PLEDGE AGREEMENT

Exhibit 4.3

XL CAPITAL LTD,

THE BANK OF NEW YORK MELLON,
as Collateral Agent, Custodial Agent and Securities Intermediary

AND

THE BANK OF NEW YORK MELLON,

as Purchase Contract Agent

PLEDGE AGREEMENT

Dated as of August 5, 2008

Table of Contents

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PLEDGE AGREEMENT

                     PLEDGE AGREEMENT, dated as of August 5, 2008 (this “Agreement”), among XL Capital Ltd, a Cayman Islands exempted limited company (the “Company”), The Bank of New York Mellon, a New York banking corporation, not individually but solely as collateral agent (in such capacity, together with its successors in such capacity, the “Collateral Agent”), as custodial agent (in such capacity, together with its successors in such capacity, the “Custodial Agent”) and as “securities intermediary” as defined in Section 8-102(a)(14) of the Code (as defined herein) (in such capacity, together with its successors in such capacity, the “Securities Intermediary”), and The Bank of New York Mellon, a New York banking corporation, not individually but solely as purchase contract agent and as attorney-in-fact of the Holders from time to time of the Units (in such capacity, together with its successors in such capacity, the “Purchase Contract Agent”) under the Purchase Contract Agreement (as defined herein).

RECITALS

                     WHEREAS, the Company and the Purchase Contract Agent are parties to the Purchase Contract Agreement, dated as of the date hereof (as modified, amended or supplemented and in effect from time to time, the “Purchase Contract Agreement”), pursuant to which there may be issued Units having a Stated Amount of $25 per Unit, all of which will initially be Normal Units.

                     WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract and (b) either beneficial ownership of (i) a 1/40, or 2.5%, beneficial ownership interest in a Note having a $1,000 principal amount or (ii) following a Special Event Redemption in accordance with the Purchase Contract Agreement and the terms of the Notes, beneficial ownership of the Treasury Consideration.

                     WHEREAS, in accordance with the terms of the Purchase Contract Agreement, a Holder of Normal Units may separate the Notes or the Treasury Consideration, as applicable, from the related Purchase Contracts by substituting for such Notes or the Treasury Consideration, as the case may be, Treasury Securities that will pay in the aggregate an amount equal to the aggregate Stated Amount of such Normal Units. Upon such separation, the Normal Units will become Stripped Units. Each Stripped Unit will be comprised of (a) a Purchase Contract and (b) a 1/40 undivided beneficial interest in a Treasury Security, or, in the case of an opt-out pursuant to Section 6.4, the Cash Consideration.

                     WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the Purchase Contracts, the Holders, from time to time, of the Units have irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided hereby of the Notes, any Treasury Consideration and any Treasury Securities delivered in exchange therefor to secure each Holder’s obligations under the related Purchase Contract, as provided herein and subject to the terms hereof.

                     NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Com-

pany, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Units, agree as follows:

ARTICLE I

DEFINITIONS

                     Section 1.1 Definitions . For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

           (a) capitalized terms used but not defined herein are used as defined in the Purchase Contract Agreement;

           (b) the defined terms in this Agreement have the meanings assigned to them in this Article and include the plural as well as the singular; and

           (c) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision.

                     “ Agreement ” means this agreement as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof.

                     “ Cash Consideration ” has the meaning specified in the Purchase Contract Agreement.

                     “ Code ” has the meaning specified in Section 6.1 hereof.

                     “ Collateral ” has the meaning specified in Section 2.1(a) hereof.

                     “ Collateral Account ” means the securities account (number 110229) maintained at The Bank of New York Mellon, 101 Barclay Street, Floor 7 West, New York, New York 10286, in the name of “XL Capital” and any successor account.

                     “ Collateral Agent ” has the meaning specified in the first paragraph of this Agreement.

                     “ Company ” means the Person named as the “Company” in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable provisions of the Purchase Contract Agreement, and thereafter “Company” shall mean such successor.

                     “ Custodial Agent ” has the meaning specified in the first paragraph of this Agreement.

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                     “ Indenture ” means the Indenture dated as of June 2, 2004 between the Company and The Bank of New York Mellon, formerly known as The Bank of New York, as supplemented by the Fifth Supplemental Indenture, dated as of August 5, 2008.

                     “ Intermediary ” means any entity that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity.

                     “ Pledge ” has the meaning specified in Section 2.1(c) hereof.

                     “ Pledged Notes ” has the meaning specified in Section 2.1(c) hereof.

                     “ Pledged Treasury Consideration ” has the meaning specified in Section 2.1(c) hereof.

                     “ Pledged Treasury Securities ” has the meaning specified in Section 2.1(c) hereof.

                     “ Proceeds ” means all interest, dividends, cash, instruments, securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and other property from time to time received, receivable or otherwise distributed upon the sale, exchange, collection or disposition of the Collateral or any proceeds thereof.

                     “ Purchase Contract Agent ” has the meaning specified in the first paragraph of this Agreement.

                     “ Purchase Contract Agreement ” has the meaning specified in the Recitals.

                     “ Securities Intermediary ” has the meaning specified in the first paragraph of this Agreement.

                     “ Security Entitlement ” has the meaning set forth in Section 8-102(a)(17) of the Code.

                     “ Separate Notes ” means any Notes that are not Pledged Notes.

                     “ TRADES Regulations ” means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the TRADES Regulations are used herein as therein defined.

                     “ Transfer ” means, with respect to the Collateral and in accordance with the instructions of the Collateral Agent, the Purchase Contract Agent or the Holder, as applicable:

           (i) in the case of Collateral consisting of certificated securities, delivery as provided in 8-301(a) of the UCC in appropriate physical form to the recipient accompanied by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient; and

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           (ii) in the case of Collateral consisting of security entitlements relating to securities maintained in book-entry form, by causing a “securities intermediary” (as defined in Section 8-102(a)(14) of the Code) to (a) credit such “security entitlement” (as defined in Section 8-102(a)(17) of the Code) to a “securities account” (as defined in Section 8-501(a) of the Code) maintained by or on behalf of the recipient and (b) to issue a confirmation to the recipient with respect to such credit. In the case of Collateral to be delivered to the Collateral Agent, the securities intermediary shall be the Securities Intermediary and the securities account shall be the Collateral Account. In addition, any Transfer of Treasury Securities and Treasury Consideration hereunder shall be made in accordance with the TRADES Regulations and other applicable law.

ARTICLE II

PLEDGE; CONTROL AND PERFECTION

                     Section 2.1 The Pledge .

                     (a) The Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact hereby pledge and grant to the Collateral Agent, for the benefit of the Company, as collateral security for the payment and performance when due by such Holders of their respective obligations to the Company under the related Purchase Contracts, a security interest in, and right of set-off against, all of the right, title and interest of the Purchase Contract Agent and such Holders in:

           (i) the Notes constituting a part of the Units that have not been released by the Collateral Agent, other than a release to the Remarketing Agent in connection with a remarketing under Section 4.5 hereof, to such Holders under the provisions of this Agreement;

           (ii) (A) the Treasury Consideration or Treasury Securities constituting a part of the Units, (B) any Treasury Securities delivered in exchange for any Notes or Treasury Consideration, as applicable, in accordance with Section 4.1 hereof, and (C) any Notes or Treasury Consideration, as applicable, delivered in exchange for any Treasury Securities in accordance with Section 4.2 hereof, in each case that have been Transferred to or otherwise received by the Collateral Agent and not released by the Collateral Agent, other than a release to the Remarketing Agent in connection with a remarketing under Section 4.5 hereof, to such Holders under the provisions of this Agreement;

           (iii) the Collateral Account and all securities, financial assets, security entitlements, cash and other property credited thereto and all Security Entitlements related thereto;

           (iv) upon the occurrence of a Special Event Redemption, the Treasury Portfolio Transferred to the Collateral Account;

           (v) all Proceeds of the foregoing; and

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           (vi) all powers and rights now owned or hereafter acquired under or with respect to any of the foregoing

(all of the foregoing, collectively, the “ Collateral ”).

           (b) Prior to or concurrently with the execution and delivery of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the Units, shall cause the Notes comprising a part of the Normal Units, which will be subject to the Pledge set forth in this Section 2.1, to be Transferred to the Collateral Agent for the benefit of the Company.

           (c) The pledge provided in this Section 2.1 is herein referred to as the “Pledge” and the Notes (including any Notes that are delivered pursuant to Section 6.2 hereof), Treasury Consideration and Treasury Securities subject to the Pledge, excluding any Notes, Treasury Consideration or Treasury Securities released from the Pledge as provided in Sections 4.1, 4.2 and 4.3 hereof, respectively, are hereinafter referred to as “Pledged Notes,” “Pledged Treasury Consideration” and “Pledged Treasury Securities,” respectively. Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from time to time shall have full beneficial ownership of the Collateral. For purposes of perfecting the Pledge under applicable law, including, to the extent applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and in effect in any applicable jurisdiction, the Collateral Agent shall be the agent of the Company as provided herein. Whenever directed by the Collateral Agent acting on behalf of the Company, the Securities Intermediary shall have the right to reregister in its name the Notes or any other securities held in physical form.

           (d) Except as may be required in order to release Notes or Treasury Consideration, as applicable, in connection with a Special Event Redemption or with a Holder’s election to convert its investment from a Normal Unit to a Stripped Unit, or except as may be required in order to release Treasury Securities in connection with a Holder’s election to convert its investment from a Stripped Unit to a Normal Unit, or except as otherwise required to release Notes, Treasury Consideration or Treasury Securities as specified herein, the Collateral Agent, shall not relinquish physical possession of any certificate evidencing Notes, Treasury Securities or Treasury Consideration, as applicable, prior to the termination of this Agreement. If it becomes necessary for the Collateral Agent to relinquish physical possession of a certificate in order to release a portion of the Notes evidenced thereby from the Pledge, the Company shall use its commercially reasonable best efforts to arrange for the Securities Intermediary to obtain physical possession of a replacement certificate evidencing any Notes remaining subject to the Pledge hereunder registered to the Securities Intermediary or endorsed in blank (or accompanied by a bond power endorsed in blank) within fifteen calendar days of the date the Securities Intermediary relinquished possession. The Securities Intermediary shall promptly notify the Company and the Collateral Agent of its inability to obtain possession of any such replacement certificate as required hereby.

           (e) Notwithstanding anything contained herein to the contrary, for avoidance of doubt, (i) the cash interest payments at the rate of 8.25% per year on the Notes and (ii) after a Special Event Redemption, the quarterly payments with respect to the Treasury Consideration (as specified in clause (B) of the definition of Treasury Consideration) that are a part of the Normal Units to Holders of Normal Units shall not be subject to the Pledge and therefore are not part of the Collateral.

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           Section 2.2 Delivery, Control and Perfection .

           (a) The Purchase Contract Agent shall immediately deliver to the Collateral Agent all certificates or instruments representing the Collateral accompanied by stock or bond powers duly executed in blank or other instruments of reasonable satisfaction to the Collateral Agent.

           (b) Except as provided in Section 5.1, at all times prior to the termination of the Pledge, the Collateral Agent shall have sole control of the Collateral Account, and the Securities Intermediary shall take instructions and directions with respect to the Collateral Account solely from the Collateral Agent. In connection with the Pledge granted in Section 2.1, and subject to the other provisions of this Agreement, the Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize and direct the Securities Intermediary (without the necessity of obtaining the further consent of the Purchase Contract Agent or any of the Holders), and the Securities Intermediary agrees, to comply with and follow any instructions and entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the Collateral Agent may deliver pursuant to the terms hereof or upon the written direction of the Company with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect thereto. Such instructions and entitlement orders may, without limitation, direct the Securities Intermediary to transfer, redeem, assign, or otherwise deliver the Notes, the Treasury Consideration and the Treasury Securities, and any Security Entitlements with respect thereto, or sell, liquidate or dispose of such assets through a broker designated by the Company, and to pay and deliver any income, proceeds or other funds derived therefrom to the Company. The Collateral Agent shall be the agent of the Company and shall act only in accordance with the terms hereof or as otherwise directed in writing by the Company. Without limiting the generality of the foregoing, the Collateral Agent shall issue entitlement orders to the Securities Intermediary when and as required by the terms hereof or as otherwise directed in writing by the Company.

      (c) The Securities Intermediary hereby confirms and agrees that:

      (i) all securities or other property underlying any financial assets credited to the Collateral Account shall be registered in the name of the Securities Intermediary, or its nominee, endorsed to the Securities Intermediary, or its nominee, or in blank or credited to another Collateral Account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent, the Collateral Agent, the Company or any Holder, payable to the order of, or specially indorsed to, the Purchase Contract Agent, the Collateral Agent, the Company or any Holder except to the extent the foregoing have been specially endorsed to the Securities Intermediary or in blank;

      (ii) all property delivered to the Securities Intermediary pursuant to this Agreement (including, without limitation, any Notes, Treasury Consideration or Treasury Securities) will be promptly credited to the Collateral Account;

      (iii) the Collateral Account is an account to which financial assets are or may be credited, and the Securities Intermediary shall, subject to the terms of this Agreement,

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treat the Purchase Contract Agent as entitled to exercise the rights of any financial asset credited to the Collateral Account;

      (iv) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other Person relating to the Collateral Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such other Person; and

      (v) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Company, the Collateral Agent or the Purchase Contract Agent purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in this Section 2.2 hereof.

           (d) The Securities Intermediary hereby agrees that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the Code.

           (e) In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement, as may be amended pursuant to Article IX hereof, shall prevail.

           (f) The Purchase Contract Agent hereby irrevocably constitutes and appoints the Collateral Agent and the Company, with full power of substitution, as the Purchase Contract Agent’s attorney-in-fact to take on behalf of, and in the name, place and stead of the Purchase Contract Agent and the Holders, any action necessary or desirable to perfect and to keep perfected the security interest in the Collateral referred to in Section 2.1. The grant of such power-of-attorney shall not be deemed to require of the Collateral Agent any specific duties or obligations not otherwise assumed by the Collateral Agent hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent, the Custodial Agent, the Securities Intermediary or the Purchase Contract Agent be responsible for the preparation or filing of any financing or continuation statements in the appropriate jurisdictions or responsible for maintenance or perfection of any security interest hereunder.

           (g) The Purchase Contract Agent shall file with the United States Internal Revenue Service and deliver to the Holders Forms 1099 (or successor or comparable forms), to the extent required of it by law, with respect to payments to the Holders.

ARTICLE III

PAYMENTS ON COLLATERAL

           Section 3.1 Payments . So long as the Purchase Contract Agent is the registered owner of the Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, it shall receive all payments thereon. If the Pledged Notes are reregistered such that the Collateral Agent becomes the registered holder, all payments of the principal of, or interest or

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other amounts on, the Pledged Notes and all payments of the principal of, or cash distributions on, any Pledged Treasury Consideration or Pledged Treasury Securities, that are received by the Collateral Agent and that are properly payable hereunder shall be paid by the Collateral Agent by wire transfer in same day funds:

      (i) in the case of (A) any interest payments with respect to the Pledged Notes or Pledged Treasury Consideration (including as specified in clause (B) of the definition of Treasury Consideration), as the case may be, with respect to Normal Units and (B) any payments with respect to any Notes or Treasury Consideration (including as specified in clause (A) of the definition of Treasury Consideration), as the case may be, that have been released from the Pledge pursuant to Section 4.3 hereof, to the Purchase Contract Agent, for the benefit of the relevant Holders of the Normal Units, to the account designated by the Purchase Contract Agent for such purpose no later than 11:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment or payment instructions are received by the Collateral Agent on a day that is not a Business Day or after 10:30 a.m., New York City time, on a Business Day, then such payment shall be made no later than 9:30 a.m., New York City time, on the next succeeding Business Day);

      (ii) in the case of any payments with respect to any Treasury Securities that have been released from the Pledge pursuant to Section 4.3 hereof to the Holders of the Stripped Units, to the accounts and in such amounts designated by the Purchase Contract Agent (subject to the Purchase Contract Agent receiving such information from the Holders) in writing for such purpose no later than 2:00 p.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment or payment instructions are received by the Collateral Agent on a day that is not a Business Day or after 12:30 p.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day); any payment to be made directly to the Holders of such Stripped Units shall be subject to applicable federal withholding law, including the requirement that a Holder shall have provided to the Collateral Agent its certified taxpayer identification number by furnishing appropriate Forms W-9 (or such other forms as shall be applicable); and

      (iii) in the case of payments in respect of any Pledged Notes, Pledged Treasury Consideration (as specified in clause (A) of the definition of Treasury Consideration) or Pledged Treasury Securities, as the case may be, to be paid upon settlement of such Holder’s obligations to purchase Ordinary Shares under the Purchase Contract, to the Company on the Stock Purchase Date in accordance with the procedure set forth in Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the respective obligations of the Holders under the related Purchase Contracts and, to the extent such payments exceed the Purchase Price, to the Purchase Contract Agent for the benefit of the Holders.

           Section 3.2 Application of Payments . All payments received by the Purchase Contract Agent as provided herein shall be applied by the Purchase Contract Agent pursuant to the provisions of the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any payments of principal on account of any Notes or Treas-

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ury Consideration (which, shall be as specified in clause (A) of the definition of Treasury Consideration), as applicable, that, at the time of such payments, are Pledged Notes or Pledged Treasury Consideration (which, shall be as specified in clause (A) of the definition of Treasury Consideration), as the case may be, or a Holder of a Stripped Unit shall receive any payments of principal on account of any Treasury Securities that, at the time of such payment, are Pledged Treasury Securities, the Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company (and promptly deliver the same over to the Company) for application to the obligations of the Holders under the related Purchase Contracts, and the Holders shall acquire no right, title or interest in any such payments of principal so received.

ARTICLE IV

SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES

           Section 4.1 Collateral Substitution and the Creation of Stripped Units . At any time on or prior to the thirteenth Business Day immediately preceding the Stock Purchase Date, a Holder of Normal Units shall have the right to substitute Treasury Securities for the Pledged Notes or Pledged Treasury Consideration, as the case may be, securing such Holder’s obligations under the Purchase Contracts comprising a part of such Normal Units, in integral multiples of 40 Normal Units, or after a Special Event Redemption, in integral multiples of Normal Units so that Treasury Securities to be deposited and the Treasury Consideration, as the case may be, to be released are in integral multiples of $1,000, by (a) Transferring to the Collateral Agent Treasury Securities having an aggregate principal amount equal to the aggregate Stated Amount of such Normal Units and (b) delivering such Normal Units to the Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Purchase Contract Agent, with a copy of such notice to the Company, stating that such Holder has Transferred Treasury Securities to the Collateral Agent pursuant to clause (a) above (stating the principal amount, the maturities and the CUSIP numbers of the Treasury Securities Transferred by such Holder) and requesting that the Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Notes or Pledged Treasury Consideration related to such Normal Units, whereupon the Purchase Contract Agent shall promptly give such instruction to the Collateral Agent, with a copy of such instruction to the Company, in the form provided in Exhibit A. Upon receipt of Treasury Securities from a Holder of Normal Units and the related instruction from the Purchase Contract Agent, the Collateral Agent shall release the Pledged Notes or Pledged Treasury Consideration and shall promptly Transfer such Pledged Notes or Pledged Treasury Consideration free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent. All items Transferred and/or substituted by any Holder pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement shall be Transferred and/or substituted free and clear of all liens, claims and encumbrances, except as otherwise set forth herein.

           Section 4.2 Collateral Substitution and the Re-Creation of Normal Units .

           (a) At any time on or prior to the thirteenth Business Day immediately preceding the Stock Purchase Date, a Holder of Stripped Units shall have the right to reestablish Normal Units (a) consisting of the Purchase Contracts and Notes in integral multiples of 40 Normal Units, or (b) after a Special Event Redemption, consisting of the Purchase Contracts and the Treasury Consideration (identified and calculated by reference to the Treasury Consideration

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then comprising Normal Units) or the appropriate portion of the Treasury Portfolio in integral multiples of Stripped Units so that the Treasury Consideration to be deposited and the Treasury Securities to be released are in integral multiples of $1,000, by (x) Transferring to the Collateral Agent Notes or the Treasury Consideration, as the case may be, then comprising such number of Normal Units as is equal to such Stripped Units and (y) delivering such Stripped Units to the Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Purchase Contract Agent, with a copy of such notice to the Company, stating that such Holder has transferred Notes or Treasury Consideration to the Collateral Agent pursuant to clause (a) above and requesting that the Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Treasury Securities related to such Stripped Units, whereupon the Purchase Contract Agent shall give such instruction to the Collateral Agent, with a copy of such instruction to the Company, in the form provided in Exhibit A . Upon receipt of the Notes or the Treasury Consideration, as the case may be, from such Holder and the instruction from the Purchase Contract Agent, the Collateral Agent shall release the Pledged Treasury Securities and shall promptly Transfer such Treasury Securities, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent.

           (b) Holders of Stripped Units who reestablish Normal Units shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses.

           Section 4.3 Termination Event .

           (a) Upon receipt by the Collateral Agent of written notice from the Company or the Purchase Contract Agent that there has occurred a Termination Event and identifying the nature of the Termination Event, the Collateral Agent shall release all Collateral from the Pledge and shall promptly Transfer any Pledged Notes or Pledged Treasury Consideration, as the case may be, and Pledged Treasury Securities to the Purchase Contract Agent for the benefit of the Holders of the Normal Units and the Stripped Units, respectively, free and clear of any lien, pledge or security interest or other interest created in favor of the Collateral Agent hereby.

           (b) If such Termination Event shall result from the Company’s becoming a debtor under the Bankruptcy Code or becoming subject to a petition under clause (ii) of the definition of Bankruptcy Law, and if the Collateral Agent shall fail for any reason to promptly effectuate, the release and Transfer of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, as provided by this Section 4.3, the Purchase Contract Agent, shall:

      (i) use its reasonable best efforts to obtain, at the expense of the Company, an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company’s being the debtor in such a bankruptcy case or becoming subject to a petition under clause (ii) of the definition of Bankruptcy Law, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 4.3, and shall deliver such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (y) the Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occur-

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rence of such Termination Event or (z) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, as provided in this Section 4.3, then the Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court with jurisdiction of the Company’s case under the applicable Bankruptcy Law seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, as provided by this Section 4.3; or

      (ii) commence an action or proceeding like that described in subsection (i)(z) hereof within ten days after the occurrence of such Termination Event.

           Section 4.4 Early Settlement; Fundamental Change Early Settlement; Cash Settlement . Upon written notice to the Collateral Agent by the Purchase Contract Agent that one or more Holders of Units have elected to effect Early Settlement, Fundamental Change Early Settlement or Cash Settlement of their respective obligations under the Purchase Contracts forming a part of such Units in accordance with the terms of the Purchase Contracts and the Purchase Contract Agreement (setting forth the number of such Purchase Contracts as to which such Holders have elected to effect Early Settlement, Fundamental Change Early Settlement or Cash Settlement), and that the Purchase Contract Agent has received from such Holders, and paid to the Company as confirmed by written notice to the Collateral Agent by the Company, the related Early Settlement Amounts, Fundamental Change Early Settlement Amounts or Cash Settlement Amounts, as the case may be, pursuant to the terms of the Purchase Contracts and the Purchase Contract Agreement and that all conditions to such Early Settlement, Fundamental Change Early Settlement or Cash Settlement, as the case may be, have been satisfied, then the Collateral Agent shall release from the Pledge (a) Pledged Notes or Pledged Treasury Consideration, as the case may be, in the case of a Holder of Normal Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped Units, identified by the Purchase Contract Agent as relating to such Purchase Contracts as to which such Holders have paid such Early Settlement Amounts, Fundamental Change Early Settlement Amounts or Cash Settlement Amounts, and shall Transfer all such Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, free and clear of the Pledge created hereby, to the Purchase Contract Agent for the benefit of the Holders.

           Section 4.5 Remarketing; Application of Proceeds; Settlement .

           (a) Pursuant to the Purchase Contract Agreement, the Purchase Contract Agent shall notify, by 10:00 a.m., New York City time, on the second Business Day immediately preceding the Remarketing Date, the Remarketing Agent and the Collateral Agent of the aggregate principal amount of Notes comprising part of Normal Units to be remarketed. The Collateral Agent shall, by 10:00 a.m., New York City time, on the Business Day immediately preceding the Remarketing Date, without any instruction from Holders of Normal Units, deliver (i) the Pledged Notes to be remarketed to the Remarketing Agent for remarketing and (ii) the remaining Pledged Notes to the Purchase Contract Agent for distribution to the Holders that have elected not to participate in the remarketing in accordance with the Purchase Contract Agreement. Upon completion of a successful remarketing, the Remarketing Agent will deliver the proceeds of such

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remarketing to the Collateral Agent for the benefit of the Company to be held in Trust for the Company. Upon receipt of the proceeds following a successful remarketing, (i) the Collateral Agent, for the benefit of the Company, shall thereupon apply such proceeds in an amount equal to the aggregate Stated Amount of the related Normal Units in direct settlement and satisfaction in full of such Normal Units Holders’ obligations to pay to the Company the Purchase Price under the Purchase Contracts on the Stock Purchase Date and (ii) the remaining portion, if any, of the proceeds of such successful remarketing shall be distributed by the Remarketing Agent to the Purchase Contract Agent for payment on a pro rata basis to such Normal Units Holders participating in such remarketing.

           (b) The Remarketing Agent shall agree to make one or more attempts to re-market the Notes in accordance with the procedures set forth in the Purchase Contract Agreement and the Remarketing Agreement between the Remarketing Date and the last Subsequent Remarketing Date. If by 4:00 p.m., New York City time, on the third Business Day immediately preceding the Stock Purchase Date the Remarketing Agent has failed to remarket the Notes at a price equal to 100% of the aggregate principal amount of the Notes participating in the remar-keting, the “Last Failed Remarketing” shall be deemed to have occurred. In this case, the Re-marketing Agent will agree to advise the Collateral Agent in writing that it cannot remarket the related Pledged Notes of such Holders of Normal Units and the Remarketing Agent will agree pursuant to the Remarketing Agreement to return to the Collateral Agent the Notes delivered to it pursuant to Section 4.5(a) within three Business Days of the Last Failed Remarketing. The Collateral Agent, for the benefit of the Company will, at the written direction of the Company, deliver or dispose of the Pledged Notes in accordance with the Company’s written instructions to satisfy in full, from any such disposition or retention, such Holders’ obligations to pay the Purchase Price for the Ordinary Shares; provided that if upon the Last Failed Remarketing, the Collateral Agent delivers or disposes of the Pledged Notes in accordance with the written instructions of the Company, any accumulated and unpaid interest on such Notes will become payable by the Company to the Purchase Contract Agent for payment to the Holder of the Normal Units to which such Notes relate in accordance with the Purchase Contract Agreement.

           (c) In the event a Holder of Stripped Units has not made an Early Settlement, Fundamental Change Early Settlement or Cash Settlement of the Purchase Contracts underlying its Stripped Units, such Holder shall be deemed to have elected to pay for the Ordinary Shares to be issued under such Purchase Contracts from the payments received in respect of the related Pledged Treasury Securities. Without receiving any instruction from any such Holder of Stripped Units, the Collateral Agent shall apply such payments to the Company in settlement of such Purchase Contracts on the Stock Purchase Date pursuant to written instructions from the Purchase Contract Agent. In the event the payments received in respect of the related Pledged Treasury Securities are in excess of the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall distribute such excess, when received, to the Purchase Contract Agent for payment to such Holders of Stripped Units.

           (d) Pursuant to the Remarketing Agreement and the Purchase Contract Agreement, on or prior to the thirteenth Business Day immediately preceding the Stock Purchase Date, but no earlier than the sixteenth Business Day immediately preceding the Stock Purchase Date, holders of Separate Notes may elect to have their Separate Notes remarketed by delivering their Separate Notes, together with a notice of such election, substantially in the form of Exhibit

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C hereto, to the Custodial Agent. On the second Business Day immediately prior to the Remar-keting Date, by 10:00 a.m., New York City time, the Custodial Agent shall notify the Remar-keting Agent of the aggregate principal amount of such Separate Notes to be remarketed. The Custodial Agent will hold such Separate Notes in an account separate from the Collateral Account. A holder of Separate Notes electing to have its Separate Notes remarketed will also have the right to withdraw such election by written notice to the Custodial Agent, substantially in the form of Exhibit D hereto, on or prior to the thirteenth Business Day immediately preceding the Stock Purchase Date, upon which notice the Custodial Agent will return such Separate Notes to such holder. On the Business Day immediately preceding the Remarketing Date, the Custodial Agent at the written direction of the Remarketing Agent will deliver to the Remarketing Agent for remarketing all Separate Notes delivered to the Custodial Agent pursuant to this Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to such date. In the event of a successful remarketing, the Remarketing Agent will remit to the Custodial Agent, for the benefit of the holders of such Separate Notes, the portion of the proceeds from such remarketing equal to the amount calculated in respect of such Separate Notes as set forth in Section 5.4(b) of the Purchase Contract Agreement. If, despite using reasonable best efforts, the Remarketing Agent advises the Custodial Agent in writing that there has been a Last Failed Remarketing, the Remar-keting Agent will promptly return such Notes to the Custodial Agent for redelivery to the holders of such Separate Notes. For purposes of this Section 4.5(d), a “holder” of Separate Notes shall mean the Person in whose name such Separate Notes are registered on the books of the registrar for the Notes.

ARTICLE V

VOTING RIGHTS -- NOTES

           Section 5.1 Exercise by Purchase Contract Agent . The Purchase Contract Agent may exercise, or refrain from exercising, any and all voting and other conse