the later of the immediately preceding May 15 and the date of this Guarantee.

 

(2)  The Guarantee Trustee shall transmit the reports required by Section 313(b) of the Trust Indenture Act at the times specified therein.

 

(3)  Reports pursuant to this Section shall be transmitted in the manner and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture Act.

 

SECTION 2.4  Evidence of Compliance with Conditions Precedent

 

The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act.  Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of a Guarantor’s Officers’ Certificate.

 

SECTION 2.5  Events of Default; Waiver

 

The Holders of not less than a majority of the outstanding principal amount of the Senior Notes may, on behalf of all Holders of the Senior Notes, waive any past default affecting the Senior Notes and its consequences, except a default (i) in the payment of the principal of, any premium or interest on, or any Additional Amounts with respect to, the Senior Notes or any Coupons appertaining thereto or (ii) in respect of a covenant or provision of the Indenture which under Article 9 of the Indenture cannot be modified or amended without the consent of all Holders of the Senior Notes.  Upon such waiver, any such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

SECTION 2.6  Event of Default; Notice

 

4

 

(a)  Within 90 days after the occurrence of any default hereunder with respect to the Senior Notes, the Guarantee Trustee shall transmit by mail to all Holders of Senior Notes entitled to receive reports pursuant to Section 7.3(3) of the Indenture, notice of such default hereunder actually known to a Responsible Officer of the Guarantee Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any), or interest, if any, on, or Additional Amounts or any sinking fund or purchase fund installment with respect to, any Senior Note, the Guarantee Trustee shall be protected in withholding such notice if and so long as the Guarantee Trustee in good faith determines that the withholding of such notice is in the best interest of the Holders of Senior Notes; and provided, further, that in the case of any default of the character specified in Section 5.1(4) or Section 5.1(5) of the Indenture with respect to the Senior Notes, no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to the Senior Notes.

 

(b)  The Guarantee Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Guarantee Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Guarantee Trustee at the Corporate Trust Office of the Guarantee Trustee, and such notice references the Senior Notes and this Guarantee.

 

SECTION 2.7  Conflicting Interests

 

The Indenture shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

 

ARTICLE III

 

POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

 

SECTION 3.1  Powers and Duties of the Guarantee Trustee

 

(a)  This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders of the Senior Notes, and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except a Holder of a Senior Note exercising his or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee.  The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment hereunder, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.

 

(b)  The Guarantee Trustee, before the occurrence of any Event of Default hereunder or under the Indenture affecting the Senior Notes and after the curing or waiver of all such Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee  

 

5

 

Agreement against the Guarantee Trustee.  In case an Event of Default has occurred hereunder or under the Indenture (that has not been cured or waived pursuant to Section 2.5), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

 

(c)  No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its negligent failure to act or its own bad faith or willful misconduct, except that:

 

(i)  prior to the occurrence of any Event of Default hereunder or under the Indenture affecting the Senior Notes and after the curing or waiving of any such Events of Default that may have occurred:

 

(A)  the Guarantee Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Guarantee and no implied covenants or obligations shall be read into this Guarantee against the Guarantee Trustee, and

 

(B)  the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein);

 

(ii)  the Guarantee Trustee shall not be liable for any action taken or error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent, acted in bad faith or engaged in willful misconduct;

 

(iii)  the Guarantee Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with an Act of the Holders hereunder, and, to the extent not so provided herein, with respect to any act requiring the Guarantee Trustee to exercise its own discretion, relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee, under this Guarantee or the Senior Notes, unless it shall be proved that, in connection with any such action taken, suffered or omitted or any such act, the Guarantee Trustee was negligent, acted in bad faith or engaged in willful misconduct; and

 

(iv)  except as expressly required by the terms of this Guarantee, none of the provisions of this Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of  

 

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its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

 

SECTION 3.2  Certain Rights of the Guarantee Trustee

 

Subject to the provisions of Section 3.1:

 

(i)  the Guarantee Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(ii)  any request or direction of the Guarantor mentioned herein shall be sufficiently evidenced by a Guarantor Request and any resolution of the Board of Directors of the Guarantor may be sufficiently evidenced by a Guarantor Board Resolution;

 

(iii)  whenever in the administration of this Guarantee the Guarantee Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless other evidence shall be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;

 

(iv)  the Guarantee Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

(v)  the Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this Guarantee at the request or direction of any of the Holders of Senior Notes pursuant to this Guarantee, unless such Holders shall have offered to the Guarantee Trustee such security or indemnity as is reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

(vi)  the Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document, but the Guarantee Trustee, in its discretion, may but shall not be obligated to make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Guarantee Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of the Guarantor, personally or by agent or attorney;

 

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(vii)  the Guarantor Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Guarantor Trustee shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee appointed with due care by it hereunder;

 

(viii)  the Guarantee Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee; and

 

(ix)  in no event shall the Guarantee Trustee be responsible or liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Guarantee Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

SECTION 3.3  Compensation and Reimbursement

 

The Guarantor agrees:

 

(1)  to pay to the Guarantee Trustee from time to time compensation for all services rendered by the Guarantee Trustee hereunder as agreed in writing between the Guarantor and the Guarantee Trustee (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(2)  except as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Guarantee Trustee in accordance with any provision of this Guarantee or arising out of or in connection with the acceptance or administration of the trust or trusts hereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to the Guarantee Trustee’s negligence, willful misconduct or bad faith; and

 

(3)  to indemnify the Guarantee Trustee and its agents, officers, directors and employees for, and to hold them harmless against, any loss, claim, damage, liability or expense incurred, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder, except to the extent that any such loss, claim, damage, liability or expense was determined to have been caused by the Guarantee Trustee’s own negligence, willful misconduct or bad faith.

 

As security for the performance of the obligations of the Guarantor under this Section, the Guarantee Trustee shall have a lien prior to the Senior Notes upon all property and funds held or collected by the Guarantee Trustee as such, except funds held in trust for the payment of principal of, and premium or interest on or any Additional Amounts with respect to the Senior Notes.

 

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To the extent permitted by law, any compensation or expense (including the charges and expenses of its counsel) incurred by the Guarantee Trustee after an Event of Default is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. “Guarantee Trustee” for purposes of this Section 3.3 shall include any predecessor Guarantee Trustee but the negligence or bad faith of any Guarantee Trustee shall not affect the rights of any other Guarantee Trustee under this Section 3.3.

 

The provisions of this Section 3.3 shall survive the satisfaction and discharge of this Guarantee or the earlier resignation or removal of the Guarantee Trustee and shall apply with equal force and effect to the Guarantee Trustee in its capacity as Authenticating Agent, Paying Agent or Security Registrar.

 

ARTICLE IV

 

GUARANTEE TRUSTEE

 

SECTION 4.1  Guarantee Trustee; Eligibility

 

(a)  There shall at all times be a Guarantee Trustee hereunder that is a Corporation organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia, that is eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act and that has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000, and that is subject to supervision or examination by Federal or state authority. If at any time the Guaranteed Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

(b)  If the Guarantee Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

 

SECTION 4.2  Appointment, Removal and Resignation of Guarantee Trustees

 

(a)  No resignation or removal of the Guarantee Trustee and no appointment of a successor Guarantee Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Guarantor Trustee in a written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor.

 

(b)  The Guarantee Trustee may resign at any time with respect to the Senior Notes by giving written notice thereof to the Guarantor. If the instrument of acceptance by a successor Guarantee Trustee shall not have been delivered to the Guarantee Trustee within 30 days after the giving of such notice of resignation, the resigning Guarantee Trustee may petition at the expense of the Guarantor any court of competent jurisdiction for the appointment of a successor Guarantee Trustee with respect to the Senior Notes.

 

(c)  The Guarantee Trustee may be removed at any time with respect to the Senior Notes by Act of the Holders of a majority in principal amount of the Outstanding Senior Notes,  

 

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delivered to the Guarantee Trustee and the Guarantor. If the instrument of acceptance by a successor Guarantee Trustee shall not have been delivered to the Guarantee Trustee within 30 days after such removal, the removed Guarantee Trustee may petition at the expense of the Guarantor any court of competent jurisdiction for the appointment of a successor Guarantee Trustee with respect to the Senior Notes.

 

ARTICLE V

 

GUARANTEE

 

SECTION 5.1  Guarantee

 

The Guarantor hereby irrevocably and unconditionally fully guarantees to each Holder the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to any Senior Note held by such Holder, when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Senior Note and of the Indenture, regardless of any defense, right of setoff or counterclaim that the Issuer may have or assert.  The Guarantor further agrees that, as between the Guarantor, on the one hand, and the Holders of the Senior Notes and the Guarantee Trustee, on the other hand, the maturity of the Senior Notes guaranteed hereby may be accelerated as provided in Article 5 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Senior Notes guaranteed hereby.

 

SECTION 5.2  Waiver of Notice and Demand

 

The Guarantor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

 

SECTION 5.3  Obligations Not Affected

 

The obligations, covenants, agreements and duties of the Guarantor under this Guarantee shall be as if it were a principal debtor, and not merely a surety, and shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

 

(a)  the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Senior Notes to be performed or observed by the Issuer;

 

(b)  any failure, omission, delay or lack of diligence on the part of or on behalf of the Holders of the Senior Notes to enforce, assert or exercise any right, privilege, power or remedy conferred on such Holders pursuant to the terms of the Senior Notes, or any action on the part of the Issuer granting indulgence or extension of any kind; 

 

(c)  the voluntary or involuntary liquidation, dissolution, sale of any collateral,

 

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receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer;

 

(d)  any invalidity or unenforceability of, or defect or deficiency in, the Senior Notes; or

 

(e)  any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances.

 

There shall be no obligation of the Holders of the Senior Notes to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing.

 

SECTION 5.4  Rights of Holders

 

The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders of the Senior Notes; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders of the Senior Notes; (iii) the Holders of not less than a majority of the outstanding principal amount of the Senior Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder of a Senior Note may, to the extent permitted by law, institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the Guarantee Trustee, the Issuer or any other Person.  The Guarantor waives any right or remedy to require that any action on this Guarantee Agreement be brought first against the Issuer or any other Person or entity before proceeding directly against the Guarantor.

 

SECTION 5.5  Guarantee of Payment and Reinstatement

 

This Guarantee creates a guarantee of payment and not of collection.  This Guarantee Agreement will not be discharged except by payment in full of all amounts (without duplication of amounts theretofore paid by the Issuer) owed under the Senior Notes.  This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment on any Senior Note, in whole or in part, is rescinded or must otherwise be restored to the Issuer or the Guarantor upon the bankruptcy, liquidation or reorganization of the Issuer or otherwise.

 

SECTION 5.6  Subrogation

 

The Guarantor shall be subrogated to all rights, if any, of the Holders of the Senior Notes against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Guarantee Agreement; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of applicable law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement.  If any amount shall  

 

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be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders of the Senior Notes and to pay over such amount to such Holders.

 

SECTION 5.7  Independent Obligations

 

The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Senior Notes, and that the Guarantor shall be liable as principal and as debtor hereunder to make all payments with respect to the Senior Notes pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (e), inclusive, of Section 5.3 hereof.

 

SECTION 5.8  Net Payments

 

All payments required to be made hereunder shall be made by the Guarantor without withholding or deduction at source for, or on account of, any present or future taxes, fees, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Switzerland or such other jurisdiction in which the Guarantor (or any of its successors under the Guarantee Agreement) may be organized (each, a “taxing jurisdiction”) or any political subdivision or taxing authority thereof or therein, unless such taxes, fees, duties, assessments or governmental charges are required to be withheld or deducted by (i) the laws (or any regulations or ruling promulgated thereunder) of a taxing jurisdiction or any political subdivision or taxing authority thereof or therein or (ii) an official position regarding the application, administration, interpretation or enforcement of any such laws, regulations or rulings (including, without limitation, a holding by a court of competent jurisdiction or by a taxing authority in a taxing jurisdiction or any political subdivision thereof).  If a withholding or deduction at source is required, the Guarantor shall, subject to certain limitations and exceptions set forth below, pay to the Holder of any Senior Note such Additional Amounts as may be necessary so that every guarantee payment made to such Holder, after such withholding or deduction, shall not be less than the amount provided for in the Indenture and this Guarantee Agreement to be then due and payable; provided, however, that the Guarantor shall not be required to make payment of such Additional Amounts for or on account of:

 

(1)  any tax, fee, duty, assessment or governmental charge of whatever nature which would not have been imposed but for the fact that such Holder:  (A) was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the relevant taxing jurisdiction or any political subdivision thereof or otherwise had some connection with the relevant taxing jurisdiction other than by reason of the mere ownership of, or receipt of payment under, such Senior Note; (B) presented such Senior Note for payment in the relevant taxing jurisdiction or any political subdivision thereof, unless such Senior Note could not have been presented for payment elsewhere; or (C) presented such Senior Note more than thirty (30) days after the date on which the payment in respect of such Senior Note first became due and payable or provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amounts if it had presented such Senior Note for payment on any day within such period of thirty (30) days;

 

(2)  any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

 

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(3)  any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure by the Holder or the beneficial owner of such Senior Note to comply with any reasonable request by the Issuer addressed to the Holder within 90 days of such request (A) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (B) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (A) or (B), is required or imposed by statute, treaty, regulation or administrative practice of the relevant taxing jurisdiction or any political subdivision thereof as a precondition to exemption from all or part of such tax, assessment or other governmental charge; or

 

(4)  any combination of items (1), (2) and (3);

 

nor shall Additional Amounts be paid with respect to any guarantee payment to any Holder of a Senior Note who is a fiduciary or partnership or other than the sole beneficial owner of the related Senior Note, but only to the extent such payment would be required by the laws of the relevant taxing jurisdiction (or any political subdivision or relevant taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts had it been the Holder of such Senior Note.

 

ARTICLE VI

 

RANKING

 

SECTION 6.1  Ranking

 

The obligation of the Guarantor under this Guarantee will constitute a direct, unsecured and unsubordinated obligation of the Guarantor and will rank equally in right of payment with the Guarantor’s obligations under its guarantees of (i) the Issuer’s 7.5% Senior Notes due 2016 issued pursuant to the Indenture dated as of July 26, 2006, as supplemented, by and between the Issuer and the Guarantee Trustee and (ii) the 5.50% Senior Notes due 2020 issued pursuant to the Indenture dated as of November 15, 2010,  as supplemented, by and between the Issuer and the Guarantee Trustee and its other direct, unsecured and unsubordinated indebtedness and senior to the Guarantor’s subordinated indebtedness and common shares and other equity interests.

 

ARTICLE VII

 

TERMINATION

 

SECTION 7.1  Termination

 

Subject to reinstatement as provided in Section 5.5 hereof, this Guarantee Agreement shall terminate and be of no further force and effect upon payment in full of all amounts (without duplication of amounts theretofore paid by the Issuer) owed under the Senior Notes.

 

ARTICLE VIII

 

MISCELLANEOUS

 

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SECTION 8.1  Successors and Assigns

 

All covenants and agreements in this Guarantee by the Guarantor shall bind its successors and assigns, whether so expressed or not.  Except in connection with a consolidation, merger, amalgamation or sale involving the Guarantor that is permitted under Article 8 of the Indenture and pursuant to which the assignee agrees in writing to perform the Guarantor’s obligations hereunder, the Guarantor shall not assign its obligations hereunder.

 

SECTION 8.2  Amendments

 

(a)  Without the consent of any Holders, the Guarantor (when authorized by or pursuant to a Guarantor Board Resolution) and the Guarantee Trustee, at any time and from time to time, may enter into one or more agreements supplemental hereto, for any of the following purposes:

 

(1)  to evidence the succession of another Person to the Guarantor, and the assumption by any such successor of the covenants of the Guarantor contained; or

 

(2)  to add to the covenants of the Guarantor for the benefit of the Holders of the Senior Notes or to surrender any right or power herein conferred upon the Guarantor; or

 

(3)  to evidence and provide for the acceptance of appointment hereunder by a successor Guarantee Trustee with respect to the Senior Notes and to add to or change any of the provisions of this Guarantee as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Guarantee Trustee; or

 

(4)  to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Guarantee which shall not adversely affect the interests of the Holders of Senior Notes in any material respect; or

 

(5)  to add any additional Events of Default with respect to the Senior Notes; or

 

(6)  to amend or supplement any provision contained herein or in any supplemental agreement, provided that no such amendment or supplement shall materially adversely affect the interests of the Holders of the Senior Notes; or

 

(7)  to add any additional guarantees with respect of the Senior Notes; or

 

(8)  to add any co-obligors with respect to the Senior Notes.

 

(b)  With the consent of the Holders of not less than a majority in principal amount of the Senior Notes, by Act of said Holders delivered to the Guarantor and the Guarantee Trustee, the Guarantor (when authorized by or pursuant to a Guarantor Board Resolution) and the Guarantee Trustee may enter into an agreement or agreements supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Guarantee or of modifying in any manner the rights of the Holders of the Senior Notes; provided, however, that no such agreement, without the consent of the Holder of each Outstanding Senior Notes affected thereby, shall modify any of the provisions of this Section, Section 5.1 or Section  

 

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6.1, except to provide that certain other provisions of this Guarantee cannot be modified or waived without the consent of the Holder of each Outstanding Senior Notes affected thereby.

 

(c)  It shall not be necessary for any Act of Holders of Senior Notes under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof.

 

SECTION 8.3  Notices

 

Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Guarantee to be made upon, given or furnished to, or filed with,

 

(1)  the Guarantee Trustee by any Holder or the Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing by courier, facsimile or electronic mail, to or with the Guarantee Trustee at its Corporate Trust Office, with a copy to The Bank of New York Mellon, 101 Barclay Street, Floor 7 East, New York, New York 10286, Attention: Corporate Trust Administration, or

 

(2)  the Guarantor by the Guarantee Trustee or any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Guarantor addressed to the attention of its Treasurer, with a copy to the attention of its General Counsel, at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Guarantee Trustee by the Guarantor

 

All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by courier, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver.

 

SECTION 8.4  Benefit

 

This Guarantee is solely for the benefit of the Holders of the Senior Notes and is not separately transferable from the Senior Notes.

 

SECTION 8.5  Governing Law; Waiver of Jury Trial

 

This Guarantee shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in said state.

 

EACH OF THE GUARANTOR, THE HOLDERS AND THE GUARANTEE 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 GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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SECTION 8.6  Interpretation

 

In this Guarantee, unless the context otherwise requires:

 

(a)  capitalized terms used in this Guarantee Agreement, but not defined in the preamble hereto have the respective meanings assigned to them in Section 1.1 or in the Indenture, as the case may be;

 

(b)  a term defined anywhere in this Guarantee Agreement has the same meaning throughout;

 

(c)  all references to “this Guarantee”, “the Guarantee Agreement” or “this Guarantee Agreement” are to this Guarantee Agreement as modified, supplemented or amended from time to time;

 

(d)  all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement, unless otherwise specified;

 

(e)  a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement, unless otherwise defined in this Guarantee Agreement or unless the context otherwise requires;

 

(f)  a reference to the singular includes the plural and vice versa; and

 

(g)  the masculine, feminine, or neuter genders used herein shall include the masculine, feminine and neuter genders.

 

SECTION 8.7  Submission to Jurisdiction

 

The Guarantor and the Holders agree that any judicial proceedings instituted in relation to any matter arising under this Guarantee may be brought in any United States Federal or New York State court sitting in the Borough of Manhattan, The City of New York, New York to the extent that such court has subject matter jurisdiction over the controversy, and, by execution and delivery of this Guarantee, the Guarantor and the Holders hereby irrevocably accept, generally and unconditionally, the jurisdiction of the aforesaid courts, acknowledges their competence and irrevocably agrees to be bound by any judgment rendered in such proceeding. The Guarantor also irrevocably and unconditionally waives for the benefit of the Guarantee Trustee and the Holders of the Senior Notes any immunity from jurisdiction and any immunity from legal process (whether through service or notice, attachment prior to judgment, attachment in the aid of execution, execution or otherwise) in respect of this Guarantee. The Guarantor hereby irrevocably designates and appoints for the benefit of the Guarantee Trustee and the Holders of the Senior Notes for the term of this Guarantee CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent to receive on its behalf service of all process (with a copy of all such service of process to be delivered to Wesley D. Dupont, General Counsel, Allied World Assurance Company Holdings, AG, Lindenstrasse 8, 6340 Baar, Zug, Switzerland) brought against it with respect to any such proceeding in any such court in The City of New York, such service being hereby acknowledged by the Guarantor to be effective and binding service on it in every respect whether or not the Guarantor shall then be doing or shall

 

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have at any time done business in New York. Such appointment shall be irrevocable so long as any of the Senior Notes or the obligations of the Guarantor hereunder remain outstanding or until the appointment of a successor by the Guarantor and such successor’s acceptance of such appointment. Upon such acceptance, the Guarantor shall notify the Guarantee Trustee in writing of the name and address of such successor. The Guarantor further agrees for the benefit of the Guarantee Trustee and the Holders of the Senior Notes to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said CT Corporation System in full force and effect so long as any of the Senior Notes or the obligations of the Guarantor hereunder shall be outstanding. The Guarantee Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Guarantor to take any such action. Nothing herein shall affect the right to serve process in any other manner permitted by any law or limit the right of the Guarantee Trustee or any Holder to institute proceedings against the Guarantor in the courts of any other jurisdiction or jurisdictions.

 

SECTION 8.8  Judgment Currency

 

The Guarantor 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 in respect of the principal of, or premium or interest, if any, or Additional Amounts on the Senior Notes (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 Guarantee 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 this Guarantee 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 this Indenture. For purposes 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 8.9  Counterparts

 

This Guarantee may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The exchange of copies of this Guarantee and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Guarantee as to the parties hereto and may be used in lieu of the original Guarantee and signature pages for all purposes.

 

SECTION 8.10  Guarantee Trustee’s Disclaimer

 

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The Guarantee Trustee shall be afforded all of the rights, powers, immunities and indemnities afforded to the Trustee as set forth in the Indenture as if such rights, powers, immunities and indemnities were specifically set forth herein, mutatis mandatis.

 

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THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.

 

	
 
    	
ALLIED   WORLD ASSURANCE COMPANY HOLDINGS, AG,
    
	
 
    	
as Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas A. Bradley
    
	
 
    	
 
    	
Name:
    	
Thomas   A. Bradley
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President &
    
	
 
    	
 
    	
 
    	
Chief   Financial Officer
    

 

[Signature Page to Senior Debt Securities Guarantee - Swiss]

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON,
    
	
 
    	
not in its individual capacity but solely as   Guarantee Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Francine Kincaid
    
	
 
    	
 
    	
Name: Francine   Kincaid
    
	
 
    	
 
    	
Title: Vice   President
    

 

[Signature Page to Senior Debt Securities Guarantee - Swiss]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00250-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00250-of-00352.parquet"}]]