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REGISTRATION NO. 333-69741
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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CNA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware CNA Financial Capital I
(State or other jurisdiction of incorporation or CNA Financial Capital II
organization) CNA Financial Capital III
36-6169860 (Exact name of each registrant as specified in its
(I.R.S. Employer Identification No.) Trust Agreement)
CNA Plaza Delaware
Chicago, Illinois 60685 (State or other jurisdiction of Incorporation or
(312) 822-5000 organization of each registrant)
(Address, including zip code and telephone number, Each to be Applied for
including area code, of registrant's principal (I.R.S. Employer Identification No.)
executive offices) c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(312) 822-5000
(Address, including zip code and telephone number,
including area code, of registrant's principal
executive offices)
</TABLE>
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JONATHAN D. KANTOR, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
CNA FINANCIAL CORPORATION
CNA PLAZA
CHICAGO, ILLINOIS 60685
(312) 822-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
<TABLE>
<S> <C>
MITCHELL L. HOLLINS, ESQ. EDWARD F. PETROSKY, ESQ.
MICHAEL D. ROSENTHAL, ESQ. BROWN & WOOD LLP
SONNENSCHEIN NATH & ROSENTHAL ONE WORLD TRADE CENTER
8000 SEARS TOWER 57TH FLOOR
CHICAGO, ILLINOIS 60606 NEW YORK, NEW YORK 10048
(312) 876-8000 (212) 839-5300
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is to be post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
SUBJECT TO COMPLETION, DATED APRIL 19, 1999
$600,000,000
CNA FINANCIAL CORPORATION
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
SUBORDINATED JUNIOR DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
PURCHASE CONTRACTS
PURCHASE UNITS
CNA Financial Corporation's Common Stock is listed on the New York Stock
Exchange, the Chicago Stock Exchange and the Pacific Exchange, and traded on the
Philadelphia Stock Exchange, under the trading symbol "CNA".
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CNA FINANCIAL CAPITAL I
CNA FINANCIAL CAPITAL II
CNA FINANCIAL CAPITAL III
Preferred Securities fully and unconditionally
guaranteed, as described herein, by
CNA FINANCIAL CORPORATION
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We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest. This prospectus may not be used to sell these securities without a
supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is April 19, 1999.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement (including any
amendments and exhibits, the "Registration Statement") that we filed with the
Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration
process. Under this shelf process, we may, over the next two years, sell any
combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $600,000,000. This prospectus provides
you with a general description of the securities that we may offer. Each time we
sell securities, we will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement
may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with
additional information described under the heading WHERE YOU CAN FIND MORE
INFORMATION.
In this prospectus, we refer to:
- CNA Financial Corporation as "CNAF";
- CNAF and its subsidiaries as the "CNA Companies";
- CNA Financial Capital I, CNA Financial Capital II and CNA Financial
Capital III as the "CNA Capital Trusts"; and
- the securities offered by this prospectus as the "Offered Securities".
WHERE YOU CAN FIND MORE INFORMATION
CNAF files annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference rooms at the following
addresses:
- 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549;
- 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048;
and
- Suite 1400, Citicorp Center, 14th Floor, 500 West Madison, Chicago,
Illinois 60661.
You can call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms.
CNAF's common stock ("Common Stock") is listed on the New York Stock
Exchange, the Chicago Stock Exchange and the Pacific Exchange. You also can find
copies of CNAF's SEC filings at the offices of these stock exchanges at the
addresses listed below:
- New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005;
- Chicago Stock Exchange, Inc., 440 South LaSalle Street, Chicago, Illinois
60603; and
- Pacific Exchange, Inc., 301 Pine Street, San Francisco, California 94104.
The SEC allows us to disclose certain information to you in this prospectus
by referring you to documents previously filed with the SEC that includes such
information. This process is generally referred to as "incorporating by
reference." The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents
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listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all of
the Offered Securities.
- Annual Report on Form 10-K for the year ended December 31, 1998; and
- The description of the Common Stock contained in the registration
statement on Form S-3 (File No. 33-35250) filed on June 6, 1990 (the
"Common Stock Description").
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Office of the General Counsel
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(312) 822-5000
We have not included, or incorporated by reference, separate financial
statements of any of the CNA Capital Trusts. The CNA Capital Trusts are newly
formed and have no operating history or independent operations. The sole
purposes of the CNA Capital Trusts will be to issue common and preferred
securities and to use the proceeds to purchase junior subordinated debt
securities ("Junior Debt Securities") from CNAF. All of the common securities of
the CNA Capital Trusts will be owned by CNAF and all of the obligations of the
CNA Capital Trusts will be fully guaranteed by CNAF. Because of these factors,
we do not believe that separate financial statements for the CNA Capital Trusts
would be helpful to you in considering an investment in any of the Offered
Securities.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different or additional information. We are not
making an offer of these securities in any jurisdiction where the offer or sale
is not permitted. You should not assume that the information in this prospectus
or any prospectus supplement is accurate as of any date other than the date on
the front of those documents.
FORWARD-LOOKING STATEMENTS
This prospectus includes a number of statements which relate to anticipated
future events (forward-looking statements) rather than actual present conditions
or historical events. You can identify forward-looking statements because
generally they include words such as "believes", "expects", "intends",
"anticipates", "estimates", and similar expressions. Forward-looking statements,
by their nature, are subject to a variety of risks and uncertainties that could
cause actual results to differ materially from the results expected in the
forward-looking statement. Many of these risks and uncertainties cannot be
controlled by the CNA Companies. Some examples of these risks and uncertainties
are:
- general economic and business conditions;
- competition;
- changes in financial markets such as fluctuations in interest rates,
credit conditions and currency, commodity and stock prices;
- changes in foreign, political, social and economic conditions; and
- regulatory initiatives and compliance with governmental regulations,
judicial decisions and rulings.
Any forward-looking statements made in this prospectus are made by CNAF as
of the date of this prospectus. CNAF does not have any obligation to update or
revise any forward-looking
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statement contained in this prospectus, even if the expectations of CNAF or any
related facts or circumstances change.
THE CNA COMPANIES
CNAF is a holding company whose subsidiaries consist primarily of
property/casualty and life insurance companies. The CNA Companies collectively
are among the largest writers of commercial property/casualty insurance and one
of the ten largest insurance organizations in the United States. CNAF had total
assets of approximately $62.36 billion and stockholders' equity of approximately
$9.16 billion as of December 31, 1998. CNAF's common stock is listed on the New
York Stock Exchange, the Chicago Stock Exchange and the Pacific Exchange and
also traded on the Philadelphia Stock Exchange. The trading symbol for the
Common Stock is "CNA". As of February 28, 1999, Loews Corporation ("Loews")
owned approximately 85% of CNAF's outstanding common stock.
CNAF was incorporated as a Delaware corporation in 1967. CNAF's principal
subsidiaries are Continental Casualty Company ("CCC"), incorporated in 1897,
Continental Assurance Company ("CAC"), incorporated in 1911, and The Continental
Corporation ("Continental"), which is the holding company of The Continental
Insurance Company ("CIC"), incorporated in 1853.
The principal business of the CNA Companies is insurance. CCC, CIC and each
of their property and casualty insurance affiliates generally conduct the
property and casualty insurance operations of the CNA Companies. CAC and Valley
Forge Life Insurance Company (a wholly owned subsidiary of CAC) generally
conduct the life insurance operations of the CNA Companies. The principal market
for insurance products offered by the CNA Companies is the United States.
AS A HOLDING COMPANY, CNAF RECEIVES ITS OPERATING INCOME AND OPERATING CASH
FLOW FROM ITS SUBSIDIARIES. CNAF RELIES UPON DISTRIBUTIONS FROM ITS SUBSIDIARIES
AS WELL AS RETURNS ON ITS CASH AND INVESTED ASSETS TO GENERATE THE FUNDS
NECESSARY TO MEET ITS OBLIGATIONS, INCLUDING ITS PAYMENT OF PRINCIPAL AND
INTEREST ON ITS DEBT AND DIVIDENDS ON ITS CAPITAL STOCK. THE ABILITY OF CNAF'S
SUBSIDIARIES TO MAKE SUCH PAYMENTS IS SUBJECT TO MANY FACTORS, INCLUDING
APPLICABLE STATE LAWS AND ANY RESTRICTIONS THAT MAY BE CONTAINED IN CREDIT
AGREEMENTS OR OTHER FINANCING ARRANGEMENTS ENTERED INTO BY CNAF OR SUCH
SUBSIDIARIES. CREDITORS OF CNAF'S SUBSIDIARIES GENERALLY WILL HAVE PRIORITY AS
TO THE ASSETS OF SUCH SUBSIDIARIES OVER THE CLAIMS OF CNAF AND THE HOLDERS OF
CNAF'S INDEBTEDNESS AND CAPITAL STOCK, INCLUDING THE OFFERED SECURITIES.
THE CNA CAPITAL TRUSTS
Each CNA Capital Trust is a statutory business trust formed under Delaware
law pursuant to (i) a trust agreement executed by CNAF, as sponsor of the CNA
Capital Trust, and a Delaware trustee for that CNA Capital Trust (the "Delaware
Trustee") and (ii) the filing of a certificate of trust with the Delaware
Secretary of State. Each trust agreement will be amended and restated in its
entirety (each, as so amended and restated, a "Trust Agreement") substantially
in the form filed as an exhibit to the Registration Statement. Each Trust
Agreement will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Each CNA Capital Trust exists for
the exclusive purposes of (i) issuing and selling its common and preferred
securities, (ii) using the proceeds from the sale of its securities to acquire a
series of Junior Debt Securities issued by CNAF, and (iii) engaging in other
related activities.
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All of the common securities of each CNA Capital Trust ("Common
Securities") will be owned by CNAF. The common securities of a CNA Capital Trust
will rank equal to, and payments will be made thereon in the same proportion, as
the preferred securities ("Preferred Securities") of such CNA Capital Trust,
except that upon the occurrence and continuance of an event of default under a
Trust Agreement resulting from an event of default under the indenture with
respect to the Junior Debt Securities (a "Junior Debt Related Event of
Default"), the rights of CNAF as holder of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption or otherwise
will be subordinated to the rights of the holders of the Preferred Securities of
such CNA Capital Trust. See "Description of Preferred Securities--Subordination
of Common Securities." CNAF will acquire Common Securities in an aggregate
liquidation amount equal to not less than 3% of the total capital of each CNA
Capital Trust.
Unless otherwise specified in the applicable prospectus supplement, each
CNA Capital Trust has a term of approximately 55 years, but may terminate
earlier as provided in the applicable Trust Agreement. Each CNA Capital Trust's
business and affairs are conducted by its trustees, each appointed by CNAF as
holder of the Common Securities. Unless otherwise specified in the applicable
prospectus supplement, the trustees for each CNA Capital Trust will be The First
National Bank of Chicago, as the property trustee (the "Property Trustee"),
First Chicago Delaware, Inc., as the Delaware Trustee, and two individual
trustees (the "Administrative Trustees") who are employees or officers of or
affiliated with the CNA Companies (collectively, the "Issuer Trustees"). The
First National Bank of Chicago, as Property Trustee, will act as sole indenture
trustee under each Trust Agreement for purposes of compliance with the Trust
Indenture Act. The First National Bank of Chicago will also act as trustee under
the Guarantees and the Junior Indenture (as defined herein). See "Description of
Guarantees" and "Description of Junior Debt Securities." The holder of the
Common Securities of a CNA Capital Trust, or the holders of a majority in
liquidation amount of the related Preferred Securities if an Event of Default in
respect of the Trust Agreement for such CNA Capital Trust has occurred and is
continuing, will be entitled to appoint, remove or replace the Property Trustee
and/or the Delaware Trustee for such CNA Capital Trust. In no event will the
holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights are vested exclusively
in the holder of the Common Securities. The duties and obligations of each
Issuer Trustee are governed by the applicable Trust Agreement. CNAF will pay all
fees and expenses related to each CNA Capital Trust and the offering of the
Preferred Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of each CNA Capital Trust.
The principal executive office of each CNA Capital Trust is CNA Plaza,
Chicago, Illinois 60685 and its telephone number is (312) 822-5000.
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USE OF PROCEEDS
Except as otherwise described in the applicable prospectus supplement, the
net proceeds from the sale of the Offered Securities will be added to CNAF's
general funds and used for general corporate purposes, which may include, but
are not limited to, prepayment of other debt and capital contributions to CNAF's
subsidiaries to support such subsidiaries' operations. Each CNA Capital Trust
will use all proceeds received from the sale of its Preferred Securities to
purchase CNAF's Junior Debt Securities.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31,
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1998 1997 1996 1995(A) 1994
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<S> <C> <C> <C> <C> <C>
Ratios:
Earnings to fixed charges(b).............................. 2.2 6.8 6.8 5.6 (c)
Earnings to fixed charges and preferred dividends(d)...... 2.2 6.6 6.5 5.4 (e)
Net income, as adjusted to fixed charges and preferred
dividends(f)............................................ 2.5 7.1 7.4 5.8 1.5
</TABLE>
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(a) Includes the results of Continental from May 10, 1995, as a result of a
merger consummated on May 10, 1995.
(b) For purposes of computing this ratio, earnings consist of income before
income taxes plus fixed charges. Fixed charges consist of interest and
that portion of operating lease rental expense which is deemed to be an
interest factor for such rentals.
(c) Earnings were insufficient to cover fixed charges for the year ended
December 31, 1994 by $134 million primarily due to capital losses of $246
million which exceeded operating income of $101 million.
(d) For purposes of computing this ratio, earnings consist of income before
income taxes plus fixed charges. Fixed charges consist of interest and
that portion of operating lease rental expense which is deemed to be an
interest factor for such rentals. Preferred stock dividends are the
amounts that would be required to meet such dividend payments.
(e) Earnings, as adjusted for interest expense and interest element of
operating leases, were insufficient to cover fixed charges for the year
ended December 31, 1994 by $39 million primarily due to capital losses of
$246 million which exceeded operating income of $101 million.
(f) For purposes of computing this ratio, net income has been adjusted to
include fixed charges after income taxes. Fixed charges consist of
interest and that portion of operating lease rental expense which is
deemed to be an interest factor for such rentals. Preferred stock
dividends are the amounts that would be required to meet such dividend
payments.
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SECURITIES TO BE OFFERED
SECURITIES TO BE OFFERED BY CNAF
CNAF may offer and sell from time to time under this prospectus:
(1) its unsecured senior debt securities ("Senior Debt Securities");
(2) its unsecured subordinated debt securities ("Subordinated Debt
Securities", and collectively with Senior Debt Securities, "Debt
Securities");
(3) Junior Debt Securities;
(4) shares of its common stock, par value $2.50 per share ("Common Stock");
(5) shares of its preferred stock, no par value ("Preferred Stock"), which
may be represented by depositary shares ("Depositary Shares");
(6) warrants ("Warrants") to purchase Debt Securities, Junior Debt
Securities, Common Stock, Preferred Stock or Depositary Shares;
(7) purchase contracts ("Purchase Contracts") to purchase any of Debt
Securities, Junior Debt Securities, Common Stock, Preferred Stock,
Depositary Shares, Warrants or preferred securities ("Preferred
Securities") of the CNA Capital Trusts (collectively the "Purchase
Contract Securities"); and
(8) purchase units ("Purchase Units"), each representing ownership of a
Purchase Contract and any of (x) Debt Securities or Junior Debt
Securities, (y) debt obligations of third parties, including treasury
bonds and similar obligations of the United States and/or (z) Trust
Preferred Securities, securing the holder's obligations to purchase the
applicable Purchase Contract Securities under the Purchase Contract.
CNAF may offer to sell the Offered Securities in one or more separate
classes or series, in amounts, at prices and on terms to be determined by market
conditions at the time of sale and set forth in a prospectus supplement. Offered
Securities may be sold for U.S. dollars, foreign denominated currency or
currency units. Similarly, the amounts payable by CNAF as dividends, interest,
principal or other distributions also may be payable in U.S. dollars, foreign
denominated currency or currency units. Debt Securities and Junior Debt
Securities may consist of debentures, notes or other evidences of indebtedness.
CNAF will describe all of these terms in the prospectus supplement relating to
the offer.
SECURITIES TO BE OFFERED BY THE CNA CAPITAL TRUSTS
Each of the CNA Capital Trusts may offer and sell, from time to time, its
Preferred Securities. CNAF will guarantee the obligation of the CNA Capital
Trusts to pay (i) periodic cash distributions, (ii) liquidation amounts and
(iii) redemption payments with respect to the Preferred Securities. See
"Description of Guarantees." EACH GUARANTEE WILL BE AN IRREVOCABLE GUARANTEE BY
CNAF ON A SUBORDINATED BASIS THAT THE RELATED CNA CAPITAL TRUST WILL PAY ITS
OBLIGATIONS UNDER ITS PREFERRED SECURITIES TO THE EXTENT THAT SUCH RELATED CNA
CAPITAL TRUST HAS SUFFICIENT FUNDS TO MAKE SUCH PAYMENTS. THE GUARANTEE IS NOT A
GUARANTEE OF COLLECTION FROM CNAF. The guarantee is subordinate to all
indebtedness of CNAF (including any Debt Securities which may be issued), except
for (i) indebtedness of CNAF that is expressly made junior to or equal with such
guarantee, (ii) non-recourse indebtedness, (iii) indebtedness of CNAF to any of
the other CNA Companies or to any of its employees, (iv) CNAF's liabilities for
taxes, (v) trade debt incurred in the ordinary course of business and (vi)
Junior Debt Securities. In connection with the investment of the proceeds from
the offering of Preferred Securities, CNA Capital Trusts will purchase Junior
Debt Securities issued by CNAF in one or more series. The Junior Debt
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Securities purchased by a CNA Capital Trust may be subsequently distributed pro
rata to the holder of Preferred Securities and Common Securities of that CNA
Capital Trust under certain circumstances. See "Description of Junior Debt
Securities".
You should read the summaries of the Offered Securities below, as well as
the description of the particular Offered Securities in any applicable
prospectus supplement. For a further description of CNAF's Common Stock, you
should refer to the Common Stock description that is incorporated by reference
in this prospectus from CNAF's registration statement on Form S-3 (File No.
33-35250) filed on June 6, 1990.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will consist of notes, debentures or other evidences of
indebtedness. Debt Securities may be issued from time to time in one or more
series. The Senior Debt Securities will be issued under an Indenture, dated
March 1, 1991, between CNAF and The First National Bank of Chicago, a national
banking association, as trustee, as supplemented by a supplemental indenture,
dated as of October 15, 1993 (as so supplemented, the "Senior Indenture"). The
Subordinated Debt Securities will be issued under an Indenture between CNAF and
The First National Bank of Chicago, a national banking association, as trustee
(the "Subordinated Indenture"). The Senior Indenture and the Subordinated
Indenture are sometimes referred to collectively as the "Indentures" and
individually as the "Indenture". The First National Bank of Chicago, in its
capacity as trustee under either or both of the Indentures is referred to
hereinafter as the "Trustee".
Each of the Indentures has been qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and is subject to that act. Copies
of the Senior Indenture and the form of the Subordinated Indenture are included
as exhibits to the Registration Statement. The following description summarizes
the material terms of the Indentures and the Debt Securities. Because it is only
a summary, it does not contain all of the details found in the full text of the
Debt Securities and the Indentures, including the definitions of certain terms
used in the description of the Debt Securities in this prospectus, and other
terms that are made a part of the Indentures by the Trust Indenture Act.
The Indentures are substantially identical except for provisions relating
to subordination. Any Debt Securities offered by this prospectus and any
accompanying prospectus supplement are referred to herein as the "Offered Debt
Securities."
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provide that Debt Securities may be
issued from time to time in one or more series and may be denominated and
payable in U.S. dollars, foreign currencies or units based on or related to
foreign currencies. CNAF may sell Offered Debt Securities at par, a premium or
an original issue discount. Offered Debt Securities sold at an original issue
discount may bear no interest or interest at a below market rate. The specific
terms of a series of Offered Debt Securities will be established in or pursuant
to a resolution of CNAF's Board of Directors and/or in one or more supplemental
indentures. Pursuant to the Indentures, CNAF can establish different rights with
respect to each series of Debt Securities issued under the Indentures.
The applicable prospectus supplement will provide information for the
following terms of the Offered Debt Securities (to the extent such terms are
applicable to such Offered Debt Securities):
- the title of such Offered Debt Securities and the particular series
thereof;
- any limit on the aggregate principal amount of such Offered Debt
Securities;
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- whether such Offered Debt Securities are to be issuable in registered
form ("Registered Securities") or bearer form ("Bearer Securities") or
both, whether any of such Offered Debt Securities are to be issuable
initially in temporary global form and whether any of such Offered Debt
Securities are to be issuable in permanent global form;
- the price or prices (generally expressed as a percentage of the aggregate
principal amount thereof) at which such Offered Debt Securities will be
issued;
- the date or dates on which such Offered Debt Securities will mature;
- the interest rate or rates per annum for the Offered Debt Securities, or
the formula by which such interest rate or rates shall be determined for
the Offered Debt Securities, the dates from which any such interest on
the Offered Debt Securities will accrue and the circumstances, if any,
under which CNAF may reset such interest rate or interest rate formula;
- the interest payment dates on which any such interest on such Offered
Debt Securities will be payable, the regular record date for any interest
payable on such Offered Debt Securities that are Registered Securities on
any interest payment date, and the extent to which, or the manner in
which any interest payable on a Global Security on an interest payment
date will be paid if other than in the manner described below under
"Global Securities";
- the person to whom interest on any Registered Security of such series
will be payable, if other than the person in whose name such Offered Debt
Security (or one or more predecessor Offered Debt Securities) is
registered at the close of business on the regular record date for such
payment, and the manner in which, or the person to whom, any interest on
any Bearer Security of such series will be payable, if otherwise than
upon presentation and surrender of the coupons thereto;
- if other than the principal amount of such Offered Debt Securities, the
portion of the principal amount of such Offered Debt Securities which
shall be payable upon declaration of acceleration of the maturity thereof
or provable in bankruptcy;
- any mandatory or optional sinking fund or analogous provisions;
- each office or agency where, subject to the terms of the applicable
Indenture as described below under "Payments and Paying Agents," the
principal of any interest on such Offered Debt Securities will be payable
and each office or agency where, subject to the terms of the applicable
Indenture as described below under "Denominations, Registration and
Transfer," such Offered Debt Securities may be presented for registration
of transfer or exchange;
- the date, if any, after which and the price or prices at which, such
Offered Debt Securities may be redeemed, pursuant to any optional or
mandatory redemption provisions, in whole or in part, and the other
detailed terms and provisions of any such optional or mandatory
redemption provisions;
- the denominations in which such Offered Debt Securities which are
Registered Securities will be issuable, if other than denominations of
U.S. $1,000 and any integral multiple thereof, and the denomination in
which such Offered Debt Securities which are Bearer Securities will be
issuable, if other than denominations of U.S. $5,000;
- the currency or currencies of payment of principal of and any premium and
interest on such Offered Debt Securities;
- any index used to determine the amount of payments of principal or any
interest on such Debt Securities different from those described herein;
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- the application, if any, of any restrictive covenants or events of
default that are in addition to or different from those described herein;
- the form of such Offered Debt Security; and
- any other terms and provisions of such Offered Debt Securities not
inconsistent with the terms and provisions of the applicable Indenture,
including without limitations any restrictive covenants which may be
applicable to CNAF for the benefit of the holders of such Offered Debt
Securities.
Any such prospectus supplement will also describe any special provisions for the
payment of additional amounts with respect to such Offered Debt Securities.
Offered Debt Securities of any series may be issued in one or more tranches as
described in the applicable prospectus supplement.
If the purchase price of any of the Offered Debt Securities is payable in a
foreign currency or currencies or foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities are
payable in a foreign currency or currencies or foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities and such foreign
currency or currencies or foreign currency unit or units will be described in
the applicable prospectus supplement.
RANKING AND SUBORDINATION
Senior Debt Securities.
The Senior Debt Securities will rank equally with all of CNAF's other
unsecured and unsubordinated indebtedness. As of December 31, 1998, CNAF had
approximately $2.47 billion aggregate principal amount of indebtedness for
borrowed money which would rank pari passu with the Senior Debt Securities. The
Senior Indenture does not limit the amount of debt, either secured or unsecured,
that may be issued by CNAF under the Senior Indenture or otherwise. In addition,
CNAF's subsidiaries had approximately $685.1 million of indebtedness
outstanding.
Subordinated Debt Securities.
Indebtedness evidenced by the Subordinated Debt Securities will be
subordinated in right of payment, as set forth in the Subordinated Indenture, to
the prior payment in full of all CNAF's existing and future Senior Indebtedness.
Senior Indebtedness is defined in the Subordinated Indenture as the principal of
and interest on (including any interest that accrues after or would have accrued
but for the filing of a petition initiating any proceeding pursuant to any
bankruptcy law, regardless of whether such interest is allowed or permitted to
the holder of such debt against the bankruptcy or any other insolvency estate of
CNAF in such proceeding) and other amounts due on or in connection with any debt
incurred, assumed or guaranteed by CNAF, whether outstanding on the date of the
Subordinated Indenture or thereafter incurred, assumed or guaranteed, and all
renewals, extensions and refundings of any such debt. Amounts outstanding under
any Senior Debt Securities will be included in Senior Indebtedness. Excluded
from the definition of Senior Indebtedness are the following: (a) any debt which
expressly provides (i) that such debt shall not be senior in right of payment to
the Subordinated Debt Securities, or (ii) that such debt shall be subordinated
to any other debt of CNAF, unless such debt expressly provides that such debt
shall be senior in right of payment to the Subordinated Debt Securities; and (b)
any of CNAF's debt in respect of the Subordinated Debt Securities. As of
December 31, 1998, CNAF had approximately $2.47 billion aggregate principal
amount of indebtedness for borrowed money which would rank senior to the
Subordinated Debt Securities and no borrowings which would rank junior or equal
with the Subordinate Debt Securities.
By reason of such subordination, in the event of dissolution, insolvency,
bankruptcy or other similar proceedings, upon any distribution of assets, (i)
the holders of Subordinated Debt
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Securities will be required to pay over their share of such distribution to the
holders of Senior Indebtedness until such Senior Indebtedness is paid in full;
and (ii) creditors of CNAF who are not holders of Subordinated Debt Securities
or holders of Senior Indebtedness may recover less, ratably, than holders of
Senior Indebtedness and may recover more, ratably, than the holders of
Subordinated Debt Securities.
In the event that the Subordinated Debt Securities are declared due and
payable prior to their stated maturity by reason of the occurrence of an event
of default, CNAF is obligated to notify holders of Senior Indebtedness promptly
of such acceleration. CNAF may not pay the Subordinated Debt Securities until
179 days have passed after such acceleration occurs and may thereafter pay the
Subordinated Debt Securities if the terms of the Subordinated Indenture
otherwise permit payment at that time.
No payment of the principal, issue price plus accrued original issue
discount (if any), redemption price, interest, if any, or any other amount
payable with respect to any Subordinated Debt Security may be made, nor may CNAF
acquire any Subordinated Debt Securities except as described in the Subordinated
Indenture, if any default with respect to Senior Indebtedness occurs and is
continuing that permits the acceleration of the maturity of the Senior
Indebtedness and either such default is the subject of judicial proceedings or
CNAF receives notice of the default, unless
- 179 days pass after notice of the default is given and such default is
not then the subject of judicial proceedings or the default with respect
to the Senior Indebtedness is cured or waived; and
- the terms of the Subordinated Indenture otherwise permit the payment or
acquisition of the Subordinated Debt Securities at that time.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Offered Debt Securities will be issuable as Registered Securities,
Bearer Securities or both. Offered Debt Securities may be issuable in the form
of one or more Global Securities, as described below under "Global Securities."
Unless otherwise provided in the applicable prospectus supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal to the
aggregate principal amount of outstanding Offered Debt Securities represented by
such Global Security. The prospectus supplement relating to Offered Debt
Securities denominated in a foreign or composite currency will specify the
denominations for these Offered Debt Securities.
In connection with its original issuance, no Bearer Security shall be
mailed or otherwise delivered to any location in the United States (as defined
below under "Limitations on Issuance of Bearer Securities") and a Bearer
Security may be delivered in connection with its original issuance only if the
person entitled to receive such Bearer Security furnishes written certification,
in the form required by the applicable Indenture, to the effect that such Bearer
Security is not being acquired by or on behalf of a United States person (as
defined below under "Limitations on Issuance of Bearer Securities"), or, if a
beneficial interest in such Bearer Security is being acquired by or on behalf of
a United States person, that such United States person is a financial
institution (as defined in Treasury Regulation Section 1.165-12(c)(1)(v)) that
is purchasing for its own account or for the account of a customer and which
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the United States Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations thereunder. See "Global Securities" and "Limitations on Issuance
of Bearer Securities" below.
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Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, if Offered
Debt Securities of any series are issuable as both Registered Securities and as
Bearer Securities, at the option of the holder upon request confirmed in
writing, and subject to the terms of the applicable Indenture, Bearer Securities
(with all unmatured coupons, except as provided below, and all matured coupons
in default attached) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Unless otherwise indicated in an
applicable prospectus supplement, any Bearer Security surrendered in exchange
for a Registered Security between a record date and the relevant date for
payment of interest shall be surrendered without the coupon relating to such
date for payment of interest attached and interest will not be payable in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the holder of such coupon when due in accordance
with the terms of the applicable Indenture. Except as provided in an applicable
prospectus supplement, Bearer Securities will not be issued in exchange for
Registered Securities.
Offered Debt Securities may be presented for exchange as provided above,
and Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the security registrar designated by CNAF or at the office of any
transfer agent designated by CNAF for such purpose with respect to any series of
Offered Debt Securities and referred to in an applicable prospectus supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. Such transfer or exchange will
be made when the security registrar or such transfer agent, as the case may be,
is satisfied with the documents of title and identity of the person making the
request. CNAF has initially appointed the Trustee as the security registrar
under the Indentures. If a prospectus supplement refers to any transfer agent
(in addition to the security registrar) initially designated by CNAF with
respect to any series of Offered Debt Securities, CNAF may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts. Exceptions to the prior sentence
will occur if Offered Debt Securities of a series are issuable only as
Registered Securities. CNAF will be required to maintain a transfer agent in
each place of payment for such series. Similarly, if Offered Debt Securities of
a series are issuable as Bearer Securities, then CNAF will be required to
maintain (in addition to the security registrar) a transfer agent in a place of
payment for such series located outside the United States. CNAF may at any time
designate additional transfer agents with respect to any series of Offered Debt
Securities.
In the event of any redemption, neither CNAF nor the Trustee shall be
required to (i) issue, register the transfer of or exchange Offered Debt
Securities of any series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Offered Debt
Securities of that series selected to be redeemed and ending at the close of
business (a) if Offered Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption,
and (b) if Offered Debt Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Offered Debt Securities of that series are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any Registered
Security or portion thereof, called for redemption, except the unredeemed
portion of any Registered Security being redeemed in part; or (iii) exchange any
Bearer Security called for redemption, except to exchange such Bearer Security
for a Registered Security of that series and like tenor which is immediately
surrendered for redemption.
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PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of and any interest on Registered Securities (other than a Global
Security) will be made at the office of such paying agent or paying agents (each
a "Paying Agent") as CNAF may designate from time to time, except that, at the
option of CNAF, payment of any interest may be made by check mailed to the
address of the payee entitled thereto as such address shall appear in the
Security Register. Unless otherwise indicated in an applicable prospectus
supplement, payment of any installment of interest on Registered Securities will
be made to the person in whose name such Registered Security is registered at
the close of business on the regular record date for such interest payment.
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents as CNAF may designate from time to time, except
that, at CNAF's option, payment of any interest may be made by check mailed to
the address of the payee entitled thereto as such address shall appear in the
Security Register. Unless otherwise indicated in an applicable prospectus
supplement, payment of any installment of interest on Registered Securities will
be made to the person in whose name such Registered Security is registered at
the close of business on the regular record date for such interest payment.
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States as CNAF may designate
from time to time, except that, at CNAF's option, payment of any interest may be
made by check or by wire transfer to an account maintained by the payee outside
the United States. Unless otherwise indicated in an applicable prospectus
supplement, payment of interest on Bearer Securities on any interest payment
date will be made only against surrender of the coupon relating to such interest
payment date. No payment with respect to any Bearer Security will be made at any
of CNAF's offices or agencies in the United States or by check mailed to any
address in the United States or by wire transfer to an account maintained in the
United States. Payments will not be made in respect of Bearer Securities or
coupons relating to those Bearer Securities pursuant to presentation to CNAF or
its Paying Agents within the United States. Notwithstanding the foregoing,
payment of principal of and any interest on Bearer Securities denominated and
payable in U.S. Dollars will be made at the office of CNAF's Paying Agent in the
United States if, and only if, payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions and
CNAF has delivered to the Trustee an opinion of counsel to that effect.
Unless otherwise indicated in an applicable prospectus supplement, the
principal office of the Trustee in The City of New York will be designated as
CNAF's sole Paying Agent for payments with respect to Offered Debt Securities
which are issuable solely as Registered Securities. Any Paying Agent outside the
United States and any other Paying Agent in the United States initially
designated by CNAF for the Offered Debt Securities will be named in the
applicable prospectus supplement. CNAF may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts, except that, if Offered Debt
Securities of a series are issuable only as Registered Securities, CNAF will be
required to maintain a Paying Agent in each place of payment of such series and,
if Offered Debt Securities of a series are issuable as Bearer Securities, CNAF
will be required to maintain (i) a Paying Agent in each place of payment for
such series in the United States for payments with respect to any Registered
Securities of such series (and for payments with respect to Bearer Securities of
such series in the circumstances described above, but not otherwise), (ii) a
Paying Agent in each place of payment located outside the United States
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where Offered Debt Securities of such series and any coupons belonging thereto
may be presented and surrendered for payment; provided that if the Offered Debt
Securities of such series are listed on The International Stock Exchange, the
London Stock Exchange or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, CNAF will maintain a Paying Agent in London or Luxembourg or any other
required city located outside the United States, as the case may be, for Offered
Debt Securities of such series, and (iii) a Paying Agent in each place of
payment located outside the United States where (subject to applicable laws and
regulations) Registered Securities of such series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
CNAF may be served.
All monies paid by CNAF to a Paying Agent for the payment of principal of
and any interest on any Offered Debt Securities that remains unclaimed for at
least two years after such principal, premium, if any, or interest has become
due and the payable will be repaid, at the request of CNAF, to CNAF. After this
repayment, the holder of such Offered Debt Security or any coupon relating
thereto will look only to CNAF for payment thereof.
GLOBAL SECURITIES
The Offered Debt Securities of a series may be issued in whole or in part
in the form of one or more Global Securities that will be deposited with, or on
behalf of, a depository (the "Depository") identified in the prospectus
supplement relating to such series. Global Securities may be issued only in
fully registered form and may be issued in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual Offered
Debt Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depository for such Global Security to a nominee of
such Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by the Depository or any nominee of such
Depository to a successor Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series
of Offered Debt Securities will be described in the prospectus supplement
relating to such series. CNAF anticipates that the following provisions will
generally apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Offered Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Offered
Debt Securities or by CNAF if such Offered Debt Securities are offered and sold
directly by CNAF. Ownership of beneficial interests in a Global Security will be
limited to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the applicable Depository or its nominee (with respect to interests of
Participants) and records of Participants (with respect to interests of persons
who hold through Participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, pledge or
transfer beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Offered Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Offered
Debt Securities of the series represented by such Global Security Registered in
their names, will not
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receive or be entitled to receive physical delivery of any such Offered Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture.
Payments of principal of and any premium and any interest on individual
Offered Debt Securities represented by a Global Security registered in the name
of a Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the registered owner of the Global Security representing
such Offered Debt Securities. None of CNAF, the Trustee, any Paying Agent or the
Security Registrar for such Offered Debt Securities will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in the Global Security for such
Offered Debt Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
CNAF expects that the Depository for a series of Offered Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Offered Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Security for such Offered Debt Securities as shown on the
records of such Depository or its nominee. CNAF also expects that payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts in
bearer form or registered in "street name." Such payments will be the
responsibility of such Participants.
If a Depository for a series of Offered Debt Securities is at any time
unwilling, unable or ineligible to continue as depository and a successor
depository is not appointed by CNAF within 90 days, CNAF will issue individual
Offered Debt Securities of such series in exchange for the Global Security
representing such series of Offered Debt Securities. In addition, CNAF may, at
any time and in its sole discretion, subject to any limitations described in the
prospectus supplement relating to such Offered Debt Securities, determine not to
have any Offered Debt Securities of such series represented by one or more
Global Securities and, in such event, will issue individual Offered Debt
Securities of such series in exchange for the Global Security or Securities
representing such series of Offered Debt Securities. Individual Offered Debt
Securities of such series so issued will be issued in denominations, unless
otherwise specified by CNAF, of $1,000 and integral multiples thereof.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than to a Qualifying Foreign Branch of a United States
Financial Institution (as defined below), and any underwriters, agents and
dealers participating in the offering of Offered Debt Securities must agree that
they will not offer any Bearer Securities for sale or resale in the United
States or to United States persons (other than a Qualifying Foreign Branch of a
United States Financial Institution) or deliver Bearer Securities within the
United States. In addition, any such underwriters, agents and dealers must agree
to send confirmations to each purchaser of a Bearer Security confirming that
such purchaser represents that it is not a United States person or is a
Qualifying Branch of a United States Financial Institution and, if such person
is a dealer, that it will send similar confirmations to purchasers from it. The
term "Qualifying Foreign Branch of a United States Financial Institution" means
a branch located outside the United States of a United States securities
clearing organization, bank or other financial institution listed under Treasury
Regulation Section 1.165-12(c)(1)(v) that agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder.
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Bearer Securities and any coupons relating thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code." Under Sections 165(j) and 1287(a) of the Code, holders
that are United States persons, with certain exceptions, will not be entitled to
deduct any loss on Bearer Securities and must treat as ordinary income, any gain
realized on the sale or other disposition (including the receipt of principal)
of Bearer Securities.
The term "United States person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision thereof, an
estate or, for taxable years beginning before January 1, 1997, a trust the
income of which is subject to United States federal income taxation regardless
of its source or, for taxable years beginning after December 31, 1996, a trust
if a U.S. court is able to exercise primary supervision over the administration
of the trust and one or more U.S. fiduciaries have the authority to control all
substantial decisions of the trust. The term "United States" means the United
States of America (including the states and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction
(including the Commonwealth of Puerto Rico).
DEFEASANCE
The Indentures provide that CNAF will be discharged from any and all
obligations in respect of the Debt Securities of any series (except for certain
obligations to register the transfer or exchange of Debt Securities of such
series, to replace stolen, lost or mutilated Debt Securities of such series, to
maintain paying agencies and to hold monies for payment in trust) upon the
deposit with the Trustee for such series of Debt Securities in trust of money
and/or U.S. Government Obligations (as defined below) in an amount sufficient to
pay the principal of and each installment of interest, if any, on the Debt
Securities of such series on the maturity of such payments in accordance with
the terms of the applicable Indenture and the Debt Securities of such series.
Such a trust may only be established if, among other things, CNAF has delivered
to such Trustee an Opinion of Counsel (who may be CNAF's counsel) to the effect
that (i) holders of the Debt Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amounts and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred, and
(ii) the Debt Securities of such series, if then listed on The New York Stock
Exchange, will not be delisted as a result of such deposit, defeasance and
discharge.
The Indentures provide that, if applicable, CNAF may omit to comply with
any additional restrictive covenants imposed on CNAF in connection with the
establishment of any series of Debt Securities and that clause (d) under "Events
of Default" with respect to such restrictive covenants and clause (e) under
"Events of Default" shall not be deemed to be an Event of Default under the
applicable Indenture and the Debt Securities of any series, upon the deposit
with the Trustee under the applicable Indenture, in trust of money and/or U.S.
Government Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of, and each installment of interest, if any, on
the Debt Securities of such series on the maturity of such payments in
accordance with the terms of the applicable Indenture and the Debt Securities of
such series. The obligations of CNAF under the applicable Indenture and Debt
Securities of such series other than with respect to the covenants referred to
above and the Events of Default other than the Events of Default referred to
above shall remain in full force and effect. Such a trust may only be
established if, among other things, CNAF has delivered to the Trustee an Opinion
of Counsel (who may be counsel for CNAF) to the effect that (i) the holders of
the Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result
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of such deposit and defeasance of certain covenants and Events of Default and
will be subject to federal income tax on the same amounts and in the same manner
and at the same times, as would have been the case if such deposit and
defeasance had not occurred, and (ii) the Debt Securities of such series, if
then listed on The New York Stock Exchange, will not be delisted as a result of
such deposit and defeasance.
In the event CNAF exercises its option to omit compliance with certain
covenants of an Indenture with respect to the Debt Securities of any series as
described above and the Debt Securities of such series are declared due and
payable because of the occurrence of any Event of Default other than an Event of
Default described in clauses (d) or (e) under "Events of Default," the amount of
money and U.S. Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the time
of the acceleration resulting from such Event of Default. However, CNAF will
remain liable for such payments.
The term "U.S. Government Obligation" means direct noncallable obligations
of, or noncallable obligations guaranteed by, the United States or an agency
thereof for the payment of which guarantee or obligation, the full faith and
credit of the United States is pledged.
MODIFICATION OF THE INDENTURES
The Indentures contain provisions permitting CNAF and the Trustee, with the
consent of the holders of a majority of the principal amount of the Debt
Securities of each series then outstanding under such Indenture, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the applicable Indenture or modifying the rights of the
holders of the Debt Securities of such series, except that no such supplemental
indenture may, among other things, (i) extend the final maturity of any Debt
Securities, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof, impair the right to institute
suit for payment thereof or reduce any amount payable upon any redemption
thereof without the consent of the holder of the Debt Security so affected, or
(ii) reduce the aforesaid percentage of Debt Securities, the consent of the
holders of which is required for any such supplemental indenture, without the
consent of the holders of all outstanding Debt Securities. CNAF's Board does not
have the power to waive any of the covenants of the Indentures including those
relating to consolidation, merger or sale of assets.
EVENTS OF DEFAULT
An Event of Default with respect to any series of Debt Securities is
defined in the Indentures as being:
- default by CNAF for thirty (30) days in the payment of any installment of
interest on the Debt Securities of such series;
- default by CNAF in the payment of any principal on the Debt Securities of
such series when due;
- default by CNAF in the payment of any sinking fund installment with
respect to such series of Debt Securities;
- default by CNAF in the performance of any of the agreements in the
applicable Indenture contained therein for the benefit of the Debt
Securities of such series which shall not have been remedied within a
period of 60 days after receipt of written notice by CNAF from the
Trustee for such series of Debt Securities or by CNAF and such Trustee
from the holders of not less than 25% in principal amount of the Offered
Debt Securities of such series then outstanding;
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- with respect to any series of Offered Debt Securities (unless otherwise
specified in the accompanying prospectus supplement), the acceleration,
or failure to pay at maturity, of any of CNAF's indebtedness for money
borrowed exceeding $20,000,000 in principal amount, which acceleration is
not rescinded or annulled or indebtedness paid within 15 days after the
date on which written notice thereof shall have first been given to CNAF
as provided in the applicable Indenture;
- certain events of bankruptcy, insolvency or reorganization of CNAF (a
"Bankruptcy Default"); or
- any other Event of Default established in accordance with the applicable
Indenture with respect to any series of Debt Securities.
No Event of Default (other than a Bankruptcy Default) with respect to a
particular series of Debt Securities necessarily constitutes an Event of Default
with respect to any other series of Debt Securities.
The Indentures provide that if an Event of Default with respect to any
series of Debt Securities shall have occurred and is continuing, either the
Trustee with respect to the Debt Securities of that series or the holders of at
least 25% in aggregate principal amount of Debt Securities of that series then
outstanding may declare the principal amount (or, if the Debt Securities of that
series were sold at an original issue discount, such portion of the principal
amount as may be specified in the terms of that series) of all the Debt
Securities of that series and interest, if any, accrued thereon to be due and
payable immediately, but upon certain conditions such declaration may be
annulled and past defaults (except, unless theretofore cured, a default in
payment of principal of or interest on Debt Securities of that series) may be
waived by the holders of a majority in principal amount of the Debt Securities
of that series then outstanding.
The Indentures each contain a provision entitling the Trustee with respect
to any series of Debt Securities, subject to the duty of the Trustee during
default to act with the required standard of care, to be indemnified by the
holders of Debt Securities of such series before proceeding to exercise any
right or power under the applicable Indenture at the request of the holders of
such Debt Securities. The Indentures also provide that the holders of a majority
in principal amount of the outstanding Debt Securities of any series may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee for such series of Debt Securities, or exercising any trust or
power conferred on such Trustee, with respect to the Debt Securities of such
series. The Indentures each contain a covenant that CNAF will file annually with
the Trustee a certificate as to the absence of any default or specifying any
default that exists.
No holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the applicable Indenture or for any
remedy under such Indenture, unless (i) such holder previously shall have given
the Trustee for such series of Debt Securities written notice of an Event of
Default with respect to Debt Securities of that series and (ii) the holders of
at least 25% in aggregate principal amount of the outstanding Debt Securities of
that series shall have made written request, and offered reasonable indemnity,
to such Trustee to institute such proceeding as trustee, and such Trustee shall
not have received from the holders of a majority in aggregate principal amount
of the outstanding Debt Securities of that series a direction inconsistent with
such request and shall have failed to institute such proceeding within 60 days.
However, any right of a holder of any Debt Security to receive payment of the
principal of and any interest on such Debt Security on or after the due dates
expressed in such CNAF Debt Security and to institute suit for the enforcement
of any such payment on or after such dates shall not be impaired or affected
without consent of such holder.
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CONSOLIDATION, MERGER AND SALE OF ASSETS
CNAF covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either CNAF shall be the continuing corporation, or the
successor corporation or the Person which acquires by sale or conveyance
substantially all of the assets of CNAF (if other than CNAF) shall be a
corporation organized under the laws of the United States or any state thereof
and shall expressly assume the due and punctual payment of the principal of and
interest on all the Debt Securities, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
the applicable Indenture to be performed or observed by CNAF, by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee by
such corporation, and (ii) CNAF or such successor corporation, as the case may
be, shall not, immediately after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such covenants or condition.
Other than the covenants described above, or as set forth in any
accompanying prospectus supplement, the Indentures and the Debt Securities do
not contain any covenants or other provisions designed to afford holders of the
Debt Securities protection in the event of a takeover, recapitalization or
highly leveraged transaction involving CNAF.
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or stockholder, as
such, of CNAF or any successor thereof shall have any liability for any
obligations of CNAF under the Debt Securities or the Indentures or for any
claims based on, in respect of, or by reason of, such obligations or their
creation. Each holder of Debt Securities by accepting such Debt Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Debt Securities.
THE TRUSTEE
The Trustee in its individual or any other capacity may become the owner or
pledgee of Debt Securities and may otherwise deal with CNAF or its Affiliates
with the same rights it would have if it were not the Trustee provided it
complies with the terms of the applicable Indenture. The CNA Companies and the
Trustee may engage in normal and customary banking transactions from time to
time.
DESCRIPTION OF JUNIOR DEBT SECURITIES
The Junior Debt Securities may be issued in one or more series under a
Junior Subordinated Indenture (the "Junior Indenture"), between CNAF and The
First National Bank of Chicago, as trustee (the "Junior Indenture Trustee"). The
Junior Indenture has been qualified under the Trust Indenture Act and is subject
to that act. The form of the Junior Indenture is included as an exhibit to the
Registration Statement. The following description summarizes the material terms
of the Junior Indenture and the Junior Debt Securities. Because it is only a
summary, it does not contain all of the details found in the full text of the
Junior Debt Securities and the Junior Indenture, including the definitions of
certain terms used in the description of the Junior Debt Securities in this
prospectus, and those terms made a part of the Junior Indenture by the Trust
Indenture Act.
GENERAL
The Junior Indenture does not limit the aggregate principal amount of
Junior Debt Securities that may be issued thereunder and provides that Junior
Debt Securities may be issued from time to time in one or more series and may be
denominated and payable in U.S. dollars, foreign
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currencies or units based on or related to foreign currencies. CNAF may sell
Junior Debt Securities at par, a premium or a discount. As of December 31, 1998,
CNAF had approximately $2.47 billion aggregate principal amount of indebtedness
for borrowed money which would rank senior to the Junior Debt Securities, and no
such indebtedness which is equal or junior to the Junior Debt Securities.
The Junior Debt Securities will be issuable in one or more series pursuant
to an indenture supplemental to the Junior Indenture or a resolution of CNAF's
Board of Directors or a committee thereof.
The applicable prospectus supplement will provide information for the
following terms of the Junior Debt Securities:
- the title of the Junior Debt Securities or series thereof;
- any limit upon the aggregate principal amount of the Junior Debt
Securities;
- the date or dates on which the principal of the Junior Debt Securities is
payable (the "Stated Maturity") or the method of determination thereof;
- the interest rate or rates, if any, for the Junior Debt Securities, the
dates on which any such interest shall be payable, the right, if any, of
CNAF to defer or extend an interest payment date, and the regular record
date for any interest payable on any interest payment date or the method
by which any of the foregoing shall be determined;
- the place or places where, subject to the terms of the Junior Indenture
as described below under "Payment and Paying Agents," the principal of
and premium, if any, and interest on the Junior Debt Securities will be
payable and where, subject to the terms of the Junior Indenture as
described below under "--Denominations, Registration and Transfer," the
Junior Debt Securities may be presented for registration of transfer or
exchange and the place or places where notices and demands to or upon
CNAF in respect of the Junior Debt Securities and the Junior Indenture
may be made ("Place of Payment");
- the obligation or the right, if any, of CNAF to redeem, purchase or repay
the Junior Debt Securities and the period or periods within which, the
price or prices at which, the currency or currencies (including currency
unit or units) in which and the other terms and conditions upon which the
Junior Debt Securities shall be redeemed, repaid or purchased, in whole
or in part, pursuant to such obligation;
- the denominations in which any Junior Debt Securities shall be issuable
if other than denominations of $25 and any integral multiple thereof;
- if other than in U.S. Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any)
and interest, if any, on the Junior Debt Securities shall be payable, or
in which the Junior Debt Securities shall be denominated;
- any additions, modifications or deletions in the Events of Default or
covenants of CNAF specified in the Junior Indenture with respect to the
Junior Debt Securities;
- if other than the principal amount thereof, the portion of the principal
amount of Junior Debt Securities that shall be payable upon declaration
of acceleration of the maturity thereof;
- any additions or changes to the Junior Indenture with respect to a series
of Junior Debt Securities as shall be necessary to permit or facilitate
the issuance of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
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- any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Junior Debt Securities and the
manner in which such amounts will be determined;
- the terms and conditions relating to the issuance of a temporary Global
Security representing all of the Junior Debt Securities of such series
and the exchange of such temporary Global Security for definitive Junior
Debt Securities of such series;
- subject to the terms described under "--Global Junior Debt Securities,"
whether the Junior Debt Securities of the series shall be issued in whole
or in part in the form of one or more Global Securities and, in such
case, the Depositary for such Global Securities, which Depositary shall
be a clearing agency registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act");
- the appointment of any Paying Agent or Agents;
- the terms and conditions of any obligation or right of CNAF or a holder
to convert or exchange the Junior Debt Securities into other securities;
- the form of the Trust Agreement and Guarantee Agreement, if applicable;
- the relative degree, if any, to which such Junior Debt Securities of the
series shall be senior to or be subordinated to other series of such
Junior Debt Securities or other indebtedness of CNAF in right of payment,
whether such other series of Junior Debt Securities or other indebtedness
are outstanding or not; and
- any other terms of the Junior Debt Securities not inconsistent with the
provisions of the Junior Indenture.
If the purchase price of any of the Junior Debt Securities is payable in a
foreign currency or currencies or foreign currency unit or units or if the
principal, premium, if any, and interest on any Junior Debt Securities are
payable in a foreign currency or currencies or currency unit or units, the
restrictions, elections, general tax considerations, specific terms and other
information with respect to such issue of Junior Debt Securities and such
foreign currency or currency units will be set forth in the applicable
prospectus supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable prospectus supplement, the
Junior Debt Securities will be issuable only in registered form without coupons
in denominations of $25 and any integral multiple thereof. Junior Debt
Securities of any series will be exchangeable for other Junior Debt Securities
of the same issue and series, of any authorized denominations, of a like
aggregate principal amount, and bearing the same terms.
Junior Debt Securities may be presented for exchange as provided above, and
may be presented for registration of transfer (with the form of transfer
endorsed thereon, or a satisfactory written instrument of transfer, duly
executed), at the office of the appropriate Securities Registrar or at the
office of any transfer agent designated by CNAF for such purpose with respect to
any series of Junior Debt Securities and referred to in the applicable
prospectus supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the Junior Indenture. CNAF will
appoint the Junior Indenture Trustee as Securities Registrar under the Junior
Indenture. If the applicable prospectus supplement refers to any transfer agents
(in addition to the Securities Registrar) initially designated by CNAF with
respect to any series of Junior Debt Securities, CNAF may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that CNAF maintains a
transfer agent in each Place of Payment for such series. CNAF may at any time
designate additional transfer agents with respect to any series of Junior Debt
Securities.
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In the event of any redemption, neither CNAF nor the Junior Indenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Debt Securities of any series during a period beginning at the opening of
business 15 days before the day of selection for redemption of Junior Debt
Securities of that series and ending at the close of business on the day of
mailing of the relevant notice of redemption or (ii) transfer or exchange any
Junior Debt Securities so selected for redemption, except, in the case of any
Junior Debt Securities being redeemed in part, any portion thereof not to be
redeemed.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal of (and premium, if any) and any interest on Junior Debt Securities
will be made at the office of the Junior Indenture Trustee in The City of New
York or at the office of such Paying Agent or Paying Agents as CNAF may
designate from time to time in the applicable prospectus supplement, except that
at the option of CNAF payment of any interest may be made (i), except in the
case of Global Junior Debt Securities, by check mailed to the address of the
Person entitled thereto as such address shall appear in the Securities Register
or (ii) by transfer to an account maintained by the Person entitled thereto as
specified in the Securities Register, provided that proper transfer instructions
have been received by the regular record date. Unless otherwise indicated in the
applicable prospectus supplement, payment of any interest on Junior Debt
Securities will be made to the Person in whose name such Junior Debt Security is
registered at the close of business on the Regular Record Date for such
interest, except in the case of defaulted interest. CNAF may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however CNAF will at all times be required to maintain a Paying Agent in
each Place of Payment for each series of Junior Debt Securities.
All monies paid by CNAF to the Junior Indenture Trustee or any Paying
Agent, or then held by CNAF in trust, for the payment of the principal, premium,
if any, or interest on any Junior Debt Security that remains unclaimed for two
years after such principal, premium, if any, or interest has become due and
payable, at the request of CNAF, will be repaid to CNAF. After this repayment,
the holder of such Junior Debt Security will look only to CNAF for payment
thereof.
GLOBAL JUNIOR DEBT SECURITIES
The Junior Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Junior Debt Securities that will be deposited
with, or on behalf of, a depositary (the "Depositary") identified in the
prospectus supplement relating to such series. Global Junior Debt Securities may
be issued only in fully registered form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for the individual
Junior Debt Securities represented thereby, a Global Junior Debt Security may
not be transferred except as a whole by the Depositary for such Global Junior
Debt Security to a nominee of such Depositary or by a nominee of such Depositary
to such Depositary or another nominee of such Depositary or by the Depositary or
any nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Junior Debt Securities will be described in the prospectus supplement
relating to such series. CNAF anticipates that the provisions described above
under the heading "Description of Debt Securities-Global Securities" will
generally apply to depositary arrangements with respect to the Junior Debt
Securities, as if the Junior Debt Securities were "Debt Securities" as discussed
in that section.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable prospectus supplement, CNAF shall have the
right at any time and from time to time during the term of any series of Junior
Debt Securities to defer payment of
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interest for such number of consecutive interest payment periods as may be
specified in the applicable prospectus supplement (each, an "Extension Period"),
subject to the terms, conditions and covenants, if any, specified in such
prospectus supplement, provided that such Extension Period may not extend beyond
the Stated Maturity of such series of Junior Debt Securities.
REDEMPTION
Unless otherwise indicated in the applicable prospectus supplement, Junior
Debt Securities will not be subject to any sinking fund.
Unless otherwise indicated in the applicable prospectus supplement, CNAF
may, at its option, redeem the Junior Debt Securities of any series in whole at
any time or in part from time to time. Except as otherwise specified in the
applicable prospectus supplement, the redemption price for any Junior Debt
Security so redeemed shall equal any accrued and unpaid interest thereon to the
redemption date, plus the principal amount thereof.
Except as otherwise specified in the applicable prospectus supplement, if a
Tax Event (as defined below) or an Investment Company Event (as defined below)
in respect of a series of Junior Debt Securities shall occur and be continuing,
CNAF may, at its option, redeem such series of Junior Debt Securities in whole
(but not in part) at any time within 90 days of the occurrence of such Tax
Event, or Investment Company Event, at a redemption price equal to 100% of the
principal amount of such Junior Debt Securities then outstanding plus accrued
and unpaid interest to the date fixed for redemption.
"Tax Event" means, with respect to a CNA Capital Trust, the receipt by CNAF
and that CNA Capital Trust of an opinion of counsel experienced in such matters
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement, such
determination or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement,
determination or decision is announced on or after the date of original issuance
of the applicable series of Junior Debt Securities under the Junior Indenture,
there is more than an insubstantial risk that (i) that such CNA Capital Trust
is, or will be within 90 days of the date of the opinion of counsel, subject to
United States federal income tax with respect to income received or accrued on
the applicable Junior Debt Securities, (ii) interest payable by CNAF on such
series of Junior Debt Securities is not, or within 90 days of the date of such
opinion will not be, deductible by CNAF, in whole or in part, for United States
federal income tax purposes, or (iii) such CNA Capital Trust is, or will be
within 90 days of the date of such opinion, subject to more than the minimal
amount of the taxes, duties or other government charges.
"Investment Company Event" means the receipt by CNAF and a CNA Capital
Trust of an opinion of counsel, experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, that such CNA Capital Trust
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, which change becomes
effective on or after the date of original issuance of the applicable series of
Junior Debt Securities.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Debt Securities to
be redeemed at its registered address. Unless CNAF defaults in payment of the
redemption price, on and after the redemption date interest ceases to accrue on
such Junior Debt Securities or portions thereof called for redemption.
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MODIFICATION OF JUNIOR INDENTURE
From time to time CNAF and the Junior Indenture Trustee may, without the
consent of the holders of any series of Junior Debt Securities, amend, waive or
supplement the Junior Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of any
series of Junior Debt Securities or, in the case of Junior Debt Securities
issued to a CNA Capital Trust ("Corresponding Junior Debt Securities"), the
holders of the Preferred Securities issued by such CNA Trust ("Related Preferred
Securities") so long as they remain outstanding) and qualifying, or maintaining
the qualification of, the Junior Indenture under the Trust Indenture Act. The
Junior Indenture contains provisions permitting CNAF and the Junior Indenture
Trustee, with the consent of the holders of a majority in principal amount of
each outstanding series of Junior Debt Securities affected, to modify the Junior
Indenture in a manner affecting the rights of the holders of such series of the
Junior Debt Securities; provided, that no such modification may, without the
consent of the holder of each outstanding Junior Debt Security so affected, (i)
change the Stated Maturity of any series of Junior Debt Securities, or reduce
the principal amount thereof, or reduce the rate (or change the manner of
calculation of the rate) or extend the time of payment of interest thereon
(except such extension as is contemplated hereby), (ii) change any of the
redemption, conversion or exchange terms, (iii) reduce the percentage of
principal amount of Junior Debt Securities of any series, the holders of which
are required to consent to any such modification of the Junior Indenture, (iv)
modify the provisions relating to modifications, waivers of covenants or waivers
of past default except under certain limited circumstances or (v) change any of
the subordination provisions provided that, in the case of Corresponding Junior
Debt Securities, so long as any of the Related Preferred Securities remain
outstanding, no such modification may be made without the prior consent of a
majority in liquidation amount of such Related Preferred Securities, or, in the
case of the preceding provision, each holder of the Related Preferred
Securities, and no termination of the Junior Indenture may occur, and no waiver
of any Junior Debt Security Event of Default or compliance with any covenant
under the Junior Indenture may be effective, without the prior consent of the
holders of a majority of the aggregate liquidation amount of such Related
Preferred Securities unless and until the principal of the Corresponding Junior
Debt Securities and all accrued and unpaid interest thereon have been paid in
full and certain other conditions are satisfied.
In addition, CNAF and the Junior Indenture Trustee may execute, without the
consent of any holder of Junior Debt Securities, any supplemental Junior
Indenture for the purpose of creating any new series of Junior Debt Securities.
JUNIOR DEBT RELATED EVENTS OF DEFAULT
The Junior Indenture provides that any one or more of the following
described events with respect to a series of Junior Debt Securities that has
occurred and is continuing constitutes a "Junior Debt Related Event of Default"
with respect to such series of Junior Debt Securities:
- failure for 30 days to pay any interest on such series of the Junior Debt
Securities, when due (subject to the deferral of any due date in the case
of an Extension Period); or
- failure to pay any principal or premium on such series of Junior Debt
Securities when due whether at maturity, upon redemption by declaration
or otherwise; or
- failure to observe or perform in any material respect certain other
covenants contained in the Junior Indenture for 90 days after written
notice to CNAF from the Junior Indenture Trustee or the holders of at
least 25% in aggregate outstanding principal amount of such series of
outstanding Junior Debt Securities; or
- certain events in bankruptcy, insolvency or reorganization of CNAF.
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The holders of a majority in aggregate outstanding principal amount of such
series of Junior Debt Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Junior
Indenture Trustee. The Junior Indenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of such series of Junior Debt
Securities may declare the principal due and payable immediately upon a Junior
Debt Related Event of Default. In the case of Corresponding Junior Debt
Securities, should the Junior Indenture Trustee fail to make such declaration,
the holders of at least 25% in aggregate liquidation amount of the Related
Preferred Securities shall have such right. The holders of a majority in
aggregate outstanding principal amount of such series of Junior Debt Securities
may annul such declaration and waive the default if the default (other than the
non-payment of the principal of such series of Junior Debt Securities which has
become due solely by such acceleration) has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Junior Indenture Trustee. In the case
of Corresponding Junior Debt Securities, the holders of a majority in aggregate
liquidation amount of the Related Preferred Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Debt Securities affected thereby may, on behalf of the holders of all the
Junior Debt Securities, waive any past default, except a default in the payment
of principal, premium, if any, or interest (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal
due otherwise than by acceleration has been deposited with the Junior Indenture
Trustee) or a default in respect of a covenant or provision which under the
Junior Indenture cannot be modified or amended without the consent of the holder
of each outstanding Junior Subordinated Debt Security. In the case of
Corresponding Junior Debt Securities, the holders of a majority in aggregate
liquidation amount of the Related Preferred Securities shall have such right.
CNAF is required to file annually with the Junior Indenture Trustee a
certificate as to whether or not CNAF is in compliance with all the conditions
and covenants applicable to it under the Junior Indenture.
In case a Junior Debt Related Event of Default shall occur and be
continuing as to a series of Corresponding Junior Debt Securities, the Property
Trustee will have the right to declare the principal of and the interest on such
Corresponding Junior Debt Securities, and any other amounts payable under the
Junior Indenture, to be immediately due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Debt Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Junior Debt Related Event of Default has occurred and is continuing
and such event is attributable to the failure of CNAF to pay interest or
principal on the related Junior Debt Securities on the date such interest or
principal is otherwise payable, a holder of Related Preferred Securities may
institute a legal proceeding directly against CNAF for enforcement of payment to
such holder of the principal and premium, if any, of or interest on such related
Junior Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Related Preferred Securities of such holder (a "Direct
Action"). CNAF may not amend the Junior Indenture to remove this right to bring
a Direct Action without the consent of all holders of the Related Preferred
Securities. If such right is removed, the applicable Issue may become subject to
the reporting obligations under the Securities Exchange Act of 1934, as amended.
CNAF shall have the right under the Junior Indenture to set-off any payment made
to such holder of Preferred Securities by CNAF in connection with a Direct
Action.
The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those described in the preceding paragraph
available to the holders of the Junior Debt Securities unless there shall have
been an Event of Default under the Trust Agreement. See "Description of
Preferred Securities -- Events of Default; Notice."
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Junior Indenture provides that CNAF shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into CNAF or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to CNAF, unless (i) in
case CNAF consolidates with or merges into another Person or conveys, transfers
or leases its properties and assets as an entirety or substantially as an
entirety to any Person, the successor Person is organized under the laws of the
United States or any state or the District of Columbia, and such successor
Person expressly assumes CNAF's obligations on the Junior Debt Securities issued
under the Junior Indenture; (ii) immediately after giving effect thereto, no
Junior Debt Related Event of Default, and no event which, after notice or lapse
of time or both, would become a Junior Debt Related Event of Default, shall have
happened and be continuing; (iii) in the case of Corresponding Junior Debt
Securities, such transaction is permitted under the related Trust Agreement and
Guarantee and does not give rise to any breach or violation of the related Trust
Agreement or Guarantee; and (iv) delivery of appropriate officers certificates
and opinions of counsel go to the satisfaction of the above listed conditions.
Other than the covenants described above, or as set forth in any
accompanying prospectus supplement, the Junior Indenture and the Junior Debt
Securities do not contain any covenants or other provisions designed to afford
holders of the Junior Debt Securities protection in the event of a takeover,
recapitalization or highly leveraged transaction involving CNAF.
SATISFACTION AND DISCHARGE
The Junior Indenture provides that when, among other things, all Junior
Debt Securities not previously delivered to the Junior Indenture Trustee for
cancellation (i) have become due and payable, (ii) will become due and payable
at their Stated Maturity within one year or (iii) are to be called for
redemption within one year, and CNAF deposits or causes to be deposited with the
Junior Indenture Trustee trust funds, in trust, for the purpose and in an amount
in the currency or currencies in which the Junior Debt Securities are payable
sufficient to pay and discharge the entire indebtedness on the Junior Debt
Securities not previously delivered to the Junior Indenture Trustee for
cancellation, for the principal, premium, if any, and interest, if any, to the
date of the deposit or to the Stated Maturity, as the case may be, then the
Junior Indenture will cease to be of further effect (except as to CNAF's
obligations to pay all other sums due pursuant to the Junior Indenture and to
provide the officers' certificates and opinions of counsel described therein),
and CNAF will be deemed to have satisfied and discharged the Junior Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable prospectus supplement, the
Junior Debt Securities of any series may be convertible or exchangeable into
Preferred Securities or other securities. The specific terms on which Junior
Debt Securities of any series may be so converted or exchanged will be set forth
in the applicable prospectus supplement. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at the
option of CNAF, in which case the number of shares of Preferred Securities or
other securities to be received by the Holders of Junior Debt Securities would
be calculated as of a time and in the manner stated in the applicable prospectus
supplement.
SUBORDINATION
In the Junior Indenture, CNAF has agreed that any Junior Debt Securities
issued thereunder will be subordinate and junior in right of payment to all
Senior Debt (as defined below) to the extent provided in the Junior Indenture.
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
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creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of CNAF, the holders of Senior Debt will be entitled to
receive payment in full of principal of (and premium, if any) and interest, if
any, on such Senior Debt before the holders of Junior Debt Securities or, in the
case of Corresponding Junior Debt Securities, the Property Trustee on behalf of
the holders, will be entitled to receive or retain any payment in respect of the
principal of (and premium, if any) or interest, if any, on the Junior Debt
Securities.
In the event of the acceleration of the maturity of any Junior Debt
Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will be entitled to receive payment in full of all amounts due
thereon (including any amounts due upon acceleration) before the holders of
Junior Debt Securities will be entitled to receive or retain any payment in
respect of the principal of (or premium, if any) or interest, if any, on the
Junior Debt Securities.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Debt Securities may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior Debt,
or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent:
- every obligation of such Person for money borrowed;
- every obligation of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses;
- every reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account
of such Person;
- every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business);
- every capital lease obligation of such Person;
- all indebtedness of CNAF, whether incurred on or prior to the date of the
Junior Indenture or thereafter incurred, for claims in respect of
derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, futures contracts, options and swaps and
similar arrangements; and
- every obligation of the type referred to in the preceding bullet points
of another Person and all dividends of another Person the payment of
which, in either case, such Person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any, including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to CNAF, whether or not such claim for
post-petition interest is allowed in such proceeding, on Debt, whether incurred
on or prior to the date of the Junior Indenture or thereafter incurred
(including, without limitation, Debt incurred pursuant to the Senior Indenture
and the Subordinated Indenture), unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the Junior Debt
Securities or to other Debt which is pari passu with, or subordinated
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to, the Junior Debt Securities; provided, however, that Senior Debt shall not be
deemed to include:
- any Debt of CNAF which, when incurred and without respect to any election
under Section 1111(b) of the Bankruptcy Code, was without recourse to
CNAF;
- any Debt of CNAF to any of its subsidiaries;
- Debt to any employee of CNAF;
- any liability for taxes;
- indebtedness or monetary obligations to trade creditors or assumed by
CNAF or any of its subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services; and
- any other Junior Debt Securities.
The Junior Indenture provides that the foregoing subordination provisions,
insofar as they relate to any particular issue of Junior Debt Securities, may be
changed prior to such issuance. Any such change would be described in the
applicable prospectus supplement.
INFORMATION CONCERNING THE JUNIOR INDENTURE TRUSTEE
The Junior Indenture Trustee, other than during the continuance of a Junior
Debt Related Event of Default, undertakes to perform only such duties as are
specifically set forth in the Junior Indenture, and in the event an Event of
Default has occurred and is continuing, exercise the same degree of care and
skill in the exercise of its rights and powers as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs. The
Junior Indenture Trustee is under no obligation to exercise any of the powers
vested in it by the Junior Indenture at the request of any holder of Junior Debt
Securities, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Junior
Indenture Trustee is not required to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties if the
Junior Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. The Junior Trustee in its individual
or any other capacity may become the owner or pledgee of Junior Debt Securities
or Related Preferred Securities and may otherwise deal with CNAF or its
Affiliates with the same rights it would have if it were not the Junior Trustee
provided it complies with the terms of the Junior Indenture. The CNA Companies
and the Junior Trustee may engage in normal and customary banking transactions
from time to time.
CORRESPONDING JUNIOR DEBT SECURITIES
The Corresponding Junior Debt Securities may be issued in one or more
series of Junior Debt Securities under the Junior Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In that
event, concurrently with the issuance of the applicable CNA Capital Trust's
Preferred Securities, such CNA Capital Trust will invest the proceeds thereof
and the consideration paid by CNAF for the Common Securities in a series of
Corresponding Junior Debt Securities issued by CNAF to such CNA Capital Trust.
Each series of Corresponding Junior Debt Securities will be in the principal
amount equal to the aggregate liquidation amount of the Related Preferred
Securities and the Common Securities of such CNA Capital Trust and will rank
pari passu with all other series of Junior Debt Securities. Holders of the
Related Preferred Securities for a series of Corresponding Junior Debt
Securities will have the rights in connection with modifications to the Junior
Indenture or upon occurrence of Junior Debt Security Events of Default described
under "--Modification of Junior Indenture" and "--Junior Debt Security Events of
Default", unless provided otherwise in the prospectus supplement for such
Related Preferred Securities.
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CNAF will covenant in the Junior Indenture as to each series of
Corresponding Junior Debt Securities, that if and so long as (i) the CNA Capital
Trust of the related series of Trust Securities is the holder of all such
Corresponding Junior Debt Securities and (ii) a Tax Event in respect of such CNA
Capital Trust has occurred and is continuing CNAF will pay to such CNA Capital
Trust the applicable Additional Sums (as defined under "Description of Preferred
Securities--Redemption or Exchange"). CNAF will also agree, as to each series of
Corresponding Junior Debt Securities:
- to maintain directly or indirectly 100% ownership of the Common
Securities of the CNA Capital Trust to which Corresponding Junior Debt
Securities have been issued, provided that certain successors which are
permitted pursuant to the Junior Indenture may succeed to CNAF's
ownership of the Common Securities
- not to voluntarily terminate, wind-up or liquidate any CNA Capital Trust,
except in connection with (a) a distribution of Corresponding Junior Debt
Securities to the holders of the Preferred Securities in liquidation of
such CNA Capital Trust, (b) the redemption of Preferred Securities or (c)
certain mergers, consolidations or amalgamations, in each case as
permitted by the related Trust Agreement; and
- to use its reasonable efforts, consistent with the terms and provisions
of the related Trust Agreement, to cause (a) such CNA Capital Trust to
remain classified as a grantor trust and not as an association taxable as
a corporation for United States federal income tax purposes or (b) each
holder of Preferred Securities to be treated as owning an undivided
beneficial interest in the Securities.
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or stockholder, as
such, of CNAF or any successor thereof shall have any liability for any
obligations of CNAF under the Junior Debt Securities or the Junior Indenture or
for any claims based on, in respect of, or by reason of, such obligations or
their creation. Each holder of Junior Debt Securities by accepting such Junior
Debt Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Junior Debt Securities.
DESCRIPTION OF COMMON STOCK
CNAF is authorized to issue 200 million shares of Common Stock. As of March
31, 1999, 185.5 million shares of Common Stock were issued and 184.2 million
were outstanding. The Common Stock has a par value of $2.50 per share. As of
February 28, 1999, Loews Corporation owned approximately 85% of CNAF's
outstanding Common Stock.
The following summary description of the terms of the Common Stock sets
forth certain general terms and provisions of the Common Stock. This description
is qualified in its entirety by reference to (i) CNAF's Certificate of
Incorporation, a copy of which is filed as an exhibit to CNAF's Registration
Statement on Form S-8 (File No. 333-65493), (ii) CNAF's By-laws, a copy of which
is filed as an exhibit to CNAF's Annual Report on Form 10-K for the year ended
December 31, 1998, and (iii) the description of the Common Stock set forth in
CNAF's registration statement on Form S-3 (File No. 33-35250) filed on June 6,
1990, all of which are incorporated herein by reference.
DIVIDENDS
Subject to the rights of the holders of Preferred Stock, holders of Common
Stock are entitled to receive dividends and other distributions in cash, stock
or CNAF's property, when, as and if declared by CNAF's Board of Directors out of
assets or funds of CNAF legally available therefor and shall share equally on a
per share basis in all such dividends and distributions.
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VOTING RIGHTS
At every meeting of stockholders, every holder of Common Stock is entitled
to one vote per share. Subject to any voting rights of the holders of Preferred
Stock and as otherwise required by Delaware law, any action submitted to
stockholders (other than the election of directors) is approved, if approved by
a majority of the stock having voting power present at a meeting at which there
is a quorum. A quorum generally requires the presence, in person or proxy, of
the holders of a majority of the stock issued and outstanding. Delaware law
requires that the holders of a majority of the issued and outstanding shares of
stock, eligible to vote thereon, approve (i) amendments to the Certificate of
Incorporation, (ii) most mergers and consolidations of CNAF and (iii) sale of
all or substantially all of CNAF's assets.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding-up of CNAF, whether
voluntary or involuntary, the holders of Common Stock are entitled to share
equally in the assets available for distribution after payment of all
liabilities and provision for the liquidation preference of any shares of
Preferred Stock then outstanding.
MISCELLANEOUS
The holders of Common Stock have no preemptive rights, cumulative voting
rights, subscription rights, or conversion rights and the Common Stock is not
subject to redemption.
The transfer agent and registrar with respect to the Common Stock is First
Chicago Trust Company of New York. The Common Stock is listed on the New York
Stock Exchange, the Chicago Stock Exchange and the Pacific Exchange, and also is
traded on the Philadelphia Stock Exchange. The trading symbol for the Common
Stock is "CNA".
DESCRIPTION OF PREFERRED STOCK
CNAF is authorized to issue up to 12,500,000 shares of Preferred Stock,
without par value, in one or more series. All shares of Preferred Stock,
irrespective of series, constitute one and the same class. The following
description of the terms of the Preferred Stock sets forth certain general terms
and provisions of the Preferred Stock. Certain terms of any series of Preferred
Stock offered by the prospectus supplement will be described in the prospectus
supplement relating to such series of Preferred Stock. If so indicated in the
prospectus supplement, the terms of any such series may differ from the terms
set forth below. CNAF has outstanding 750 shares each of Money Market Cumulative
Preferred(TM) Stock, Series E and Series F with a liquidation preference of
$100,000 per share and 2,000 shares of its Series G Cumulative Exchangeable
Preferred Stock with a liquidation preference of $100,000 per share.
The following summary description of the terms of the Preferred Stock sets
forth certain general terms and provisions of the Preferred Stock. This
description is qualified in its entirety by reference to CNAF's Certificate of
Incorporation and By-Laws, copies of which are filed as exhibits to CNAF's
registration statement on Form S-8 (File No. 333-65493) and to the Registration
Statement.
GENERAL
The Board of Directors is authorized to establish and designate series and
to fix the number of shares and the relative rights, preferences and limitations
of the respective series of Preferred Stock, including:
- the designation and number of shares comprising such series, which may be
increased or decreased from time to time by the Board of Directors;
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- the dividend rate or rates on the shares of such series and the relation
which such dividends bear to the dividends payable on any other class or
classes or of any other series of capital stock, the terms and conditions
upon which and the periods in respect of which dividends shall be
payable, whether and upon what conditions such dividends shall be
cumulative and, if cumulative, the dates from which dividends shall
accumulate;
- whether the shares of such series shall be redeemable, the limitations
and restrictions with respect to such redemption, the time or times when,
the price or prices at which and the manner in which such shares shall be
redeemable, including the manner of selecting shares of such series for
redemption if less than all shares are to be redeemed;
- the rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding-up of CNAF,
which rights may vary depending on whether such liquidation, dissolution,
distribution or winding-up is voluntary or involuntary, and, if
voluntary, may vary at different dates;
- whether the shares of such series shall be subject to the operation of a
purchase, retirement or sinking fund, and, if so, whether and upon what
conditions such purchase, retirement or sinking fund shall be cumulative
or noncumulative, the extent to which and the manner in which such fund
shall be applied to the purchase or redemption of the shares of such
series for retirement or to other corporate purposes and the terms and
provisions relative to the operation thereof;
- whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or classes or of any other
series of any class or classes of capital stock of CNAF, and, if so
convertible or exchangeable, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same, and
any other terms and conditions of such conversion or exchange;
- the voting powers, full and/or limited, if any, of the shares of such
series; and whether and under what conditions the shares of such series
(alone or together with the shares of one or more other series having
similar provisions) shall be entitled to vote separately as a single
class, for the election of one or more matters;
- whether the issuance of any additional shares of such series, or of any
shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other
series; and
- any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors may
deem advisable.
Unless otherwise specifically described in the applicable prospectus supplement
for a series of Preferred Stock, all shares of Preferred Stock shall be of equal
rank, preference and priority as to dividends; when the stated dividends are not
paid in full, the shares of all series of the Preferred Stock shall share
ratably in any payment thereof; and upon liquidation, dissolution or winding up,
if assets are insufficient to pay in full all Preferred Stock, then such assets
shall be distributed among the holders ratably.
The description of certain provisions of the Preferred Stock described
below is only a summary and is subject to and qualified in its entirety by
reference to the Certificate of Incorporation and the Certificate of
Designations that relates to a particular series of Preferred Stock.
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DIVIDEND RIGHTS
Except as may be set forth in an applicable prospectus supplement relating
to a series of Preferred Stock, the holders of Preferred Stock shall be entitled
to receive, but only when and as declared by the Board of Directors out of funds
legally available for that purpose, cash dividends at the rates and on the dates
set forth in the applicable prospectus supplement relating to a particular
series of Preferred Stock. Such rate may be fixed or variable. Each such
dividend will be payable to the holders of record as they appear on the stock
register of CNAF on such record dates as will be fixed by the Board of Directors
of CNAF or a duly authorized committee thereof. Dividends payable on the
Preferred Stock for any period less than a full dividend period (being the
period between such dividend payment dates) will be computed on the basis of the
actual number of days elapsed over a 360 day year. For a full dividend period,
the amount of dividends payable will be computed on the basis of a 360 day year
consisting of twelve 30 day months. Except as may be set forth in the prospectus
supplement relating to a series of Preferred Stock, such dividends shall be
payable from, and shall be cumulative from, the date of original issue of each
share, so that if in any dividend period, dividends at the rate or rates as
described in the applicable prospectus supplement relating to such series of
Preferred Stock shall not have been declared and paid or set apart for payment
on all outstanding shares of Preferred Stock for such dividend period and all
preceding dividend periods from and after the first day from which dividends are
cumulative, then the aggregate deficiency shall be declared and fully paid or
set apart for payment, but without interest, before any dividends shall be
declared or paid or set apart for payment on the Common Stock by CNAF. After
payment in full of all dividend arrearages on the Preferred Stock, dividends on
the Common Stock may be declared and paid out of funds legally available for
that purpose as the Board of Directors may determine.
REDEMPTION
The prospectus supplement will describe whether and under what
circumstances (i) any shares of Preferred Stock may be redeemed by CNAF and (ii)
the holders of Preferred Shares may require CNAF to redeem any or all of such
shares.
CONVERSION OR EXCHANGE
The holders of Preferred Stock will have such rights, if any, to convert
such shares into or to exchange such shares for shares of any other class or
classes, or of any other series of any class, of the capital stock of CNAF
and/or other property or cash, as described in the applicable prospectus
supplement.
VOTING RIGHTS
The holders of Preferred Stock will have such voting rights, if any, as
described in the applicable prospectus supplement relating to a series of
Preferred Stock. Unless and except to the extent required by the law or provided
by the Board of Directors, holders of Preferred Stock shall have no voting power
with respect to any matter. In no event shall the Preferred Stock be entitled to
more than one vote per share in respect of each share of stock.
The holders of the outstanding shares of a series of Preferred Stock shall
be entitled to vote as a class upon a proposed amendment, whether or not
entitled to vote thereon by the Certificate of Incorporation, if the amendment
would increase or decrease the aggregate number of authorized shares of such
series of Preferred Stock, increase or decrease the par value of the shares of
such series of Preferred Stock, or alter or change the powers, preferences, or
special rights of the shares of such series of Preferred Stock so as to affect
them adversely. If any proposed amendment would alter or change the powers,
preferences, or special rights of one or more series of Preferred Stock so as to
affect them adversely, but shall not so affect the entire series, then only the
shares of the series so affected by the amendment shall be considered a
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separate series for purposes of this paragraph. The number of authorized shares
of any such series of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the stock of CNAF entitled to vote irrespective of
the previous two sentences, if so provided in the Certificate of Incorporation,
in any amendment thereto which created such series of Preferred Stock, or in any
amendment thereto which was authorized by a resolution or resolutions adopted by
the affirmative vote of the holders of a majority of such series of Preferred
Stock. This paragraph is subject to any amendments to Delaware law regarding
these matters.
The foregoing voting provisions will not apply if, in connection with the
matters specified, provision is made for the redemption or retirement of all
outstanding Preferred Stock.
LIQUIDATION RIGHTS
Upon any liquidation, dissolution or winding up of CNAF, whether voluntary
or involuntary, holders of Preferred Stock will have such preferences and
priorities, if any, with respect to distribution of the assets of CNAF or the
proceeds thereof as may be set forth in the applicable prospectus supplement
relating to a series of Preferred Stock.
MISCELLANEOUS
The transfer agent, dividend disbursing agent and registrar for the
Preferred Stock issued in connection with this prospectus will be as described
in the applicable prospectus supplement. The holders of Preferred Stock,
including any Preferred Stock issued in connection with this prospectus, will
not have any preemptive rights to purchase or subscribe for any shares of any
class or other securities of any type of CNAF. When issued, the Preferred Stock
will be fully paid and nonassessable. The Certificate of Designations setting
forth the provisions of each series of Preferred Stock will become effective
after the date of this prospectus, but on or before issuance of the related
series of Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any prospectus supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts summarizes the material terms of the Deposit
Agreement and of the Depositary Shares and Depositary Receipts, and is qualified
in its entirety by reference to, the form of Deposit Agreement and form of
Depositary Receipts relating to each series of the Preferred Stock.
GENERAL
CNAF may, at its option, elect to have shares of Preferred Stock be
represented by Depositary Shares. The shares of any series of the Preferred
Stock underlying the Depositary Shares will be deposited under a separate
deposit agreement (the "Deposit Agreement") between CNAF and a bank or trust
company selected by CNAF (the "Preferred Stock Depositary"). The prospectus
supplement relating to a series of Depositary Shares will set forth the name and
address of the Preferred Stock Depositary. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, proportionately,
to all the rights, preferences and privileges of the Preferred Stock represented
thereby (including dividend, voting, redemption, conversion, exchange and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the Preferred Stock
described in the applicable prospectus supplement.
A holder of Depositary Shares will be entitled to receive the shares of
Preferred Stock (but only in whole shares of Preferred Stock) underlying such
Depositary Shares. If the Depositary
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Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the whole number of shares of Preferred Stock to be withdrawn, the
Depositary will deliver to such holder at the same time a new Depositary Receipt
evidencing such excess number of Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions in respect to the Preferred Stock to the record holders of
Depositary Receipts in proportion, insofar as possible, to the number of
Depositary Shares owned by such holders.
In the event of a distribution other than in cash in respect to the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines that it is not feasible to make
such distribution, in which case the Preferred Stock Depositary may, with the
approval of CNAF, adopt such method as it deems equitable and practicable for
the purpose of effecting such distribution, including sale (at public or private
sale) of such property and distribution of the net proceeds from such sale to
such holders.
The amount so distributed in any of the foregoing cases will be reduced by
any amount required to be withheld by CNAF or the Preferred Stock Depositary on
account of taxes.
CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the prospectus
supplement relating thereto, each record holder of Depositary Shares will have
the right or obligation to convert or exchange such Depositary Shares pursuant
to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of the Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the aggregate redemption
price payable with respect to the number of shares of Preferred Stock underlying
the Depositary Shares. Whenever CNAF redeems Preferred Stock from the Preferred
Stock Depositary, the Preferred Stock Depositary will redeem as of the same
redemption date a proportionate number of Depositary Shares representing the
shares of Preferred Stock that were redeemed. If less than all the Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed will be selected
by lot or pro rata as may be determined by CNAF.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by CNAF with the
Preferred Stock Depositary for any Depositary Shares which the holders thereof
fail to redeem shall be returned to CNAF after a period of two years from the
date such funds are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice to
the record holders of the Depositary Receipts. Each record holder of such
Depositary Receipts on the record date (which will be the same date as
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the record date for the Preferred Stock) will be entitled to instruct the
Preferred Stock Depositary as to the exercise of the voting rights pertaining to
the number of shares of Preferred Stock underlying such holder's Depositary
Shares. The Preferred Stock Depositary will endeavor, insofar as practicable, to
vote the number of shares of Preferred Stock underlying such Depositary Shares
in accordance with such instructions, and CNAF will agree to take all reasonable
action which may be deemed necessary by the Preferred Stock Depositary to enable
the Preferred Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting the Preferred Stock to the extent it does not receive
specific written instructions from holders of Depositary Receipts representing
such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred Stock,
or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of or any
election on the part of CNAF to call for the redemption of any Preferred Stock,
the Preferred Stock Depositary shall, in each such instance, fix a record date
(which shall be the same as the record date for the Preferred Stock) for the
determination of the holders of Depositary Receipts (y) who shall be entitled to
receive such dividend, distribution, rights, preferences or privileges or the
net proceeds of the sale thereof or (z) who shall be entitled to give
instructions for the exercise of voting rights at any such meeting or to receive
notice of such meeting or of such redemption or conversion, subject to the
provisions of the Deposit Agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Deposit Agreement
may at any time be amended by agreement between CNAF and the Preferred Stock
Depositary. However, any amendment which imposes or increases any fees, taxes or
other charges payable by the holders of Depositary Receipts (other than taxes
and other governmental charges, fees and other expenses payable by such holders
as stated under "Charges of Preferred Stock Depositary"), or which otherwise
prejudices any substantial existing right of holders of Depositary Receipts,
will not take effect as to outstanding Depositary Receipts until the expiration
of 90 days after notice of such amendment has been mailed to the record holders
of outstanding Depositary Receipts.
Whenever so directed by CNAF, the Preferred Stock Depositary will terminate
the Deposit Agreement by mailing notice of such termination to the record
holders of all Depositary Receipts then outstanding at least 30 days prior to
the date fixed in such notice for such termination. The Preferred Stock
Depositary may likewise terminate the Deposit Agreement if at any time 45 days
shall have expired after the Preferred Stock Depositary shall have delivered to
CNAF a written notice of its election to resign and a successor depositary shall
not have been appointed and accepted its appointment. If any Depositary Receipts
remain outstanding after the date of termination, the Preferred Stock Depositary
thereafter will discontinue the transfer of Depositary Receipts, will suspend
the distribution of dividends to the holders thereof, and will not give any
further notices (other than notice of such termination) or perform any further
acts under the Deposit Agreement except as provided below and except that the
Preferred Stock Depositary will continue (i) to collect dividends on the
Preferred Stock and any other distributions with respect thereto and (ii) to
deliver the Preferred Stock together with such dividends and distributions and
the net proceeds of any sales of rights, preferences, privileges or other
property, without liability for interest thereon, in exchange for Depositary
Receipts surrendered. At any time after the expiration of two years from the
date of termination, the Preferred Stock Depositary may sell the Preferred Stock
then held by it at public or private sales, at such place or places and upon
such terms as it deems proper and may thereafter hold the net proceeds of any
such sale, together
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with any money and other property then held by it, without liability for
interest thereon, for the pro rata benefit of the holders of Depositary Receipts
which have not been surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
CNAF will pay all charges of the Preferred Stock Depositary including
charges in connection with the initial deposit of the Preferred Stock, the
initial issuance of the Depositary Receipts, the distribution of information to
the holders of Depositary Receipts with respect to matters on which Preferred
Stock is entitled to vote, withdrawals of the Preferred Stock by the holders of
Depositary Receipts or redemption or conversion of the Preferred Stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be at
the expense of holders of Depositary Receipts or persons depositing Preferred
Stock.
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by
holders of Depositary Receipts at its corporate office and its New York office
all reports and communications from CNAF which are delivered to the Preferred
Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor CNAF will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Preferred
Stock Depositary under the Deposit Agreement are limited to performing its
duties thereunder without negligence or bad faith. The obligations of CNAF under
the Deposit Agreement are limited to performing its duties thereunder in good
faith. Neither CNAF nor the Preferred Stock Depositary is obligated to prosecute
or defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. CNAF and the Preferred Stock
Depositary are entitled to rely upon advice of or information from counsel,
accountants or other persons believed to be competent and on documents believed
to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by
CNAF, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been appointed
or accepted such appointment within 45 days after the Preferred Stock Depositary
has delivered a notice of election to resign to CNAF, the Preferred Stock
Depositary may terminate the Deposit Agreement. See "Amendment and Termination
of Deposit Agreement" above.
DESCRIPTION OF WARRANTS
GENERAL
CNAF may issue Warrants to purchase Debt Securities, Junior Debt
Securities, Preferred Stock (or Depositary Shares representing Preferred Stock)
or Common Stock (collectively, the "Underlying Warrant Securities"), and such
Warrants may be issued independently or together with any such Underlying
Warrant Securities and may be attached to or separate from such Underlying
Warrant Securities. Each series of Warrants will be issued under a separate
warrant agreement (each a "Warrant Agreement") to be entered into between CNAF
and a warrant agent ("Warrant Agent"). The Warrant Agent will act solely as an
agent of CNAF in connection with the Warrants of such series and will not assume
any obligation or relationship of agency for or with holders or beneficial
owners of Warrants. The following describes certain general terms and provisions
of the offered Warrants hereby. Further terms of the Warrants and the applicable
Warrant Agreement will be described in the applicable prospectus supplement.
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The applicable prospectus supplement will describe the specific terms of
any Warrants for which this Prospectus is being delivered, including the
following:
- the title of such Warrants;
- the aggregate number of such Warrants;
- the issue price or prices of the Warrants;
- the currency or currencies, including composite currencies, in which the
price of such Warrants may be payable;
- the designation and terms of the Underlying Warrant Securities
purchasable upon exercise of such Warrants;
- the price at which and the currency or currencies, including composite
currencies, in which the Underlying Warrant Securities purchasable upon
exercise of such Warrants may be purchased;
- the exercise date and expiration date for such Warrants;
- whether such Warrants will be issued in registered form or bearer form;
- if applicable, the minimum or maximum amount of such Warrants which may
be exercised at any one time;
- if applicable, the designation and terms of the Underlying Warrant
Securities with which such Warrants are issued and the number of such
Warrants issued with each such Underlying Warrant Security;
- if applicable, the date on and after which such Warrants and the related
Underlying Warrant Securities will be traded separately;
- information with respect to book-entry procedures, if any;
- if applicable, a discussion of certain United States federal income tax
considerations; and
- any other terms of such Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Warrants.
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each CNA Capital Trust,
the Issuer Trustee on behalf of such CNA Capital Trust will issue the Preferred
Securities and the Common Securities (collectively, "Trust Securities"). The
Preferred Securities of a particular issue will represent preferred beneficial
interests in the CNA Capital Trust and the holders thereof will be entitled to a
preference over the Common Securities of such CNA Capital Trust in certain
circumstances with respect to distributions and amounts payable on redemption or
liquidation over the Common Securities of such CNA Capital Trust, as well as
other benefits as described in the corresponding Trust Agreement. Because the
description below is only a summary, it does not contain the detailed
information contained in each Trust Agreement, including certain of the
definitions used in this prospectus or in the Trust Indenture Act. The form of
the Trust Agreement has been filed as an exhibit to the Registration Statement
of which this Prospectus forms a part. Each of the CNA Capital Trusts is a
legally separate entity and the assets of one are not available to satisfy the
obligations of any of the others.
GENERAL
The Preferred Securities of a CNA Capital Trust will rank equal with, and
payments will be made thereon in proportion with, the Common Securities of that
CNA Capital Trust except as
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described under "--Subordination of Common Securities." Legal title to the
Corresponding Junior Debt Securities will be held by the Property Trustee in
trust for the benefit of the holders of the related Preferred Securities and
Common Securities. Each Guarantee Agreement executed by CNAF for the benefit of
the holders of a CNA Capital Trust's Preferred Securities (the "Guarantee" for
such Preferred Securities) will be a guarantee on a subordinated basis with
respect to the related Preferred Securities but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Preferred
Securities when the related CNA Capital Trust does not have funds on hand
available to make such payments. See "Description of Guarantees."
The revenue of a CNA Capital Trust available for distribution to holders of
Preferred Securities will be limited to payments under the corresponding Junior
Debt Securities which such CNA Capital Trust purchased with the proceeds from
the sale of its Common Securities and Preferred Securities. If CNAF fails to
make a required payment in respect of such Junior Debt Securities, the
applicable CNA Capital Trust will not have sufficient funds to make the related
payments, including distributions in respect of its Preferred Securities.
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable prospectus supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), unless otherwise specified in the applicable prospectus
supplement, payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect to any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed.
Each CNA Capital Trust's Preferred Securities represent preferred
beneficial interests in the applicable CNA Capital Trust, and the Distributions
on each Preferred Security will be payable at a rate specified in the prospectus
supplement for such Preferred Securities. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months unless otherwise specified in the applicable prospectus supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional Distributions at the rate per annum if and as specified in
the applicable prospectus supplement. The term "Distributions" as used herein
includes any such additional Distributions unless otherwise stated.
If provided in the applicable prospectus supplement, CNAF has the right
under the Indenture, pursuant to which it will issue the Corresponding Junior
Debt Securities, to defer the payment of interest at any time or from time to
time on any series of the Corresponding Junior Debt Securities for a period
which will be specified in such prospectus supplement relating to such series
(each, an "Extension Period"), provided that no Extension Period may extend
beyond the stated maturity of the Corresponding Junior Debt Securities. Because
of any such extension, Distributions on the corresponding Preferred Securities
would be deferred (but would continue to accumulate additional Distributions
thereon at the rate per annum described in the prospectus supplement for such
Preferred Securities) by the CNA Capital Trust which issued such Preferred
Securities during any such Extension Period. During such Extension Period CNAF
may not, and may not permit any subsidiary of CNAF to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of CNAF's capital stock or (ii) make
any payment of principal, interest or premium, if any, on or repay,
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repurchase or redeem any debt securities of CNAF that rank pari passu with or
junior in interest to the Corresponding Junior Debt Securities or (iii) make any
guarantee payments with respect to any guarantee by CNAF of debt securities of
any subsidiary of CNAF if such guarantee ranks pari passu with or junior in
interest to the Corresponding Junior Debt Securities (other than (a) dividends
or distributions in common stock of CNAF, (b) payments under any Guarantee and
(c) purchases of common stock related to the issuance of common stock under any
of CNAF's benefit plans for its directors, officers or employees).
The revenue of each CNA Capital Trust available for distribution to holders
of its Preferred Securities will be limited to payments under the Corresponding
Junior Debt Securities in which the CNA Capital Trust will invest the proceeds
from the issuance and sale of its Trust Securities. See "Description of Junior
Debt Securities--Corresponding Junior Debt Securities." If CNAF does not make
interest payments on such Corresponding Junior Debt Securities, the Property
Trustee will not have funds available to pay Distributions on the Related
Preferred Securities. The payment of Distributions (if and to the extent the CNA
Capital Trust has funds legally available for the payment of such Distributions
and cash sufficient to make such payments) is guaranteed by CNAF to the extent
set forth herein under "Description of Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such CNA Capital Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
form, will be one Business Day prior to the relevant distribution date. If any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be the date at least 15 days prior to the
relevant Distribution Date, as specified in the applicable prospectus
supplement.
REDEMPTION OR EXCHANGE
Mandatory Redemption.
Upon the repayment or redemption, in whole or in part, of any Corresponding
Junior Debt Securities, whether at maturity or upon earlier redemption as
provided in the Junior Indenture, the proceeds from such repayment or redemption
shall be applied by the Property Trustee to redeem a Like Amount (as defined
below) of the Common Securities and Preferred Securities of the CNA Capital
Trust, upon not less than 30 nor more than 60 days' notice, at a redemption
price (the "Redemption Price") equal to the aggregate liquidation amount of such
Common Securities and Preferred Securities plus accumulated but unpaid
Distributions thereon to the date of redemption (the "Redemption Date") and the
related amount of the premium, if any, paid by CNAF upon the concurrent
redemption of such Corresponding Junior Debt Securities. See "Description of
Junior Debt Securities--Redemption." If less than all of any series of
Corresponding Junior Debt Securities are to be repaid or redeemed on a
Redemption Date, then unless there is a Junior Debt Related Event of Default
then continuing, the proceeds from such repayment or redemption shall be
allocated to the redemption pro rata of the related Preferred Securities and the
Common Securities. The amount of premium, if any, paid by CNAF upon the
redemption of all or any part of any series of any Corresponding Junior Debt
Securities to be repaid or redeemed on a Redemption Date shall be allocated to
the redemption pro rata of the related Preferred Securities and the Common
Securities unless there is a Junior Debt Related Event of Default then
continuing.
Special Event Redemption or Distribution of Corresponding Junior Debt
Securities.
If a Special Event in respect of a series of Preferred Securities and
Common Securities shall occur and be continuing, CNAF has the right to redeem
the Corresponding Junior Debt Securities in whole (but not in part) and thereby
cause a mandatory redemption of such Preferred Securities and Common Securities
in whole (but not in part) at the Redemption Price within 90 days following the
occurrence of such Special Event. At any time (so long as it would not be
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a taxable event to the holders of Preferred Securities under federal law), CNAF
has the right to terminate the related CNA Capital Trust and, after satisfaction
of the liabilities of creditors of such CNA Capital Trust as provided by
applicable law, cause such Corresponding Junior Debt Securities to be
distributed to the holders of such Preferred Securities and Common Securities in
liquidation of the CNA Capital Trust. If CNAF does not elect either option
described above, the applicable series of Preferred Securities will remain
outstanding and, in the event a Tax Event has occurred and is continuing,
Additional Sums (as defined below) may be payable on the Corresponding Junior
Debt Securities.
Extension of Maturity of Corresponding Junior Debt Securities.
If provided in the applicable prospectus supplement, CNAF shall have the
right to extend or shorten the maturity of any series of Corresponding Junior
Debt Securities at the time that CNAF exercises its right to elect to terminate
the related CNA Capital Trust and cause such Corresponding Junior Debt
Securities to be distributed to the holders of such Preferred Securities and
Common Securities in liquidation of the CNA Capital Trust, provided that it can
extend the maturity only if certain conditions specified in the applicable
prospectus supplement are met at the time such election is made and at the time
of such extension.
"Additional Sums" means the additional amounts as may be necessary so that
the amount of Distributions then due and payable by a CNA Capital Trust on the
outstanding Preferred Securities and Common Securities of the CNA Capital Trust
shall not be reduced as a result of any additional taxes, duties and other
governmental charges to which such CNA Capital Trust has become subject as a
result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of any series of
Common Securities or Preferred Securities, securities of such series having a
liquidation amount equal to that portion of the principal amount of
Corresponding Junior Debt Securities to be contemporaneously redeemed in
accordance with the Junior Indenture, allocated to the Common Securities and to
the Preferred Securities based upon the relative Liquidation Amounts of such
classes and the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, and (ii) with respect to a distribution of Corresponding
Junior Debt Securities to holders of any series of Trust Securities in
connection with a dissolution or liquidation of the related CNA Capital Trust,
Corresponding Junior Debt Securities having a principal amount equal to the
liquidation amount of the Trust Securities of the holder to whom such
Corresponding Junior Debt Securities are distributed.
After the liquidation date fixed for any distribution of Corresponding
Junior Debt Securities for any series of Preferred Securities (i) such series of
Preferred Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company ("DTC") or its nominee, if the record holder of any
series of Preferred Securities, will receive a registered global certificate or
certificates representing the Corresponding Junior Debt Securities to be
delivered upon such distribution and (iii) any certificates representing such
series of Preferred Securities not held by DTC or its nominee will be deemed to
represent the Corresponding Junior Debt Securities having a principal amount
equal to the liquidation amount of such series of Preferred Securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such series of Preferred Securities until such certificates are
presented to the Administrative Trustees or their agent for transfer or
reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Debt Securities that may be distributed
in exchange for Preferred Securities if a dissolution and liquidation of a CNA
Capital Trust were to occur. Accordingly, the Preferred Securities that an
investor may purchase, or the Corresponding Junior Debt Securities that the
investor may receive on dissolution and liquidation of a CNA Capital Trust, may
trade at a different price from the purchase price for those Preferred
Securities.
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REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Debt Securities. Redemptions of the
Preferred Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the related CNA Capital Trust has
funds on hand available for the payment of such Redemption Price. See also
"--Subordination of Common Securities."
If a CNA Capital Trust gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are legally available, with respect to any Preferred
Securities held by DTC or its nominee, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
to the holders of such Preferred Securities. If such Preferred Securities are
not in book-entry form, the Property Trustee, to the extent funds are legally
available, will irrevocably deposit with the paying agent for such Preferred
Securities funds sufficient to pay the applicable Redemption Price and will give
such paying agent irrevocable instructions and authority to pay the Redemption
Price to the holders thereof upon surrender of their certificates evidencing
such Preferred Securities. Notwithstanding the foregoing, distributions payable
on or prior to the Redemption Date for any Preferred Securities called for
redemption shall be payable to the holders of such Preferred Securities on the
relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of the holders of such Preferred Securities so
called for redemption will cease, except the right of the holders of such
Preferred Securities to receive the Redemption Price, but without interest on
such Redemption Price, and such Preferred Securities will cease to be
outstanding. In the event that any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by the CNA Capital Trust or
by CNAF pursuant to the Guarantee as described under "Description of
Guarantees", distributions on such Preferred Securities will continue to accrue
at the then applicable rate, from the Redemption Date originally established by
the CNA Capital Trust for such Preferred Securities to the date such Redemption
Price is actually paid, in which case the actual payment date will be the date
fixed for redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), CNAF or its subsidiaries may at any time and from time
to time purchase outstanding Preferred Securities by tender, in the open market
or by private agreement.
If less than all of the Preferred Securities and Common Securities issued
by a CNAF Capital Trust are to be redeemed on a Redemption Date, then a Like
Amount of such Preferred Securities and Common Securities shall be redeemed. The
particular Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to the minimum
liquidation amount or an integral multiple in excess thereof) of the liquidation
amount of Preferred Securities of a larger denomination. The Property Trustee
shall promptly notify the trust registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the liquidation amount thereof to be redeemed. For all
purposes of each Trust Agreement, unless the context otherwise requires, all
provisions relating
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to the redemption of Preferred Securities shall relate, in the case of any
Preferred Securities redeemed or to be redeemed only in part, to the portion of
the aggregate liquidation amount of Preferred Securities which has been or is to
be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, the Redemption Price of, and the Liquidation
Distribution (as defined below) applicable to, each CNA Capital Trust's
Preferred Securities and Common Securities, as applicable, shall be made
proportionately based on the liquidation amount of such Preferred Securities and
Common Securities; provided, however, that if on any Distribution Date,
Redemption Date or liquidation date a Junior Debt Related Event of Default shall
have occurred and be continuing, no payment of any Distribution on, Redemption
Price of, or Liquidation Distribution applicable to any of the CNA Capital
Trust's Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all of
the CNA Capital Trust's outstanding Preferred Securities for all Distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price or Liquidation Distribution the full amount of such payment in
respect of all of the CNA Capital Trust's outstanding Preferred Securities,
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, Redemption Price of, or Liquidation Distribution applicable to
the CNA Capital Trust's Preferred Securities then due and payable.
In the case of a Junior Debt Related Event of Default, CNAF as holder of
such CNA Capital Trust's Common Securities will be deemed to have waived any
right to act with respect to any such Junior Debt Related Event of Default under
the applicable Trust Agreement until the effect of all such Junior Debt Related
Events of Default with respect to such Preferred Securities have been cured,
waived or otherwise eliminated. Until any such events of default under the
applicable Trust Agreement with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the holders of such Preferred Securities and not on behalf of CNAF as
holder of the CNA Capital Trust's Common Securities, and only the holders of
such Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each CNA Capital Trust shall
automatically terminate upon expiration of its term and shall terminate on the
first to occur of:
- certain events of bankruptcy, dissolution or liquidation of CNAF (a
"Bankruptcy Event");
- the distribution of a Like Amount of the Corresponding Junior Debt
Securities to the holders of its Trust Securities, if CNAF, as Depositor,
has given written direction to the Property Trustee to terminate such CNA
Capital Trust (which direction is optional and wholly within the
discretion of CNAF, as Depositor) and such distribution would not result
in a federal taxable event to holders of the Preferred Securities (a
"Distribution Event");
- the redemption of all of the CNA Capital Trust's Trust Securities
following a Special Event;
- redemption of all of the CNA Capital Trust's Preferred Securities as
described under "Description of Preferred Securities--Redemption or
Exchange--Mandatory Redemption"; and
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- the entry of an order for the dissolution of the CNA Capital Trust by a
court of competent jurisdiction (a "Dissolution Event").
If an early termination occurs from a Bankruptcy Event, a Distribution
Event or a Dissolution Event, the CNA Capital Trust shall be liquidated by the
Issuer Trustees as expeditiously as the Issuer Trustees determine to be possible
by distributing, after satisfaction of liabilities to creditors of such CNA
Capital Trust as provided by applicable law, to the holders of such Trust
Securities a Like Amount of the Corresponding Junior Debt Securities, unless
such distribution is determined by the Property Trustee not to be practical, in
which event such holders will be entitled to receive out of the assets of the
CNA Capital Trust available for distribution to holders, after satisfaction of
liabilities to creditors of such CNA Capital Trust as provided by applicable
law, an amount equal to, in the case of holders of Preferred Securities, the
aggregate of the liquidation amount plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such CNA Capital Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by
such CNA Capital Trust on its Preferred Securities shall be paid on a pro rata
basis. The holder(s) of such CNA Capital Trust's Common Securities will be
entitled to receive distributions upon any such liquidation pro rata with the
holders of its Preferred Securities, except that if a Junior Debt Related Event
of Default has occurred and is continuing, the Preferred Securities shall have a
priority over the Common Securities. A supplemental Indenture may provide that
if an early termination occurs as described in the fifth bullet point above, the
Corresponding Junior Debt Securities may be subject to optional redemption in
whole (but not in part).
EVENTS OF DEFAULT; NOTICE
A Junior Debt Related Event of Default under the Junior Indenture (see
"Description of Junior Debt Securities--Junior Debt Related Events of Default")
will constitute an event of default with respect to the Preferred Securities.
Within five Business Days after the occurrence of any Junior Debt Related
Event of Default actually known to the Property Trustee, the Property Trustee
shall transmit notice of such Event of Default to the holders of such CNA
Capital Trust's Preferred Securities, the Administrative Trustees and CNAF, as
Depositor, unless such Event of Default shall have been cured or waived. CNAF,
as Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under each Trust
Agreement.
If a Junior Debt Related Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities as
described above under "--Subordination of Common Securities."
Upon certain Junior Debt Related Events of Default, the holders of
Preferred Securities may have the right to bring a Direct Action. See
"Description of Junior Debt Securities--Enforcement of Certain Rights by Holders
of Preferred Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Junior Debt Related Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the holder of the
Common Securities. If a Junior Debt Related Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in liquidation amount of the outstanding
Preferred Securities. In no event will the holders of the Preferred Securities
have the right to vote to appoint, remove or replace the Administrative
Trustees, which voting rights are vested exclusively in CNAF as the holder of
the Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until
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the acceptance of appointment by the successor trustee in accordance with the
provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless a Trust Related Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, CNAF, as the holder of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a Junior
Debt Related Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under
each Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE CNA CAPITAL TRUSTS
A CNA Capital Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below. A CNA Capital Trust may, at the request of CNAF, with
the consent of the Administrative Trustees and without the consent of the
holders of the Preferred Securities, merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to a trust organized as
such under the laws of any state; provided, that:
- such successor entity either (a) expressly assumes all of the obligations
of such CNA Capital Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise;
- CNAF expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the
Corresponding Junior Debt Securities;
- the Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange
or other organization on which the Preferred Securities are then listed,
if any;
- such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
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- such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect;
- such successor entity has a purpose identical to that of the CNA Capital
Trust;
- prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, CNAF has received an opinion from
independent counsel to the CNA Capital Trust experienced in such matters
to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect,
(b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the CNA Capital Trust nor such
successor entity will be required to register as an investment company
under the Investment Company Act and (c) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Trust (or any successor entity) will continue to be classified as a
grantor trust for United States federal income tax purposes; and
- CNAF or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the
extent provided by the Guarantee.
Notwithstanding the foregoing, a CNA Capital Trust shall not, except with
the consent of holders of 100% in Liquidation Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the CNA Capital Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by CNAF, the Property
Trustee and the Administrative Trustees, without the consent of the holders of
the Preferred Securities (i) to cure any ambiguity, correct or supplement any
provisions in such Trust Agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under such Trust Agreement, which shall not be inconsistent with the
other provisions of such Trust Agreement, or (ii) to modify, eliminate or add to
any provisions of such Trust Agreement to such extent as shall be necessary to
ensure that the CNA Capital Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the CNA Capital Trust will not be required to
register as an "investment company" under the Investment Company Act; provided,
however, that such action shall not adversely affect in any material respect the
interests of any holder of Trust Securities, and any amendments of such Trust
Agreement shall become effective when notice thereof is given to the holders of
Trust Securities. Each Trust Agreement may be amended by the Issuer Trustees and
CNAF with (i) the consent of holders representing a majority (based upon
liquidation amounts) of the outstanding Preferred Securities, and (ii) receipt
by the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the CNA Capital Trust's status as
a grantor trust for United States
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federal income tax purposes or the CNA Capital Trust's exemption from status as
an "investment company" under the Investment Company Act, provided that without
the consent of each holder of Trust Securities, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date, (ii)
change any redemption, conversion or exchange provisions of the Trust
Securities, (iii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date,
(iv) change the purpose of the CNA Capital Trust, (v) authorize or issue any
beneficial interest in the CNA Capital Trust other than the contemplated Trust
Securities, (vi) change the conditions precedent for CNAF to elect to dissolve
the CNA Capital Trust and distribute the Corresponding Junior Debt Securities or
(vii) affect the limited liability of any holder of Preferred Securities.
So long as any Corresponding Junior Debt Securities are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Junior
Indenture Trustee, or executing any trust or power conferred on the Property
Trustee with respect to such Corresponding Junior Debt Securities, (ii) waive
any past default that is waivable under the Junior Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Junior
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Junior Indenture or such Corresponding Junior
Debt Securities where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
liquidation amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Junior Indenture would require the consent of
each holder of Corresponding Junior Debt Securities affected thereby, no such
consent shall be given by the Property Trustee without the prior consent of each
holder of the Related Preferred Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Preferred Securities except by subsequent vote of the holders of the Preferred
Securities. The Property Trustee shall notify each holder of Preferred
Securities of any notice of default with respect to the Corresponding Junior
Debt Securities. In addition to obtaining the foregoing approvals of the holders
of the Preferred Securities, prior to taking any of the foregoing actions, the
Issuer Trustees shall obtain an opinion of counsel experienced in such matters
to the effect that the CNA Capital Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in each
Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for a CNA Capital Trust to redeem and cancel its Preferred Securities in
accordance with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by CNAF, the Issuer Trustees or any affiliate of CNAF
or any Issuer Trustees shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited with,
or on behalf of, the Depositary
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identified in the applicable prospectus supplement. Unless otherwise indicated
in the prospectus supplement for such series, the Depositary will be DTC. Global
Preferred Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Preferred Securities represented thereby, a Global
Preferred Security may not be transferred except as a whole by the Depositary
for such Global Preferred Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Preferred Securities will be described in the applicable prospectus
supplement. CNAF anticipates that the following provisions will generally apply
to depositary arrangements.
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate liquidation amounts
of the individual Preferred Securities represented by such Global Preferred
Securities to the accounts of Participants. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Preferred Securities or
by CNAF if such Preferred Securities are offered and sold directly by CNAF.
Ownership of beneficial interests in a Global Preferred Security will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Preferred Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depositary or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Preferred Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Preferred Securities represented by such Global Preferred Security for all
purposes under the Indenture governing such Preferred Securities. Except as
provided below, owners of beneficial interests in a Global Preferred Security
will not be entitled to have any of the individual Preferred Securities of the
series represented by such Global Preferred Security registered in their names,
will not receive or be entitled to receive physical delivery of any such
Preferred Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Payments of Distributions, Redemption Price and Liquidation Distributions
in respect of individual Preferred Securities represented by a Global Preferred
Security registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Preferred Security representing such Preferred Securities. None of
CNAF, the Property Trustee, any Paying Agent, or the Securities Registrar for
such Preferred Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
CNAF expects that the Depositary for a series of Preferred Securities or
its nominee, upon receipt of any payment of Distributions, Redemption Price and
Liquidation Distributions in respect of a permanent Global Preferred Security
representing any of such Preferred Securities, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security for such Preferred Securities as shown on the records
of such Depositary or its
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nominee. CNAF also expects that payments by Participants to owners of beneficial
interests in such Global Preferred Security held through such Participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable prospectus supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling, unable
or ineligible to continue as depositary and a successor depositary is not
appointed by CNAF within 90 days, CNAF will issue individual Preferred
Securities of such series in exchange for the Global Preferred Security
representing such series of Preferred Securities. In addition, CNAF may at any
time and in its sole discretion, subject to any limitations described in the
prospectus supplement relating to such Preferred Securities, determine not to
have any Preferred Securities of such series represented by one or more Global
Preferred Securities and, in such event, will issue individual Preferred
Securities of such series in exchange for the Global Preferred Security or
Securities representing such series of Preferred Securities. Further, if CNAF so
specifies with respect to the Preferred Securities of a series, an owner of a
beneficial interest in a Global Preferred Security representing Preferred
Securities of such series may, on terms acceptable to CNAF, the Property Trustee
and the Depositary for such Global Preferred Security, receive individual
Preferred Securities of such series in exchange for such beneficial interests,
subject to any limitations described in the prospectus supplement relating to
such Preferred Securities. In any such instance, an owner of a beneficial
interest in a Global Preferred Security will be entitled to physical delivery of
individual Preferred Securities of the series represented by such Global
Preferred Security equal in principal amount to such beneficial interest and to
have such Preferred Securities registered in its name.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any CNA Capital Trust's Preferred
Securities are not held by the Depositary, such payments shall be made by check
mailed to the address of the holder entitled thereto as such address shall
appear on the Register. Unless otherwise specified in the applicable prospectus
supplement, the paying agent (the "Paying Agent") shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and CNAF. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and CNAF. In the event that the Property Trustee shall no longer be the
Paying Agent, the Administrative Trustees shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrative Trustees and CNAF)
to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable prospectus supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each CNA Capital Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The CNA Capital Trusts will not be required to register or cause to
be registered the transfer of their Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of a
Trust Related Event of Default, undertakes to perform only such duties as are
specifically set forth in each Trust Agreement and, after such Junior Debt
Related Event of Default, must exercise the same
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degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
applicable Trust Agreement at the request of any holder of Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Junior Debt Related Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by CNAF and if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the CNA Capital Trust's Common Securities and Preferred
Securities and will have no liability except for its own bad faith, negligence
or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the CNA Capital Trusts in such a way that no CNA
Capital Trust will be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association
taxable as a corporation for United States federal income tax purposes and so
that the Corresponding Subordinated Debt Securities will be treated as
indebtedness of CNAF for United States federal income tax purposes. In this
connection, CNAF and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of each
CNA Capital Trust or each Trust Agreement, that CNAF and the Administrative
Trustees determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No CNA Capital Trust may borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by CNAF concurrently with the
issuance by each CNA Capital Trust of its Preferred Securities for the benefit
of the holders from time to time of such Preferred Securities. The First
National Bank of Chicago will act as indenture trustee ("Guarantee Trustee")
under each Guarantee for the purposes of compliance with the Trust Indenture Act
and each Guarantee will be qualified as an indenture under the Trust Indenture
Act. The form of the Guarantee has been included as an exhibit to the
Registration Statement.
The following description summarizes the material terms of the Guarantees.
This summary is qualified in its entirety by reference to the detailed
provisions of the Guarantees, including the definitions of certain terms used in
the description of the Guarantees in this prospectus, and those terms made a
part of each of the Guarantees by the Trust Indenture Act. Reference in this
summary to Preferred Securities means that CNA Capital Trust's Preferred
Securities to which a Guarantee relates. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the related CNA Capital Trust's
Preferred Securities.
GENERAL
CNAF will irrevocably agree to pay in full on a subordinated basis, to the
extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such CNA Capital
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Trust may have or assert other than the defense of payment. The following
payments with respect to the Preferred Securities, to the extent not paid by or
on behalf of the related CNA Capital Trust (the "Guarantee Payments"), will be
subject to the Guarantee: (i) any accumulated and unpaid Distributions required
to be paid on such Preferred Securities, to the extent that such CNA Capital
Trust has funds on hand available therefor at such time, (ii) the Redemption
Price with respect to any Preferred Securities called for redemption, to the
extent that such CNA Capital Trust has funds on hand available therefor at such
time, or (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of such CNA Capital Trust (unless the Corresponding Junior Debt
Securities are distributed to holders of such Preferred Securities), the lesser
of (a) the Liquidation Distribution and (b) the amount of assets of such CNA
Capital Trust remaining available for distribution to holders of Preferred
Securities after satisfaction of liabilities to creditors of such CNA Capital
Trust as required by applicable law (in either case, the "Liquidation
Distribution"). CNAF's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by CNAF to the holders of the
applicable Preferred Securities or by causing the CNA Capital Trust to pay such
amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related CNA Capital Trust's obligations under the Preferred Securities, but
will apply only to the extent that such related CNA Capital Trust has funds
sufficient to make such payments, and is not a guarantee of collection.
If CNAF does not make required payments on the Corresponding Junior Debt
Securities held by the CNA Capital Trust, the CNA Capital Trust will not have
funds legally available and will not be able to pay the related amounts in
respect of the Preferred Securities. Each Guarantee will rank subordinate and
junior in right of payment to all Senior Debt of CNAF. See "--Status of the
Guarantees." Except as otherwise provided in the applicable prospectus
supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of CNAF, whether under the Indentures, the Junior
Indenture, any other indenture that CNAF may enter into in the future or
otherwise. See the prospectus supplement relating to any offering of Preferred
Securities.
CNAF's obligations described herein and in any accompanying prospectus
supplement, through the applicable Guarantee, the applicable Trust Agreement,
the Junior Debt Securities, the Junior Indenture and any supplemental indentures
thereto, and the Expense Agreement, taken together, constitute a full,
irrevocable and unconditional guarantee by CNAF of payments due on the Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the CNA Capital Trust's obligations
under the Preferred Securities. See "The CNA Capital Trusts," "Description of
Preferred Securities," and "Description of Subordinated Debt Securities."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of CNAF and will
rank subordinate and junior in right of payment to all Senior Debt.
Each Guarantee will rank equally with all other Guarantees issued by CNAF.
Each Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held for the benefit of the holders of the related Preferred
Securities. Each Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the CNA Capital Trust or
upon distribution to the holders of the Preferred Securities of the
Corresponding Subordinated Debt Securities. None of the Guarantees places a
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limitation on the amount of additional Senior Debt that may be incurred by CNAF.
CNAF expects from time to time to incur additional indebtedness constituting
Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will be
required), no Guarantee may be amended without the prior approval of the holders
of not less than a majority of the aggregate liquidation amount of such
outstanding Preferred Securities. The manner of obtaining any such approval will
be as set forth under "Description of the Preferred Securities--Voting Rights;
Amendment of Each Trust Agreement." All guarantees and agreements contained in
each Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of CNAF and shall inure to the benefit of the holders of the
related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
CNAF to perform any of its payment or other obligations thereunder. The holders
of not less than a majority in aggregate liquidation amount of the Preferred
Securities 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 such
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against CNAF to enforce its rights under such Guarantee without first
instituting a legal proceeding against the CNA Capital Trust, the Guarantee
Trustee or any other person or entity.
CNAF, as guarantor, is required to file annually with the Guarantee Trustee
a certificate as to whether or not CNAF is in compliance with all the conditions
and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by CNAF in performance of any Guarantee, undertakes to perform only
such duties as are specifically set forth in each Guarantee and, after default
with respect to any Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by any Guarantee at the request of
any holder of any Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Preferred Securities, upon full
payment of the amounts payable upon liquidation of the related CNA Capital Trust
or upon distribution of Corresponding Junior Debt Securities to the holders of
the related Preferred Securities. Each Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any holder of the
related Preferred Securities must restore payment of any sums paid under such
Preferred Securities or such Guarantee.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by CNAF under each Trust
Agreement (the "Expense Agreement"), CNAF will irrevocably and unconditionally
guarantee to each person or
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entity to whom the CNA Capital Trust becomes indebted or liable, the full
payment of any costs, expenses or liabilities of the CNA Capital Trust, other
than obligations of the CNA Capital Trust to pay to the holders of any Preferred
Securities or other similar interests in the CNA Capital Trust of the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be.
DESCRIPTION OF PURCHASE CONTRACTS
AND PURCHASE UNITS
CNAF and/or the CNA Capital Trusts may issue Purchase Contracts,
representing contracts obligating holders to purchase from CNAF and/or the
applicable CNA Capital Trust, and CNAF and/or the applicable CNA Capital Trust
to sell to the holders, a specified quantity of Debt Securities, Junior Debt
Securities Common Stock, Preferred Stock, Depositary Shares, Warrants or
Preferred Securities at a future date or dates. The price of the securities
subject to a Purchase Contract may be fixed at the time the Purchase Contracts
are issued or may be determined by reference to a specific formula set forth in
the Purchase Contracts. The Purchase Contracts may be issued separately or as a
part of units ("Purchase Units") consisting of a Purchase Contract and either
(x) Debt Securities or Junior Debt Securities, (y) debt obligations of third
parties, including U.S. Treasury securities, or (z) Preferred Securities of a
CNA Capital Trust, securing the holder's obligations to purchase the applicable
securities under the Purchase Contracts. The Purchase Contracts may require CNAF
to make periodic payments to the holders of the Purchase Units or vice versa,
and such payments may be unsecured or prefunded on some basis. The Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner and in certain circumstances CNAF may deliver newly issued
prepaid purchase contracts ("Prepaid Securities") upon release to a holder of
any collateral securing such holder's obligations under the original Purchase
Contract.
The applicable prospectus supplement will describe the terms of any
Purchase Contracts or Purchase Units and, if applicable, Prepaid Securities. The
description in the prospectus supplement will not purport to be complete and
will be qualified in its entirety by reference to the Purchase Contracts, the
collateral arrangements and depositary arrangements, if applicable, relating to
such Purchase Contracts or Purchase Units and, if applicable, the Prepaid
Securities and the document pursuant to which such Prepaid Securities will be
issued.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR DEBT SECURITIES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the CNA Capital Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by CNAF as and to the extent set forth
under "Description of Guarantees." Taken together, CNAF's obligations under each
series of Junior Debt Securities, the Junior Indenture, the related Trust
Agreement, the related Expense Agreement, and the related Guarantee provide, in
the aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the related series of Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the CNA Capital Trust's obligations
under the Preferred Securities. If and to the extent that CNAF does not make
payments on any series of Corresponding Junior Debt Securities, such CNA Capital
Trust will not pay Distributions or other amounts due on its Preferred
Securities. The Guarantees do not cover any payment when the
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related CNA Capital Trust does not have sufficient funds therefor. In such
event, the remedy of a holder of a series of Preferred Securities is to
institute a legal proceeding directly against CNAF for enforcement of such
payment to such holder. The obligations of CNAF under each Guarantee are
subordinate and junior in right of payment to all Senior Debt of CNAF.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Debt Securities, such payments will be
sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Debt Securities will be equal to the sum of
the aggregate liquidation amount of the Related Preferred Securities and related
Common Securities; (ii) the interest rate and interest and other payment dates
on each series of Corresponding Junior Debt Securities will match the
Distribution rate and Distribution and other payment dates for the related
Preferred Securities; (iii) CNAF shall pay for all and any costs, expenses and
liabilities of such CNA Capital Trust except the CNA Capital Trust's obligations
to holders of its Preferred Securities under such Preferred Securities; and (iv)
each Trust Agreement further provides that the CNA Capital Trust will not engage
in any activity that is not consistent with the limited purposes of such CNA
Capital Trust.
Notwithstanding anything to the contrary in the Junior Indenture, CNAF has
the right to set-off any payment it is otherwise required to make thereunder to
the extent CNAF has theretofore made, or is concurrently on the date of such
payment making, a payment under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any related Preferred Security may institute a legal proceeding
directly against CNAF to enforce its rights under the related Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, the related
CNA Capital Trust or any other person or entity.
A default or event of default under any Senior Debt of CNAF would not
constitute a default or Event of Default. However, in the event of payment
defaults under, or acceleration of, Senior Debt of CNAF, the subordination
provisions of the Junior Indenture provide that no payments may be made in
respect of the Corresponding Junior Debt Securities until such Senior Debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on any series of Corresponding Junior Debt
Securities would constitute a Junior Debt Related Event of Default and permit
Direct Actions by the holders of Preferred Securities against CNAF to collect
upon the corresponding Junior Debt Securities.
LIMITED PURPOSE OF CNA CAPITAL TRUSTS
Each CNA Capital Trust's Preferred Securities evidence a beneficial
interest in such CNA Capital Trust, and each CNA Capital Trust exists for the
sole purpose of issuing its Preferred Securities and Common Securities and
investing the proceeds thereof in Corresponding Junior Debt Securities. A
principal difference between the rights of a holder of a Preferred Security and
a holder of a Corresponding Junior Debt Security is that a holder of a
Corresponding Junior Debt Security is entitled to receive from CNAF the
principal amount of and interest accrued on Corresponding Junior Debt Securities
held, while a holder of Preferred Securities is entitled to receive payment of
Distributions and the Redemption Price from such CNA Capital Trust (or from CNAF
under the applicable Guarantee) if and to the extent such CNA Capital Trust has
funds available for such payment.
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RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
any CNA Capital Trust involving the liquidation of the Corresponding Junior Debt
Securities, the holders of the related Preferred Securities will be entitled to
receive, out of assets held by such CNA Capital Trust, the Liquidation
Distribution in cash. See "Description of Preferred Securities--Liquidation
Distribution Upon Termination." Upon any voluntary or involuntary liquidation or
bankruptcy of CNAF, the Property Trustee, as holder of the Corresponding Junior
Debt Securities, would be a subordinated creditor of CNAF, subordinated in right
of payment to all Senior Debt, but entitled to receive payment in full of
principal and interest, before any stockholders of CNAF receive payments or
distributions. Since CNAF is the guarantor under each Guarantee and has agreed
to pay for all costs, expenses and liabilities of each CNA Capital Trust (other
than the CNA Capital Trust's obligations to the holders of its Preferred
Securities), the positions of a holder of such Preferred Securities and a holder
of such Corresponding Junior Debt Securities relative to other creditors and to
stockholders of CNAF in the event of liquidation or bankruptcy of CNAF are
expected to be substantially the same.
PLAN OF DISTRIBUTION
CNAF and/or any CNA Capital Trust may sell any of the Offered Securities in
any one or more of the following ways from time to time: (i) through agents;
(ii) to or through underwriters; (iii) through dealers; or (iv) directly to
purchasers.
The prospectus supplement with respect to the Offered Securities will set
forth the terms of the offering of the Offered Securities, including the name or
names of any underwriters, dealers or agents; the purchase price of the Offered
Securities and the proceeds to CNAF and/or a CNA Capital Trust from such sale;
any underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation; any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
and any securities exchange on which such Offered Securities may be listed. Any
initial public offering price, discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
Offers to purchase Offered Securities may be solicited by agents designated
by CNAF from time to time. Any such agent involved in the offer or sale of the
Offered Securities in respect of which this prospectus is delivered will be
named, and any commissions payable by CNAF and/or the applicable CNA Capital
Trust to such agent will be described, in the applicable prospectus supplement.
Unless otherwise indicated in such prospectus supplement, any such agent will be
acting on a reasonable best efforts basis for the period of its appointment. Any
such agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Offered Securities so offered and sold.
If Offered Securities are sold by means of an underwritten offering, CNAF
and/or the applicable CNA Capital Trust will execute an underwriting agreement
with an underwriter or underwriters at the time an agreement for such sale is
reached, and the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the prospectus supplement which will be
used by the underwriters to make resales of the Offered Securities in respect of
which this prospectus is delivered to the public. If underwriters are used in
the sale of the Offered Securities in respect of which this prospectus is
delivered, the Offered Securities will be acquired by the underwriters for
55
<PAGE> 57
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at fixed public offering prices
or at varying prices determined by the underwriter at the time of sale. Offered
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by the managing underwriters.
If any underwriter or underwriters are used in the sale of the Offered
Securities, unless otherwise indicated in the prospectus supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to certain conditions precedent and that the underwriters with respect
to a sale of Offered Securities will be obligated to purchase all such Offered
Securities of a series if any are purchased.
If a dealer is used in the sales of the Offered Securities in respect of
which this prospectus is delivered, CNAF and/or the applicable CNA Capital Trust
will sell such Offered Securities to the dealer as principal. The dealer may
then resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. Any such dealer may be deemed
to be an underwriter, as such term is defined in the Securities Act, of the
Offered Securities so offered and sold. The name of the dealer and the terms of
the transaction will be set forth in the prospectus supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by CNAF
and/or the applicable CNA Capital Trust and the sale thereof may be made by CNAF
and/or the applicable CNA Capital Trust directly to institutional investors or
others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the prospectus supplement relating thereto.
Agents, underwriters and dealers may be entitled under relevant agreements
to indemnification or contribution by CNAF and/or the applicable CNA Capital
Trust against certain liabilities, including liabilities under the Securities
Act.
Agents, underwriters and dealers may be customers of, engage in
transactions with or perform services for CNAF and its subsidiaries in the
ordinary course of business.
Offered Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for CNAF and/or the applicable CNA Capital
Trust. Any remarketing firm will be identified and the terms of its agreement,
if any, with its compensation will be described in the applicable prospectus
supplement. Remarketing firms may be deemed to be underwriters, as such term is
defined in the Securities Act, in connection with the Offered Securities
remarketed thereby. Remarketing firms may be entitled under agreements which may
be entered into with CNAF and/or the applicable CNA Capital Trust to
indemnification or contribution by CNAF and/or the applicable CNA Capital Trust
against certain civil liabilities, including liabilities under the Securities
Act, and may be customers of, engage in transactions with or perform services
for CNAF and its subsidiaries in the ordinary course of business.
If so indicated in the applicable prospectus supplement, CNAF and/or the
applicable CNA Capital Trust may authorize agents, underwriters or dealers to
solicit offers by certain types of institutions to purchase Offered Securities
from CNAF and/or the applicable CNA Capital Trust at the public offering prices
set forth in the applicable prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date or dates in the
future. A commission indicated in the applicable prospectus supplement will be
paid to underwriters, dealers and agents soliciting purchases of Offered
Securities pursuant to any such delayed delivery contracts accepted by CNAF
and/or the applicable CNA Capital Trust.
56
<PAGE> 58
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable prospectus supplement, certain
legal matters will be passed upon (i) for CNAF by Jonathan D. Kantor, Esq.,
Senior Vice President, Secretary and General Counsel of CNAF and Sonnenschein
Nath & Rosenthal, Chicago, Illinois, counsel to CNAF; (ii) for the CNA Capital
Trusts by Young, Conaway, Stargatt & Taylor, special Delaware counsel to the CNA
Capital Trusts; and (iii) for any underwriters, dealers or agents by Brown &
Wood LLP, New York, New York.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedules incorporated by reference in this prospectus from
CNAF's Annual Report on Form 10-K for the year ended December 31, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports which have been incorporated herein by reference and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
57
<PAGE> 59
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred in connection with the
Offering described in this Registration Statement.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $166,800
Accounting fees and expenses................................ 80,000
Printing and engraving expenses............................. 80,000
Legal fees and expenses..................................... 80,000
Indenture trustee's fees and expenses....................... 25,000
Rating agencies fees........................................ 175,000
Miscellaneous............................................... 33,200
--------
Total............................................. $600,000
========
</TABLE>
The foregoing items, except for the Securities and Exchange Commission fee,
are estimated. All expenses will be borne by CNAF except as otherwise indicated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides in relevant part that "a corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was
unlawful."
With respect to derivative actions, Section 145(b) of the DGCL provides in
relevant part that "[a] corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor .... [by reason of the person's service in one
of the capacities specified in the preceding paragraph] against expenses
(including attorneys' fees) actually and reasonably incurred by the person in
connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or other court shall deem proper."
Article X of CNAF's By-Laws contains provisions similar to Section 145 of
the DGCL, although providing mandatory indemnification in certain of the
circumstances covered by Section 145(a) of the DGCL.
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<PAGE> 60
Such indemnification may apply to claims arising under the Securities Act
of 1933, as amended. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted for directors, officers or persons
controlling CNAF pursuant to the foregoing provisions, CNAF has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in that Act and therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by CNAF of expenses incurred or paid by a
director, officer or controlling person of CNAF in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, CNAF will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
CNAF maintains directors' and officers' liability insurance, subject to
appreciable deductibles at the corporate level, for each wrongful act where
corporate reimbursement is available to any director or officer.
Under each Trust Agreement, CNAF will agree to indemnify each of the
Trustees of the CNA Capital Trust or any predecessor Trustee for the CNA Capital
Trust, and to hold the Trustee harmless against, any loss, damage, claims,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
Trust Agreements, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties under the Trust Agreements.
ITEM 16. EXHIBITS
EXHIBIT NO.
<TABLE>
<C> <S>
3(a) Certificate of Incorporation of CNA Financial Corporation,
as amended May 6, 1987 and May 6, 1998, is incorporated by
reference to Exhibit 3.1 of CNAF's registration statement on
Form S-8 (File No. 333-65493).
3(b) By-laws of CNA Financial Corporation, as amended effective
February 10, 1999, are incorporated by reference to Exhibit
3.2 of CNAF's Annual Report on Form 10-K for the year ended
December 31, 1998.
4(a) Senior Debt Indenture between CNA Financial Corporation and
The First National Bank of Chicago, a national banking
association, as Trustee, is incorporated by reference to
Exhibit 4.1 of CNAF's registration statement on Form S-3
(File No. 33-35250).
4(b) Form of First Supplemental Indenture of the Senior Indenture
between CNA Financial Corporation and The First National
Bank of Chicago, a national banking association, as Trustee,
is incorporated by reference to Exhibit 4.2 of CNAF's
registration statement on Form S-3 (File No. 33-50753).
4(c) Form of Subordinated Indenture between CNA Financial
Corporation and The First National Bank of Chicago, a
national banking association, as Trustee, is incorporated by
reference to Exhibit 4.3 of CNAF's registration statement on
Form S-3 (File No. 33-50753).
4(d) Form of Junior Subordinated Indenture between CNA Financial
Corporation and The First National Bank of Chicago, a
national banking association, as Trustee.
4(e) Certificate of Trust of CNA Financial Capital I.
4(f) Form of Amended and Restated Trust Agreement of CNA
Financial Capital I.
4(g) Certificate of Trust of CNA Financial Capital II.
4(h) Form of Amended and Restated Trust Agreement of CNA
Financial Capital II.
</TABLE>
II-2
<PAGE> 61
<TABLE>
<C> <S>
4(i) Certificate of Trust of CNA Financial Capital III.
4(j) Form of Amended and Restated Trust Agreement of CNA Financial Capital III.
4(k) Form of Guarantee Agreement for CNA Financial Capital I.
4(l) Form of Guarantee Agreement for CNA Financial Capital II.
4(m) Form of Guarantee Agreement for CNA Financial Capital III.
5(a) Opinion of Jonathan D. Kantor, Esq.
5(b) Opinion of Young, Conaway, Stargatt & Taylor as to legality of the Preferred Securities to be issued by
CNA Financial Capital I.
5(c) Opinion of Young, Conaway, Stargatt & Taylor as to legality of the Preferred Securities to be issued by
CNA Financial Capital II.
5(d) Opinion of Young, Conaway, Stargatt & Taylor as to legality of the Preferred Securities to be issued by
CNA Financial Capital III.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Young, Conaway, Stargatt & Taylor (to be included in Exhibit 5(b)).
24* Powers of Attorney (previously filed).
25(a) Form T-1 Statement of Eligibility of The First National Bank of Chicago to act as trustee under the
Senior Indenture is incorporated by reference to Exhibit 25.1 of the registration statement on Form S-3
(File No. 333-33821).
25(b) Form T-1 Statement of Eligibility of The First National Bank of Chicago to act as trustee under the
Subordinated Indenture is incorporated by reference to Exhibit 25.2 of the registration statement on
Form S-3 (File No. 333-33821).
25(c) Form T-1 Statement of Eligibility of The First National Bank of Chicago to act as trustee under the
Junior Subordinated Indenture.
25(d) Form T-1 Statement of Eligibility of The First National Bank of Chicago to act as trustee under the
Trust Agreement of CNA Financial Capital I.
25(e) Form T-1 Statement of Eligibility of The First National Bank of Chicago to act as trustee under the
Trust Agreement of CNA Financial Capital II.
25(f) Form T-1 Statement of Eligibility of The First National Bank of Chicago to act as trustee under the
Trust Agreement of CNA Financial Capital III.
25(g) Form T-1 Statement of Eligibility of The First National Bank of Chicago under the Guarantee for the
benefit of the holders of Preferred Securities of CNA Financial Capital I.
25(h) Form T-1 Statement of Eligibility of The First National Bank of Chicago under the Guarantee for the
benefit of the holders of Preferred Securities of CNA Financial Capital II.
25(i) Form T-1 Statement of Eligibility of The First National Bank of Chicago under the Guarantee for the
benefit of the holders of Preferred Securities of CNA Financial Capital III.
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers and sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
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<PAGE> 62
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) If the securities to be registered are to be offered at competitive
bidding, the undersigned registrants hereby undertake: (1) to use its best
efforts to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus which
at that time meets the requirements of Section 10(a) of the Act, and relating to
the securities offered at competitive bidding, as contained in the Registration
Statement, together with any supplements thereto, and (2) to file an amendment
to the Registration Statement reflecting the results of bidding, the terms of
the reoffering and related matters to the extent required by the applicable
form, not later than the first use, authorized by the issuer after the opening
of bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer and
no reoffering of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
II-4
<PAGE> 63
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Chicago, Illinois on April 19, 1999.
CNA FINANCIAL CORPORATION
By: /s/ W. JAMES MACGINNITIE
------------------------------------
W. James MacGinnitie
Senior Vice President and
Chief Financial Officer
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THEIR RESPECTIVE CAPACITIES ON THE 19th DAY OF APRIL, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ LAURENCE A. TISCH* Chief Executive Officer and Director
- ------------------------------------------
Laurence A. Tisch
/s/ W. JAMES MACGINNITIE* Senior Vice President and Chief Financial Officer
- ------------------------------------------ (Principal Financial and Accounting Officer)
W. James MacGinnitie
/s/ ANTOINETTE COOK BUSH* Director
- ------------------------------------------
Antoinette Cook Bush
/s/ DENNIS H. CHOOKASZIAN* Director
- ------------------------------------------
Dennis H. Chookaszian
/s/ PHILIP L. ENGEL* Director
- ------------------------------------------
Philip L. Engel
/s/ BERNIE L. HENGESBAUGH Director
- ------------------------------------------
Bernie L. Hengesbaugh
/s/ ROBERT P. GWINN* Director
- ------------------------------------------
Robert P. Gwinn
/s/ WALTER F. MONDALE* Director
- ------------------------------------------
Walter F. Mondale
/s/ EDWARD J. NOHA* Director
- ------------------------------------------
Edward J. Noha
/s/ JOSEPH ROSENBERG* Director
- ------------------------------------------
Joseph Rosenberg
/s/ RICHARD L. THOMAS* Director
- ------------------------------------------
Richard L. Thomas
/s/ JAMES S. TISCH* Director
- ------------------------------------------
James S. Tisch
/s/ PRESTON ROBERT TISCH* Director
- ------------------------------------------
Preston Robert Tisch
/s/ MARVIN ZONIS* Director
- ------------------------------------------
Marvin Zonis
*By: /s/ W. JAMES MACGINNITIE
------------------------------------
W. JAMES MACGINNITIE
</TABLE>
/s/ W. James MacGinnitie, as Attorney-in-Fact Pursuant to Power of Attorney
included as Exhibit 24 to this Registration Statement.
II-6
<PAGE> 65
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CNA Financial
Capital I, CNA Financial Capital II, and CNA Financial Capital III, each
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on April
19, 1999.
CNA FINANCIAL CAPITAL I
By: CNA Financial Corporation, as
Depositor
-----------------------------------
By: /s/ W. JAMES MACGINNITIE
-----------------------------------
Name: W. James MacGinnitie
Title: Senior Vice President and
Chief Financial Officer
CNA FINANCIAL CAPITAL II
By: CNA Financial Corporation, as
Depositor
-----------------------------------
By: /s/ W. JAMES MACGINNITIE
-----------------------------------
Name: W. James MacGinnitie
Title: Senior Vice President and
Chief Financial Officer
CNA FINANCIAL CAPITAL III
By: CNA Financial Corporation, as
Depositor
-----------------------------------
By: /s/ W. JAMES MACGINNITIE
-----------------------------------
Name: W. James MacGinnitie
Title: Senior Vice President and
Chief Financial Officer
II-7
<PAGE> 1
EXHIBIT 4(d)
CNA FINANCIAL CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
JUNIOR SUBORDINATED INDENTURE
DATED AS OF ,
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............................................. 1
Section 1.1. Definitions.............................................................................. 1
Section 1.2. Compliance Certificate and Opinions...................................................... 9
Section 1.3. Forms of Documents Delivered to Trustee.................................................. 9
Section 1.4. Acts of Holders.......................................................................... 10
Section 1.5. Notices, Etc. to Trustee and CNAF........................................................ 12
Section 1.6. Notice to Holders; Waiver................................................................ 12
Section 1.7. Conflict with Trust Indenture Act........................................................ 13
Section 1.8. Effect of Headings and Table of Contents................................................. 13
Section 1.9. Successors and Assigns................................................................... 13
Section 1.10. Separability Clause...................................................................... 13
Section 1.11. Benefits of Junior Indenture............................................................. 13
Section 1.12. Governing Law............................................................................ 13
Section 1.13. Non-Business Days........................................................................ 13
ARTICLE II. SECURITY FORMS..................................................................................... 14
Section 2.1. Forms Generally.......................................................................... 14
Section 2.2. Form of Face of Security................................................................. 14
Section 2.3. Form of Reverse of Security.............................................................. 17
Section 2.4. Form of Trustee's Certificate of Authentication.......................................... 20
ARTICLE III. THE SECURITIES.................................................................................... 21
Section 3.1. Title and Terms.......................................................................... 21
Section 3.2. Denominations............................................................................ 23
Section 3.3. Execution Authentication, Delivery and Dating............................................ 23
Section 3.4. Temporary Securities..................................................................... 24
Section 3.5. Registration, Transfer and Exchange...................................................... 25
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities......................................... 27
Section 3.7. Payment of Interest; Interest Rights Preserved........................................... 27
Section 3.8. Persons Deemed Owners.................................................................... 28
Section 3.9. Cancellation............................................................................. 29
Section 3.10. Computation of Interest.................................................................. 29
Section 3.11. Deferrals of Interest Payment Dates...................................................... 29
Section 3.12. Right of Set-Off......................................................................... 30
Section 3.13. Agreed Tax Treatment..................................................................... 30
Section 3.14. Extension of Stated Maturity; Adjustment of Stated Maturity Upon an Exchange............. 30
Section 3.15. CUSIP Numbers............................................................................ 31
ARTICLE IV. SATISFACTION AND DISCHARGE......................................................................... 31
Section 4.1. Satisfaction and Discharge of Junior Indenture........................................... 31
Section 4.2. Application of Trust Funds .............................................................. 32
Section 4.3. Satisfaction, Discharge and Defeasance of Securities of Any Series....................... 32
ARTICLE V. REMEDIES............................................................................................ 33
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
Section 5.1. Events of Default........................................................................ 33
Section 5.2. Acceleration of Maturity; Rescission and Annulment....................................... 34
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.......................... 35
Section 5.4. Trustee May File Proofs of Claim......................................................... 36
Section 5.5. Trustee May Enforce Claim Without Possession of Securities............................... 37
Section 5.6. Application of Money Collected........................................................... 37
Section 5.7. Limitation on Suits...................................................................... 37
Section 5.8. Unconditional Right of Holders to Receive Principal, Interest and Other Amounts.......... 38
Section 5.9. Restoration of Rights and Remedies....................................................... 38
Section 5.10. Rights and Remedies Cumulative........................................................... 38
Section 5.11. Delay or Omission Not Waiver............................................................. 39
Section 5.12. Control by Holders ...................................................................... 39
Section 5.13. Waiver of Past Defaults.................................................................. 39
Section 5.14. Undertaking for Costs.................................................................... 40
ARTICLE VI. THE TRUSTEE........................................................................................ 40
Section 6.1. Certain Duties and Responsibilities...................................................... 40
Section 6.2. Notice of Defaults....................................................................... 41
Section 6.3. Certain Rights of Trustee................................................................ 41
Section 6.4. Not Responsible for Recitals or Issuance of Securities................................... 42
Section 6.5. May Hold Securities...................................................................... 42
Section 6.6. Money Held in Trust...................................................................... 42
Section 6.7. Compensation and Reimbursement........................................................... 43
Section 6.8. Disqualification; Conflicting Interests.................................................. 43
Section 6.9. Corporate Trustee Required; Eligibility.................................................. 43
Section 6.10. Resignation and Removal; Appointment of Successor........................................ 44
Section 6.11. Acceptance of Appointment by Successor................................................... 45
Section 6.12. Merger, Conversion, Consolidation or Succession to Business.............................. 46
Section 6.13. Preferential Collection of Claims Against CNAF........................................... 46
Section 6.14. Appointment of Authenticating Agent...................................................... 47
ARTICLE VII. HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CNAF.................................................... 48
Section 7.1. Disclosure of Names and Addresses of Holders............................................. 48
Section 7.2. Preservation of Information, Communications to Holders................................... 48
Section 7.3. Reports by Trustee....................................................................... 49
Section 7.4. Reports by CNAF.......................................................................... 49
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............................................. 49
Section 8.1. CNAF May Consolidate, Etc., Only on Certain Terms........................................ 49
Section 8.2. Successor Person Substituted............................................................. 50
ARTICLE IX. SUPPLEMENTAL INDENTURES............................................................................ 51
Section 9.1. Supplemental Indentures without Consent of Holders....................................... 51
Section 9.2. Supplemental Indentures with Consent of Holders.......................................... 52
Section 9.3. Execution of Supplemental Indentures..................................................... 53
Section 9.4. Effect of Supplemental Indentures........................................................ 53
Section 9.5. Conformity with Trust Indenture Act...................................................... 53
Section 9.6. Reference in Securities to Supplemental Indentures....................................... 53
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE X. COVENANTS........................................................................................... 54
Section 10.1. Payment of Principal, Premium and Interest.............................................. 54
Section 10.2. Maintenance of Office or Agency......................................................... 54
Section 10.3. Money for Security Payments to be Held in Trust......................................... 54
Section 10.5. Waiver of Certain Covenants............................................................. 56
Section 10.6. Additional Sums......................................................................... 56
Section 10.7. Additional Covenants.................................................................... 56
ARTICLE XI. REDEMPTION OF SECURITIES........................................................................... 57
Section 11.1. Applicability of This Article........................................................... 57
Section 11.2. Election to Redeem; Notice to Trustee................................................... 57
Section 11.3. Selection by Trustee of Securities to be Redeemed....................................... 57
Section 11.4. Notice of Redemption.................................................................... 58
Section 11.5. Deposit of Redemption Price............................................................. 59
Section 11.6. Payment of Securities Called for Redemption............................................. 59
Section 11.7. CNAF's Right of Redemption.............................................................. 59
ARTICLE XII. SINKING FUNDS..................................................................................... 60
Section 12.1. Applicability of Article................................................................ 60
Section 12.2. Satisfaction of Sinking Fund Payments with Securities................................... 60
Section 12.3. Redemption of Securities for Sinking Fund............................................... 61
ARTICLE XIII. SUBORDINATION OF SECURITIES...................................................................... 62
Section 13.1. Securities Subordinate to Senior Debt................................................... 62
Section 13.2. Payment Over of Proceeds Upon Dissolution, Etc.......................................... 62
Section 13.3. Prior Payment to Senior Debt Upon Acceleration of Securities............................ 63
Section 13.4. No Payment When Senior Debt in Default.................................................. 64
Section 13.5. Payment Permitted If No Default......................................................... 64
Section 13.6. Subrogation to Rights of Holders of Senior Debt......................................... 64
Section 13.7. Provisions Solely to Define Relative Rights............................................. 65
Section 13.8. Trustee to Effectuate Subordination..................................................... 65
Section 13.9. No Waiver of Subordination Provisions................................................... 65
Section 13.10. Notice to Trustee....................................................................... 66
Section 13.11. Reliance on Judicial Order or Certificate of Liquidating Agent.......................... 66
Section 13.12. Trustee Not Fiduciary for Holders of Senior Debt........................................ 66
Section 13.13. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights............ 66
Section 13.14. Article Applicable to Paying Agents..................................................... 67
Section 13.15. Certain Conversions or Exchanges........................................................ 67
</TABLE>
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<PAGE> 5
CNA FINANCIAL CORPORATION
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 318
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Junior Indenture
whether or not physically contained therein) and the Junior Subordinated
Indenture, dated as of , .
<TABLE>
<CAPTION>
Trust Indenture Junior
Act Section Indenture Section
<S> <C> <C>
310 (a) (1), (2) and (5)...................................................................................6.9
(a) (3).....................................................................................Not Applicable
(a) (4).....................................................................................Not Applicable
(b)..............................................................................................6.8, 6.10
(c).........................................................................................Not Applicable
311 (a)................................................................................................6.13(a)
(b)................................................................................................6.13(b)
(b) (2).........................................................................................7.3(a) (2)
312 (a)............................................................................................7.1, 7.2(a)
(b).................................................................................................7.2(b)
(c).................................................................................................7.2(c)
313 (a).................................................................................................7.3(a)
(b)................................................................................................ 7.3(b)
(c).........................................................................................7.3(a), 7.3(b)
(d).................................................................................................7.3(c)
314 (a) (1), (2) and (3)...................................................................................7.4
(a) (4)...............................................................................................10.5
(b).........................................................................................Not Applicable
(c) (1)................................................................................................1.2
(c) (2)................................................................................................1.2
(c) (3).....................................................................................Not Applicable
(d).........................................................................................Not Applicable
(e)....................................................................................................1.2
(f).........................................................................................Not Applicable
315 (a).................................................................................................6.1(a)
(b)........................................................................................6.2, 7.3(a) (6)
(c).................................................................................................6.1(b)
(d).................................................................................................6.1(c)
(d) (1).........................................................................................6.1(a) (1)
(d) (2).........................................................................................6.1(c) (2)
(d) (3).........................................................................................6.1(c) (3)
(e)...................................................................................................5.14
316 (a)....................................................................................................1.1
(a) (1) (A)...........................................................................................5.12
(a) (1) (B)...........................................................................................5.13
(a) (2).....................................................................................Not Applicable
(b)....................................................................................................5.8
(c).................................................................................................1.4(f)
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C> <C>
317 (a) (1)................................................................................................5.3
(a) (2)................................................................................................5.4
(b)...................................................................................................10.3
318 (a)....................................................................................................1.7
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Junior Subordinated Indenture.
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<PAGE> 7
JUNIOR SUBORDINATED INDENTURE ("Junior Indenture"), dated as of , , between
CNA FINANCIAL CORPORATION, a Delaware corporation (hereinafter called "CNAF")
having its principal office at CNA Plaza, Chicago, Illinois 60685, and The First
National Bank of Chicago, a national banking association, as Junior Indenture
Trustee (hereinafter called the "Trustee") having a office at ,
Chicago, Illinois .
RECITALS OF CNAF
CNAF has duly authorized the execution and delivery of this Junior Indenture
to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to CNAF of the proceeds from the
issuance from time to time by one or more business trusts (each a "CNA Capital
Trust," and, collectively, the "CNA Capital Trusts") of preferred trust
interests in such Trusts (the "Preferred Securities") and common interests in
such Trusts (the "Common Securities" and, collectively with the Preferred
Securities, the "Trust Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered.
All things necessary to make the Securities, when executed by CNAF and
authenticated and delivered hereunder and duly issued by CNAF, the valid
obligations of CNAF, and to make this Junior Indenture a valid agreement of
CNAF, in accordance with their and its terms, have been done.
NOW THEREFORE, THIS JUNIOR INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS.
For all purposes of this Junior Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by CNAF; and
<PAGE> 8
(4) The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Junior Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been made
on the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means the sum of any additional taxes, duties and other
governmental charges to which a CNA Capital Trust has become subject from time
to time as a result of a Tax Event.
"Administrative Trustee" means, in respect of any CNA Capital Trust, each
Person identified as an "Administrative Trustee" in the related Trust Agreement,
solely in such Person's capacity as Administrative Trustee of such CNA Capital
Trust under such Trust Agreement and not in such Person's individual capacity,
or any successor administrative trustee appointed as therein provided.
"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 CNAF
shall not be deemed to include any CNA Capital Trust to which Securities have
been issued. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of CNAF or any
committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of CNAF to have been duly adopted by the Board of
Directors, or such committee of the Board of Directors or officers of CNAF to
which authority to act on behalf of the Board of Directors has been delegated,
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday or (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"CNA Capital Trust" has the meaning specified in the first recital of this
Junior Indenture.
-2-
<PAGE> 9
"CNAF" means the Person named as "CNAF" in the first paragraph of this
Junior Indenture until a successor corporation shall have become such pursuant
to the applicable provisions of this Junior Indenture, and thereafter "CNAF"
shall mean such successor corporation.
"CNAF Guarantee" means the guarantee by CNAF in respect of the Preferred
Securities of a CNA Capital Trust to the extent provided in the Guarantee
Agreement, substantially in the form attached hereto as Annex C, or
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from time
to time.
"CNAF Request" and "CNAF Order" mean, respectively, the written request or
order signed in the name of CNAF by the Chairman, Chief Executive Officer,
President or a Vice President, and by the Treasurer, the Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary of CNAF, and delivered
to the Trustee.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of this
Junior Indenture.
"Common Stock" means the common stock, without par value, of CNAF.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered.
"Corporation" includes a corporation, association, joint stock, limited
liability or other company or business trust.
"Debt" means, with respect to any Person, whether recourse as to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of CNAF whether incurred on or prior to the date of this Junior
Indenture or thereafter incurred, for claims in respect of derivative products,
futures contracts including interest rate, foreign exchange rate and commodity
forward contracts, options and swaps and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
-3-
<PAGE> 10
"Depository" means, with respect to the Securities of any series issuable or
issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depository by CNAF pursuant to Section 3.1 with respect to
such series (or any successor thereto).
"Discount Security" means any Security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by a CNA
Capital Trust, means amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions."
"Dollar" means the currency of the United States of America that, as at the
time of payment, is legal tender for the payment of public and private debts.
"Event of Default," unless otherwise specified in the supplemental
indenture, Board Resolution, or the Officers' Certificate delivered pursuant to
Section 3.1 creating a series of Securities, has the meaning specified in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" has the meaning specified in Section 3.11.
"Foreign Currency" means (i) any currency, including, without limitation,
the Euro, issued by the government of one or more countries other than the
United States of America or by any recognized confederation or association of
such governments and (ii) any currency unit.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depository or
its nominee for such series, and registered in the name of such Depository or
its nominee.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the timely payment
of which is unconditionally guaranteed by the United States of America or such
government which issued the Foreign Currency in which the Securities of such
series are payable, and which, in either case, are full faith and credit
obligations of the United States of America or such government which issued the
Foreign Currency in which the Securities of such series are payable, and are not
callable or redeemable at the option of the issuer thereof and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the holder
of such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
-4-
<PAGE> 11
"Guarantee Agreement" means the Guarantee Agreement substantially in the
form attached hereto as Annex C, or substantially in such form as may be
specified as contemplated by Section 3.1 with respect to the Securities of any
series, in each case as amended from time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Interest Rate" means the rate of interest specified or determined as
specified in each Security as being payable on such Security.
"Investment Company Event" means, in respect of a CNA Capital Trust, the
receipt by CNAF and such CNA Capital Trust of an Opinion of Counsel, rendered
by a law firm experienced in such matters, to the effect that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"), such
CNA Capital Trust is or will be considered an "investment company" that is
required to be registered under the 1940 Act, which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the Preferred
Securities of such CNA Capital Trust.
"Junior Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"Junior Subordinated Payment" has the meaning specified in Section 13.2.
"Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Notice of Default" has the meaning specified in Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman and Chief
Executive Officer, President or any Senior Vice President or Group Vice
President, and by the Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary of CNAF, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for CNAF, including an employee of CNAF.
"Original Issue Date" means the date of issuance specified as such in each
Security.
-5-
<PAGE> 12
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Junior Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities or portions thereof for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other Securities
have been authenticated and delivered or which have been paid pursuant to
Section 3.6, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding
and legal obligations of CNAF;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by CNAF or any other obligor upon the Securities or any Affiliate of CNAF or
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not CNAF or any other obligor upon the Securities or any Affiliate of CNAF or
such other obligor. Upon the written request of the Trustee, CNAF shall furnish
to the Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by CNAF to be owned or held by or for the account of
CNAF, or any other obligor on the Securities or any Affiliate of CNAF or such
obligor, and, subject to the provisions of Section 6.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by CNAF to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
CNAF.
"Person" means any individual, corporation, partnership, trust, joint
venture, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where the principal of (and premium, if any) and interest or
other amounts on the Securities of such series are payable pursuant to Sections
3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
lost, destroyed or stolen Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Security.
"Preferred Securities" has the meaning specified in the first recital of
this Junior Indenture.
-6-
<PAGE> 13
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any CNA Capital Trust, the
commercial bank or trust company identified as the "Property Trustee" in the
related Trust Agreement, solely in its capacity as Property Trustee of such CNA
Capital Trust under such Trust Agreement and not in its individual capacity, or
its successor in interest in such capacity, or any successor property trustee
appointed as therein provided.
"Redemption Date," when used with respect to any Security to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Junior Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Junior Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i) in the case
of Securities of a series represented by one or more Global Securities, the
Business Day next preceding such Interest Payment Date and (ii) in the case of
Securities of a series not represented by one or more Global Securities, the
date which is fifteen days next preceding such Interest Payment Date (whether or
not a Business Day).
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Junior Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to CNAF, whether or not such claim for
post-petition interest is allowed in such proceeding), on Debt, whether incurred
on or prior to the date of this Junior Indenture or thereafter incurred,
including, without limitation, Debt issued pursuant to the Senior Debt Indenture
between CNA Financial Corporation and The First National Bank of Chicago, the
First Supplemental Indenture of the Senior Debt Indenture between CNA Financial
Corporation and The First National Bank of Chicago, and the Subordinated
Indenture between CNA Financial Corporation and The First National Bank of
Chicago, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are pari
passu or are not superior in right of payment to the Securities or to other Debt
which is pari passu with, or subordinated to, the Securities; provided, however,
that Senior Debt shall not be deemed to include (a) any Debt of CNAF which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to CNAF, (b) any Debt of
CNAF to any of its Subsidiaries, (c) Debt to any employee of CNAF, (d) any
liability for taxes, (e) Debt or other monetary obligations to trade creditors
created or assumed by CNAF or any of its Subsidiaries in the ordinary course of
business in connection with the obtaining of goods, materials or services and
(f) the Securities.
"Special Event" means a Tax Event or an Investment Company Event.
-7-
<PAGE> 14
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified pursuant to
the terms of such Security as the date on which the principal of such Security
or such installment of interest is due and payable, in the case of such
principal, as such date may be changed or extended as provided pursuant to the
terms of such Security and this Junior Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by CNAF or by one or more other
Subsidiaries, or by CNAF and one or more other Subsidiaries. For purposes of
this definition, "voting stock" means stock or other equity interests which
ordinarily has voting power for the election of directors, trustees or managers,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Tax Event" means, with respect to a CNA Capital Trust, the receipt by CNAF
and such CNA Capital Trust of an Opinion of Counsel experienced in such matters
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein or as a result of any administrative pronouncement or determination or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement, determination or
decision is announced on or after the date of original issuance of the
Preferred Securities of such CNA Capital Trust, there is more than an
insubstantial risk that (i) such CNA Capital Trust is, or will be within 90
days of the date of such Opinion of Counsel, subject to United States Federal
income tax with respect to income received or accrued on the corresponding
series of Securities, (ii) interest payable by CNAF on the corresponding series
of Securities is not, or within 90 days of the date of such Opinion of Counsel
will not be, deductible by CNAF, in whole or in part, for United States Federal
income tax purposes or (iii) such CNA Capital Trust is, or will be within 90
days of the date of such Opinion of Counsel, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Trust Agreement" means the Trust Agreement of the applicable CNA Capital
Trust substantially in the form attached hereto as Annex A, as amended by the
form of Amended and Restated Trust Agreement substantially in the form attached
hereto as Annex B, or substantially in such form as may be specified as
contemplated by Section 3.1 with respect to the Securities of any series, in
each case as amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Junior Indenture until a successor Trustee shall have become such pursuant
to the applicable provisions of this Junior Indenture, and thereafter "Trustee"
shall mean or include each Person who is then a Trustee hereunder; provided,
however, that if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in effect on the date as of this Junior
Indenture, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of this
Junior Indenture.
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<PAGE> 15
SECTION 1.2. COMPLIANCE CERTIFICATE AND OPINIONS.
Upon any application or request by CNAF to the Trustee to take any action
under any provision of this Junior Indenture, CNAF shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent (including
covenants, compliance with which constitutes a condition precedent), if any,
provided for in this Junior Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Junior
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Junior Indenture (other than the certificates
provided pursuant to Section 10.4) shall include:
(a) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 1.3. FORMS OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of CNAF may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
matters upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of CNAF stating that the information with respect to such factual
matters is in the possession of CNAF, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
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<PAGE> 16
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Junior Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.4. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Junior Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to CNAF.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Junior Indenture and (subject to Section 6.1) conclusive in favor of the Trustee
and CNAF, if made in the manner provided in this Section.
Without limiting the generality of this Section 1.4, unless otherwise
provided in or pursuant to this Junior Indenture, a Holder, including a
Depository that is a Holder of a Global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other Act provided in or
pursuant to this Junior Indenture to be made, given or taken by Holders, and a
Depository that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interests in any such Global Security
through such Depository's standing instructions and customary practices.
The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any permanent Global Security
held by a Depository entitled under the procedures of such Depository to make,
give or take, by a proxy or proxies duly appointed in writing, any request,
demand, authorization, direction, notice, consent, waiver or other Act provided
in or pursuant to this Junior Indenture to be made, given or taken by Holders.
If such a record date is fixed, the Holders on such record date or their duly
appointed proxy or proxies, and only such Persons, shall be entitled to make,
give or take such request, demand, authorization, direction, notice, consent,
waiver or other Act, whether or not such Holders remain Holders after such
record date. No such request, demand, authorization, direction, notice, consent,
waiver or other Act shall be valid or effective if made, given or taken more
than 90 days after such record date.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a Person acting in other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The fact and date of the execution by any Person of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient and in accordance
with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities Register.
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<PAGE> 17
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or suffered to be done by the Trustee or CNAF in reliance thereon, whether or
not notation of such action is made upon such Security.
(f) CNAF may, but shall not be obligated to, set any day as a record date
for the purpose of determining the Holders of Outstanding Securities of any
series entitled to give, make or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Junior Indenture to be given, made or taken by Holders of Securities of such
series, provided that CNAF may not set a record date for, and the provisions of
this paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph. If
any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent CNAF from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be construed to
render ineffective any action taken by Holders of the requisite principal amount
of Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, CNAF,
at its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Trustee in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(b) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record is set
pursuant to this paragraph, the Trustee, at CNAF's expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to CNAF in writing and to each Holder of Securities
of the relevant series in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the
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<PAGE> 18
Expiration Date to any earlier or later day, provided that no such change shall
be effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities of the relevant
series in the manner set forth in Section 10.6, on or prior to the existing
Expiration Date. If any Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto which set such record
date shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its right to
change the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.5. NOTICES, ETC. TO TRUSTEE AND CNAF.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Junior Indenture
to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by CNAF shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust office, or
(b) CNAF by the Trustee or by any Holder shall be sufficient for every
purpose (except as otherwise provided in Section 5.1 hereof) hereunder if in
writing and mailed, first class, postage prepaid, to CNAF addressed to it at the
address of its principal office specified in the first paragraph of this Junior
Indenture or at any other address previously furnished in writing to the Trustee
by CNAF.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER.
Where this Junior Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Securities Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.
Where this Junior Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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<PAGE> 19
SECTION 1.7. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Junior Indenture limits, qualifies or conflicts
with the duties imposed by any of Sections 310 to 318, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
SECTION 1.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.9. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Junior Indenture by CNAF shall bind its
successors and assigns, whether so expressed or not.
SECTION 1.10. SEPARABILITY CLAUSE.
In case any provision in this Junior Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. BENEFITS OF JUNIOR INDENTURE.
Nothing in this Junior Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent, any Authenticating Agent and their successors hereunder and
the Holders of Senior Debt, the holders of Preferred Securities of the
applicable CNA Capital Trust and the Holders of the Securities and, to the
extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and 9.2,
the Holders of Preferred Stock, any benefit or any legal or equitable right,
remedy or claim under this Junior Indenture. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, in any Security,
or because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such or against any past, present or future stockholder,
officer of director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders thereof
and as part of the consideration for the issue of the Securities.
SECTION 1.12. GOVERNING LAW.
This Junior Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of laws.
SECTION 1.13. NON-BUSINESS DAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (unless otherwise
specifically specified to the contrary in this Junior Indenture or the
Securities) payment of interest (or premium, if any) or principal need not be
made on such date, but may be made on the next succeeding Business Day (and no
interest shall accrue for the
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<PAGE> 20
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day (in each case with the
same force and effect as if made on the Interest Payment Date or Redemption Date
or at the Stated Maturity).
ARTICLE II. SECURITY FORMS
SECTION 2.1. FORMS GENERALLY.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Junior Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with applicable tax laws or the rules of
any securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of CNAF and
delivered to the Trustee at or prior to the delivery of CNAF Order contemplated
by Section 3.3 with respect to the authentication and delivery of such
Securities.
The Trustee's certificate of authentication shall be substantially in the
form set forth in this Section 2.5.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such securities.
SECTION 2.2. FORM OF FACE OF SECURITY.
[If the Security is a Global Security, insert "This Security is a Global
Security within the meaning of the Junior Indenture hereinafter referred to and
is registered in the name of The Depository Trust Company (the "Depository") or
a nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Junior Indenture and no transfer
of this Security (other than a transfer of this Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Security is presented by an authorized representative of the
Depository (55 Water Street, New York) to CNA Financial Corporation or its agent
for registration of transfer, exchange or payment, and any Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depository and any payment hereon is made to
Cede
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<PAGE> 21
& Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein."] [Such other legend as may be applicable for a Depository
other than DTC.]
CNA FINANCIAL CORPORATION
(Title of Security)
No. $
----------------- -----------------
CNA FINANCIAL CORPORATION, a corporation organized and existing under the
laws of Delaware (hereinafter called "CNAF", which term includes any successor
corporation under the Junior Indenture hereinafter referred to), for value
received, hereby promises to pay to , or registered assigns, the
principal sum of Dollars on ; [provided that
CNAF may (i) change the maturity date upon the occurrence of an exchange of the
Securities for the Trust Securities subject to certain conditions set forth in
Section 3.14 of the Junior Indenture, which changed maturity date shall in no
case be earlier than , or later than ,
and (ii) extend the maturity date subject to certain conditions specified in
Section 3.14 of the Junior Indenture, which extended maturity date shall in no
case be later than , ]. CNAF further promises to
pay interest on said principal sum from ,
or from the most recent Interest Payment Date (as defined
below) on which interest has been paid or duly provided for, [monthly]
[quarterly] [semi-annually] [annually] [if applicable, insert "(subject to
deferral as set forth herein)"] in arrears on [insert applicable Interest
Payment Dates] of each year, commencing ,
(each such date, an "Interest Payment Date"), at the rate of % per annum,
until the principal hereof shall have become due and payable, if applicable,
plus Additional Interest, if any, until the principal hereof is paid or duly
provided for or made available for payment, and on any overdue principal and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
rate of % per annum, compounded [monthly] [quarterly] [semi-annually]
[annually]. The amount of interest payable for any period shall be computed on
the basis of twelve 30-day months and a 360-day year. In the event that any date
on which interest is payable on this Security is not a Business Day (as defined
below), then a payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable. [INSERT ALTERNATIVE FLOATING
PROVISIONS, IF APPLICABLE] A "Business Day" shall mean any day other than (i) a
Saturday or Sunday, or (ii) a day on which banking institutions in The City of
New York are authorized or required by law or executive order to remain closed.
The interest installment so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Junior Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Junior Indenture) is registered at the close of
business on the Regular Record Date for such interest installment, which shall
be the [insert definition of Regular Record Dates]. Any such interest
installment not so punctually paid or duly provided for shall 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 Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this
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<PAGE> 22
series 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 on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Junior Indenture.
[If applicable, insert "so long as no Event of Default (as defined in the
Junior Indenture) shall have occurred and be continuing, CNAF shall have the
right at any time during the term of this Security, from time to time, to defer
payment of interest on such Security for up to consecutive [monthly]
[quarterly] [semi-annual [annual] interest payment periods with respect to each
deferral period (each an "Extension Period"), during which Extension Periods
CNAF shall have the right to make partial or no payments of interest on any
Interest Payment Date, and at the end of which CNAF shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to the extent
permitted by applicable law) and any Additional Sums then due; provided that
during any such Extension Period, CNAF shall not, and shall not permit or cause
any Subsidiary of CNAF to, (i) declare or pay any dividends or distributions or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
CNAF's outstanding capital stock (which includes common and preferred stock) or
(ii) make any payment of principal of, or interest or premium, if any, on, or
repay, repurchase or redeem, any debt security of CNAF (including Securities
issued by CNAF pursuant to the Junior Indenture and not represented by this
certificate) that ranks pari passu in all respects with or junior in interest to
this Security or make any guarantee payments with respect to any guarantee by
CNAF of the debt securities of any Subsidiary of CNAF if such guarantee ranks
pari passu in all respects with or junior in interest to this Security (other
than dividends or distributions in Common Stock of CNAF, (b) payments under any
CNAF Guarantee (as defined in the Junior Indenture) and (c) purchases of Common
Stock related to the issuance of Common Stock under any of CNAF's benefit plans
for its directors, officers or employees), and (d) any declaration of a dividend
in connection with the implementation of a stockholders rights plan, or the
issuance of stock under any such plan in the future or the redemption or
repurchase of any such rights pursuant thereto. Prior to the termination of any
Extension Period, CNAF may further extend such Extension Period, provided that
no Extension Period (taking into account all previous and subsequent extensions
within such Extension Period) shall exceed consecutive [months]
[quarters] [semi-annual] [annual] periods, end on a date other than an Interest
Payment Date or extend beyond the Maturity of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest and Additional Sums then due, CNAF
may elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period except at the end
thereof. CNAF shall give the Holder of this Security, the Trustee and the
Property Trustee under the relevant Trust Agreement (as defined in the Junior
Indenture) notice of its election to begin any Extension Period at least five
Business Days prior to the earlier of (i) the date Distributions on the
Preferred Securities (as defined in the Junior Indenture) are payable or (ii)
the date the Administrative Trustees are required to give notice to any
securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date
such distributions are payable, but in any event not less than five Business
Days (as defined in the Junior Indenture) prior to such record date.
Payment of the principal of and interest including Additional Interest on
this Security will be made at the office or agency of CNAF maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert "; provided, however, that at the option of
CNAF payment of interest may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the Securities Register
or (ii) by wire transfer in immediately available
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<PAGE> 23
funds at such place and to such account as may be designated by the Person
entitled thereto as specified in the Securities Register"].
The indebtedness evidenced by this Security is, to the extent provided in
the Junior Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Junior Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
actions as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the
acceptance of the subordination provisions contained herein and in the Junior
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Junior Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, CNAF has caused this instrument to be duly executed
under its corporate seal.
Dated: ------------------------
CNA Financial Corporation
By: ------------------------------------------
[Chairman and Chief Executive Officer,
President or Vice President]
Attest:
- -----------------------------------
[Secretary or Assistant Secretary]
SECTION 2.3. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of debt securities of CNAF
(herein called the "Securities"), issued and to be issued in one or more series
under a Junior Subordinated Indenture, dated as of , 1999 (herein called the
"Junior Indenture"), between CNAF and The First National Bank of Chicago, as
trustee (herein called the "Trustee", which term includes any successor trustee
under the Junior Indenture), to which Junior Indenture and all indentures
supplemental thereto
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<PAGE> 24
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, CNAF and the Holders
of the Securities, and of the terms upon which the Securities are, and are to
be, authenticated and delivered. This Security is one of the series designated
on the face hereof, limited in aggregate principal amount, to the extent
provided in the Junior Indenture, to $ .
All terms used in this Security that are defined in the Junior Indenture and
in the Trust Agreement, dated as of February , 1999, as amended (the "Trust
Agreement"), for CNA Financial Capital ("CNA Capital Trust"),
among CNAF, as Depositor, and the Trustees named therein, shall have the
meanings assigned to them in the Junior Indenture or the Trust Agreement, as the
case may be.
[If applicable, insert "On or after , , CNAF
may at any time, at its option, subject to the terms and conditions of Article
XI of the Junior Indenture, redeem this Security in whole at any time or in part
from time to time, at a redemption price equal to [insert redemption price
calculation] of the principal amount thereof plus the accrued and unpaid
interest, including Additional Interest, if any and Additional Sums, if any, to
the date fixed for redemption."]
[If applicable, insert "If a Special Event in respect of CNA Capital Trust
shall occur and be continuing, CNAF may, at its option, redeem this Security
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of Section 11.7 and the other provisions of
Article XI of the Junior Indenture, at a redemption price equal to 100% of the
principal amount thereof plus accrued and unpaid interest, including Additional
Interest, if any, and Additional Sums, if any, to the date fixed for
redemption."]
[If applicable, insert "In the event of redemption of this Security in part
only, a new Security or Securities of this series for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof."]
The Junior Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Security upon
compliance by CNAF with certain conditions set forth in the Junior Indenture.
The Junior Indenture permits, with certain exceptions as therein provided,
CNAF and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of CNAF and of the Holders of the Securities, with the consent of the Holders of
not less than a majority in principal amount of the Outstanding Securities of
each series to be affected by such supplemental indenture. The Junior Indenture
also contains provisions permitting Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
CNAF with certain provisions of the Junior Indenture and certain past defaults
under the Junior Indenture and their consequences. Any such consent or waiver by
the Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, insert "If an Event of Default
with respect to Securities of this series shall occur and be continuing, the
principal of this Security may, and, in certain, cases,
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<PAGE> 25
shall, be accelerated to be due and payable in the manner, with the effect and
subject to the conditions provided in the Junior Indenture."]
[If the Security is not a Discount Security, insert "As provided in and
subject to the provisions of the Junior Indenture, if an Event of Default with
respect to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series may
declare the principal amount of all the Securities of this series to be due and
payable immediately, by a notice in writing to CNAF (and to the Trustee if given
by Holders); provided, however, in the case of the Securities of this series as
to which a CNA Capital Trust is the registered Holder, that if upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of this series fails to declare the principal of all
the Securities of this series to be immediately due and payable, the holders of
at least 25% in aggregate liquidation amount of the corresponding series of
Preferred Securities then outstanding shall have such right by a notice in
writing to CNAF and the Trustee; and upon any such declaration, the principal
of, and interest (including any Additional Interest) on all the Securities of
this series shall become immediately due and payable, provided that the payment
of the principal or and interest (including any Additional Interest) on such
Securities shall remain subordinated to the extent provided in Article Thirteen
of the Junior Indenture."]
[If the Security is a Discount Security, insert "If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Junior Indenture. Such
amount shall be equal to [insert formula for determining the amount]. Upon
payment of (i) the amount of principal so declared due and payable and (ii)
interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
CNAF's obligations in respect of the payment of the principal of and interest,
if any, on this Security shall terminate."]
[If the Security is a Discount Security, insert "As provided in and subject
to the provisions of the Junior Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than such portion of the principal amount as may be specified in the terms of
this series of all the Securities of this series to be due and payable
immediately, by a notice in writing to CNAF (and to the Trustee if given by
Holders); provided, however, in the case of the Securities of this series as to
which CNA Capital Trust is the registered Holder that if upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of this series fails to declare the principal of all
the Securities of this series to be immediately due and payable, the holders of
at least 25% in aggregate liquidation amount of the corresponding series of
Preferred Securities then outstanding shall have such right by a notice in
writing to CNAF and the Trustee. Such amount shall be equal to [insert formula
for determining the amount]. Upon any such declaration such specified amount of
and the accrued interest (including any Additional Interest) on all the
Securities of this series shall become immediately due and payable, provided
that the payment of principal and interest (including any Additional Interest)
on such Securities shall remain subordinated to the extent provided in Article
Thirteen of the Junior Indenture."] Upon payment (i) of the amount of principal
so declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of CNAF's obligations in respect of the
payment of the principal of and interest, if any, on this Security shall
terminate.
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<PAGE> 26
No reference herein to the Junior Indenture and no provision of this
Security or of the Junior Indenture shall alter or impair the obligation of
CNAF, which is absolute and unconditional, to pay the principal of and interest
including Additional Interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof.
As provided in the Junior Indenture and subject to certain limitations herein
and therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of CNAF maintained under Section 10.2 of the
Junior Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to CNAF and the Securities Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Securities of this series, of authorized denominations 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 CNAF may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
CNAF, the Trustee and any agent of CNAF or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither CNAF, the Trustee nor any
such agent shall be affected by notice to the contrary.
As provided in the Junior Indenture and subject to certain limitations
herein and therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of such series of a different
authorized denomination, as requested by the Holder surrendering the same.
CNAF and, by its acceptance of this Security or a beneficial interest
therein, the Holder of, and any Person that acquires a beneficial interest in,
this Security agree that for United States Federal, state and local tax purposes
it is intended that this Security constitute indebtedness.
THE JUNIOR INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 2.4. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. Subject to
Section [6.11], the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the within-mentioned Junior
Indenture.
---------------------, as Trustee
By: ---------------------------------
Authorized Signatory
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<PAGE> 27
ARTICLE III. THE SECURITIES
SECTION 3.1. TITLE AND TERMS.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Junior Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate (such Officers' Certificate shall have the effect of a supplemental
indenture for all purposes hereunder), or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of a series:
(a) the title of the securities of such series, which shall distinguish the
Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the Securities
of such series which may be authenticated and delivered under this Junior
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6).
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;
(d) the Interest Rate or Interest Rates, if any, at which the Securities of
such series shall bear interest, if any, the rate or rates and extent to which
Additional Interest, if any, shall be payable in respect of any Securities of
such series, the Interest Payment Dates on which such interest shall be payable,
the right, pursuant to Section 3.11 or as otherwise set forth therein, of CNAF
to defer or extend an Interest Payment Date, and the Regular Record Date for the
interest payable on any Interest Payment Date, or the method by which any of the
foregoing shall be determined;
(e) the place or places where the principal of and interest including
Additional Interest on the Securities of such series shall be payable, the place
or places where the Securities of such series may be presented for registration
of transfer or exchange, and the place or places where notices and demands to or
upon CNAF in respect of the Securities of such series may be made;
(f) the period or periods within or the date or dates on which, if any, the
price or prices at which and the terms and conditions upon which the Securities
of such series may be redeemed, in whole or in part, at the option of CNAF, if
CNAF is to have the option;
(g) the obligation or the right, if any, of CNAF to redeem (if other than in
accordance with Section 11.7 hereof), repay or purchase the Securities of such
series pursuant to any sinking fund, amortization or analogous provisions, or at
the option of a Holder thereof, and the period or periods within or the date or
date on which, the price or prices at which, the currency or currencies
(including currency unit or units) in which and the other terms and conditions
upon which Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple thereof;
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<PAGE> 28
(i) if other than Dollars, the Foreign Currency in which the principal of
and interest including Additional Interest, if any, on the Securities of the
series shall be payable, or in which the Securities of the series shall be
denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of CNAF set forth herein with respect to the Securities of
such series;
(k) if other than the principal amount thereof, the portion of the principal
amount of Securities of such series that shall be payable upon declaration of
acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Junior Indenture with respect
to the Securities of such series as shall be necessary to permit or facilitate
the issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal on the Securities of such series or the manner in which such amounts
will be determined;
(n) whether the Securities of the series, or any portion thereof, shall
initially be issuable in the form of a temporary Global Security representing
all or such portion of the Securities of such series and the provisions for the
exchange of such temporary Global Security for definitive Securities of such
series;
(o) whether the Securities of the series, or any portion thereof, shall be
issued in whole or in part in the form of one or more Global Securities and, in
such case, the Depository for such Global Securities (which Depository shall be
a clearing agency registered under the Securities Exchange Act of 1934, as
amended), in the form of any legend or legends which shall be borne by any such
Global Security in addition to or in lieu of that set forth in Section 2.4 and
any circumstances in addition to or in lieu of those set forth in Section 3.5 in
which any such Global Security may be exchanged in whole or in part for
Securities registered, and any transfer of such Global Security in whole or in
part may be registered, in the name or names of Persons other than the
Depository for such Global Security or a nominee thereof; and
(p) the appointment of any Paying Agent or Agents for the Securities of such
series;
(q) the terms of any right to convert or exchange Securities of such series
into any other securities or property of CNAF, and the additions or changes, if
any, to this Junior Indenture with respect to the Securities of such series to
permit or facilitate such conversion or exchange;
(r) the form or forms of the Trust Agreement, Amended and Restated Trust
Agreement and Guarantee Agreement, if different from the forms attached hereto
as Annexes A, B and C, respectively;
(s) the relative degree, if any, to which the Securities of such series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(t) any other terms of the Securities of such series (which terms shall not
be inconsistent with the provisions of this Junior Indenture or the requirements
of the Trust Indenture Act).
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<PAGE> 29
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided herein or in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of CNAF and delivered to
the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms of the series.
SECTION 3.2. DENOMINATIONS.
The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations of $25 and any integral multiple thereof,
unless otherwise specified as contemplated by Section 3.1.
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of CNAF by its Chief Executive
Officer, President or one of its Senior Vice Presidents or Group Vice Presidents
under its corporate seal reproduced or impressed thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile signatures of the present
or any future so authorized officer and may be imprinted or otherwise produced
upon the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of CNAF shall bind CNAF, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Securities or did not hold such offices
at the date of such Securities. At any time and from time to time after the
execution and delivery of this Junior Indenture, CNAF may deliver Securities
executed by CNAF to the Trustee for authentication. Securities may be
authenticated on original issuance from time to time and delivered pursuant to
such procedures acceptable to the Trustee ("Procedures") as may be specified
from time to time by CNAF Order. Procedures may authorize authentication and
delivery pursuant to oral instructions of CNAF or a duly authorized agent, which
instructions shall be promptly confirmed in writing.
Prior to the initial delivery of a series of Securities to the Trustee for
authentication, CNAF shall deliver to the Trustee the following:
(a) A CNAF Order requesting the Trustee's authentication and delivery of all
or a portion of the Securities of such series, and if less than all, setting
forth procedures for such authentication;
(b) The Board Resolution by or pursuant to which such form of Security has
been approved, and the Board Resolution, if any, by or pursuant to which the
terms of the Securities of such series have been approved, and, if pursuant to a
Board Resolution, an Officers' Certificate describing the action taken;
(c) An Officers' Certificate dated the date such certificate is delivered to
the Trustee, stating that all conditions precedent provided for in this Junior
Indenture relating to the authentication and delivery of Securities in such form
and with such terms have been complied with; and
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<PAGE> 30
(d) An Opinion of Counsel stating that (i) the form of such Securities has
been duly authorized and approved in conformity with the provisions of this
Junior Indenture; (ii) the terms of such Securities have been duly authorized
and determined in conformity with the provisions of this Junior Indenture, or,
if such terms are to be determined pursuant to Procedures, when so determined
such terms shall have been duly authorized and determined in conformity with the
provisions of this Junior Indenture; and (iii) Securities in such form when
completed by appropriate insertions and executed and delivered by CNAF to the
Trustee for authentication in accordance with this Junior Indenture,
authenticated and delivered by the Trustee in accordance with this Junior
Indenture within the authorization as to aggregate principal amount established
from time to time by the Board of Directors and sold in the manner specified in
such Opinion of Counsel, will be the legal, valid and binding obligations of
CNAF entitled to the benefits of this Junior Indenture, subject to applicable
bankruptcy, reorganization, insolvency and similar laws generally affecting
creditors' rights, to general equitable principles and except as enforcement
thereof may be limited by (A) requirements that a claim with respect to any
Securities denominated other than in Dollars (or a Foreign Currency judgment in
respect of such claim) be converted into Dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (B) governmental
authority to limit, delay or prohibit the making of payments in Foreign
Currencies or payments outside the United States, and subject to such other
qualifications as such counsel shall conclude do not materially affect the
rights of Holders of such Securities; provided, however, that the Trustee shall
be entitled to receive the documents referred to in Clauses (b), (c) and (d)
above only at or prior to the first request of CNAF to the Trustee to
authenticate Securities of such series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Junior Indenture or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by CNAF,
and CNAF shall deliver such Security to the Trustee for cancellation as provided
in Section 3.9, for all purposes of this Junior Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Junior Indenture.
SECTION 3.4. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, CNAF may
execute, and upon CNAF Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities of such series in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities of any series are issued, CNAF will cause definitive
Securities of such series to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of CNAF designated for that purpose without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, CNAF shall execute and
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<PAGE> 31
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations
having the same Original Issue Date and Stated Maturity and having the same
terms as such temporary Securities. Until so exchanged, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Junior Indenture as definitive Securities of such series.
SECTION 3.5. REGISTRATION, TRANSFER AND EXCHANGE.
CNAF shall cause to be kept at the Corporate Trust Office of the Trustee a
register in which, subject to such reasonable regulations as it may prescribe,
CNAF shall provide for the registration of Securities and of transfers of
Securities. Such register is herein sometimes referred to as the "Securities
Register." The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the office or
agency of CNAF designated for that purpose CNAF shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series of any authorized
denominations, of a like aggregate principal amount, of the same Original Issue
Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
CNAF shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of CNAF, evidencing the same debt, and entitled to the
same benefits under this Junior Indenture, as the Securities surrendered upon
such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by CNAF or the Securities Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to CNAF and
the Securities Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange of
Securities, but CNAF may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Securities other than exchanges pursuant to Section 3.6 not
involving any transfer.
Neither CNAF nor the Trustee shall be required, pursuant to the provisions
of this Section, (a) to issue, transfer or exchange any Security of any series
during a period beginning at the opening of business 15 days before the day of
selection for redemption of Securities pursuant to Article XI and ending at the
close of business on the day of mailing of notice of redemption or (b) to
transfer or exchange any Security so selected for redemption in whole or in
part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.
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<PAGE> 32
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global
Securities:
(1) Each Global Security authenticated under this Junior Indenture shall be
registered in the name of the Depository designated for such Global Security or
a nominee thereof and delivered to such Depository or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Junior Indenture.
(2) Notwithstanding any other provision in this Junior Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depository for such Global Security or a nominee
thereof unless (A) such Depository (i) has notified CNAF that it is unwilling or
unable to continue as Depository for such Global Security or (ii) has ceased to
be a clearing agency registered under the Exchange Act at a time when the
Depository is required to be so registered to act as depository, in each case
unless CNAF has approved a successor Depository within 60 days, (B) there shall
have occurred and be continuing an Event of Default with respect to such Global
Security, or (C) CNAF in its sole discretion determines that such Global
Security will be so exchangeable and delivers to the Trustee a CNAF Order that
such Global Security shall be so exchangeable. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchanged, without
unnecessary delay but in no event later that the earliest date on which such
Global Security shall be exchangeable, for Securities registered in such names
as such Depository shall direct.
Notwithstanding any other provision in this Junior Indenture, a Global
Security may not be transferred except as a whole by the Depository with respect
to such Global Security to a nominee of such Depositary, or by a nominee of such
Depositary to such Depositary or another nominee of such Depository.
(3) Any Global Security that is exchangeable pursuant hereto shall be
exchanged without unnecessary delay but in no event later than the earliest date
on which such Global Security shall be exchangeable, for any Securities
registered in such names as such Depository shall direct. If a Security is
issued in exchange for any portion of a Global Security after the close of
business at the office or agency for such Security where such exchange occurs on
or after (i) any Regular Record Date for such Security and before the opening of
business at such office or agency on the next Interest Payment Date, or (ii) any
Special Record Date for such Security and before the opening of business at such
office or agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, interest shall not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Security, but shall be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such Global Security shall be payable in
accordance with the provisions of this Junior Indenture.
(4) Every Security authenticated and delivered upon registration or transfer
of, or in exchange for or in lieu of, a Global Security or any portion thereof,
whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depository for such Global Security or a nominee thereof.
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<PAGE> 33
SECTION 3.6. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee together with such
reasonable security or indemnity as may be required by CNAF or the Trustee to
save each of them harmless, CNAF shall execute, and the Trustee shall
authenticate and deliver, in exchange therefor a new Security of the same series
of like tenor and principal amount, having the same Original Issue Date and
Stated Maturity and other terms as such mutilated Security, and bearing a number
not contemporaneously outstanding.
If there shall be delivered to CNAF and to the Trustee (i) evidence to their
reasonable satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be reasonably required by them to save
each of them harmless, then, in the absence of notice to CNAF or the Trustee
that such Security has been acquired by a bona fide purchaser, CNAF shall
execute, and the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series of like
tenor and principal amount, having the same Original Issue Date and Stated
Maturity and other terms as such destroyed, lost or stolen Security, and bearing
a number not contemporaneously outstanding.
Notwithstanding the provisions the previous paragraphs, in case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, CNAF in its discretion may, instead of issuing a new Security,
pay such Security.
Upon the issuance of any new Security under this Section, CNAF may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual
obligation of CNAF, whether or not the destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Junior Indenture equally and proportionately with any and all other
Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, interest on any Security of any
series which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date, shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest in respect of Securities of such
series. The initial payment of interest on any Security of any series which is
issued between a Regular Record Date and the related Interest Payment Date shall
be payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, any interest on any Security
which is payable, but is not timely paid or
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<PAGE> 34
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by CNAF, at its election in each case,
as provided in Clause (a) or (b) below:
(a) CNAF may elect to make payment of any Defaulted Interest to the Persons
in whose names the Securities of such series in respect of which interest is in
default (or their respective Predecessor Securities) are registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. CNAF shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment, and at the same time CNAF shall deposit
with the Trustee an amount of money in the currency in which the Securities of
such series are payable (except as otherwise specified pursuant to Section 3.1
for the Securities of such series) equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify CNAF of such Special Record Date and, in the name and at
the expense of CNAF, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed, first
class, postage prepaid, to each Holder of a Security of such series at the
address of such Holder as it appears in the Securities Register not less than 10
days prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of CNAF, cause a similar notice to be published at
least once in a newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities)
are registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (b).
(b) CNAF may make payment of any Defaulted Interest in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of the series in respect of which interest is in default
may be listed and, upon such notice as may be required by such exchange (or by
the Trustee if the Securities are not listed), if, after notice given by CNAF to
the Trustee of the proposed payment pursuant to this Clause, such payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.7 and Section 3.5,
each Security delivered under this Junior Indenture upon transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, CNAF,
the Trustee and any agent of CNAF or the Trustee may treat the Person in whose
name any Security is registered as the
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owner of such Security for the purpose of receiving payment of principal of and
(subject to Sections 3.5 and 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and none of CNAF,
the Trustee or any agent of CNAF or the Trustee shall be affected by notice to
the contrary.
SECTION 3.9. CANCELLATION.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. CNAF may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which CNAF may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. If the Company shall so acquire any of the Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Junior Indenture. All
canceled Securities shall be destroyed by the Trustee and the Trustee shall
deliver to CNAF a certificate of such destruction.
SECTION 3.10. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series for any period shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. DEFERRALS OF INTEREST PAYMENT DATES.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, CNAF shall have the right, at any time during the
term of such Securities, from time to time to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 3.1 (each, an "Extension Period") during which Extension Periods CNAF
shall have the right to make partial or no payments of interest on any Interest
Payment Date. At the end of any such Extension Period, CNAF shall pay all
interest then accrued and unpaid on the Securities (together with Additional
Interest thereon, if any, at the rate specified for the Securities of such
series to the extent permitted by applicable law) and any Additional Sums then
due provided, however, that during any such Extension Period, CNAF shall not,
and shall not cause or permit any Subsidiary to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of CNAF's outstanding capital stock
(which includes common and preferred stock), or (ii) make any payment of
principal of, or interest or premium, if any, on or repay, repurchase or redeem
any debt security of CNAF (including other series of Securities issued by CNAF
pursuant to the Junior Indenture) that ranks pari passu in all respects with or
junior in interest to the Securities of such series or make any guarantee
payments with respect to any guarantee by CNAF of the debt securities of any
Subsidiary of CNAF if such guarantee ranks pari passu in all respects with or
junior in interest to the Securities of such series (other than (a) dividends or
distributions in Common Stock of CNAF, (b) payments under any CNAF Guarantee (as
defined in the Junior Indenture) (c) purchases of Common Stock related to the
issuance of Common Stock under any of CNAF's benefit plans for its directors,
officers or employees and (d) any declaration of a
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dividend in connection with the implementation of stockholder's rights plan, or
the issuance of stock under any such plan in the future or a redemption or
repurchase of any such rights pursuant thereto). Prior to the termination of any
Extension Period, CNAF may further extend such Extension Period, provided that
no Extension Period (taking into account all previous and subsequent extensions
within such Extension Period) shall exceed the maximum consecutive period or
periods specified in such Securities, end on a date other than an Interest
Payment Date or extend beyond the Maturity of such Securities. Upon termination
of any Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest and Additional Sums then due on any Interest Payment
Date, CNAF may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. CNAF shall give the Holders of the Securities of such
series, the Trustee and the Property Trustee under the relevant Trust Agreement
notice of its election to begin any such Extension Period at least five Business
Days prior to the earlier of (i) the date the distributions on the Preferred
Securities of the applicable CNA Capital Trust are payable or (ii) the date the
Administrative Trustees of such CNA Capital Trust are required to give notice to
any securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date.
The Trustee shall promptly give notice of CNAF's election to begin any such
Extension Period to the Holders of the outstanding Securities of such series.
SECTION 3.12. RIGHT OF SET-OFF.
With respect to the Securities of a series issued to a CNA Capital Trust,
notwithstanding anything to the contrary in this Junior Indenture, CNAF shall
have the right to set-off any payment it is otherwise required to make in
respect of any such Security to the extent CNAF has theretofore made, or is
concurrently on the date of such payment making, an unreimbursed payment under
the CNAF Guarantee relating to such Security or under Section 5.8 of the Junior
Indenture.
SECTION 3.13. AGREED TAX TREATMENT.
Each Security issued hereunder shall provide that CNAF and, by its
acceptance of a Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Security agree that for
United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.
SECTION 3.14. EXTENSION OF STATED MATURITY; ADJUSTMENT OF STATED MATURITY
UPON AN EXCHANGE.
If specified as contemplated by Section 2.1 or Section 3.1 with respect to
the Securities of a particular series, CNAF shall have the right to (a) change
the Maturity of the Securities of such series upon the liquidation of a CNA
Capital Trust and the exchange of such Securities for the Preferred Securities
of such CNA Capital Trust and (b) extend the Maturity for the Securities of such
series; provided, that, if CNAF exercises its right to liquidate the applicable
CNA Capital Trust and exchange the Securities of a particular series for the
Preferred Securities of such CNA Capital Trust as specified in clause (a) above,
any changed Maturity of the Securities of such series shall be no earlier than
the date that is five years after the issuance of such Preferred Securities and
no later than the date 30 years (plus an extended term of up to an additional 19
years if the above-referenced conditions are satisfied) after the date of the
initial issuance of such Preferred Securities; provided
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further, that at time any election to extend the Maturity Date is made and at
the time of such extension, (i) CNAF is not in bankruptcy, otherwise insolvent
or in liquidation, (ii) CNAF is not in default in the payment of any interest or
principal on the Securities of such series and no deferred interest payments
thereon have accrued, (iii) the applicable CNA Capital Trust is not in arrears
on payments of distributions on its Preferred Securities and no deferred
distributions thereon are accumulated, (iv) the Securities are rated not less
than BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors
Service, Inc. or the equivalent by any other nationally recognized statistical
rating organization and (v) the extended Maturity is no later than the 49th
anniversary of the initial issuance of the Preferred Securities of the
applicable CNA Capital Trust. In the event CNAF elects to change or extend the
Stated Maturity as herein provided, it shall give notice to the Trustee, and the
Trustee shall give notice of such change or extension to the Holders no less
than 30 and no more than 60 days prior to the effectiveness thereof.
SECTION 3.15. CUSIP NUMBERS.
CNAF in issuing the Securities may use "CUSIP" numbers (if then generally in
use), and, if so, the Trustee shall use the "CUSIP" numbers of the Securities in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE IV. SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF JUNIOR INDENTURE.
This Junior Indenture shall, upon a CNAF order, cease to be of further
effect with respect to any series of Securities specified in a CNAF order
(except as to (i) any surviving rights of transfer, substitution, conversion and
exchange of Securities, (ii) rights of Holders to receive payments of principal
of and interest including Additional Interest on the Securities and other
rights, duties and obligations of the Holders as beneficiaries hereof with
respect to the amounts, if any, deposited with the Trustee pursuant to this
Article IV and (iii) the rights and obligations of the Trustee hereunder), and
the Trustee, at the expense of CNAF, shall execute proper instruments
acknowledging satisfaction and discharge of this Junior Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other than (A)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (B) Securities for whose payment
money has theretofore been deposited in trust or segregated and held in trust by
CNAF and thereafter repaid to CNAF or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
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(B) will become due and payable at their Stated Maturity within one year
of the date of deposit, or
(C) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of CNAF and CNAF, in the case of Clause
(ii) (A), (ii) (B) or (ii) (C) above, has deposited or caused to be deposited
with the Trustee as trust funds in trust for such purpose an amount in the
currency or currencies in which the Securities of such series are payable
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, including principal (and
premium, if any) and interest (including any Additional Interest) to the date of
such deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(b) CNAF has paid or caused to be paid all other sums payable hereunder by
CNAF; and
(c) CNAF has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Junior Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Junior Indenture, the
obligations of CNAF to the Trustee under Section 6.7 and, if money shall have
been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this
Section, the obligations of the Trustee under Section 4.2 and the last paragraph
of Section 10.3 shall survive.
SECTION 4.2. APPLICATION OF TRUST FUNDS.
Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 or money or Government
Obligations deposited with the Trustee pursuant to Section 4.3, or received by
the Trustee in respect of Government Obligations deposited with the Trustee
pursuant to Section 4.3, shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities and this Junior Indenture, to
the payment, either directly or through any Paying Agent (including CNAF acting
as its own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal and interest or other amounts for the payment of which
such money or obligations have been deposited with or received by the Trustee;
provided, however, such moneys need not be segregated from other funds except to
the extent required by law.
SECTION 4.3. SATISFACTION, DISCHARGE AND DEFEASANCE OF SECURITIES OF ANY
SERIES.
To the extent provided in, and subject to any limitations set forth pursuant
to, a Board Resolution adopted pursuant to Section 3.1 establishing the terms of
the Securities of any series, CNAF shall be deemed to have paid and discharged
the entire indebtedness on all the Outstanding Securities of any such series and
the Trustee, at the expense of CNAF, shall execute proper instruments
acknowledging satisfaction and discharge of such indebtedness, when
(a) with respect to all Outstanding Securities of such series,
(i) CNAF has irrevocably deposited or caused to be irrevocably deposited
with the Trustee as trust funds in trust for such purpose an amount sufficient
to pay and discharge the entire indebtedness
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on all Outstanding Securities of such series for principal (and premium, if any)
and interest (including any Additional Interest) to the Stated Maturity or any
Redemption Date as contemplated by the penultimate paragraph of this Section
4.3, as the case may be; or
(ii) CNAF has irrevocably deposited or caused to be irrevocably deposited
with the Trustee as obligations in trust for such purpose an amount of
Government Obligations as will, in the written opinion of independent public
accountants delivered to the Trustee, together with predetermined and certain
income to accrue thereon, without consideration of any reinvestment thereof, be
sufficient to pay and discharge when due the entire indebtedness on all
Outstanding Securities of such series for principal (and premium, if any) and
interest (including any Additional Interest) to the Stated Maturity or any
Redemption Date as contemplated by the penultimate paragraph of this Section
4.3, as the case may be; and
(b) CNAF has paid or caused to be paid all other sums payable with respect
to the Outstanding Securities of such series; and
(c) CNAF has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of the entire indebtedness on all
Outstanding Securities of any such series have been complied with.
Any deposits with the Trustee referred to in Section 4.3(a) above shall be
irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance reasonably satisfactory to the Trustee. If any Outstanding
Securities of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the applicable escrow trust agreement shall
provide therefor and CNAF shall make such arrangements as are satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of CNAF. If the Securities of such series are not to become
due and payable at their Stated Maturity or upon call for redemption within one
year of the date of deposit, then CNAF shall give, not later than the date of
such deposit, notice of such deposit to the Holders of Securities of such
series.
Upon the satisfaction of the conditions set forth in this Section 4.3 with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Junior Indenture, shall no longer be binding upon, or
applicable to, CNAF; provided, that CNAF shall not be discharged from any
payment obligations in respect of Securities of such series which are deemed not
to be Outstanding under clause (iii) of the definition thereof if such
obligations continue to be valid obligations of CNAF under applicable law.
ARTICLE V. REMEDIES
SECTION 5.1. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to the Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(a) default in the payment of any interest upon any Security of that series,
including any Additional Interest in respect thereof, when it becomes due and
payable, and continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of an Extension Period); or
(b) default in the payment of (i) the principal of any Security of that
series at its stated Maturity, upon redemption by declaration or otherwise or
(ii) any sinking fund payment when and as due by the terms of any Security of
that series; or
(c) default in the performance, or breach, in any material respect, of any
covenant or warranty of CNAF in this Junior Indenture applicable to any Security
of that series (other than a covenant or warranty a default in the performance
of which or the breach of which is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to CNAF by the Trustee or
to CNAF and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied; or
(d) the entry of a decree or order by a court having jurisdiction in the
premises adjudging CNAF a bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of or
in respect of CNAF under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of CNAF or of any
substantial part of its property or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 90 consecutive days; or
(e) the institution by CNAF of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the consent by
it to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of CNAF
or of any substantial part of its property, or the making by it of an assignment
for the benefit for creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due and its willingness to
be adjudicated a bankrupt or insolvent, or the taking of corporate action by
CNAF in furtherance of any such action; or
(f) any other Event of Default with respect to Securities of that series.
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to CNAF
(and to the Trustee if given by Holders), provided, that, in the case of the
Securities of a series issued to a CNA Capital Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series fail to declare the principal of all
the Securities of that series to be immediately due and payable, the holders of
at least 25% in aggregate liquidation amount of the corresponding series of
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Preferred Securities then outstanding shall have such right by a notice in
writing to CNAF and the Trustee; and upon any such declaration such principal
amount (or specified amount) of and the accrued interest (including any
Additional Interest) on all the Securities of such series shall become
immediately due and payable. Payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article Thirteen notwithstanding that such amount shall become
immediately due and payable as herein provided. If an Event of Default specified
in Section 5.1(d) or 5.1(e) with respect to Securities of any series at the time
Outstanding occurs, the principal amount of all the Securities of that series
(or, if the Securities of that series are Discount Securities, such portion of
the principal amount of such Securities as may be specified by the terms of that
series) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
At any time after a declaration of acceleration with respect to Securities
of any series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Securities of that series, by written notice to CNAF and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) CNAF has paid or deposited with the Trustee a sum of money sufficient to
pay in the currency in which the Securities of such series are payable (except
as otherwise specified pursuant to Section 3.1 for the Securities of such
series:
(i) all overdue installments of interest (including any Additional
Interest) on all Securities of that series,
(ii) the principal of any Securities of that series which have become due
otherwise than by such declaration of acceleration and interest thereon at the
Interest Rate borne by the Securities,
(iii) to the extent that payment of such interest is lawful, interest upon
overdue installments of interest at the Interest Rate or Interest Rates borne
by or provided for in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
(b) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series which has
become due solely by such acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
CNAF covenants that if:
(a) default is made in the payment of any installment of interest (including
any Additional Interest) on any Security when such interest becomes due and
payable and such default continues for a period of 30 days, or
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(b) default is made in the payment of the principal of (and premium, if any,
on) any Security at the Maturity thereof
CNAF will, upon demand of the Trustee, pay to the Trustee, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal, including any sinking fund payment or analogous
obligations, (and premium, if any), and interest (including any Additional
Interest); and, in addition thereto, all amounts owing the Trustee under Section
6.7.
If CNAF fails to pay such amounts forthwith upon such demand, the Trustee,
in its own name and as trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid, and may prosecute
such proceeding to judgment or final decree, and may enforce the same against
CNAF or any other obligor upon the Securities and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of CNAF
or any other obligor upon the Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Junior Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to CNAF or any other obligor upon the Securities or
the property of CNAF or of such other obligor or their creditors,
(a) the Trustee (irrespective of whether the principal of the Securities of
any series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on CNAF for the payment of overdue principal or interest (including any
Additional Interest)) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal and
interest (including any Additional Interest) owing and unpaid in respect to the
Securities and to file such other papers or documents as may be necessary or
advisable and to take any and all actions as are authorized under the Trust
Indenture Act in order to have the claims of the Holders and any predecessor to
the Trustee under Section 6.7 and of the Holders allowed in any such judicial
proceedings; and
(ii) and in particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby authorized
by each Holder of Securities of such series to make such payments to the Trustee
for distribution in accordance with Section 5.6, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it and any predecessor Trustee under
Section 6.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.5. TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Junior Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. APPLICATION OF MONEY COLLECTED.
Any money or property collected by the Trustee with respect to a series of
Securities pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money or property on account of principal or interest (including any Additional
Interest), upon presentation of the Securities, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: To the payment of the amounts then due and unpaid upon such series
of Securities for principal (and premium, if any) and interest (including any
Additional Interest), in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such series of Securities for
principal and interest (including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. LIMITATION ON SUITS.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Junior Indenture or
for the appointment of a receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(b) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;
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(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Junior Indenture to affect, disturb or prejudice the rights of
any other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Junior Indenture, except in the manner herein provided and for the equal and
ratable benefit of all such Holders.
SECTION 5.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, INTEREST
AND OTHER AMOUNTS.
Notwithstanding any other provision in this Junior Indenture, the Holder of
any Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest and Additional Sums) on such
Security on the respective Stated Maturities expressed in such Security and to
institute suit for the enforcement of any such payment (or for the conversion or
exchange of the Securities in accordance with their terms, to the extent
applicable), and such right shall not be impaired without the consent of such
Holder. In the case of Securities of a series issued to a CNA Capital Trust, any
holder of the corresponding series of Preferred Securities shall have the right,
upon the occurrence of an Event of Default described in Section 5.1(a) or 5.1(b)
hereof, to institute a suit directly against CNAF for enforcement of payment to
such Holder of principal of (and premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest and Additional Sums) on the
Securities having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of the corresponding series held by such Holder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Junior Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case CNAF, the Trustee and
the Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 3.6, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS OF SECURITIES.
The Holders of a majority in principal amount of the Outstanding Securities
of any series (or in the case of Securities of a series held of record by a CNA
Capital Trust, the holders of a majority of the aggregate liquidation amount of
the Preferred Securities of the corresponding series) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Junior Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have the
right to decline to follow such direction if the Trustee in good faith shall, by
a Responsible Officer or Officers of the Trustee, determine that the proceeding
so directed would be unjustly prejudicial to the Holders (or such holders of
Preferred Securities, as applicable) not joining in any such direction or would
involve the Trustee in personal liability.
SECTION 5.13. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Outstanding Securities
of any series (or in the case of Securities of a series held of record by a CNA
Capital Trust, the holders of a majority of the aggregate liquidation amount of
the Preferred Securities of the corresponding series) may on behalf of the
Holders of all the Securities of such series (or such holders of Preferred
Securities) waive any past default hereunder and its consequences with respect
to such series except a default:
(1) in the payment of the principal of or interest (including any Additional
Interest and Additional Sums) on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Junior Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 5.14. UNDERTAKING FOR COSTS.
All parties to this Junior Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Junior Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest and Additional Sums) on any Security on or after the
respective Stated Maturities expressed in such Security or for the conversion or
exchange of the Securities in accordance with their terms.
ARTICLE VI. THE TRUSTEE
SECTION 6.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Junior Indenture, and no implied covenants or
obligations shall be read into this Junior Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Junior Indenture; but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Junior Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Junior
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Junior Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct except that;
(i) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Junior Indenture with
respect to the Securities of such series.
(d) No provision of this Junior Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Junior Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2. NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default hereunder known to the 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 interest (including any
Additional Interest) on any Security of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the best interests of the Holders of Securities of such series; and
provided, further, that, in the case of any default of the character specified
in Section 5.1(c) with respect to the Securities of any series, no such notice
to Holders of Securities of such series shall be given until at least 30 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 Securities of such series.
SECTION 6.3. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, Security or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of CNAF mentioned herein shall be sufficiently
evidenced by a CNAF Request or CNAF Order (other than delivery of any Security
to the Trustee for authentication and delivery pursuant to Section 3.3 which
shall be sufficiently evidenced as provided therein) and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Junior Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the
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Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel 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;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Junior Indenture at the request or direction of
any of the Holders pursuant to this Junior Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the 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, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of CNAF, personally
or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
SECTION 6.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of CNAF, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Junior Indenture or
of the Securities except that the Trustee represents that it is duly authorized
to execute and deliver this Junior Indenture, authenticate the Securities and
perform its obligations hereunder and that the statements made by it in the
Statement of Eligibility on Form T-1 supplied to CNAF are true and correct. The
Trustee shall not be accountable for the use or application by CNAF of the
Securities or the proceeds thereof.
SECTION 6.5. MAY HOLD SECURITIES.
The Trustee, any Paying Agent, Securities Registrar or any other agent of
CNAF, in its individual or any other capacity, may become the owner or pledgee
of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with
CNAF and its Affiliates with the same rights it would have if it were not
Trustee, Paying Agent, Securities Registrar or such other agent.
SECTION 6.6. MONEY HELD IN TRUST.
Except as provided in Section 4.2, money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with CNAF.
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SECTION 6.7. COMPENSATION AND REIMBURSEMENT.
CNAF agrees
(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder in such amounts as CNAF and the Trustee shall
agree from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Junior Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without negligence or bad
faith, arising out of or in connection with the acceptance or administration of
this trust or the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
This indemnification shall survive the termination of this Agreement and the
resignation or removal of the Trustees.
To secure CNAF's payment obligations in this Section, CNAF and the Holders
agree that the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except funds held in trust by the
Trustee for the benefit of Holders of Securities. Such lien shall survive the
satisfaction and discharge of this Junior Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(d) or (e) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
similar law.
SECTION 6.8. DISQUALIFICATION; CONFLICTING INTERESTS.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Each
Trust Agreement and Guarantee with respect to all other CNAF Trusts are hereby
excluded. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second to last paragraph of
Section 310(b) of the Trust Indenture Act.
SECTION 6.9. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
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(a) a corporation organized and doing business under the laws of the United
States of America or of any State, Territory or the District of Columbia,
authorized under such laws to exercise corporate trust powers, or
(b) a corporation or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal, State, Territorial, or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section 6.9, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article Six. Neither CNAF nor any Person directly or indirectly controlling,
controlled by or under common control with CNAF shall serve as Trustee for the
Securities of any series issued hereunder.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to CNAF. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to CNAF.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.8 after written
request therefor by CNAF or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by CNAF or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation
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then, in any such case, (i) CNAF, acting pursuant to the authority of a Board
Resolution, may remove the Trustee and appoint a successor Trustee with respect
to all Securities, or (ii) subject to Section 5.14, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, CNAF, by a Board Resolution, shall
promptly appoint a successor Trustee with respect to the Securities of that or
those series. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to CNAF and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor
Trustee with respect to the Securities of such series and supersede the
successor Trustee appointed by CNAF. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by CNAF or the Holders and
accepted appointment in the manner hereinafter provided, any Holder who has been
a bona fide Holder of a Security for at least six months may, subject to Section
5.14, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) CNAF shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to CNAF and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of CNAF
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, CNAF, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee
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with respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Junior Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of CNAF or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, CNAF shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all rights, powers and trusts referred to in subsection (a) or
(b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, with the same
effect as if such successor Trustee had itself authenticated such Securities. In
case any Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
Trustee or in the name of such successor Trustee, and in all cases the
certificate of authentication shall have the full force which it is provided
anywhere in the Securities or in this Junior Indenture that the certificate of
the Trustee shall have.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST CNAF.
If and when the Trustee shall be or become a creditor of CNAF (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against CNAF (or any
such other obligor).
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SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof, and
Securities so authenticated shall be entitled to the benefits of this Junior
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer for the Trustee a copy of
which instrument shall be promptly furnished to CNAF. Wherever reference is made
in this Junior Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent other than an Affiliate of the
Trustee shall be acceptable to CNAF and shall at all times be a corporation
organized and doing business under the laws of the United States of America, or
of any State, Territory or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to CNAF. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to CNAF. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee may appoint a successor Authenticating Agent which shall be acceptable
to CNAF and shall give notice of such appointment in the manner provided in
Section 1.6 to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.
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If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned Junior
Indenture.
-----------------------------------------
As Trustee
By:
------------------------------------
As Authenticating Agent
By:
------------------------------------
Authorized Officer
ARTICLE VII. HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CNAF
SECTION 7.1. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
In accordance with Section 312(a) of the Trust Indenture Act, CNAF will
furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 15 and July 15, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such January 1 and July 1, and
(b) such other times as the Trustee may request in writing, within 30 days
after the receipt by CNAF 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, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
SECTION 7.2. PRESERVATION OF INFORMATION, COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Junior Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with CNAF and the Trustee that neither CNAF nor the Trustee nor any agent of
either of them shall be held accountable
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by reason of the disclosure of information as to the names and addresses of the
Holders made pursuant to the Trust Indenture Act.
SECTION 7.3. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Junior Indenture as may be required pursuant
to the Trust Indenture Act, at the times and in the manner provided pursuant
thereto.
(b) Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than July 15 in each calendar year,
commencing with the first July 15 after the first issuance of Securities under
this Junior Indenture.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange, if any, upon which
the Securities are listed and also with the Commission. CNAF will notify the
Trustee whenever the Securities are listed on any stock exchange.
SECTION 7.4. REPORTS BY CNAF.
CNAF shall file with the Trustee and with the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided in the Trust Indenture Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
shall be filed with the Trustee within 15 days after the same is required to be
filed with the Commission. Notwithstanding that CNAF may not be required to
remain subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, CNAF shall continue to file with the Commission
and provide the Trustee with the annual reports and the information, documents
and other reports which are specified in Sections 13 and 15(d) of the Securities
Exchange Act of 1934. CNAF also shall comply with the other provisions of Trust
Indenture Act Section 314(a).
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. CNAF MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
CNAF shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to any Person, and no Person shall consolidate with or merge into
CNAF or convey, transfer or lease its properties and assets substantially as an
entirety to CNAF, unless:
(1) In case CNAF shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets substantially as an entirety
to another Person, the corporation formed by such consolidation or into which
CNAF is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of CNAF as an entirety or substantially as an
entirety shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America or any State or the District of
Columbia, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
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Trustee, the due and punctual payment of the principal of (and premium, if any)
and interest (including any Additional Interest and Additional Sums) on all the
Securities and the performance of every covenant of this Junior Indenture on the
part of CNAF to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series issued to a CNA Capital Trust,
such consolidation, merger, conveyance, transfer or lease is permitted under the
related Trust Agreement and CNAF Guarantee and does not give rise to any breach
or violation of the related Trust Agreement or CNAF Guarantee; and
(4) CNAF has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger, conveyance,
transfer or lease and any such supplemental indenture complies with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee, subject to Section 6.1,
may rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 8.1.
SECTION 8.2. SUCCESSOR PERSON SUBSTITUTED.
Upon any consolidation or merger by CNAF with or into any other Person, or
any conveyance, transfer or lease by CNAF of its properties and assets as an
entirety or substantially as an entirety to any Person in accordance with
Section 8.1, the successor Person formed by such consolidation or into which
CNAF is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
CNAF under this Junior Indenture with the same effect as if such successor
Person had been named as CNAF herein; and thereafter, except in the case of a
lease, CNAF shall be discharged from all obligations and covenants under the
Junior Indenture and the Securities and may be dissolved and liquidated.
A successor Person may cause to be signed, and may issue either in its own
name or in the name of CNAF, any or all of the Securities issuable hereunder
which theretofore shall not have been signed by CNAF and delivered to the
Trustee; and, upon the order of such successor Person instead of CNAF and
subject to all the terms, conditions and limitations in this Junior Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of CNAF to
the Trustee for authentication pursuant to such provisions and any Securities
which such successor Person thereafter shall cause to be signed and delivered to
the Trustee on its behalf for the purpose pursuant to such provisions. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Junior Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Junior Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
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ARTICLE IX. SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, CNAF, when authorized by or pursuant to
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to CNAF, and the assumption
by any such successor of the covenants of CNAF herein and in the Securities
contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee or to surrender any right or power herein conferred upon CNAF; or
(3) to establish the form or terms of Securities of any series as permitted
by Sections 2.1 or 3.1; or
(4) to add to the covenants of CNAF for the benefit of the Holders of all or
any series of Securities (and if such covenants are to be for the benefit of
less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of such series); or
(5) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such Events of Default are to be for
the benefit of less than all series of Securities, stating that such Events of
Default are expressly being included solely for the benefit of such series); or
(6) to change or eliminate any provision of this Junior Indenture, provided
that any such change or elimination shall become effective only when there is no
Security Outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision; or
(7) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Junior
Indenture, provided that any action pursuant to this clause (7) shall not
materially adversely affect the interest of the Holders of Securities of any
series or, in the case of the Securities of a series issued to a CNA Capital
Trust and for so long as any of the corresponding series of Preferred Securities
shall remain outstanding, the holders of such Preferred Securities; or
(8) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Junior Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or
(9) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Junior Indenture under the Trust Indenture
Act.
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SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to CNAF and the Trustee, CNAF, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Junior Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Junior Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) except to the extent permitted by Section 3.11 or 3.14 or as otherwise
specified as contemplated by Section 2.1 or 2.1 with respect to the deferral of
the payment of interest on the Securities of any series, change the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest or Additional Sums) on, any such Security, or reduce the
principal amount thereof or the rate (or manner of calculation) of interest
thereon or change any provision regarding the redemption thereof, or reduce the
amount of principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or
change the place of payment where, or the coin or currency in which, the
principal of, or interest (or premium, if any) on, any such Security is payable,
or impair the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date) or the conversion or exchange of any such Security in
accordance with the terms thereof to the extent applicable, or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Junior Indenture or
certain defaults hereunder and their consequences) contemplated under in this
Junior Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or Section
10.5, except to increase any such percentage or to provide that certain other
provisions of this Junior Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby; or
(4) modify the provisions in Article Thirteen of this Junior Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
adverse to the Holders thereof;
provided that, in the case of the Securities of a series held of record by a CNA
Capital Trust, so long as any of the corresponding series of Preferred
Securities remains outstanding, no such amendment shall be made, without the
prior consent of the holders of a majority of the aggregate liquidation amount
of such Preferred Securities then outstanding; and provided further that in the
case of the Securities of a series held of record by a CNA Capital Trust, so
long as any of the corresponding series of Preferred Securities remain
outstanding, if the consent of the Holder of each Outstanding Security affected
thereby is required, no amendment shall be made without the prior consent of the
holders of each Preferred Security then outstanding.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Junior Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to
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such covenant or other provision, shall be deemed not to affect the rights under
this Junior Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Junior Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Junior Indenture and
that all conditions precedent have been complied with. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Junior
Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article Nine or
delivery to the Trustee of the Officers' Certificate pursuant to Section 3.1
hereof (which Officers' Certificate shall have the effect of a supplemental
indenture for all purposes hereunder), this Junior Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Junior Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article Nine and
every Officers' Certificate delivered to the Trustee pursuant to Section 3.1
hereof shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 9.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine or delivery to the Trustee
of the Officers' Certificate pursuant to Section 3.1 hereof (which Officers
Certificate shall have the effect of a supplemental indenture for all purposes
hereunder) may, and shall if required by CNAF, bear a notation in form approved
by CNAF as to any matter provided for in such supplemental indenture or such
Officers' Certificate. If CNAF shall so determine, new Securities of any series
so modified as to conform, in the opinion of CNAF, to any such supplemental
indenture or such Officers' Certificate may be prepared and executed by CNAF and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
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ARTICLE X. COVENANTS
SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
CNAF covenants and agrees for the benefit of the Holders of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including Additional Interest and Additional Sums) on the
Securities of that series in accordance with the terms of such Securities and
this Junior Indenture.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
CNAF will maintain in each Place of Payment for any series an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities may be surrendered for transfer or exchange, where
Securities of that series that are convertible or exchangeable may be
surrendered for conversion or exchange, as applicable, and where notices and
demands to or upon CNAF in respect of the Securities and this Junior Indenture
may be served. CNAF initially appoints the Trustee, acting through its Corporate
Trust Office, as its agent for said purposes. CNAF will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time CNAF shall fail to maintain such office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and CNAF hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and demands.
CNAF may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all of
such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve CNAF
of its obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. CNAF will give prompt written notice
to the Trustee of any such designation and any change in the location of any
such office or agency.
SECTION 10.3. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If CNAF shall at any time act as its own Paying Agent with respect to any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest and other amounts on any of the Securities of
such series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
and other amounts so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and will promptly notify the
Trustee of its failure so to act.
Whenever CNAF shall have one or more Paying Agents, it will, prior to 10:00
a.m. New York City time on each due date of the principal of (and premium, if
any) or interest and other amounts on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest
and other amounts so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal (and premium, if any) or interest and
other amounts, and (unless such Paying Agent is the Trustee) CNAF will promptly
notify the Trustee of its failure so to act.
CNAF will cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of this Section 10.3, that such Paying
Agent will:
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(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest and other amounts on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by CNAF (or any other obligor
upon the Securities) in the making of any payment of principal (and premium, if
any) or interest or any other amounts payable hereunder;
(c) at any time during the continuance of any such default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent; and
(d) comply with the provisions of the Trust Indenture Act applicable to it
as a Paying Agent.
CNAF may at any time, for the purpose of obtaining the satisfaction and
discharge of this Junior Indenture or for any other purpose, pay, or by CNAF
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
CNAF or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by CNAF or such Paying Agent;
and, upon such payment by CNAF or any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as provided in the Securities of any series, any money deposited with
the Trustee or any Paying Agent, or then held by CNAF, in trust for the payment
of the principal of (and premium, if any) or interest or any other amounts on
any Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest or any other amounts has become due and payable
shall (unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on CNAF Request to CNAF, or (if
then held by CNAF) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to CNAF for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of CNAF as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of CNAF cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, the City of New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to CNAF.
SECTION 10.4. STATEMENT AS TO COMPLIANCE.
CNAF shall deliver to the Trustee, within 120 days after the end of each
calendar year of CNAF ending after the date hereof, an Officers' Certificate
covering the preceding calendar year, stating whether or not to the best
knowledge of the signers thereof CNAF is in default in the performance,
observance or fulfillment of or compliance with any of the terms, provisions,
covenants and conditions of this Junior Indenture and, if CNAF shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge. For the purpose of this Section 10.4, compliance shall
be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Junior Indenture.
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SECTION 10.5. WAIVER OF CERTAIN COVENANTS.
CNAF may omit in any particular instance to comply with any covenant or
condition as specified as contemplated by Section 3.1, 9.1(c) or 9.1(d) with
respect to the Securities of any series, if before or after the time for such
compliance the Holders of a majority in principal amount of the Outstanding
Securities of such series (or in the case of Securities of a series held of
record by a CNA Capital Trust, the holders of a majority of the aggregate
liquidation amount of the Preferred Securities of the corresponding series)
shall either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of CNAF in
respect of any such covenant or condition shall remain in full force and effect.
SECTION 10.6. ADDITIONAL SUMS.
In the case of the Securities of a series issued to a CNA Capital Trust,
except as otherwise specified as contemplated by Section 3.1, in the event that
(i) a Property Trustee on behalf of a CNA Capital Trust is the Holder of all of
the Outstanding Securities of such series and (ii) a Tax Event in respect of
such CNA Capital Trust shall have occurred and be continuing, CNAF shall pay to
such CNA Capital Trust (and its permitted successors or assigns under the
related Trust Agreement), for so long as such CNA Capital Trust (or its
permitted successor or assignee) is the Holder of any Securities of such series,
such additional amounts as may be necessary in order that the amount of
distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by such CNA Capital Trust on the related
Preferred Securities and Common Securities that at any time remain outstanding
in accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes (the "Additional Sums"). Whenever in this Junior Indenture or
the Securities there is a reference in any context to the payment of principal
of or interest on the Securities, such mention shall be deemed to include
mention of the payments of the Additional Sums provided for in this paragraph to
the extent that, in such context, Additional Sums are, were or would be payable
in respect thereof pursuant to the provisions of this paragraph and express
mention of the payment of Additional Sums (if applicable) in any provisions
hereof shall not be construed as excluding Additional Sums in those provisions
hereof where such express mention is not made; provided, however, that the
deferral of the payment of interest pursuant to Section 3.11 or the Securities
shall not extend the payment of any Additional Sums that may be due and payable.
SECTION 10.7. ADDITIONAL COVENANTS.
CNAF covenants and agrees with each Holder of Securities of a series issued
to a CNA Capital Trust that it will not, and it will not permit any Subsidiary
of CNAF to, (a) declare or pay any dividends or distributions on, or redeem
purchase, acquire or make a liquidation payment with respect to, any shares of
CNAF's capital stock (which includes common and preferred stock), or (b) make
any payment of principal of, or interest or premium, if any, on, or repay,
repurchase or redeem any debt securities of CNAF (including securities other
than the Securities of such series) that rank pari passu in all respects with
or junior to the Securities of such series or (c) make any guarantee payments
with respect to any guarantee by CNAF of debt securities of any subsidiary of
CNAF if such guarantee ranks pari passu in all respects with or junior to the
Securities (other than (1) dividends or distributions in Common Stock of CNAF,
(2) payments under the related CNAF Guarantee, (3) purchases of Common Stock
related to the issuance of Common Stock under any of CNAF's benefit plans for
its directors, officers or
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employees), and (4) any declaration of a dividend in connection with the
implementation of a stockholder's rights plan, or issuance of stock under any
such plan in the future or a redemption or repurchase of any such rights
pursuant thereto) if at such time (i) there shall have occurred any event of
which CNAF has actual knowledge that (a) with the giving of notice or the lapse
of time or both, would constitute an Event of Default hereunder and (b) in
respect of which CNAF shall not have taken reasonable steps to cure, (ii) CNAF
shall be in default with respect to its payment of any obligations under the
related CNAF Guarantee or (iii) CNAF shall have given notice of its election to
begin an Extension Period as provided herein and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall be
continuing.
CNAF also covenants and agrees with each Holder of Securities of a series
issued to a CNA Capital Trust (i) to maintain directly or indirectly 100%
ownership of the Common Securities of such CNA Capital Trust; provided, however,
that any permitted successor of CNAF hereunder may succeed to CNAF's ownership
of such Common Securities, (ii) not to voluntarily terminate, wind-up or
liquidate such CNA Capital Trust, except in connection with (a) a distribution
of the Securities of such series to the holders of Preferred Securities in
liquidation of such CNA Capital Trust, (b) the redemption of the Preferred
Securities, or (c) certain mergers, consolidations or amalgamations in each case
as permitted by the related Trust Agreement and (iii) to use its reasonable
efforts, consistent with the terms and provisions of such Trust Agreement, to
cause (a) such CNA Capital Trust to remain classified as a grantor trust and not
an association taxable as a corporation for United States federal income tax
purposes or (b) each holder of Preferred Securities to be treated as owning an
undivided beneficial interest in the Securities.
ARTICLE XI. REDEMPTION OF SECURITIES
SECTION 11.1. APPLICABILITY OF THIS ARTICLE.
Securities of any series which are redeemable before the stated maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 3.1 for Securities of any series) in
accordance with this Article.
SECTION 11.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of CNAF to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
CNAF of less than all of the Securities of any particular series and having the
same terms, CNAF shall, not less than 45 nor more than 60 days prior to the date
fixed for redemption (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such date and of the principal amount of
Securities of that series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities, CNAF shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction.
SECTION 11.3. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed (unless all
the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such
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series, provided that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities of such series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify CNAF in writing of the Securities selected
for partial redemption and the principal amount thereof to be redeemed. For all
purposes of this Junior Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed. If CNAF
shall so direct, Securities registered in the name of CNAF, any Affiliate or any
Subsidiary thereof shall not be included in the Securities selected for
redemption.
SECTION 11.4. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the date fixed for redemption, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of each series to be redeemed, each notice of
redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of such particular series and
having the same terms are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due and
payable upon each such Security or portion thereof, and that interest thereon,
if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of CNAF
shall be given by CNAF or, at CNAF's request, by the Trustee in the name and at
the expense of CNAF and shall not be irrevocable. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice. In any case, a failure to give
such notice by mail or any defect in the notice to the Holder of any Security
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security.
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SECTION 11.5. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. New York City time on the Redemption Date specified in
the notice of redemption given as provided in Section 11.4, CNAF will deposit
with the Trustee or with one or more Paying Agents (or if CNAF is acting as its
own Paying Agent, the Company will segregate and hold in trust as provided in
Section 10.3) an amount of money sufficient to redeem on the Redemption Date all
the Securities so called for redemption at the applicable Redemption Price,
together with any accrued interest (including Additional Interest) to the
Redemption Date.
SECTION 11.6. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.
If any notice of redemption has been given as provided in Section 11.4, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable Redemption Price. On presentation and surrender
of such Securities at a Place of Payment in said notice specified, the said
securities or the specified portions thereof shall be paid and redeemed by CNAF
at the applicable Redemption Price together with any accrued interest (including
Additional Interest) to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 3.1, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.7.
Upon presentation of any Security redeemed in part only, CNAF shall execute
and the Trustee shall authenticate and deliver to the Holder thereof, at the
expense of CNAF, a new Security or Securities of the same series, of authorized
denominations, in aggregate principal amount equal to the unredeemed portion of
the Security so presented and having the same Original Issue Date, Stated
Maturity and other terms. If a Global Security is so surrendered, such new
Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, (and, to the
extent legally enforceable, interest) on such Security shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 11.7. CNAF'S RIGHT OF REDEMPTION.
(a) Unless otherwise specified as contemplated by Section 3.1 with respect
to the Securities of a particular series and notwithstanding any additional
redemption rights that may be so specified, CNAF may, at its option, redeem the
Securities of any series after their date of issuance in whole at any time or in
part from time to time, subject to the provisions of this clause (a) and the
other provisions of this Article Eleven. Unless otherwise specified as
contemplated by Section 3.1 with respect to the Securities of a particular
series, the redemption price for any Security so redeemed pursuant to this
clause (a) shall be equal to 100% of the principal amount of such Securities
plus any accrued and unpaid interest, including any Additional Interest and
Additional Sums, to the date fixed for redemption. CNAF shall not redeem the
Securities in part unless all accrued and unpaid interest (including any
Additional Interest) has been paid in full on all Securities Outstanding for all
interest periods terminating on or prior to the Redemption Date.
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(b) In the case of the Securities of a series issued to a CNA Capital Trust,
except as otherwise specified as contemplated by Section 3.1, if a Special Event
in respect of such CNA Capital Trust shall occur and be continuing, CNAF may, at
its option, redeem the Securities of such series within 90 days of the
occurrence of such Special Event, in whole but not in part, subject to the
provisions of this clause (b) and the other provisions of this Article Eleven.
The redemption price for any Security so redeemed pursuant to this clause (b)
shall be equal to 100% of the principal amount of such Securities then
Outstanding plus accrued and unpaid interest, including any Additional Interest
and Additional Sums, to the date fixed for redemption.
ARTICLE XII. SINKING FUNDS
SECTION 12.1. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any sinking fund payment in excess of such minimum amount which is
permitted to be made by the terms of such Securities of any series is herein
referred to as an "optional sinking fund payment". If provided for by the terms
of any Securities of any series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of such Securities.
SECTION 12.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, CNAF may at its option, at any
time no more than 16 months and no less than 45 days prior to the date on which
such sinking fund payment is due, deliver to the Trustee Securities of such
series (together with the unmatured Coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by CNAF or apply Securities which
had been previously so delivered and cancelled pursuant to Section 3.9, or apply
Securities which have been converted, if applicable, except Securities of such
series that have been redeemed through the application of mandatory or optional
sinking fund payments pursuant to the terms of the Securities of such series,
accompanied by a CNAF Order instructing the Trustee to credit such obligations
and stating that the Securities of such series were originally issued by CNAF by
way of bona fide sale or other negotiation for value; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose by
the Trustee at the redemption price for such Securities, as specified in the
Securities so to be redeemed, for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 12.3. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any series
of Securities, CNAF will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any,
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which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Certificate shall be irrevocable
and upon its delivery CNAF shall be obligated to make the cash payment or
payments therein referred to, if any, on or before the succeeding sinking fund
payment date. In the case of the failure of CNAF to deliver such Certificate
(or, as required by this Junior Indenture, the Securities and coupons, if any,
specified in such Certificate), the sinking fund payment due on the succeeding
sinking fund payment date for such series shall be paid entirely in cash and
shall be sufficient to redeem the principal amount of the Securities of such
series subject to a mandatory sinking fund payment without the right to deliver
or credit securities as provided in Section 12.2 and without the right to make
the optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by CNAF if CNAF is acting as its own Paying Agent) on the sinking fund payment
date on which such payment is made (or, if such payment is made before a sinking
fund payment date, on the sinking fund payment date immediately following the
date of such payment) to the redemption of Securities of such series at the
redemption price specified in such Securities with respect to the sinking fund.
Any sinking fund moneys not so applied or allocated by the Trustee (or by CNAF
if CNAF is acting as its own Paying Agent, segregated and held in trust as
provided in Section 10.3) for such series and together with such payment (or
such amount so segregated) shall be applied in accordance with the provisions of
this Section 12.3. Any and all sinking fund moneys with respect to the
Securities of any particular series held by the Trustee (or if CNAF is acting as
its own Paying Agent, segregated and held in trust as provided in Section 10.3)
on the last sinking fund payment date with respect to Securities of such series
and not held for the payment or redemption of particular Securities of such
series shall be applied by the Trustee (or by CNAF if CNAF is acting as its own
Paying Agent), together with other moneys, if necessary, to be deposited (or
segregated) sufficient for the purpose, to the payment of the principal of the
Securities of such series at Maturity. The Trustee shall select the Securities
to be redeemed upon such sinking fund payment date in the manner specified in
Section 11.3 and cause notice of the redemption thereof to be given in the name
of and at the expense of CNAF in the manner provided in Section 11.4. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Section 11.6. On or before each
sinking fund payment date, CNAF shall pay to the Trustee (or, if CNAF is acting
as its own Paying Agent, CNAF shall segregate and hold in trust as provided in
Section 10.3) in cash a sum in the currency in which Securities of such series
are payable (except as provided pursuant to Section 3.1) equal to the principal
and any interest accrued to the redemption date for Securities or portions
thereof to be redeemed on such sinking fund payment date pursuant to this
Section 12.3.
Neither the Trustee nor CNAF shall redeem any Securities of a series with
sinking fund moneys or mail any notice of redemption of Securities of such
series by operation of the sinking fund for such series during the continuance
of a default in payment of interest, if any, on any Securities of such series or
of any Event of Default (other than an Event of Default occurring as a
consequence of this paragraph) with respect to the Securities of such series,
except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or CNAF if CNAF is then acting as its
own Paying Agent) shall redeem such Securities if cash sufficient for that
purpose shall be deposited with the Trustee (or segregated by CNAF) for that
purpose in accordance with the terms of this Article Twelve. Except as
aforesaid, any moneys in the sinking fund for such series at the
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time when any such default or Event of Default shall occur and any moneys
thereafter paid into such sinking fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.3.
ARTICLE XIII. SUBORDINATION OF SECURITIES
SECTION 13.1. SECURITIES SUBORDINATE TO SENIOR DEBT.
CNAF covenants and agrees, and each Holder of a Security, by its acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article Thirteen, the payment of the principal of
(and premium, if any) and interest (including any Additional Interest and
Additional Sums) on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
amounts then due and payable in respect of all Senior Debt.
SECTION 13.2. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to CNAF (each such event, if any, herein sometimes
referred to as a "Proceeding"), then the holders of Senior Debt shall be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before the Holders of the Securities are entitled to
receive or retain any payment or distribution of any kind or character, whether
in cash, property or securities (including any payment or distribution which may
be payable or deliverable by reason of the payment of any other Debt of CNAF
(including any series of the Securities) subordinated to the payment of the
Securities, such payment or distribution being hereinafter referred to as a
"Junior Subordinated Payment"), on account of principal of (or premium, if any)
or interest (including any Additional Interest and Additional Sums) on the
Securities and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof, any payment or distribution of
any kind or character, whether in cash, property or securities, including any
Junior Subordinated Payment, which may be payable or deliverable in respect of
the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this Section,
the Trustee or the Holder of any Security shall have received any payment or
distribution of assets of CNAF of any kind or character, whether in cash,
property or securities, including any Junior Subordinated Payment, before all
Senior Debt is paid in full or payment thereof is provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior Debt,
and if such fact shall, at or prior to the time of such payment or distribution,
have been made known to the Trustee or, as the case may be, such Holder, then
and in such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of CNAF for application to the payment of all Senior Debt remaining
unpaid, to the extent necessary to pay all Senior Debt in full, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
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For purposes of this Article only, the words "any payment or distribution of
any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of CNAF as reorganized or readjusted, or
securities of CNAF or any other corporation provided for by a plan of
reorganization or readjustment which securities are subordinated in right of
payment to all then outstanding Senior Debt to substantially the same extent as
the Securities are so subordinated as provided in this Article Thirteen. The
consolidation of CNAF with, or the merger of CNAF into, another Person or the
liquidation or dissolution of CNAF following the sale of all or substantially
all of its properties and assets as an entirety to another Person or the
liquidation or dissolution of CNAF following the sale of all or substantially
all of its properties and assets as an entirety to another Person upon the terms
and conditions set forth in Article Eight shall not be deemed a Proceeding for
the purposes of this Section 13.2 if the Person formed by such consolidation or
into which CNAF is merged or the Person which acquires by sale such properties
and assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, or sale comply with the conditions set forth in Article
Eight.
SECTION 13.3. PRIOR PAYMENT TO SENIOR DEBT UPON ACCELERATION OF SECURITIES.
In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by CNAF on account of the principal of (or premium, if any) or interest
(including any Additional Interest and Additional Sums) on the Securities or on
account of the purchase or other acquisition of Securities by CNAF or any
Subsidiary; provided, however, that nothing in this Section 13.3 shall prevent
the satisfaction of any sinking fund payment in accordance with this Junior
Indenture or as otherwise specified as contemplated by Section 3.1 for the
Securities of any series by delivering and crediting pursuant to Section 12.2 or
as otherwise specified as contemplated by Section 3.1 for the Securities of any
series Securities which have been acquired (upon redemption or otherwise) prior
to such declaration of acceleration.
In the event that, notwithstanding the foregoing, CNAF shall make any
payment to the Trustee or the Holder of any Security prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment shall be paid over and delivered
forthwith to CNAF.
The provisions of this Section 13.3 shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.4. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT.
(a) In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Debt, or in the
event that any event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior Debt becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable, unless and until such event of default shall have
been cured or waived or
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shall have ceased to exist and such acceleration shall have been rescinded or
annulled, or (b) in the event any proceeding shall be pending with respect to
any such default in payment or such event or default, then no payment or
distribution of any kind or character, or defeasance, whether in cash,
properties or securities (including any Junior Subordinated Payment) shall be
made by CNAF on account of principal of (or premium, if any) or interest
(including any Additional Interest), if any, on the Securities provided,
however, that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with this Junior Indenture or as otherwise
specified as contemplated by Section 3.1 for the Securities of any series by
delivering and crediting pursuant to Section 12.2 or as otherwise specified as
contemplated by Section 3.1 for the Securities of any series Securities which
have been acquired (upon redemption or otherwise) prior to such default in
payment or event of default.
In the event that, notwithstanding the foregoing, CNAF shall make any
payment to the Trustee or the Holder of any Security prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment shall be paid over and delivered
forthwith to CNAF.
The provisions of this Section 13.3 shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.5. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article Thirteen or elsewhere in this Junior
Indenture or in any of the Securities shall prevent (a) CNAF, at any time except
during the pendency of any Proceeding referred to in Section 13.2 or under the
conditions described in Sections 13.3 and 13.4, from making payments at any time
of principal of (and premium, if any) or interest (including Additional Interest
and Additional Sums) on the Securities, or (b) the application by the Trustee of
any money or Government Obligations deposited with it hereunder to the payment
of or on account of the principal of (and premium, if any) or interest
(including any Additional Interest and Additional Sums) on the Securities or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article Thirteen.
SECTION 13.6. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all Senior Debt, or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior Debt
pursuant to the provisions of this Article Thirteen (equally and ratably with
the holders of all indebtedness of CNAF which by its express terms is
subordinated to Senior Debt of CNAF to the same extent as the Securities are
subordinated to the Senior Debt and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior Debt) to
the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest on the Securities
shall be paid in full. For purposes of such subrogation or assignment, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior Debt
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by Holders of the Securities or the Trustee, shall, as among CNAF, its creditors
other than holders of Senior Debt, and the Holders of the Securities, be deemed
to be a payment or distribution by CNAF to or on account of the Senior Debt.
SECTION 13.7. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article Thirteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Junior Indenture or in the Securities is
intended to or shall (a) impair, as between CNAF and the Holders of the
Securities, the obligations of CNAF, which are absolute and unconditional, to
pay to the Holders of the Securities the principal of (and premium, if any) and
interest (including any Additional Interest and Additional Sums) on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against CNAF of the Holders of
the Securities and creditors of CNAF other than their rights in relation to the
holders of Senior Debt; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Junior Indenture, including, without limitation, filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article
Thirteen of the holders of Senior Debt to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 13.8. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
SECTION 13.9. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of CNAF or by any act or
failure to act, in good faith, by any such holder, or by any noncompliance
by CNAF with the terms, provisions and covenants of this Junior Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Thirteen or the obligations hereunder of the Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against CNAF and any other Person.
SECTION 13.10. NOTICE TO TRUSTEE.
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CNAF shall give prompt written notice to the Trustee of any fact known to
CNAF which would prohibit the making of any payment to or by the Trustee in
respect of the Securities. Notwithstanding the provisions of this Article
Thirteen or any other provision of this Junior Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from CNAF or a
holder of Senior Debt or from any trustee, agent or representative therefor
(whether or not the facts contained in such notice are true); provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 13.10 at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest
(including any Additional Interest) on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received and shall not be affected by any notice to the contrary which
may be received by it within two Business Days prior to such date.
SECTION 13.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of CNAF referred to in this
Article Thirteen, the Trustee, subject to the provisions of Article Six, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which a Proceeding is pending,
or a certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Debt and other
indebtedness of CNAF, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article Thirteen.
SECTION 13.12. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee, in its capacity as trustee under this Junior Indenture, shall
not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to CNAF or to any other Person cash,
property or securities to which any holders of Senior Debt shall be entitled by
virtue of this Article or otherwise.
SECTION 13.13. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Thirteen with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Junior Indenture shall deprive the Trustee of any of its
rights as such holder. The Trustee's rights under Section 6.7 and Section 5.6
are not subject to the provisions of this Article.
SECTION 13.14. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by CNAF and be then acting hereunder, the term "Trustee" as used in
this Article Thirteen shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent
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<PAGE> 73
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee.
SECTION 13.15. CERTAIN CONVERSIONS OR EXCHANGES.
For the purposes of this Article Thirteen only, (a) the issuance and
delivery of junior securities upon conversion or exchange of Securities shall
not be deemed to constitute a payment or distribution on account of the
principal of (or premium, if any) or interest (including any Additional Interest
and Additional Sums) on Securities and (b) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion or
exchange of a Security shall be deemed to constitute payment on account of the
principal of such security. For the purposes of this Section 13.15, the term
"junior securities" means (i) shares of any capital stock of any class of CNAF
or (ii) securities of CNAF which are subordinated in right of payment to all
Senior Debt which may be outstanding at the time of issuance or delivery of such
securities to the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article Thirteen.
* * * *
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Junior Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CNA FINANCIAL CORPORATION
By:
-------------------------------
Attest:
- --------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
as Junior Indenture Trustee
By:
-------------------------------
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<PAGE> 1
EXHIBIT 4(e)
CERTIFICATE OF TRUST
OF
CNA FINANCIAL CAPITAL I
This Certificate of Trust of CNA Financial Capital I (the "Trust"),
dated December 23, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is CNA
Financial Capital I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware, 19801.
IN WITNESS WHEREOF, the undersigned, constituting all of the trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: /s/ Steven M. Wagner
------------------------------
Name: Steven M. Wagner
Title: First Vice President
FIRST CHICAGO DELAWARE, INC., as
Trustee
By: /s/ Steven M. Wagner
------------------------------
Name: Steven M. Wagner
Title: First Vice President
Pamela S. Dempsey, as Trustee
By: /s/ Pamela S. Dempsey
------------------------------
Donald P. Lofe, Jr., as Trustee
By: /s/ Donald P. Lofe, Jr.
------------------------------
<PAGE> 1
EXHIBIT 4(f)
-----------------------------------------------------------------
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AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
CNA FINANCIAL CORPORATION, AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE, INC.,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF , _____
CNA FINANCIAL CAPITAL I
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<PAGE> 2
EXHIBIT 4(f)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I Defined Terms............................................................................1
Section 1.1 Definitions..............................................................................1
ARTICLE II Establishment of the Trust...............................................................9
Section 2.1 Name.....................................................................................9
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.............................10
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.........................10
Section 2.4 Issuance of the Trust Securities........................................................11
Section 2.5 Subscription and Purchase of Debentures.................................................11
Section 2.6 Declaration of Trust....................................................................11
Section 2.7 Authorization to Enter into Certain Transactions........................................12
Section 2.8 Assets of Trust.........................................................................16
Section 2.9 Title to Trust Property.................................................................16
ARTICLE III Payment Account.........................................................................16
Section 3.1 Payment Account.........................................................................16
ARTICLE IV Distributions; Redemption...............................................................16
Section 4.1 Distributions...........................................................................16
Section 4.2 Redemption..............................................................................18
Section 4.3 Subordination of Common Securities......................................................20
Section 4.4 Payment Procedures......................................................................20
Section 4.5 Tax Returns and Reports.................................................................21
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust.............................................21
Section 4.7 Reduction for Payments under Junior Indenture...........................................21
ARTICLE V Trust Securities Certificates...........................................................22
Section 5.1 Initial Ownership.......................................................................22
Section 5.2 The Trust Securities Certificates.......................................................22
Section 5.3 Execution and Delivery of Trust Securities Certificates. ...............................22
Section 5.4 Registration of Transfer and Exchange of Preferred Securities Certificates..............22
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates......................23
Section 5.6 Persons Deemed Securityholders..........................................................24
Section 5.7 Access to List of Securityholders' Names and Addresses..................................24
Section 5.8 Maintenance of Office or Agency.........................................................24
Section 5.9 Appointment of Paying Agent.............................................................25
Section 5.10 Ownership of Common Securities by Depositor; No Transfer. ..............................26
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities Certificate.............26
Section 5.12 Notices to Clearing Agency..............................................................27
Section 5.13 Issuance of Definitive Preferred Securities Certificates................................27
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.14 Rights of Securityholders...............................................................28
ARTICLE VI Acts of Securityholders; Meetings; Voting...............................................30
Section 6.1 Limitations on Voting Rights............................................................30
Section 6.2 Notice of Meetings......................................................................31
Section 6.3 Meetings of Preferred Securityholders...................................................31
Section 6.4 Voting Rights...........................................................................32
Section 6.5 Proxies, etc............................................................................32
Section 6.6 Securityholder Action by Written Consent................................................32
Section 6.7 Record Date for Voting and Other Purposes...............................................32
Section 6.8 Acts of Securityholders.................................................................33
Section 6.9 Inspection of Records...................................................................34
ARTICLE VII Representations and Warranties..........................................................34
Section 7.1 Representations and Warranties of the Bank and the Bank (Delaware)......................34
Section 7.2 Representations and Warranties of Depositor.............................................36
ARTICLE VIII The Trustees............................................................................37
Section 8.1 Certain Duties and Responsibilities.....................................................37
Section 8.2 Notices of Defaults and Payment Deferrals...............................................39
Section 8.3 Certain Rights of Property Trustee......................................................39
Section 8.4 Not Responsible for Recitals or Issuance of Securities..................................41
Section 8.5 May Hold Securities.....................................................................41
Section 8.6 Compensation; Indemnity; Fees...........................................................41
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees............................42
Section 8.8 Conflicting Interests...................................................................43
Section 8.9 Co-Trustees and Separate Trustee........................................................43
Section 8.10 Resignation and Removal; Appointment of Successor.......................................45
Section 8.11 Acceptance of Appointment by Successor..................................................46
Section 8.12 Merger, Conversion, Consolidation or Succession to Business.............................47
Section 8.13 Preferential Collection of Claims Against Depositor or Trust............................47
Section 8.14 Reports by Property Trustee.............................................................48
Section 8.15 Reports to the Property Trustee.........................................................48
Section 8.16 Evidence of Compliance with Conditions Precedent........................................48
Section 8.17 Number of Trustees......................................................................48
Section 8.18 Delegation of Power.....................................................................49
Section 8.19 Voting..................................................................................49
ARTICLE IX Termination, Liquidation and Merger.....................................................49
Section 9.1 Termination Upon Expiration Date........................................................49
Section 9.2 Early Termination.......................................................................50
Section 9.3 Termination.............................................................................50
Section 9.4 Liquidation.............................................................................50
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust.....................52
ARTICLE X Miscellaneous Provisions................................................................53
Section 10.1 Limitation of Rights of Securityholders.................................................53
Section 10.2 Amendment...............................................................................53
Section 10.3 Separability............................................................................55
Section 10.4 Governing Law...........................................................................55
Section 10.5 Payments Due on Non-Business Day........................................................55
Section 10.6 Successors..............................................................................55
Section 10.7 Headings................................................................................55
Section 10.8 Reports, Notices and Demands............................................................56
Section 10.9 Trust Indenture Act; Conflict with Trust Indenture Act..................................56
Section 10.10 Acceptance of Terms of Trust Agreement, Guarantee and Junior Indenture..................57
</TABLE>
Exhibit Document
------- --------
A Certificate of Trust
B Certificate Depository Agreement
C Common Securities Certificate
D Expense Agreement
E Preferred Securities Certificate
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<PAGE> 5
CNA FINANCIAL CAPITAL I
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST
ACT SECTION AGREEMENT SECTION
- ----------- -----------------
<S> <C> <C>
Section 310 (a)(1)....................................................................................... 8.7
(a)(2)........................................................................................8.7
(a)(3)........................................................................................8.9
(a)(4).................................................................................2.7(a)(ii)
(b) ..........................................................................................8.8
Section 311 (a) .........................................................................................8.13
(b) .........................................................................................8.13
Section 312 (a)...........................................................................................5.7
(b)...........................................................................................5.7
(c)...........................................................................................5.7
Section 313 (a).......................................................................................8.14(a)
(a)(4)....................................................................................8.14(b)
(b).......................................................................................8.14(b)
(c)..........................................................................................10.8
(d).......................................................................................8.14(c)
Section 314 (a)..........................................................................................8.15
(b)................................................................................Not Applicable
(c)(1).......................................................................................8.16
(c)(2).......................................................................................8.16
(c)(3).............................................................................Not Applicable
(d)................................................................................Not Applicable
(e).....................................................................................1.1, 8.16
Section 315 (a)................................................................................8.1(a), 8.3(a)
(b).....................................................................................8.2, 10.8
(c)........................................................................................8.1(a)
(d)......................................................................................8.1, 8.3
(e)................................................................................Not Applicable
Section 316 (a)................................................................................Not Applicable
(a)(1)(A)..........................................................................Not Applicable
(a)(1)(B)..........................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)................................................................................Not Applicable
(c)...........................................................................................6.7
Section 317 (a)(1).............................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)...........................................................................................5.9
Section 318 (a)..........................................................................................10.9
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
-iv-
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , , among (i) CNA
Financial Corporation, a Delaware corporation (including any successors or
assigns, the "Depositor"), (ii) The First National Bank of Chicago, a national
banking association, as property trustee, (in such capacity, the "Property
Trustee," and in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank" (iii) First Chicago Delaware Inc., as Delaware
trustee (in such capacity, "Delaware Trustee," and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Bank (Delaware)"),
(iv) Pamela S. Dempsey, an individual, and Donald P. Lofe, Jr., an individual,
each of whose address is c/o CNA Financial Corporation, CNA Plaza, Chicago,
Illinois 60685 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (iv) the
several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Trust Agreement, dated as of
December 23, 1998 (the "Original Trust Agreement"), and by the execution and
filing with the Secretary of State of the State of Delaware of the Certificate
of Trust, filed on December 23, 1998, attached as Exhibit A hereto; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities (as hereinafter
defined) by the Trust to the Depositor, (ii) the issuance and sale of the
Preferred Securities (as hereinafter defined) by the Trust pursuant to the
Underwriting Agreement (as hereinafter defined), (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the Junior
Debt Securities (as hereinafter defined) and (iv) the appointment of the
Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE> 7
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest or
Additional Sums (as defined in the Junior Indenture), as applicable, paid by the
Depositor on a Like Amount of Junior Debt Securities for such period.
"Additional Sums" has the meaning specified in Section 10.7 of the
Junior Indenture.
"Administrative Trustee" means a Person satisfying the eligibility
requirements set forth in Section 8.7(b) and initially means of Pamela S.
Dempsey, and Donald P. Lofe, Jr., solely in such Person's capacity as
Administrative Trustee of the Trust formed and continued hereunder and not in
such Person's individual capacity, or such Administrative Trustee's successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"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. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal or
State bankruptcy, insolvency, reorganization or other
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<PAGE> 8
similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any substantial
part of its property or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person, or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt or insolvent, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Company to which authority to act on behalf of the
Board of Directors has been delegated, and to be in full force and effect on the
date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means certificates
representing beneficial interests in the Preferred Securities, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday or (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
-3-
<PAGE> 9
"Closing Date" means the Closing Time as defined in the Underwriting
Agreement, which date is also the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $___ and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in Chicago, Illinois.
"Definitive Preferred Securities Certificates" means Preferred
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Event of Default" means the occurrence of a Junior Debt Related Event
of Default.
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<PAGE> 10
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Period" has the meaning specified in Section 3.11 of the
Junior Indenture.
"Extension Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The First National Bank of Chicago, as trustee, contemporaneously
with the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"Junior Debt Related Event of Default" means an "Event of Default" as
defined in the Junior Indenture.
"Junior Debt Securities" means the aggregate principal amount of the
Depositor's Junior Subordinated Deferrable Interest Junior Debt Securities,
Series __, issued pursuant to the Junior Indenture.
"Junior Debt Security Investment Company Event" means an "Investment
Company Event" as defined in the Junior Indenture.
"Junior Debt Security Redemption Date" means, with respect to any
Junior Debt Securities to be redeemed under the Junior Indenture, the date fixed
for redemption under the Junior Indenture.
"Junior Debt Security Tax Event" means a "Tax Event" as defined in the
Junior Indenture.
"Junior Indenture" means the Junior Subordinated Indenture, dated as of
__, , between the Depositor and the Junior Indenture Trustee, as trustee, as
amended or supplemented from time to time.
"Junior Indenture Trustee" means The First National Bank of Chicago, a
national banking association organized and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of
-5-
<PAGE> 11
Junior Debt Securities to be contemporaneously redeemed in accordance with the
Junior Indenture, allocated to the Common Securities and to the Preferred
Securities based on their relative Liquidation Amounts and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities, and (b) with
respect to a distribution of Junior Debt Securities to Holders of Trust
Securities in connection with a dissolution and liquidation of the Trust, Junior
Debt Securities having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Junior Debt Securities are
distributed.
"Liquidation Amount" means the stated amount of $____ per Trust
Security.
"Liquidation Date" means the date on which Junior Debt Securities are
to be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or any Senior Vice President or Group Vice
President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 8.16 shall be the principal executive,
financial or accounting officer of the Depositor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, 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, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
-6-
<PAGE> 12
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Trust Securities; provided that, if such
Preferred Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement;
(c) Trust Securities which have been paid or in exchange for or in lieu
of which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13; and
(d) as provided in Section 9.4(c).
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Administrative Trustee or any
Affiliate of the Depositor or any Administrative Trustee shall be disregarded
and deemed not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
that such Trustee knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the Outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Preferred Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act with
respect to such Preferred Securities and that the pledgee is not the Depositor
or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Bank.
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<PAGE> 13
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Junior Debt Securities will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Article
Four.
"Person" means any individual, corporation, partnership, joint venture,
trust, association, joint stock company, limited liability company or
corporation, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means a preferred undivided beneficial interest in
the assets of the Trust, designated as "_____% ___________________" having a
Liquidation Amount of $___ and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of one or more Preferred Securities, substantially in the form
attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Junior Debt Security Redemption Date and the
stated maturity of the Junior Debt Securities shall be a Redemption Date for a
Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, [plus the related amount of the premium,
if any,] paid by the Depositor upon the concurrent redemption of a Like Amount
of Junior Debt Securities, allocated on a pro rata basis (based on Liquidation
Amounts) among the Trust Securities, subject to the provisions contained herein.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
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"Special Event" means "Special Event" as defined in the Junior
Indenture.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, including the rules duly
adopted by the Commission thereunder; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trust Property" means (a) the Junior Debt Securities, (b) the rights
under the Guarantee, (c) any cash on deposit in, or owing to, the Payment
Account and (d) all proceeds and rights in respect of the foregoing and any
other property and assets for the time being held or deemed to be held by the
Property Trustee pursuant to this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Terms Agreement, dated as of __, ,
among the Trust, the Depositor and the Underwriters named therein incorporating
the Underwriting Agreement Standard Provisions.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 NAME.
The Trust continued hereby shall be known as "CNA Financial Capital I,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees
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may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Depositor. The principal executive office of the Trust is c/o CNA Plaza,
Chicago, Illinois 60685.
SECTION 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.
(a) The Trustees acknowledge receipt from the Depositor in connection
with the Original Trust Agreement of the sum of $10, which constituted the
initial Trust Property.
(b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees as provided in Section 8.7 the costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, Paying Agent(s),
Securities Registrar, duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(c) The Depositor will pay any and all taxes of the Trust (other than
United States withholding taxes attributable to the Trust or its assets) and
all liabilities, costs and expenses with respect to such taxes.
(d) The Depositor's obligations under this Section 2.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. The Property Trustee
and any such Creditor may enforce the Depositor's obligations under this Section
2.3 directly against the Depositor and the Depositor irrevocably waives any
right or remedy to require that the Property Trustee or any such Creditor take
any action against the Trust or any other Person before proceeding against the
Depositor. The Depositor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 2.3.
(e) The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
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SECTION 2.4 ISSUANCE OF THE TRUST SECURITIES.
On __, 1999, the Depositor, on behalf of the Trust and pursuant to the
Original Trust Agreement, executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Underwriters named in the Underwriting Agreement
Preferred Securities Certificates, [registered in the name of the nominee of the
initial Clearing Agency,] in an aggregate amount of _________ Preferred
Securities having an aggregate Liquidation Amount of $____________, against
receipt of such aggregate purchase price of such Preferred Securities of
$_____________, which amount the Administrative Trustee shall promptly deliver
to the Property Trustee. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Depositor a Common
Securities Certificate, registered in the name of the Depositor, in an aggregate
amount of _________ Common Securities having an aggregate Liquidation Amount of
$______________ against payment by the Depositor of such amount, which amount
such Administrative Trustee shall promptly deliver to the Property Trustee.
SECTION 2.5 SUBSCRIPTION AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Junior Debt Securities, registered in the name of the Trust
and having an aggregate principal amount equal to $_____________, and, in
satisfaction of the purchase price for such Junior Debt Securities, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$_____________, such amount being the sum of the amounts delivered to the
Property Trustee pursuant to Section 2.4 and (ii) the first sentence of this
Section 2.5.
SECTION 2.6 DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the Junior
Debt Securities, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of any of the Trustees set forth herein except as required by
the Delaware Business Trust Act. The Delaware Trustee shall be one of the
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Trustees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 2.7, and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the exclusive power and authority to act on behalf of the Trust with
respect to the following matters:
(A) the issuance and sale of the Trust Securities, including
execution of any agreement, certificates evidencing Trust
Securities or other documents necessary or advisable with respect
to such issuance and sale;
(B) the purchase of the Junior Debt Securities
(C) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may
be necessary or desirable in connection with the purposes and
function of the Trust;
(D) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(E) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(F) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures
to the Securityholders in accordance with this Trust Agreement;
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(G) registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement (but only if at
such time the Property Trustee shall not be the Securities
Registrar);
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone or together
with any or all of the Administrative Trustees) any documents that
the Administrative Trustees have the power to execute pursuant to
this Trust Agreement; and
(J) the taking of any action incidental to the foregoing as
such Administrative Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust
Agreement for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment and maintenance of the Payment Account
and the appointment, subject to Section 5.9, of Paying Agents;
(B) the receipt and registered ownership of the Junior Debt
Securities;
(C) the receipt of payments of the purchase price of the Trust
Securities and the collection of interest, principal and any other
payments made in respect of the Junior Debt Securities and deposit
into the Payment Account;
(D) making Distributions and other payments to the
Securityholders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Junior Debt Securities, subject to the terms of the
Junior Indenture;
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(F) the sending of notices of default, redemption, Extension
Periods, Special Events, liquidation and other information
regarding the Trust Securities and the Junior Debt Securities to
the Securityholders in accordance with this Trust Agreement;
(G) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust, including, the
distribution of the Trust Property in accordance with the terms of
this Trust Agreement and the preparation, execution and filing of
the certificate of cancellation with the Secretary of State of the
State of Delaware;
(H) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time
to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder);
(I) so long as the Property Trustee is the Securities
Registrar, registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement; and
(J) except as otherwise provided in this Section 2.7(a)(ii) or
as required by the Trust Indenture Act, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of
the Administrative Trustees set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not cause the Trust to
(i) acquire any assets or make any investments (other than the Junior Debt
Securities) or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action that
would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States Federal income tax purposes, (iv) make any loans (other than the
Junior Debt Securities) or incur any indebtedness for borrowed money or issue
any other debt, (v) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in the Trust other than the Trust
Securities or (vi) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
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(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the doing of any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and advising the
Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Trust or on behalf of the Trust, as the Depositor
deems necessary or advisable in order to comply with the applicable
laws of any such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to The New York Stock Exchange or
any other national stock exchange or The Nasdaq Stock Market for
listing upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments
thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so, that (i) the Trust will not be deemed to
be an "investment company" required to be registered under the 1940 Act (ii) the
Trust will be classified as a grantor trust for United States Federal income tax
purposes and (iii) the Junior Debt Securities will be treated as indebtedness of
the Depositor for United States Federal income tax purposes. In this connection,
the Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust, as amended from
time to time, or this Trust Agreement, that each of the Depositor and the
Administrative Trustees determines in their discretion to be necessary or
desirable for such purposes, as long as such
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action does not adversely affect in any material respect the interests of the
holders of the Preferred Securities.
SECTION 2.8 ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement;
provided that any Paying Agent shall have the right of withdrawal with respect
to the Payment Account solely for the purpose of making the payments
contemplated under Article Four. All monies and other property deposited or held
from time to time in the Payment Account shall be held by the Property Trustee
in the Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Junior Debt Securities and any
amounts paid to the Property Trustee pursuant to this Guarantee. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including any Additional Amounts) will
be made on the Trust
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Securities at the rate [(or manner of calculation of the rate)] and on the dates
that payments of interest (including any Additional Interest, as defined in the
Junior Indenture) are made on the Junior Debt Securities. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accumulate from ,
, and, except in the event that the Depositor exercises its right to
defer the payment of interest on the Junior Debt Securities pursuant to
the Junior Indenture, shall be payable [quarterly] [monthly]
[semi-annually] [annually] in arrears on [Insert Dates] of each year,
commencing on _________, . If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then
the payment of such Distribution shall be made on the next succeeding
day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall
be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on which
distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date"). [insert alternative floating rate convention, if
applicable]
Within two Business Days after receipt by the Property Trustee of notice of an
Extension Period pursuant to Section 3.11 of the Junior Indenture, the Property
Trustee shall give notice thereof to the Securityholders by first class mail,
postage prepaid.
(ii) Assuming payments of interest on the Junior Debt Securities
are made when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Trust Securities shall be payable at
a rate of ____% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any full period
shall be computed on the basis of a 360-day year of twelve 30-day
months. [insert alternative floating rate provisions, if applicable].
The amount of Distributions for any partial period shall be computed on
the basis of the number of days elapsed in a 360-day year of twelve
30-day months. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on
hand legally available in the Payment Account for the payment of such
Distributions.
(iv) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be [one Business Day prior to such
Distribution Date; provided, however, that in the event that the
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Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date] 15 days prior to the relevant
Distribution Date.
SECTION 4.2 REDEMPTION.
(a) Upon receipt by the Trust of a notice of redemption or other
acceleration of the maturity of the Junior Debt Securities, the Property
Trustee, subject to Section 4.3, will call for redemption a Like Amount of Trust
Securities on the Junior Debt Security Redemption Date and will call for
redemption all Outstanding Trust Securities on the stated maturity date of the
Junior Debt Securities, in each case at the applicable Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and (v) the place or places
where Trust Securities are to be surrendered for payment of the
Redemption Price;
(vi) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or payment at maturity of Junior Debt Securities. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand legally
available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then[, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long
as the Preferred Securities are in book-entry-only form, irrevocably deposit
with the Clearing Agency for the Preferred Securities funds sufficient to pay
the applicable Redemption Price for the Preferred Securities
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being redeemed on such date and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
If the Preferred Securities are not in book-entry-only form,] the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders thereof upon surrender of their Preferred Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price, but
without interest, and such Securities will cease to be Outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
any Trust Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Trust Securities will be subject to the rights of Holders on the
close of business on the relevant record date in respect of a Distribution Date
occurring on or prior to such Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the Preferred Securities.
The particular Preferred Securities to be redeemed shall be selected) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method (including, without limitation, by lot) as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. If fewer than all of the Trust Securities represented by a Trust
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Securities Certificate are redeemed, an Administrative Trustee shall execute for
the Holder a new Trust Securities Certificate representing the unredeemed Trust
Securities. The Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price and/or Liquidation Distribution of, the
Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro
rata among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date, Redemption Date or Liquidation Date any Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price and/or Liquidation
Distribution of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment shall have been made or been provided for in full in cash of (i)
all accumulated and unpaid Distributions (including Additional Amounts, if
applicable) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, such Redemption Price on all Outstanding
Preferred Securities then being redeemed, as applicable, shall have been made or
provided for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price and/or
Liquidation Distribution of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default, the Holder
of Common Securities will be deemed to have waived any right to act with respect
to any such Event of Default under this Trust Agreement until the effect of such
Event of Default has been cured, waived or otherwise eliminated with respect to
the Preferred Securities. Until any such Event of Default under this Trust
Agreement has been so cured, waived or otherwise eliminated with respect to the
Preferred Securities, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
SECTION 4.4 PAYMENT PROCEDURES.
If the Preferred Securities are held by a Clearing Agency, payment of
Distributions and any Redemption Price or Liquidation Distribution shall be made
to the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments of the Redemption Price or
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Liquidation Distribution in respect of Definitive Preferred Securities held in
certificated form shall be made to the Holder thereof in immediately available
funds upon surrender of the Preferred Securities Certificate representing such
Definitive Preferred Securities at the Corporate Office of the Trustee. Payments
of Distributions (including Additional Amounts, if applicable) in respect of
Definitive Preferred Securities shall be made by check mailed to the address of
the Person entitled thereto as such address shall appear on the Securities
Register. Payments in respect of Common Securities shall be made in such manner
as shall be mutually agreed between the Property Trustee and the Common
Securityholder.
SECTION 4.5 TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States Federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided on such form. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns and reports promptly
after such filing or furnishing. The Administrative Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Junior Debt Securities of Additional Sums and
directions as to the payments of such Additional Sums, the Property Trustee
shall promptly pay, solely out of monies on deposit pursuant to this Trust
Agreement, any taxes, duties or governmental charges of whatsoever nature (other
than withholding taxes) imposed on the Trust by the United States or any other
taxing authority.
SECTION 4.7 REDUCTION FOR PAYMENTS UNDER JUNIOR INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities (and
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant to
Section 5.8 of the Junior Indenture, Section 5.14 of this Trust Agreement or the
Guarantee.
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ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 INITIAL OWNERSHIP.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2 THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in minimum
denominations of $___ Liquidation Amount and integral multiples of $___ in
excess thereof, and the Common Securities Certificate shall be issued in an
aggregate Liquidation Amount equal to $_________. Trust Securities Certificates
representing fractional interests shall not be issued. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
SECTION 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date, the Administrative Trustees shall cause Preferred
Securities Certificates and the Common Securities Certificates, in the
respective aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to
be executed on behalf of the Trust as provided in Section 5.2 and delivered to
or upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor.
SECTION 5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities
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Register") in which, the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and the Common
Securities Certificate (subject to Section 5.10 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Bank shall be the
initial Securities Registrar; any successor Securities Registrar shall be
appointed by the Administrative Trustees.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer
of any Preferred Securities that have been called for redemption. At the option
of a Holder, Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations and of a like
aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section V.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each
Preferred Securities Certificate surrendered for registration of transfer or
exchange shall be cancelled and subsequently disposed of by the Securities
Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates (other than any exchange not involving a transfer).
SECTION 5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its reasonable satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
reasonably required by them to save each of them harmless, then in the absence
of notice that such Trust Securities Certificate shall have been acquired by a
bona fide purchaser, the Administrative Trustees, or any one of them, on behalf
of the Trust shall
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execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the Trust Property, as if originally issued, whether or
not the lost, stolen or destroyed Trust Securities Certificate shall be found at
any time.
SECTION 5.6 PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner and Holder of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and none of the Trustees, the Paying Agent or the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
(a) The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act. Each Securityholder, by receiving and
holding a Trust Securities Certificate, and each Owner shall be deemed to have
agreed not to hold the Depositor, the Property Trustee the Delaware Trustee, or
the Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
In the event that the Property Trustee is no longer the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of the most recent
record date and (a) the Property Trustee, quarterly not later than 10 days prior
to a Distribution Date and (b) to the Property Trustee, promptly after receipt
by the Administrative Trustees, promptly after receipt by the Administrative
Trustees or the Depositor of a request therefor from the Property Trustee in
order to enable the Paying Agent to pay Distributions in accordance with Section
4.1 hereof, in each case to the extent such information is in the possession or
control of the Administrative Trustees or the Depositor and is not identical to
a previously supplied list or has not otherwise been received by the Property
Trustee.
SECTION 5.8 MAINTENANCE OF OFFICE OR AGENCY.
The Property Trustee shall maintain in New York, New York and Chicago,
Illinois, an office or offices or agency or agencies where Preferred Securities
Certificates may be
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surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served, initially located at __________. The Property Trustees shall
give prompt written notice to the Depositor and to the Securityholders of any
change in the location of the Securities Register or any such office or agency.
SECTION 5.9 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions. The Administrative Trustees may revoke such power
and remove the Paying Agent if such Trustees determine in their sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect; provided that such revocation and
removal with respect to the sole Paying Agent shall not become effective until
the appointment of a successor. The Paying Agent shall initially be the Bank,
and any co-paying agent chosen by the Bank, and acceptable to the Administrative
Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees, the Property Trustee and the Depositor. In the event that the Bank
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee (in the case of a Paying
Agent other than the Bank) and the Depositor to act as Paying Agent (which shall
be a bank or trust company meeting the eligibility requirements set forth in
Section 6.9 of the Junior Indenture); provided that such resignation with
respect to the sole Paying Agent shall not become effective until the
appointment of a successor. The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply
to the Bank also in its role as Paying Agent, for so long as the Bank shall act
as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
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SECTION 5.10 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR; NO TRANSFER.
On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than in connection with a consolidation or merger of the Depositor
into another corporation, or any conveyance, transfer or lease by the Depositor
of its properties and assets substantially as an entirety to any Person,
pursuant to Section 8.1 of the Junior Indenture, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause the
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON SECURITIES
CERTIFICATE.
(a) The Preferred Securities Certificates, upon original issuance, will
be issued in the form of a Preferred Securities Certificate or Certificates
representing [Definitive Preferred Securities or] Book-Entry Preferred
Securities Certificates, to be delivered to The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Trust. Book-Entry Preferred
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Owner will receive a Definitive Preferred Securities
Certificate representing such Owner's interest in such Preferred Securities,
except as provided in Section 5.13. Unless and until Definitive Preferred
Securities Certificates have been issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including
the payment of the Redemption Price Amount of and Distributions on the
Book-Entry Preferred Securities and the giving of instructions or
directions to Owners of Book-Entry Preferred Securities) as the sole
Holder of Book-Entry Preferred Securities and shall have no obligations
to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants; provided, that solely for the
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purposes of determining whether the Holders of the requisite
Liquidation Amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, so long as Definitive Preferred
Security Certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the
Clearing Agency setting forth the Owners' votes or assigning the right
to vote on any matter to any other Persons either in whole or in part.
Pursuant to the Certificate Depository Agreement, unless and until
Definitive Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13 ISSUANCE OF DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Property Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Preferred Securities
Certificates or that the Clearing Agency is no longer registered or in good
standing under the Securities Act of 1934, as amended, or other applicable
statute or regulation, and the Depositor is unable to locate a qualified
successor within 90 days, (b) the Depositor at its option advises the Property
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or (c) after the occurrence of an Event of Default, Owners of
Book-Entry Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the Liquidation Amount advise the Property
Trustee in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interest of the Owners of Book-Entry
Preferred Securities Certificates, then the Property Trustee shall instruct the
Clearing Agency to notify all Owners of Preferred Securities Certificates and
the other Trustees of the occurrence of any such event and of the availability
of the Definitive Preferred Securities Certificates to Owners requesting the
same. Upon surrender to the Property Trustees of the Preferred Securities
Certificate or Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in authorized denominations in
accordance with the instructions of the Clearing Agency. Neither the Securities
Registrar nor the Trustees shall be liable for any
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delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders of
the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
SECTION 5.14 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Junior Debt Related Event of Default, the Junior Indenture Trustee fails
or the holders of not less than 25% in principal amount of the outstanding
Junior Debt Securities fail to declare the principal of all of the Junior Debt
Securities to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Preferred Securities then Outstanding shall have such
right by a notice in writing to the Depositor and the Junior Indenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Junior Debt Securities shall become immediately due and payable,
provided that the payment of principal and interest on such Junior Debt
Securities shall remain subordinated to the extent provided in the Junior
Indenture.
At any time after such a declaration of acceleration with respect to
the Junior Debt Securities has been made and before a judgment or decree for
payment of the money due has been obtained by the Junior Indenture Trustee as in
the Junior Indenture provided, the Holders of a majority in Liquidation Amount
of the Preferred Securities, by written notice to the Property Trustee, the
Depositor and the Junior Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture Trustee
a sum sufficient to pay
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(A) all overdue installments of interest (including any
Additional Interest (as defined in the Junior Indenture)) on all of
the Junior Debt Securities,
(B) the principal of (and premium, if any, on) any Junior Debt
Securities which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate then borne by the
Junior Debt Securities, and
(C) all sums paid or advanced by the Junior Indenture Trustee
under the Junior Indenture and the reasonable compensation,
expenses, disbursements and advances of the Junior Indenture
Trustee and the Property Trustee, their agents and counsel; and
(ii) all Events of Default, other than the non-payment of the principal
or premium, if any, of the Junior Debt Securities which has become due solely
by such acceleration, have been cured or waived as provided in Section 5.13 of
the Junior Indenture.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of the
Preferred Securities, a record date shall be established for determining Holders
of Outstanding Preferred Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
that, unless such declaration of acceleration, or rescission and annulment, as
the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day which is 90 days after
such record date, such notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new
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written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
The holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the holders of the Junior Debt
Securities and the Holders of the related Preferred Securities, waive any past
default under the Junior Indenture, except a default in they payment of
principal, premium, if any, or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest, premium, if any,
and principal due otherwise than by acceleration has been deposited with the
Junior Indenture Trustee) or a default in respect of a covenant or provision
which under the Junior Indenture cannot be modified or amended without the
consent of the holder of each outstanding Junior Debt Security. No such
recission shall affect any subsequent default or impair any right consequent
thereon.
(c) For so long as any Preferred Securities remain Outstanding, upon an
Event of Default specified in Sections 5.1(a) or 5.1(b) of the Junior Indenture,
any Holder of Preferred Securities shall have the right to institute a
proceeding directly against the Depositor pursuant to Section 5.8 of the Junior
Indenture for enforcement of payment to such Holders of the principal of or
premium, if any, or interest on the Junior Debt Securities having a principal
amount equal to the Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action").
Except as set forth in this Section 5.14(c) and Section 5.14(b) and
Sections 5.12, 9.2 and 10.5 of the Junior Indenture, the Holders of Preferred
Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Junior Debt Securities.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and 10.2
and in the Junior Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Junior Debt Securities are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Junior Indenture
Trustee, or executing any trust or power conferred on the Junior Indenture
Trustee with respect to the Junior Debt Securities, (ii) waive any past default
which is waivable under Section 5.13 of the Junior Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Junior
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Junior Indenture or the Junior Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in Liquidation Amount
of all Outstanding Preferred Securities, provided, however, that where a consent
under the Junior Indenture would require the consent of each holder of Junior
Debt Securities affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action
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previously authorized or approved by a vote of the Holders of Preferred
Securities, except by a subsequent vote of the Holders of Preferred Securities.
The Property Trustee shall notify all Holders of the Preferred Securities of any
notice of default received from the Junior Indenture Trustee with respect to the
Junior Debt Securities. In addition to obtaining the foregoing consents of the
Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will
continue to qualify as a grantor trust for United States Federal income tax
purposes after taking into account such action.
(c) Subject to Section 10.2(c) hereof, if any proposed amendment to the
Trust Agreement provides for, or the Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers,
preferences or special rights of the Preferred Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than pursuant to the terms of this
Trust Agreement, then the Holders of Outstanding Preferred Securities will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of the Holders of a majority in
Liquidation Amount of the Outstanding Preferred Securities. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
fail to qualify as a grantor trust for United States federal income tax
purposes.
SECTION 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at its
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3 MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
10% of the Outstanding Preferred Securities (based upon their Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any time
in their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
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If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders present, either in person or by proxy, at such
meeting shall constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4 VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $___ of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5 PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders shall be entitled to vote. When Trust Securities
are held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Securityholder shall be deemed valid unless challenged at
or prior to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding a majority of all Preferred
Trust Securities (based upon their Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
SECTION 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from
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time to time fix a date, not more than 90 days prior to the date of any meeting
of Securityholders or the payment of a Distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 6.8 ACTS OF SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
Without limiting the generality of this Section 6.8, unless otherwise
provided in or pursuant to this Trust Agreement, a Securityholder, including a
Clearing Agency, may make, give or take, by a proxy, or proxies, duly appointed
in writing, any request, demand, authorization, direction, notice, consent,
waiver or other act provided in or pursuant to this Trust Agreement to be made,
given or taken by Securityholders, and a Clearing Agency that is a
Securityholder may provide its proxy or proxies to the beneficial owners of
interest the Trust Securities owned by such Clearing Agency through such
Clearing Agency's standing instructions and customary practices.
The Administrative Trustees shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in any Trust
Securities held by a Clearing House entitled under the procedures of such
Clearing House to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other act provided in or pursuant to this Trust Agreement to be made, given
or taken by Securityholders. If such a record date is fixed, the Securityholders
on such record date or their duly appointed proxy or proxies, and only such
Persons, shall be entitled to make, give or take such request, demand,
authorization, direction, notice, consent, waiver or other act, whether or not
such Securityholders remain Securityholders after such record date. No such
request, demand, authorization, direction, notice, consent, waiver or other act
shall be valid or effective if made, given or taken more than 90 days after such
record date.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary
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public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to him or her the execution thereof. Where such execution is by a signer acting
in a capacity other than his or her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his or her authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article 6, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
SECTION 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE BANK
(DELAWARE).
The Bank and the Bank (Delaware), each severally on behalf of and as to
itself, hereby represents and warrants for the benefit of the Depositor and the
Securityholders that:
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(a) the Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States; The Bank
(Delaware) is a Delaware banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; and The Bank
(Delaware), as Delaware Trustee, fulfills for the trust the statutory
requirements of Section 3807 of the Delaware Business Trust Act;
(b) each of the Bank and the Bank (Delaware) has full corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Bank and the Bank (Delaware) and constitutes the valid and
legally binding agreement of the Bank and the Bank (Delaware) enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles;
(d) the execution, delivery and performance by each of the Bank and the
Bank (Delaware) of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Bank and the Bank
(Delaware), respectively, and do not require any approval of stockholders of the
Bank or the Bank (Delaware) and such execution, delivery and performance will
not (i) violate the Bank's or the Bank's (Delaware) Charter or By-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Bank or the Bank (Delaware) Trustee, as the case may be, is a party
or by which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware, as the case may be,
governing the corporate, banking or trust powers of the Bank or the Bank
(Delaware) (as appropriate in context) or any order, judgment or decree
applicable to the Bank or the Bank (Delaware);
(e) neither the authorization, execution or delivery by the Bank or the
Bank (Delaware) of this Trust Agreement nor the consummation of any of the
transactions by the Bank or the Bank (Delaware) (as the case may be)
contemplated herein requires the consent or approval of, the giving of notice
to, the registration with or the taking of any other action with respect to any
governmental authority or agency under any existing Federal law governing the
corporate, banking or trust powers of the Bank or the Bank (Delaware), as
appropriate in context, under the laws of the United States or the State of
Delaware;
(f) there are no proceedings pending or, to the best of each of the
Bank's and the Bank's (Delaware) knowledge, threatened against or affecting the
Bank or the Bank (Delaware) in any court or before any governmental authority,
agency or arbitration board or
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tribunal which, individually or in the aggregate, would materially and adversely
affect the Trust or would question the right, power and authority of the Bank or
the Bank (Delaware), as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on behalf of the Trust
have been duly authorized and have been, duly and validly executed, issued and
delivered by the Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders will be entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
To the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are
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agreed by the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) Except during the continuance of an Event of Default,
(i) each of the Property Trustee, the Delaware Trustee and the
Administrative Trustees undertakes to perform such duties and only such duties
as are specifically set forth in this Trust Agreement, and no implied covenants
or obligations shall be read into this Trust Agreement against any of the
Property Trustee; and
(ii) in the absence of bad faith on its part, the Property Trustee,
the Delaware Trustee and the Administrative Trustees may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to such Person and conforming
to the requirements of this ; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to any such Person, such Person shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this Trust
Agreement.
(c) In case an Event of Default has occurred and is continuing, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(d) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
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(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in Liquidation Amount
of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Junior Debt Securities
and the Payment Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 8.2 NOTICES OF DEFAULTS AND PAYMENT DEFERRALS.
Within ninety calendar days after the occurrence of any Event of
Default or Junior Debt Security Tax Event actually known to the Property
Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.8, notice of such Event of Default to the
Securityholders, the Administrative Trustees and the Depositor, unless such
Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Debt Securities pursuant to the Junior Indenture, the Administrative Trustee
shall transmit, in the manner and to the extent provided in Section 10.8, notice
of such exercise to the Securityholders and the Property Trustee, unless such
exercise shall have been revoked.
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SECTION 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section VIII.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if, other than during the occurrence and continuance of an Event of
Default, (i) in performing its duties under this Trust Agreement, the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions of this Trust Agreement the Property Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor and the Property Trustee shall be fully
protected in acting in accordance with such instructions; provided, however,
that if the Property Trustee does not receive such instructions of the Depositor
within ten Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent practicable
shall not be less than two Business Days), it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no liability
except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
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(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such 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 and in accordance with
such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property 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, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
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No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor, and the Trustees do not
assume any responsibility for their correctness (except to the extent they are
incorporated into the Statement of Eligibility on Form T-1 provided by the
Property Trustee to Depositor in connection herewith). The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Junior Debt Securities.
SECTION 8.5 MAY HOLD SECURITIES.
Except as provided in the definition of the term "Outstanding" in
Article I, any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6 COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, bad faith or wilful
misconduct; and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of
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defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee.
SECTION 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder. The
Property Trustee shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities 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) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
SECTION 8.8 CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. Subject to the foregoing, the Depositor and any Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders shall have no rights by virtue of this
Trust Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor nor any Trustee shall be obligated to present
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any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Trustee may
engage in any financial or other transaction with the Depositor or any Affiliate
of the Depositor, or may act as depository for, trustee or agent for, or act on
any committee or body of holders of, securities or other obligations of the
Depositor or its Affiliates.
SECTION 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default has occurred and is continuing,
the Property Trustee alone shall have power to make such appointment. Any
co-trustee or separate trustee appointed pursuant to this Section shall either
be (i) a natural person who is at least 21 years of age and a resident of the
United States or (ii) a legal entity with its principal place of business in the
United States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate trustee such property, title, right, or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) the Trust Securities shall be executed and delivered, and all
rights, powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee;
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(b) the rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee;
(c) the Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case an Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor;
upon the written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal; and a successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder;
(e) the Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee; and
(f) any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the Relevant Trustee may petition, at the expense of the
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Depositor, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.
Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by Act of the Common Securityholder. If an
Event of Default shall have occurred and be continuing, the Property Trustee or
the Delaware Trustee, or both of them, may be removed at such time by Act of the
Holders of a majority in Liquidation Amount of the Outstanding Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to the
retiring Trustee, shall promptly appoint a successor Trustee or Trustees with
respect to the Trust Securities and the Trust, and the retiring Trustee shall
comply with the applicable requirements of Section 8.11. If the Property Trustee
or the Delaware Trustee shall resign, be removed or become incapable of
continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when an Event of Default shall have occurred and be
continuing, the Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees with respect to the Trust Securities and the Trust,
and such successor Trustee shall comply with the applicable requirements of
Section 8.11.
If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, regardless of whether an Event of
Default shall have occurred and be continuing, the Common Securityholder by Act
of the Common Securityholder delivered to the Administrative Trustee shall
promptly appoint a successor Administrative Trustee or Administrative Trustees
with respect to the Trust Securities and the Trust, and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee with respect to the Trust
Securities shall have been so appointed by the Common Securityholder or the
Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee with respect to the Trust
Securities.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 8.7).
SECTION 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Depositor or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and if the Property Trustee is the
resigning Trustee shall duly assign, transfer and deliver to the successor
Trustee all property and money held by such retiring Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust Securities
shall execute and deliver an amendment hereto wherein each successor Relevant
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (b) shall add to or change any of the provisions of this Trust
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee with respect to the Trust Securities and the
Trust; but, on request of the Trust or any successor Relevant Trustee such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
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Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor (whether directly or indirectly Secured or Unsecured) of the
Depositor or the Trust (or any other obligor upon the Junior Debt Securities or
the Trust Securities), the Property Trustee or the Delaware Trustee, as the case
may be, shall be subject to and shall take all actions necessary in order to
comply with the provisions of the Trust Indenture Act regarding the collection
of claims against the Depositor or Trust (or any such other obligor).
SECTION 8.14 REPORTS BY PROPERTY TRUSTEE.
The Property Trustee shall transmit to Preferred Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. If required by Section 313(a) of
the Trust Indenture Act, the Property Trustee shall, within 60 days after each
_________ following the date of the Trust Agreement deliver to Holders a brief
report, dated as of ____________, which complies with the provisions of such
Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each stock exchange upon which
any Preferred Securities are then listed, with the Commission and with the
Trust. The Trust will promptly notify the Property Trustee when any Preferred
Securities are listed on any stock exchange.
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SECTION 8.15 REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust 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) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.17 NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees; provided, however, that there shall at all
times be at least one Administrative Trustee. The Property Trustee and the
Delaware Trustee may be the same Person if the Property Trustee meets the
applicable requirements.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
SECTION 8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any
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registration statement or amendment thereto filed with the Commission, or making
any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 8.19 VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically terminate on
____________, _____ (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2 EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution, liquidation or winding-up of, the Depositor;
(b) the direction to the Property Trustee from the Depositor at any
time (which direction is optional and wholly within the discretion of the
Depositor) to terminate the Trust and distribute a Like Amount of Junior Debt
Securities to Securityholders of Trust Securities.
(c) the redemption of all of the Trust Securities; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
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The direction of the Depositor pursuant to Section 9.2(b) shall be made
in writing by the Depositor and specify the date of distribution of the Junior
Debt Securities, which shall not be less than less than 30 days after the date
of the delivery of such direction.
The election of the Depositor pursuant to Section 9.2(b) shall be made
by the Depositor giving written notice to the Trustees not less than 30 days
prior to the date of distribution of the Junior Debt Securities. Such notice
shall specify the date of distribution of the Junior Debt Securities and shall
be accompanied by an Opinion of Counsel that such event will not be a taxable
event to the Holders of the Preferred Securities for Federal income tax
purposes.
SECTION 9.3 TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
SECTION 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Junior Debt
Securities, subject to clause (d) below. Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Junior Debt Securities; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Junior
Debt Securities or, if
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clause (d) below applies, receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) In order to effect the liquidation of the Trust and distribution of
the Junior Debt Securities to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Debt Securities in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or clause (d) below applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Junior Debt
Securities will be issued to holders of Trust Securities Certificates, upon
surrender of such certificates to the Administrative Trustees or their agent for
exchange, (iii) the Depositor shall use its commercially practicable efforts to
have the Junior Debt Securities listed on the New York Stock Exchange or on such
other exchange, interdealer quotation system or self-regulatory organization as
the Preferred Securities are then listed, if any, (iv) any Trust Securities
Certificates not so surrendered for exchange will be deemed to represent a Like
Amount of Junior Debt Securities, accruing interest at the rate provided for in
the Junior Debt Securities from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Junior Debt Securities) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Junior Debt Securities upon surrender of Trust
Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Junior Debt Securities
in the manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive the Liquidation Distribution upon any
such dissolution, winding-up or termination pro
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rata (determined as aforesaid) with Holders of Preferred Securities, except
that, if an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities, and no Liquidation
Distribution shall be paid to the Holders of the Common Securities unless and
until receipt by all Holders of the Preferred Securities of the entire
Liquidation Distribution payable in respect thereof.
SECTION 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except pursuant to this Section IX.5. At the request of the Depositor, with the
consent of only the Administrative Trustees and without the consent of the
Holders of the Preferred Securities, the Property Trustee or the Delaware
Trustee, the Trust may merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities rank in priority with respect to Distributions and payments upon
liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Junior Debt Securities, (iii) the
Successor Securities are listed or traded, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Preferred Securities are then listed or traded,
if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded or placed under surveillance or review by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an Opinion of Counsel
to the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (c) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Trust (or any successor entity) will continue to be classified as a grantor
trust for United States Federal income tax purposes and (viii) the Depositor
owns all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the
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Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) to
cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Trust will be classified
for United States Federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust will not
be required to register as an investment company under the 1940 Act; provided,
however, that such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 6.1 and 10.2(c) hereof, any provision
of this Trust Agreement may be amended by the Trustees and the Depositor with
(i) the consent of Trust Securityholders representing a majority (based upon
Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for
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United States Federal income tax purposes or the Trust's exemption from status
of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Article Six hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) change the redemption provisions of the Trust Securities,
(iii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment contemplated in (i) or (ii) above on or after
such date, (iv) modify the first sentence of Section 2.6 hereof, (v) authorize
or issue any beneficial interest in the Trust other than as contemplated by this
Trust Agreement, (vi) change the conditions precedent for the Depositor to elect
to dissolve the Trust and distribute the Debentures to Holders of the Trust
Securities as set forth in Section 9.2, or (vii) affect the limited liability of
any Holder of Preferred Securities; and notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, the Property Trustee or the Delaware
Trustee (as the case may be), this Trust Agreement may not be amended in a
manner which imposes any additional obligation on the Depositor, the Property
Trustee or the Delaware Trustee, respectively.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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SECTION 10.4 GOVERNING LAW.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust Agreement
and the Trust Securities shall be construed in accordance with and governed by
the laws of the State of Delaware without regard to conflict of laws principles.
SECTION 10.5 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date [insert alternative floating rate
conversion, if applicable].
SECTION 10.6 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Junior Indenture and pursuant to which the assignee agrees
in writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7 HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8 REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to CNA Financial
Corporation, CNA Plaza, Chicago, Illinois 60685, Attention: ________, facsimile
no.: (312) ______________. Any notice to Preferred Securityholders shall also be
given to such owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee for that
purpose. Such notice, demand or other
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communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to The First National Bank of Chicago,
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126 Attention:
Corporate Trust Department; (b) with respect to the Delaware Trustee, to First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801; and (c) with
respect to the Administrative Trustees, to them at the address above for notices
to the Depositor, marked "Attention Administrative Trustees of CNA Financial
Capital I." Such notice, demand or other communication to or upon the Trust or
the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 10.10 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND JUNIOR
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
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<PAGE> 62
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE JUNIOR INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
CNA Financial Corporation,
as Depositor
By:
-----------------------------------
Name:
Title:
The First National Bank of Chicago,
as Property Trustee
By:
-----------------------------------
Name: Steven M. Wagner
Title: First Vice President
First Chicago Delaware Inc.,
as Delaware Trustee
By:
-----------------------------------
Name: Steven M. Wagner
Title: First Vice President
-----------------------------------
Patricia S. Dempsey,
as Administrative Trustee
-----------------------------------
Donald P. Lofe, Jr.
as Administrative Trustee
Other Admin. Trustee
-57-
<PAGE> 1
EXHIBIT 4(g)
CERTIFICATE OF TRUST
OF
CNA FINANCIAL CAPITAL II
This Certificate of Trust of CNA Financial Capital II (the "Trust"),
dated December 23, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is CNA
Financial Capital II.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware, 19801.
IN WITNESS WHEREOF, the undersigned, constituting all of the trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: /s/ Steven M. Wagner
------------------------------
Name: Steven M. Wagner
Title: First Vice President
FIRST CHICAGO DELAWARE, INC., as
Trustee
By: /s/ Steven M. Wagner
------------------------------
Name: Steven M. Wagner
Title: First Vice President
Pamela S. Dempsey, as Trustee
By: /s/ Pamela S. Dempsey
------------------------------
Donald P. Lofe, Jr., as Trustee
By: /s/ Donald P. Lofe, Jr.
------------------------------
<PAGE> 1
EXHIBIT 4(h)
-----------------------------------------------------------------
-----------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
CNA FINANCIAL CORPORATION, AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE, INC.,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF , _____
CNA FINANCIAL CAPITAL II
-----------------------------------------------------------------
-----------------------------------------------------------------
<PAGE> 2
EXHIBIT 4(h)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I Defined Terms............................................................................1
Section 1.1 Definitions..............................................................................1
ARTICLE II Establishment of the Trust...............................................................9
Section 2.1 Name.....................................................................................9
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.............................10
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.........................10
Section 2.4 Issuance of the Trust Securities........................................................11
Section 2.5 Subscription and Purchase of Debentures.................................................11
Section 2.6 Declaration of Trust....................................................................11
Section 2.7 Authorization to Enter into Certain Transactions........................................12
Section 2.8 Assets of Trust.........................................................................16
Section 2.9 Title to Trust Property.................................................................16
ARTICLE III Payment Account.........................................................................16
Section 3.1 Payment Account.........................................................................16
ARTICLE IV Distributions; Redemption...............................................................16
Section 4.1 Distributions...........................................................................16
Section 4.2 Redemption..............................................................................18
Section 4.3 Subordination of Common Securities......................................................20
Section 4.4 Payment Procedures......................................................................20
Section 4.5 Tax Returns and Reports.................................................................21
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust.............................................21
Section 4.7 Reduction for Payments under Junior Indenture...........................................21
ARTICLE V Trust Securities Certificates...........................................................22
Section 5.1 Initial Ownership.......................................................................22
Section 5.2 The Trust Securities Certificates.......................................................22
Section 5.3 Execution and Delivery of Trust Securities Certificates. ...............................22
Section 5.4 Registration of Transfer and Exchange of Preferred Securities Certificates..............22
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates......................23
Section 5.6 Persons Deemed Securityholders..........................................................24
Section 5.7 Access to List of Securityholders' Names and Addresses..................................24
Section 5.8 Maintenance of Office or Agency.........................................................24
Section 5.9 Appointment of Paying Agent.............................................................25
Section 5.10 Ownership of Common Securities by Depositor; No Transfer. ..............................26
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities Certificate.............26
Section 5.12 Notices to Clearing Agency..............................................................27
Section 5.13 Issuance of Definitive Preferred Securities Certificates................................27
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.14 Rights of Securityholders...............................................................28
ARTICLE VI Acts of Securityholders; Meetings; Voting...............................................30
Section 6.1 Limitations on Voting Rights............................................................30
Section 6.2 Notice of Meetings......................................................................31
Section 6.3 Meetings of Preferred Securityholders...................................................31
Section 6.4 Voting Rights...........................................................................32
Section 6.5 Proxies, etc............................................................................32
Section 6.6 Securityholder Action by Written Consent................................................32
Section 6.7 Record Date for Voting and Other Purposes...............................................32
Section 6.8 Acts of Securityholders.................................................................33
Section 6.9 Inspection of Records...................................................................34
ARTICLE VII Representations and Warranties..........................................................34
Section 7.1 Representations and Warranties of the Bank and the Bank (Delaware)......................34
Section 7.2 Representations and Warranties of Depositor.............................................36
ARTICLE VIII The Trustees............................................................................37
Section 8.1 Certain Duties and Responsibilities.....................................................37
Section 8.2 Notices of Defaults and Payment Deferrals...............................................39
Section 8.3 Certain Rights of Property Trustee......................................................39
Section 8.4 Not Responsible for Recitals or Issuance of Securities..................................41
Section 8.5 May Hold Securities.....................................................................41
Section 8.6 Compensation; Indemnity; Fees...........................................................41
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees............................42
Section 8.8 Conflicting Interests...................................................................43
Section 8.9 Co-Trustees and Separate Trustee........................................................43
Section 8.10 Resignation and Removal; Appointment of Successor.......................................45
Section 8.11 Acceptance of Appointment by Successor..................................................46
Section 8.12 Merger, Conversion, Consolidation or Succession to Business.............................47
Section 8.13 Preferential Collection of Claims Against Depositor or Trust............................47
Section 8.14 Reports by Property Trustee.............................................................48
Section 8.15 Reports to the Property Trustee.........................................................48
Section 8.16 Evidence of Compliance with Conditions Precedent........................................48
Section 8.17 Number of Trustees......................................................................48
Section 8.18 Delegation of Power.....................................................................49
Section 8.19 Voting..................................................................................49
ARTICLE IX Termination, Liquidation and Merger.....................................................49
Section 9.1 Termination Upon Expiration Date........................................................49
Section 9.2 Early Termination.......................................................................50
Section 9.3 Termination.............................................................................50
Section 9.4 Liquidation.............................................................................50
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust.....................52
ARTICLE X Miscellaneous Provisions................................................................53
Section 10.1 Limitation of Rights of Securityholders.................................................53
Section 10.2 Amendment...............................................................................53
Section 10.3 Separability............................................................................55
Section 10.4 Governing Law...........................................................................55
Section 10.5 Payments Due on Non-Business Day........................................................55
Section 10.6 Successors..............................................................................55
Section 10.7 Headings................................................................................55
Section 10.8 Reports, Notices and Demands............................................................56
Section 10.9 Trust Indenture Act; Conflict with Trust Indenture Act..................................56
Section 10.10 Acceptance of Terms of Trust Agreement, Guarantee and Junior Indenture..................57
</TABLE>
Exhibit Document
------- --------
A Certificate of Trust
B Certificate Depository Agreement
C Common Securities Certificate
D Expense Agreement
E Preferred Securities Certificate
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<PAGE> 5
CNA FINANCIAL CAPITAL II
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST
ACT SECTION AGREEMENT SECTION
- ----------- -----------------
<S> <C> <C>
Section 310 (a)(1)....................................................................................... 8.7
(a)(2)........................................................................................8.7
(a)(3)........................................................................................8.9
(a)(4).................................................................................2.7(a)(ii)
(b) ..........................................................................................8.8
Section 311 (a) .........................................................................................8.13
(b) .........................................................................................8.13
Section 312 (a)...........................................................................................5.7
(b)...........................................................................................5.7
(c)...........................................................................................5.7
Section 313 (a).......................................................................................8.14(a)
(a)(4)....................................................................................8.14(b)
(b).......................................................................................8.14(b)
(c)..........................................................................................10.8
(d).......................................................................................8.14(c)
Section 314 (a)..........................................................................................8.15
(b)................................................................................Not Applicable
(c)(1).......................................................................................8.16
(c)(2).......................................................................................8.16
(c)(3).............................................................................Not Applicable
(d)................................................................................Not Applicable
(e).....................................................................................1.1, 8.16
Section 315 (a)................................................................................8.1(a), 8.3(a)
(b).....................................................................................8.2, 10.8
(c)........................................................................................8.1(a)
(d)......................................................................................8.1, 8.3
(e)................................................................................Not Applicable
Section 316 (a)................................................................................Not Applicable
(a)(1)(A)..........................................................................Not Applicable
(a)(1)(B)..........................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)................................................................................Not Applicable
(c)...........................................................................................6.7
Section 317 (a)(1).............................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)...........................................................................................5.9
Section 318 (a)..........................................................................................10.9
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
-iv-
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , , among (i) CNA
Financial Corporation, a Delaware corporation (including any successors or
assigns, the "Depositor"), (ii) The First National Bank of Chicago, a national
banking association, as property trustee, (in such capacity, the "Property
Trustee," and in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank" (iii) First Chicago Delaware Inc., as Delaware
trustee (in such capacity, "Delaware Trustee," and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Bank (Delaware)"),
(iv) Pamela S. Dempsey, an individual, and Donald P. Lofe, Jr., an individual,
each of whose address is c/o CNA Financial Corporation, CNA Plaza, Chicago,
Illinois 60685 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (iv) the
several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Trust Agreement, dated as of
December 23, 1998 (the "Original Trust Agreement"), and by the execution and
filing with the Secretary of State of the State of Delaware of the Certificate
of Trust, filed on December 23, 1998, attached as Exhibit A hereto; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities (as hereinafter
defined) by the Trust to the Depositor, (ii) the issuance and sale of the
Preferred Securities (as hereinafter defined) by the Trust pursuant to the
Underwriting Agreement (as hereinafter defined), (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the Junior
Debt Securities (as hereinafter defined) and (iv) the appointment of the
Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE> 7
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest or
Additional Sums (as defined in the Junior Indenture), as applicable, paid by the
Depositor on a Like Amount of Junior Debt Securities for such period.
"Additional Sums" has the meaning specified in Section 10.7 of the
Junior Indenture.
"Administrative Trustee" means a Person satisfying the eligibility
requirements set forth in Section 8.7(b) and initially means of Pamela S.
Dempsey, and Donald P. Lofe, Jr., solely in such Person's capacity as
Administrative Trustee of the Trust formed and continued hereunder and not in
such Person's individual capacity, or such Administrative Trustee's successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"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. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal or
State bankruptcy, insolvency, reorganization or other
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<PAGE> 8
similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any substantial
part of its property or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person, or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt or insolvent, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Company to which authority to act on behalf of the
Board of Directors has been delegated, and to be in full force and effect on the
date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means certificates
representing beneficial interests in the Preferred Securities, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday or (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
-3-
<PAGE> 9
"Closing Date" means the Closing Time as defined in the Underwriting
Agreement, which date is also the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $___ and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in Chicago, Illinois.
"Definitive Preferred Securities Certificates" means Preferred
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Event of Default" means the occurrence of a Junior Debt Related Event
of Default.
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<PAGE> 10
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Period" has the meaning specified in Section 3.11 of the
Junior Indenture.
"Extension Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The First National Bank of Chicago, as trustee, contemporaneously
with the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"Junior Debt Related Event of Default" means an "Event of Default" as
defined in the Junior Indenture.
"Junior Debt Securities" means the aggregate principal amount of the
Depositor's Junior Subordinated Deferrable Interest Junior Debt Securities,
Series __, issued pursuant to the Junior Indenture.
"Junior Debt Security Investment Company Event" means an "Investment
Company Event" as defined in the Junior Indenture.
"Junior Debt Security Redemption Date" means, with respect to any
Junior Debt Securities to be redeemed under the Junior Indenture, the date fixed
for redemption under the Junior Indenture.
"Junior Debt Security Tax Event" means a "Tax Event" as defined in the
Junior Indenture.
"Junior Indenture" means the Junior Subordinated Indenture, dated as of
__, , between the Depositor and the Junior Indenture Trustee, as trustee, as
amended or supplemented from time to time.
"Junior Indenture Trustee" means The First National Bank of Chicago, a
national banking association organized and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of
-5-
<PAGE> 11
Junior Debt Securities to be contemporaneously redeemed in accordance with the
Junior Indenture, allocated to the Common Securities and to the Preferred
Securities based on their relative Liquidation Amounts and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities, and (b) with
respect to a distribution of Junior Debt Securities to Holders of Trust
Securities in connection with a dissolution and liquidation of the Trust, Junior
Debt Securities having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Junior Debt Securities are
distributed.
"Liquidation Amount" means the stated amount of $____ per Trust
Security.
"Liquidation Date" means the date on which Junior Debt Securities are
to be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or any Senior Vice President or Group Vice
President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 8.16 shall be the principal executive,
financial or accounting officer of the Depositor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, 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, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
-6-
<PAGE> 12
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Trust Securities; provided that, if such
Preferred Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement;
(c) Trust Securities which have been paid or in exchange for or in lieu
of which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13; and
(d) as provided in Section 9.4(c).
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Administrative Trustee or any
Affiliate of the Depositor or any Administrative Trustee shall be disregarded
and deemed not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
that such Trustee knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the Outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Preferred Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act with
respect to such Preferred Securities and that the pledgee is not the Depositor
or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Bank.
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"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Junior Debt Securities will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Article
Four.
"Person" means any individual, corporation, partnership, joint venture,
trust, association, joint stock company, limited liability company or
corporation, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means a preferred undivided beneficial interest in
the assets of the Trust, designated as "_____% ___________________" having a
Liquidation Amount of $___ and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of one or more Preferred Securities, substantially in the form
attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Junior Debt Security Redemption Date and the
stated maturity of the Junior Debt Securities shall be a Redemption Date for a
Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, [plus the related amount of the premium,
if any,] paid by the Depositor upon the concurrent redemption of a Like Amount
of Junior Debt Securities, allocated on a pro rata basis (based on Liquidation
Amounts) among the Trust Securities, subject to the provisions contained herein.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
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"Special Event" means "Special Event" as defined in the Junior
Indenture.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, including the rules duly
adopted by the Commission thereunder; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trust Property" means (a) the Junior Debt Securities, (b) the rights
under the Guarantee, (c) any cash on deposit in, or owing to, the Payment
Account and (d) all proceeds and rights in respect of the foregoing and any
other property and assets for the time being held or deemed to be held by the
Property Trustee pursuant to this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Terms Agreement, dated as of __, ,
among the Trust, the Depositor and the Underwriters named therein incorporating
the Underwriting Agreement Standard Provisions.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 NAME.
The Trust continued hereby shall be known as "CNA Financial Capital
II," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees
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may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Depositor. The principal executive office of the Trust is c/o CNA Plaza,
Chicago, Illinois 60685.
SECTION 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.
(a) The Trustees acknowledge receipt from the Depositor in connection
with the Original Trust Agreement of the sum of $10, which constituted the
initial Trust Property.
(b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees as provided in Section 8.7 the costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, Paying Agent(s),
Securities Registrar, duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(c) The Depositor will pay any and all taxes of the Trust (other than
United States withholding taxes attributable to the Trust or its assets) and
all liabilities, costs and expenses with respect to such taxes.
(d) The Depositor's obligations under this Section 2.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. The Property Trustee
and any such Creditor may enforce the Depositor's obligations under this Section
2.3 directly against the Depositor and the Depositor irrevocably waives any
right or remedy to require that the Property Trustee or any such Creditor take
any action against the Trust or any other Person before proceeding against the
Depositor. The Depositor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 2.3.
(e) The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
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SECTION 2.4 ISSUANCE OF THE TRUST SECURITIES.
On __, 1999, the Depositor, on behalf of the Trust and pursuant to the
Original Trust Agreement, executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Underwriters named in the Underwriting Agreement
Preferred Securities Certificates, [registered in the name of the nominee of the
initial Clearing Agency,] in an aggregate amount of _________ Preferred
Securities having an aggregate Liquidation Amount of $____________, against
receipt of such aggregate purchase price of such Preferred Securities of
$_____________, which amount the Administrative Trustee shall promptly deliver
to the Property Trustee. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Depositor a Common
Securities Certificate, registered in the name of the Depositor, in an aggregate
amount of _________ Common Securities having an aggregate Liquidation Amount of
$______________ against payment by the Depositor of such amount, which amount
such Administrative Trustee shall promptly deliver to the Property Trustee.
SECTION 2.5 SUBSCRIPTION AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Junior Debt Securities, registered in the name of the Trust
and having an aggregate principal amount equal to $_____________, and, in
satisfaction of the purchase price for such Junior Debt Securities, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$_____________, such amount being the sum of the amounts delivered to the
Property Trustee pursuant to Section 2.4 and (ii) the first sentence of this
Section 2.5.
SECTION 2.6 DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the Junior
Debt Securities, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of any of the Trustees set forth herein except as required by
the Delaware Business Trust Act. The Delaware Trustee shall be one of the
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Trustees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 2.7, and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the exclusive power and authority to act on behalf of the Trust with
respect to the following matters:
(A) the issuance and sale of the Trust Securities, including
execution of any agreement, certificates evidencing Trust
Securities or other documents necessary or advisable with respect
to such issuance and sale;
(B) the purchase of the Junior Debt Securities
(C) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may
be necessary or desirable in connection with the purposes and
function of the Trust;
(D) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(E) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(F) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures
to the Securityholders in accordance with this Trust Agreement;
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(G) registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement (but only if at
such time the Property Trustee shall not be the Securities
Registrar);
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone or together
with any or all of the Administrative Trustees) any documents that
the Administrative Trustees have the power to execute pursuant to
this Trust Agreement; and
(J) the taking of any action incidental to the foregoing as
such Administrative Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust
Agreement for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment and maintenance of the Payment Account
and the appointment, subject to Section 5.9, of Paying Agents;
(B) the receipt and registered ownership of the Junior Debt
Securities;
(C) the receipt of payments of the purchase price of the Trust
Securities and the collection of interest, principal and any other
payments made in respect of the Junior Debt Securities and deposit
into the Payment Account;
(D) making Distributions and other payments to the
Securityholders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Junior Debt Securities, subject to the terms of the
Junior Indenture;
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(F) the sending of notices of default, redemption, Extension
Periods, Special Events, liquidation and other information
regarding the Trust Securities and the Junior Debt Securities to
the Securityholders in accordance with this Trust Agreement;
(G) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust, including, the
distribution of the Trust Property in accordance with the terms of
this Trust Agreement and the preparation, execution and filing of
the certificate of cancellation with the Secretary of State of the
State of Delaware;
(H) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time
to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder);
(I) so long as the Property Trustee is the Securities
Registrar, registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement; and
(J) except as otherwise provided in this Section 2.7(a)(ii) or
as required by the Trust Indenture Act, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of
the Administrative Trustees set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not cause the Trust to
(i) acquire any assets or make any investments (other than the Junior Debt
Securities) or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action that
would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States Federal income tax purposes, (iv) make any loans (other than the
Junior Debt Securities) or incur any indebtedness for borrowed money or issue
any other debt, (v) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in the Trust other than the Trust
Securities or (vi) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
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(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the doing of any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and advising the
Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Trust or on behalf of the Trust, as the Depositor
deems necessary or advisable in order to comply with the applicable
laws of any such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to The New York Stock Exchange or
any other national stock exchange or The Nasdaq Stock Market for
listing upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments
thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so, that (i) the Trust will not be deemed to
be an "investment company" required to be registered under the 1940 Act (ii) the
Trust will be classified as a grantor trust for United States Federal income tax
purposes and (iii) the Junior Debt Securities will be treated as indebtedness of
the Depositor for United States Federal income tax purposes. In this connection,
the Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust, as amended from
time to time, or this Trust Agreement, that each of the Depositor and the
Administrative Trustees determines in their discretion to be necessary or
desirable for such purposes, as long as such
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action does not adversely affect in any material respect the interests of the
holders of the Preferred Securities.
SECTION 2.8 ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement;
provided that any Paying Agent shall have the right of withdrawal with respect
to the Payment Account solely for the purpose of making the payments
contemplated under Article Four. All monies and other property deposited or held
from time to time in the Payment Account shall be held by the Property Trustee
in the Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Junior Debt Securities and any
amounts paid to the Property Trustee pursuant to this Guarantee. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including any Additional Amounts) will
be made on the Trust
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Securities at the rate [(or manner of calculation of the rate)] and on the dates
that payments of interest (including any Additional Interest, as defined in the
Junior Indenture) are made on the Junior Debt Securities. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accumulate from ,
, and, except in the event that the Depositor exercises its right to
defer the payment of interest on the Junior Debt Securities pursuant to
the Junior Indenture, shall be payable [quarterly] [monthly]
[semi-annually] [annually] in arrears on [Insert Dates] of each year,
commencing on _________, . If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then
the payment of such Distribution shall be made on the next succeeding
day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall
be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on which
distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date"). [insert alternative floating rate convention, if
applicable]
Within two Business Days after receipt by the Property Trustee of notice of an
Extension Period pursuant to Section 3.11 of the Junior Indenture, the Property
Trustee shall give notice thereof to the Securityholders by first class mail,
postage prepaid.
(ii) Assuming payments of interest on the Junior Debt Securities
are made when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Trust Securities shall be payable at
a rate of ____% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any full period
shall be computed on the basis of a 360-day year of twelve 30-day
months. [insert alternative floating rate provisions, if applicable].
The amount of Distributions for any partial period shall be computed on
the basis of the number of days elapsed in a 360-day year of twelve
30-day months. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on
hand legally available in the Payment Account for the payment of such
Distributions.
(iv) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be [one Business Day prior to such
Distribution Date; provided, however, that in the event that the
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Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date] 15 days prior to the relevant
Distribution Date.
SECTION 4.2 REDEMPTION.
(a) Upon receipt by the Trust of a notice of redemption or other
acceleration of the maturity of the Junior Debt Securities, the Property
Trustee, subject to Section 4.3, will call for redemption a Like Amount of Trust
Securities on the Junior Debt Security Redemption Date and will call for
redemption all Outstanding Trust Securities on the stated maturity date of the
Junior Debt Securities, in each case at the applicable Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and (v) the place or places
where Trust Securities are to be surrendered for payment of the
Redemption Price;
(vi) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or payment at maturity of Junior Debt Securities. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand legally
available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then[, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long
as the Preferred Securities are in book-entry-only form, irrevocably deposit
with the Clearing Agency for the Preferred Securities funds sufficient to pay
the applicable Redemption Price for the Preferred Securities
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being redeemed on such date and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
If the Preferred Securities are not in book-entry-only form,] the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders thereof upon surrender of their Preferred Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price, but
without interest, and such Securities will cease to be Outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
any Trust Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Trust Securities will be subject to the rights of Holders on the
close of business on the relevant record date in respect of a Distribution Date
occurring on or prior to such Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the Preferred Securities.
The particular Preferred Securities to be redeemed shall be selected) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method (including, without limitation, by lot) as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. If fewer than all of the Trust Securities represented by a Trust
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Securities Certificate are redeemed, an Administrative Trustee shall execute for
the Holder a new Trust Securities Certificate representing the unredeemed Trust
Securities. The Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price and/or Liquidation Distribution of, the
Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro
rata among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date, Redemption Date or Liquidation Date any Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price and/or Liquidation
Distribution of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment shall have been made or been provided for in full in cash of (i)
all accumulated and unpaid Distributions (including Additional Amounts, if
applicable) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, such Redemption Price on all Outstanding
Preferred Securities then being redeemed, as applicable, shall have been made or
provided for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price and/or
Liquidation Distribution of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default, the Holder
of Common Securities will be deemed to have waived any right to act with respect
to any such Event of Default under this Trust Agreement until the effect of such
Event of Default has been cured, waived or otherwise eliminated with respect to
the Preferred Securities. Until any such Event of Default under this Trust
Agreement has been so cured, waived or otherwise eliminated with respect to the
Preferred Securities, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
SECTION 4.4 PAYMENT PROCEDURES.
If the Preferred Securities are held by a Clearing Agency, payment of
Distributions and any Redemption Price or Liquidation Distribution shall be made
to the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments of the Redemption Price or
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Liquidation Distribution in respect of Definitive Preferred Securities held in
certificated form shall be made to the Holder thereof in immediately available
funds upon surrender of the Preferred Securities Certificate representing such
Definitive Preferred Securities at the Corporate Office of the Trustee. Payments
of Distributions (including Additional Amounts, if applicable) in respect of
Definitive Preferred Securities shall be made by check mailed to the address of
the Person entitled thereto as such address shall appear on the Securities
Register. Payments in respect of Common Securities shall be made in such manner
as shall be mutually agreed between the Property Trustee and the Common
Securityholder.
SECTION 4.5 TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States Federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided on such form. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns and reports promptly
after such filing or furnishing. The Administrative Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Junior Debt Securities of Additional Sums and
directions as to the payments of such Additional Sums, the Property Trustee
shall promptly pay, solely out of monies on deposit pursuant to this Trust
Agreement, any taxes, duties or governmental charges of whatsoever nature (other
than withholding taxes) imposed on the Trust by the United States or any other
taxing authority.
SECTION 4.7 REDUCTION FOR PAYMENTS UNDER JUNIOR INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities (and
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant to
Section 5.8 of the Junior Indenture, Section 5.14 of this Trust Agreement or the
Guarantee.
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ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 INITIAL OWNERSHIP.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2 THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in minimum
denominations of $___ Liquidation Amount and integral multiples of $___ in
excess thereof, and the Common Securities Certificate shall be issued in an
aggregate Liquidation Amount equal to $_________. Trust Securities Certificates
representing fractional interests shall not be issued. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
SECTION 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date, the Administrative Trustees shall cause Preferred
Securities Certificates and the Common Securities Certificates, in the
respective aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to
be executed on behalf of the Trust as provided in Section 5.2 and delivered to
or upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor.
SECTION 5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities
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Register") in which, the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and the Common
Securities Certificate (subject to Section 5.10 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Bank shall be the
initial Securities Registrar; any successor Securities Registrar shall be
appointed by the Administrative Trustees.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer
of any Preferred Securities that have been called for redemption. At the option
of a Holder, Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations and of a like
aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section V.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each
Preferred Securities Certificate surrendered for registration of transfer or
exchange shall be cancelled and subsequently disposed of by the Securities
Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates (other than any exchange not involving a transfer).
SECTION 5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its reasonable satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
reasonably required by them to save each of them harmless, then in the absence
of notice that such Trust Securities Certificate shall have been acquired by a
bona fide purchaser, the Administrative Trustees, or any one of them, on behalf
of the Trust shall
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execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the Trust Property, as if originally issued, whether or
not the lost, stolen or destroyed Trust Securities Certificate shall be found at
any time.
SECTION 5.6 PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner and Holder of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and none of the Trustees, the Paying Agent or the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
(a) The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act. Each Securityholder, by receiving and
holding a Trust Securities Certificate, and each Owner shall be deemed to have
agreed not to hold the Depositor, the Property Trustee the Delaware Trustee, or
the Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
In the event that the Property Trustee is no longer the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of the most recent
record date and (a) the Property Trustee, quarterly not later than 10 days prior
to a Distribution Date and (b) to the Property Trustee, promptly after receipt
by the Administrative Trustees, promptly after receipt by the Administrative
Trustees or the Depositor of a request therefor from the Property Trustee in
order to enable the Paying Agent to pay Distributions in accordance with Section
4.1 hereof, in each case to the extent such information is in the possession or
control of the Administrative Trustees or the Depositor and is not identical to
a previously supplied list or has not otherwise been received by the Property
Trustee.
SECTION 5.8 MAINTENANCE OF OFFICE OR AGENCY.
The Property Trustee shall maintain in New York, New York and Chicago,
Illinois, an office or offices or agency or agencies where Preferred Securities
Certificates may be
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surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served, initially located at __________. The Property Trustees shall
give prompt written notice to the Depositor and to the Securityholders of any
change in the location of the Securities Register or any such office or agency.
SECTION 5.9 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions. The Administrative Trustees may revoke such power
and remove the Paying Agent if such Trustees determine in their sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect; provided that such revocation and
removal with respect to the sole Paying Agent shall not become effective until
the appointment of a successor. The Paying Agent shall initially be the Bank,
and any co-paying agent chosen by the Bank, and acceptable to the Administrative
Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees, the Property Trustee and the Depositor. In the event that the Bank
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee (in the case of a Paying
Agent other than the Bank) and the Depositor to act as Paying Agent (which shall
be a bank or trust company meeting the eligibility requirements set forth in
Section 6.9 of the Junior Indenture); provided that such resignation with
respect to the sole Paying Agent shall not become effective until the
appointment of a successor. The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply
to the Bank also in its role as Paying Agent, for so long as the Bank shall act
as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
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SECTION 5.10 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR; NO TRANSFER.
On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than in connection with a consolidation or merger of the Depositor
into another corporation, or any conveyance, transfer or lease by the Depositor
of its properties and assets substantially as an entirety to any Person,
pursuant to Section 8.1 of the Junior Indenture, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause the
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON SECURITIES
CERTIFICATE.
(a) The Preferred Securities Certificates, upon original issuance, will
be issued in the form of a Preferred Securities Certificate or Certificates
representing [Definitive Preferred Securities or] Book-Entry Preferred
Securities Certificates, to be delivered to The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Trust. Book-Entry Preferred
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Owner will receive a Definitive Preferred Securities
Certificate representing such Owner's interest in such Preferred Securities,
except as provided in Section 5.13. Unless and until Definitive Preferred
Securities Certificates have been issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including
the payment of the Redemption Price Amount of and Distributions on the
Book-Entry Preferred Securities and the giving of instructions or
directions to Owners of Book-Entry Preferred Securities) as the sole
Holder of Book-Entry Preferred Securities and shall have no obligations
to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants; provided, that solely for the
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purposes of determining whether the Holders of the requisite
Liquidation Amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, so long as Definitive Preferred
Security Certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the
Clearing Agency setting forth the Owners' votes or assigning the right
to vote on any matter to any other Persons either in whole or in part.
Pursuant to the Certificate Depository Agreement, unless and until
Definitive Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13 ISSUANCE OF DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Property Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Preferred Securities
Certificates or that the Clearing Agency is no longer registered or in good
standing under the Securities Act of 1934, as amended, or other applicable
statute or regulation, and the Depositor is unable to locate a qualified
successor within 90 days, (b) the Depositor at its option advises the Property
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or (c) after the occurrence of an Event of Default, Owners of
Book-Entry Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the Liquidation Amount advise the Property
Trustee in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interest of the Owners of Book-Entry
Preferred Securities Certificates, then the Property Trustee shall instruct the
Clearing Agency to notify all Owners of Preferred Securities Certificates and
the other Trustees of the occurrence of any such event and of the availability
of the Definitive Preferred Securities Certificates to Owners requesting the
same. Upon surrender to the Property Trustees of the Preferred Securities
Certificate or Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in authorized denominations in
accordance with the instructions of the Clearing Agency. Neither the Securities
Registrar nor the Trustees shall be liable for any
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delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders of
the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
SECTION 5.14 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Junior Debt Related Event of Default, the Junior Indenture Trustee fails
or the holders of not less than 25% in principal amount of the outstanding
Junior Debt Securities fail to declare the principal of all of the Junior Debt
Securities to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Preferred Securities then Outstanding shall have such
right by a notice in writing to the Depositor and the Junior Indenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Junior Debt Securities shall become immediately due and payable,
provided that the payment of principal and interest on such Junior Debt
Securities shall remain subordinated to the extent provided in the Junior
Indenture.
At any time after such a declaration of acceleration with respect to
the Junior Debt Securities has been made and before a judgment or decree for
payment of the money due has been obtained by the Junior Indenture Trustee as in
the Junior Indenture provided, the Holders of a majority in Liquidation Amount
of the Preferred Securities, by written notice to the Property Trustee, the
Depositor and the Junior Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture Trustee
a sum sufficient to pay
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(A) all overdue installments of interest (including any
Additional Interest (as defined in the Junior Indenture)) on all of
the Junior Debt Securities,
(B) the principal of (and premium, if any, on) any Junior Debt
Securities which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate then borne by the
Junior Debt Securities, and
(C) all sums paid or advanced by the Junior Indenture Trustee
under the Junior Indenture and the reasonable compensation,
expenses, disbursements and advances of the Junior Indenture
Trustee and the Property Trustee, their agents and counsel; and
(ii) all Events of Default, other than the non-payment of the principal
or premium, if any, of the Junior Debt Securities which has become due solely
by such acceleration, have been cured or waived as provided in Section 5.13 of
the Junior Indenture.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of the
Preferred Securities, a record date shall be established for determining Holders
of Outstanding Preferred Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
that, unless such declaration of acceleration, or rescission and annulment, as
the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day which is 90 days after
such record date, such notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new
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written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
The holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the holders of the Junior Debt
Securities and the Holders of the related Preferred Securities, waive any past
default under the Junior Indenture, except a default in they payment of
principal, premium, if any, or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest, premium, if any,
and principal due otherwise than by acceleration has been deposited with the
Junior Indenture Trustee) or a default in respect of a covenant or provision
which under the Junior Indenture cannot be modified or amended without the
consent of the holder of each outstanding Junior Debt Security. No such
recission shall affect any subsequent default or impair any right consequent
thereon.
(c) For so long as any Preferred Securities remain Outstanding, upon an
Event of Default specified in Sections 5.1(a) or 5.1(b) of the Junior Indenture,
any Holder of Preferred Securities shall have the right to institute a
proceeding directly against the Depositor pursuant to Section 5.8 of the Junior
Indenture for enforcement of payment to such Holders of the principal of or
premium, if any, or interest on the Junior Debt Securities having a principal
amount equal to the Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action").
Except as set forth in this Section 5.14(c) and Section 5.14(b) and
Sections 5.12, 9.2 and 10.5 of the Junior Indenture, the Holders of Preferred
Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Junior Debt Securities.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and 10.2
and in the Junior Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Junior Debt Securities are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Junior Indenture
Trustee, or executing any trust or power conferred on the Junior Indenture
Trustee with respect to the Junior Debt Securities, (ii) waive any past default
which is waivable under Section 5.13 of the Junior Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Junior
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Junior Indenture or the Junior Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in Liquidation Amount
of all Outstanding Preferred Securities, provided, however, that where a consent
under the Junior Indenture would require the consent of each holder of Junior
Debt Securities affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action
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previously authorized or approved by a vote of the Holders of Preferred
Securities, except by a subsequent vote of the Holders of Preferred Securities.
The Property Trustee shall notify all Holders of the Preferred Securities of any
notice of default received from the Junior Indenture Trustee with respect to the
Junior Debt Securities. In addition to obtaining the foregoing consents of the
Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will
continue to qualify as a grantor trust for United States Federal income tax
purposes after taking into account such action.
(c) Subject to Section 10.2(c) hereof, if any proposed amendment to the
Trust Agreement provides for, or the Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers,
preferences or special rights of the Preferred Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than pursuant to the terms of this
Trust Agreement, then the Holders of Outstanding Preferred Securities will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of the Holders of a majority in
Liquidation Amount of the Outstanding Preferred Securities. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
fail to qualify as a grantor trust for United States federal income tax
purposes.
SECTION 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at its
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3 MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
10% of the Outstanding Preferred Securities (based upon their Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any time
in their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
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If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders present, either in person or by proxy, at such
meeting shall constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4 VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $___ of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5 PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders shall be entitled to vote. When Trust Securities
are held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Securityholder shall be deemed valid unless challenged at
or prior to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding a majority of all Preferred
Trust Securities (based upon their Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
SECTION 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from
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time to time fix a date, not more than 90 days prior to the date of any meeting
of Securityholders or the payment of a Distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 6.8 ACTS OF SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
Without limiting the generality of this Section 6.8, unless otherwise
provided in or pursuant to this Trust Agreement, a Securityholder, including a
Clearing Agency, may make, give or take, by a proxy, or proxies, duly appointed
in writing, any request, demand, authorization, direction, notice, consent,
waiver or other act provided in or pursuant to this Trust Agreement to be made,
given or taken by Securityholders, and a Clearing Agency that is a
Securityholder may provide its proxy or proxies to the beneficial owners of
interest the Trust Securities owned by such Clearing Agency through such
Clearing Agency's standing instructions and customary practices.
The Administrative Trustees shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in any Trust
Securities held by a Clearing House entitled under the procedures of such
Clearing House to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other act provided in or pursuant to this Trust Agreement to be made, given
or taken by Securityholders. If such a record date is fixed, the Securityholders
on such record date or their duly appointed proxy or proxies, and only such
Persons, shall be entitled to make, give or take such request, demand,
authorization, direction, notice, consent, waiver or other act, whether or not
such Securityholders remain Securityholders after such record date. No such
request, demand, authorization, direction, notice, consent, waiver or other act
shall be valid or effective if made, given or taken more than 90 days after such
record date.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary
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public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to him or her the execution thereof. Where such execution is by a signer acting
in a capacity other than his or her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his or her authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article 6, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
SECTION 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE BANK
(DELAWARE).
The Bank and the Bank (Delaware), each severally on behalf of and as to
itself, hereby represents and warrants for the benefit of the Depositor and the
Securityholders that:
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(a) the Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States; The Bank
(Delaware) is a Delaware banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; and The Bank
(Delaware), as Delaware Trustee, fulfills for the trust the statutory
requirements of Section 3807 of the Delaware Business Trust Act;
(b) each of the Bank and the Bank (Delaware) has full corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Bank and the Bank (Delaware) and constitutes the valid and
legally binding agreement of the Bank and the Bank (Delaware) enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles;
(d) the execution, delivery and performance by each of the Bank and the
Bank (Delaware) of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Bank and the Bank
(Delaware), respectively, and do not require any approval of stockholders of the
Bank or the Bank (Delaware) and such execution, delivery and performance will
not (i) violate the Bank's or the Bank's (Delaware) Charter or By-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Bank or the Bank (Delaware) Trustee, as the case may be, is a party
or by which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware, as the case may be,
governing the corporate, banking or trust powers of the Bank or the Bank
(Delaware) (as appropriate in context) or any order, judgment or decree
applicable to the Bank or the Bank (Delaware);
(e) neither the authorization, execution or delivery by the Bank or the
Bank (Delaware) of this Trust Agreement nor the consummation of any of the
transactions by the Bank or the Bank (Delaware) (as the case may be)
contemplated herein requires the consent or approval of, the giving of notice
to, the registration with or the taking of any other action with respect to any
governmental authority or agency under any existing Federal law governing the
corporate, banking or trust powers of the Bank or the Bank (Delaware), as
appropriate in context, under the laws of the United States or the State of
Delaware;
(f) there are no proceedings pending or, to the best of each of the
Bank's and the Bank's (Delaware) knowledge, threatened against or affecting the
Bank or the Bank (Delaware) in any court or before any governmental authority,
agency or arbitration board or
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tribunal which, individually or in the aggregate, would materially and adversely
affect the Trust or would question the right, power and authority of the Bank or
the Bank (Delaware), as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on behalf of the Trust
have been duly authorized and have been, duly and validly executed, issued and
delivered by the Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders will be entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
To the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are
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agreed by the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) Except during the continuance of an Event of Default,
(i) each of the Property Trustee, the Delaware Trustee and the
Administrative Trustees undertakes to perform such duties and only such duties
as are specifically set forth in this Trust Agreement, and no implied covenants
or obligations shall be read into this Trust Agreement against any of the
Property Trustee; and
(ii) in the absence of bad faith on its part, the Property Trustee,
the Delaware Trustee and the Administrative Trustees may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to such Person and conforming
to the requirements of this ; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to any such Person, such Person shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this Trust
Agreement.
(c) In case an Event of Default has occurred and is continuing, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(d) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
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(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in Liquidation Amount
of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Junior Debt Securities
and the Payment Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 8.2 NOTICES OF DEFAULTS AND PAYMENT DEFERRALS.
Within ninety calendar days after the occurrence of any Event of
Default or Junior Debt Security Tax Event actually known to the Property
Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.8, notice of such Event of Default to the
Securityholders, the Administrative Trustees and the Depositor, unless such
Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Debt Securities pursuant to the Junior Indenture, the Administrative Trustee
shall transmit, in the manner and to the extent provided in Section 10.8, notice
of such exercise to the Securityholders and the Property Trustee, unless such
exercise shall have been revoked.
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SECTION 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section VIII.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if, other than during the occurrence and continuance of an Event of
Default, (i) in performing its duties under this Trust Agreement, the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions of this Trust Agreement the Property Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor and the Property Trustee shall be fully
protected in acting in accordance with such instructions; provided, however,
that if the Property Trustee does not receive such instructions of the Depositor
within ten Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent practicable
shall not be less than two Business Days), it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no liability
except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
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(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such 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 and in accordance with
such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property 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, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
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No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor, and the Trustees do not
assume any responsibility for their correctness (except to the extent they are
incorporated into the Statement of Eligibility on Form T-1 provided by the
Property Trustee to Depositor in connection herewith). The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Junior Debt Securities.
SECTION 8.5 MAY HOLD SECURITIES.
Except as provided in the definition of the term "Outstanding" in
Article I, any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6 COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, bad faith or wilful
misconduct; and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of
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defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee.
SECTION 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder. The
Property Trustee shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities 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) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
SECTION 8.8 CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. Subject to the foregoing, the Depositor and any Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders shall have no rights by virtue of this
Trust Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor nor any Trustee shall be obligated to present
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any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Trustee may
engage in any financial or other transaction with the Depositor or any Affiliate
of the Depositor, or may act as depository for, trustee or agent for, or act on
any committee or body of holders of, securities or other obligations of the
Depositor or its Affiliates.
SECTION 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default has occurred and is continuing,
the Property Trustee alone shall have power to make such appointment. Any
co-trustee or separate trustee appointed pursuant to this Section shall either
be (i) a natural person who is at least 21 years of age and a resident of the
United States or (ii) a legal entity with its principal place of business in the
United States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate trustee such property, title, right, or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) the Trust Securities shall be executed and delivered, and all
rights, powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee;
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(b) the rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee;
(c) the Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case an Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor;
upon the written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal; and a successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder;
(e) the Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee; and
(f) any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the Relevant Trustee may petition, at the expense of the
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Depositor, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.
Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by Act of the Common Securityholder. If an
Event of Default shall have occurred and be continuing, the Property Trustee or
the Delaware Trustee, or both of them, may be removed at such time by Act of the
Holders of a majority in Liquidation Amount of the Outstanding Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to the
retiring Trustee, shall promptly appoint a successor Trustee or Trustees with
respect to the Trust Securities and the Trust, and the retiring Trustee shall
comply with the applicable requirements of Section 8.11. If the Property Trustee
or the Delaware Trustee shall resign, be removed or become incapable of
continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when an Event of Default shall have occurred and be
continuing, the Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees with respect to the Trust Securities and the Trust,
and such successor Trustee shall comply with the applicable requirements of
Section 8.11.
If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, regardless of whether an Event of
Default shall have occurred and be continuing, the Common Securityholder by Act
of the Common Securityholder delivered to the Administrative Trustee shall
promptly appoint a successor Administrative Trustee or Administrative Trustees
with respect to the Trust Securities and the Trust, and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee with respect to the Trust
Securities shall have been so appointed by the Common Securityholder or the
Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee with respect to the Trust
Securities.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 8.7).
SECTION 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Depositor or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and if the Property Trustee is the
resigning Trustee shall duly assign, transfer and deliver to the successor
Trustee all property and money held by such retiring Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust Securities
shall execute and deliver an amendment hereto wherein each successor Relevant
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (b) shall add to or change any of the provisions of this Trust
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee with respect to the Trust Securities and the
Trust; but, on request of the Trust or any successor Relevant Trustee such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
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Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor (whether directly or indirectly Secured or Unsecured) of the
Depositor or the Trust (or any other obligor upon the Junior Debt Securities or
the Trust Securities), the Property Trustee or the Delaware Trustee, as the case
may be, shall be subject to and shall take all actions necessary in order to
comply with the provisions of the Trust Indenture Act regarding the collection
of claims against the Depositor or Trust (or any such other obligor).
SECTION 8.14 REPORTS BY PROPERTY TRUSTEE.
The Property Trustee shall transmit to Preferred Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. If required by Section 313(a) of
the Trust Indenture Act, the Property Trustee shall, within 60 days after each
_________ following the date of the Trust Agreement deliver to Holders a brief
report, dated as of ____________, which complies with the provisions of such
Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each stock exchange upon which
any Preferred Securities are then listed, with the Commission and with the
Trust. The Trust will promptly notify the Property Trustee when any Preferred
Securities are listed on any stock exchange.
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SECTION 8.15 REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust 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) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.17 NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees; provided, however, that there shall at all
times be at least one Administrative Trustee. The Property Trustee and the
Delaware Trustee may be the same Person if the Property Trustee meets the
applicable requirements.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
SECTION 8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any
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registration statement or amendment thereto filed with the Commission, or making
any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 8.19 VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically terminate on
____________, _____ (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2 EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution, liquidation or winding-up of, the Depositor;
(b) the direction to the Property Trustee from the Depositor at any
time (which direction is optional and wholly within the discretion of the
Depositor) to terminate the Trust and distribute a Like Amount of Junior Debt
Securities to Securityholders of Trust Securities.
(c) the redemption of all of the Trust Securities; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
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The direction of the Depositor pursuant to Section 9.2(b) shall be made
in writing by the Depositor and specify the date of distribution of the Junior
Debt Securities, which shall not be less than less than 30 days after the date
of the delivery of such direction.
The election of the Depositor pursuant to Section 9.2(b) shall be made
by the Depositor giving written notice to the Trustees not less than 30 days
prior to the date of distribution of the Junior Debt Securities. Such notice
shall specify the date of distribution of the Junior Debt Securities and shall
be accompanied by an Opinion of Counsel that such event will not be a taxable
event to the Holders of the Preferred Securities for Federal income tax
purposes.
SECTION 9.3 TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
SECTION 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Junior Debt
Securities, subject to clause (d) below. Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Junior Debt Securities; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Junior
Debt Securities or, if
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clause (d) below applies, receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) In order to effect the liquidation of the Trust and distribution of
the Junior Debt Securities to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Debt Securities in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or clause (d) below applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Junior Debt
Securities will be issued to holders of Trust Securities Certificates, upon
surrender of such certificates to the Administrative Trustees or their agent for
exchange, (iii) the Depositor shall use its commercially practicable efforts to
have the Junior Debt Securities listed on the New York Stock Exchange or on such
other exchange, interdealer quotation system or self-regulatory organization as
the Preferred Securities are then listed, if any, (iv) any Trust Securities
Certificates not so surrendered for exchange will be deemed to represent a Like
Amount of Junior Debt Securities, accruing interest at the rate provided for in
the Junior Debt Securities from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Junior Debt Securities) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Junior Debt Securities upon surrender of Trust
Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Junior Debt Securities
in the manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive the Liquidation Distribution upon any
such dissolution, winding-up or termination pro
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rata (determined as aforesaid) with Holders of Preferred Securities, except
that, if an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities, and no Liquidation
Distribution shall be paid to the Holders of the Common Securities unless and
until receipt by all Holders of the Preferred Securities of the entire
Liquidation Distribution payable in respect thereof.
SECTION 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except pursuant to this Section IX.5. At the request of the Depositor, with the
consent of only the Administrative Trustees and without the consent of the
Holders of the Preferred Securities, the Property Trustee or the Delaware
Trustee, the Trust may merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities rank in priority with respect to Distributions and payments upon
liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Junior Debt Securities, (iii) the
Successor Securities are listed or traded, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Preferred Securities are then listed or traded,
if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded or placed under surveillance or review by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an Opinion of Counsel
to the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (c) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Trust (or any successor entity) will continue to be classified as a grantor
trust for United States Federal income tax purposes and (viii) the Depositor
owns all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the
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Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) to
cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Trust will be classified
for United States Federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust will not
be required to register as an investment company under the 1940 Act; provided,
however, that such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 6.1 and 10.2(c) hereof, any provision
of this Trust Agreement may be amended by the Trustees and the Depositor with
(i) the consent of Trust Securityholders representing a majority (based upon
Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for
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United States Federal income tax purposes or the Trust's exemption from status
of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Article Six hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) change the redemption provisions of the Trust Securities,
(iii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment contemplated in (i) or (ii) above on or after
such date, (iv) modify the first sentence of Section 2.6 hereof, (v) authorize
or issue any beneficial interest in the Trust other than as contemplated by this
Trust Agreement, (vi) change the conditions precedent for the Depositor to elect
to dissolve the Trust and distribute the Debentures to Holders of the Trust
Securities as set forth in Section 9.2, or (vii) affect the limited liability of
any Holder of Preferred Securities; and notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, the Property Trustee or the Delaware
Trustee (as the case may be), this Trust Agreement may not be amended in a
manner which imposes any additional obligation on the Depositor, the Property
Trustee or the Delaware Trustee, respectively.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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SECTION 10.4 GOVERNING LAW.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust Agreement
and the Trust Securities shall be construed in accordance with and governed by
the laws of the State of Delaware without regard to conflict of laws principles.
SECTION 10.5 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date [insert alternative floating rate
conversion, if applicable].
SECTION 10.6 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Junior Indenture and pursuant to which the assignee agrees
in writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7 HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8 REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to CNA Financial
Corporation, CNA Plaza, Chicago, Illinois 60685, Attention: ________, facsimile
no.: (312) ______________. Any notice to Preferred Securityholders shall also be
given to such owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee for that
purpose. Such notice, demand or other
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communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to The First National Bank of Chicago,
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126 Attention:
Corporate Trust Department; (b) with respect to the Delaware Trustee, to First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801; and (c) with
respect to the Administrative Trustees, to them at the address above for notices
to the Depositor, marked "Attention Administrative Trustees of CNA Financial
Capital I." Such notice, demand or other communication to or upon the Trust or
the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 10.10 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND JUNIOR
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
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<PAGE> 62
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE JUNIOR INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
CNA Financial Corporation,
as Depositor
By:
-----------------------------------
Name:
Title:
The First National Bank of Chicago,
as Property Trustee
By:
-----------------------------------
Name: Steven M. Wagner
Title: First Vice President
First Chicago Delaware Inc.,
as Delaware Trustee
By:
-----------------------------------
Name: Steven M. Wagner
Title: First Vice President
-----------------------------------
Patricia S. Dempsey,
as Administrative Trustee
-----------------------------------
Donald P. Lofe, Jr.
as Administrative Trustee
Other Admin. Trustee
-57-
<PAGE> 1
EXHIBIT 4(i)
CERTIFICATE OF TRUST
OF
CNA FINANCIAL CAPITAL III
This Certificate of Trust of CNA Financial Capital III (the "Trust"),
dated December 23, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is CNA
Financial Capital III.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware, 19801.
IN WITNESS WHEREOF, the undersigned, constituting all of the trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: /s/ Steven M. Wagner
-------------------------------------
Name: Steven M. Wagner
Title: First Vice President
FIRST CHICAGO DELAWARE, INC., as
Trustee
By: /s/ Steven M. Wagner
-------------------------------------
Name: Steven M. Wagner
Title: First Vice President
Pamela S. Dempsey, as Trustee
By: /s/ Pamela S. Dempsey
-------------------------------------
Donald P. Lofe, Jr., as Trustee
By: /s/ Donald P. Lofe, Jr.
-------------------------------------
<PAGE> 1
EXHIBIT 4(j)
-----------------------------------------------------------------
-----------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
CNA FINANCIAL CORPORATION, AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE, INC.,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF , _____
CNA FINANCIAL CAPITAL III
-----------------------------------------------------------------
-----------------------------------------------------------------
<PAGE> 2
EXHIBIT 4(j)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I Defined Terms............................................................................1
Section 1.1 Definitions..............................................................................1
ARTICLE II Establishment of the Trust...............................................................9
Section 2.1 Name.....................................................................................9
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.............................10
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.........................10
Section 2.4 Issuance of the Trust Securities........................................................11
Section 2.5 Subscription and Purchase of Debentures.................................................11
Section 2.6 Declaration of Trust....................................................................11
Section 2.7 Authorization to Enter into Certain Transactions........................................12
Section 2.8 Assets of Trust.........................................................................16
Section 2.9 Title to Trust Property.................................................................16
ARTICLE III Payment Account.........................................................................16
Section 3.1 Payment Account.........................................................................16
ARTICLE IV Distributions; Redemption...............................................................16
Section 4.1 Distributions...........................................................................16
Section 4.2 Redemption..............................................................................18
Section 4.3 Subordination of Common Securities......................................................20
Section 4.4 Payment Procedures......................................................................20
Section 4.5 Tax Returns and Reports.................................................................21
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust.............................................21
Section 4.7 Reduction for Payments under Junior Indenture...........................................21
ARTICLE V Trust Securities Certificates...........................................................22
Section 5.1 Initial Ownership.......................................................................22
Section 5.2 The Trust Securities Certificates.......................................................22
Section 5.3 Execution and Delivery of Trust Securities Certificates. ...............................22
Section 5.4 Registration of Transfer and Exchange of Preferred Securities Certificates..............22
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates......................23
Section 5.6 Persons Deemed Securityholders..........................................................24
Section 5.7 Access to List of Securityholders' Names and Addresses..................................24
Section 5.8 Maintenance of Office or Agency.........................................................24
Section 5.9 Appointment of Paying Agent.............................................................25
Section 5.10 Ownership of Common Securities by Depositor; No Transfer. ..............................26
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities Certificate.............26
Section 5.12 Notices to Clearing Agency..............................................................27
Section 5.13 Issuance of Definitive Preferred Securities Certificates................................27
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.14 Rights of Securityholders...............................................................28
ARTICLE VI Acts of Securityholders; Meetings; Voting...............................................30
Section 6.1 Limitations on Voting Rights............................................................30
Section 6.2 Notice of Meetings......................................................................31
Section 6.3 Meetings of Preferred Securityholders...................................................31
Section 6.4 Voting Rights...........................................................................32
Section 6.5 Proxies, etc............................................................................32
Section 6.6 Securityholder Action by Written Consent................................................32
Section 6.7 Record Date for Voting and Other Purposes...............................................32
Section 6.8 Acts of Securityholders.................................................................33
Section 6.9 Inspection of Records...................................................................34
ARTICLE VII Representations and Warranties..........................................................34
Section 7.1 Representations and Warranties of the Bank and the Bank (Delaware)......................34
Section 7.2 Representations and Warranties of Depositor.............................................36
ARTICLE VIII The Trustees............................................................................37
Section 8.1 Certain Duties and Responsibilities.....................................................37
Section 8.2 Notices of Defaults and Payment Deferrals...............................................39
Section 8.3 Certain Rights of Property Trustee......................................................39
Section 8.4 Not Responsible for Recitals or Issuance of Securities..................................41
Section 8.5 May Hold Securities.....................................................................41
Section 8.6 Compensation; Indemnity; Fees...........................................................41
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees............................42
Section 8.8 Conflicting Interests...................................................................43
Section 8.9 Co-Trustees and Separate Trustee........................................................43
Section 8.10 Resignation and Removal; Appointment of Successor.......................................45
Section 8.11 Acceptance of Appointment by Successor..................................................46
Section 8.12 Merger, Conversion, Consolidation or Succession to Business.............................47
Section 8.13 Preferential Collection of Claims Against Depositor or Trust............................47
Section 8.14 Reports by Property Trustee.............................................................48
Section 8.15 Reports to the Property Trustee.........................................................48
Section 8.16 Evidence of Compliance with Conditions Precedent........................................48
Section 8.17 Number of Trustees......................................................................48
Section 8.18 Delegation of Power.....................................................................49
Section 8.19 Voting..................................................................................49
ARTICLE IX Termination, Liquidation and Merger.....................................................49
Section 9.1 Termination Upon Expiration Date........................................................49
Section 9.2 Early Termination.......................................................................50
Section 9.3 Termination.............................................................................50
Section 9.4 Liquidation.............................................................................50
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust.....................52
ARTICLE X Miscellaneous Provisions................................................................53
Section 10.1 Limitation of Rights of Securityholders.................................................53
Section 10.2 Amendment...............................................................................53
Section 10.3 Separability............................................................................55
Section 10.4 Governing Law...........................................................................55
Section 10.5 Payments Due on Non-Business Day........................................................55
Section 10.6 Successors..............................................................................55
Section 10.7 Headings................................................................................55
Section 10.8 Reports, Notices and Demands............................................................56
Section 10.9 Trust Indenture Act; Conflict with Trust Indenture Act..................................56
Section 10.10 Acceptance of Terms of Trust Agreement, Guarantee and Junior Indenture..................57
</TABLE>
Exhibit Document
------- --------
A Certificate of Trust
B Certificate Depository Agreement
C Common Securities Certificate
D Expense Agreement
E Preferred Securities Certificate
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<PAGE> 5
CNA FINANCIAL CAPITAL III
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE TRUST
ACT SECTION AGREEMENT SECTION
- ----------- -----------------
<S> <C> <C>
Section 310 (a)(1)....................................................................................... 8.7
(a)(2)........................................................................................8.7
(a)(3)........................................................................................8.9
(a)(4).................................................................................2.7(a)(ii)
(b) ..........................................................................................8.8
Section 311 (a) .........................................................................................8.13
(b) .........................................................................................8.13
Section 312 (a)...........................................................................................5.7
(b)...........................................................................................5.7
(c)...........................................................................................5.7
Section 313 (a).......................................................................................8.14(a)
(a)(4)....................................................................................8.14(b)
(b).......................................................................................8.14(b)
(c)..........................................................................................10.8
(d).......................................................................................8.14(c)
Section 314 (a)..........................................................................................8.15
(b)................................................................................Not Applicable
(c)(1).......................................................................................8.16
(c)(2).......................................................................................8.16
(c)(3).............................................................................Not Applicable
(d)................................................................................Not Applicable
(e).....................................................................................1.1, 8.16
Section 315 (a)................................................................................8.1(a), 8.3(a)
(b).....................................................................................8.2, 10.8
(c)........................................................................................8.1(a)
(d)......................................................................................8.1, 8.3
(e)................................................................................Not Applicable
Section 316 (a)................................................................................Not Applicable
(a)(1)(A)..........................................................................Not Applicable
(a)(1)(B)..........................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)................................................................................Not Applicable
(c)...........................................................................................6.7
Section 317 (a)(1).............................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)...........................................................................................5.9
Section 318 (a)..........................................................................................10.9
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
-iv-
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , , among (i) CNA
Financial Corporation, a Delaware corporation (including any successors or
assigns, the "Depositor"), (ii) The First National Bank of Chicago, a national
banking association, as property trustee, (in such capacity, the "Property
Trustee," and in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank" (iii) First Chicago Delaware Inc., as Delaware
trustee (in such capacity, "Delaware Trustee," and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Bank (Delaware)"),
(iv) Pamela S. Dempsey, an individual, and Donald P. Lofe, Jr., an individual,
each of whose address is c/o CNA Financial Corporation, CNA Plaza, Chicago,
Illinois 60685 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (iv) the
several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Trust Agreement, dated as of
December 23, 1998 (the "Original Trust Agreement"), and by the execution and
filing with the Secretary of State of the State of Delaware of the Certificate
of Trust, filed on December 23, 1998, attached as Exhibit A hereto; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities (as hereinafter
defined) by the Trust to the Depositor, (ii) the issuance and sale of the
Preferred Securities (as hereinafter defined) by the Trust pursuant to the
Underwriting Agreement (as hereinafter defined), (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the Junior
Debt Securities (as hereinafter defined) and (iv) the appointment of the
Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE> 7
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest or
Additional Sums (as defined in the Junior Indenture), as applicable, paid by the
Depositor on a Like Amount of Junior Debt Securities for such period.
"Additional Sums" has the meaning specified in Section 10.7 of the
Junior Indenture.
"Administrative Trustee" means a Person satisfying the eligibility
requirements set forth in Section 8.7(b) and initially means of Pamela S.
Dempsey, and Donald P. Lofe, Jr., solely in such Person's capacity as
Administrative Trustee of the Trust formed and continued hereunder and not in
such Person's individual capacity, or such Administrative Trustee's successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"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. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal or
State bankruptcy, insolvency, reorganization or other
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<PAGE> 8
similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any substantial
part of its property or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person, or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt or insolvent, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Company to which authority to act on behalf of the
Board of Directors has been delegated, and to be in full force and effect on the
date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means certificates
representing beneficial interests in the Preferred Securities, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday or (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
-3-
<PAGE> 9
"Closing Date" means the Closing Time as defined in the Underwriting
Agreement, which date is also the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $___ and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in Chicago, Illinois.
"Definitive Preferred Securities Certificates" means Preferred
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Event of Default" means the occurrence of a Junior Debt Related Event
of Default.
-4-
<PAGE> 10
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Period" has the meaning specified in Section 3.11 of the
Junior Indenture.
"Extension Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The First National Bank of Chicago, as trustee, contemporaneously
with the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"Junior Debt Related Event of Default" means an "Event of Default" as
defined in the Junior Indenture.
"Junior Debt Securities" means the aggregate principal amount of the
Depositor's Junior Subordinated Deferrable Interest Junior Debt Securities,
Series __, issued pursuant to the Junior Indenture.
"Junior Debt Security Investment Company Event" means an "Investment
Company Event" as defined in the Junior Indenture.
"Junior Debt Security Redemption Date" means, with respect to any
Junior Debt Securities to be redeemed under the Junior Indenture, the date fixed
for redemption under the Junior Indenture.
"Junior Debt Security Tax Event" means a "Tax Event" as defined in the
Junior Indenture.
"Junior Indenture" means the Junior Subordinated Indenture, dated as of
__, , between the Depositor and the Junior Indenture Trustee, as trustee, as
amended or supplemented from time to time.
"Junior Indenture Trustee" means The First National Bank of Chicago, a
national banking association organized and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of
-5-
<PAGE> 11
Junior Debt Securities to be contemporaneously redeemed in accordance with the
Junior Indenture, allocated to the Common Securities and to the Preferred
Securities based on their relative Liquidation Amounts and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities, and (b) with
respect to a distribution of Junior Debt Securities to Holders of Trust
Securities in connection with a dissolution and liquidation of the Trust, Junior
Debt Securities having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Junior Debt Securities are
distributed.
"Liquidation Amount" means the stated amount of $____ per Trust
Security.
"Liquidation Date" means the date on which Junior Debt Securities are
to be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or any Senior Vice President or Group Vice
President, and by the Treasurer, an Associate Treasurer, an Assistant Treasurer,
the Controller, the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 8.16 shall be the principal executive,
financial or accounting officer of the Depositor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, 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, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
-6-
<PAGE> 12
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Trust Securities; provided that, if such
Preferred Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement;
(c) Trust Securities which have been paid or in exchange for or in lieu
of which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13; and
(d) as provided in Section 9.4(c).
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Administrative Trustee or any
Affiliate of the Depositor or any Administrative Trustee shall be disregarded
and deemed not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
that such Trustee knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the Outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Preferred Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act with
respect to such Preferred Securities and that the pledgee is not the Depositor
or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Bank.
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"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Junior Debt Securities will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Article
Four.
"Person" means any individual, corporation, partnership, joint venture,
trust, association, joint stock company, limited liability company or
corporation, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means a preferred undivided beneficial interest in
the assets of the Trust, designated as "_____% ___________________" having a
Liquidation Amount of $___ and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of one or more Preferred Securities, substantially in the form
attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Junior Debt Security Redemption Date and the
stated maturity of the Junior Debt Securities shall be a Redemption Date for a
Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, [plus the related amount of the premium,
if any,] paid by the Depositor upon the concurrent redemption of a Like Amount
of Junior Debt Securities, allocated on a pro rata basis (based on Liquidation
Amounts) among the Trust Securities, subject to the provisions contained herein.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
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"Special Event" means "Special Event" as defined in the Junior
Indenture.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, including the rules duly
adopted by the Commission thereunder; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
"Trust Property" means (a) the Junior Debt Securities, (b) the rights
under the Guarantee, (c) any cash on deposit in, or owing to, the Payment
Account and (d) all proceeds and rights in respect of the foregoing and any
other property and assets for the time being held or deemed to be held by the
Property Trustee pursuant to this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Terms Agreement, dated as of __, ,
among the Trust, the Depositor and the Underwriters named therein incorporating
the Underwriting Agreement Standard Provisions.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 NAME.
The Trust continued hereby shall be known as "CNA Financial Capital
III," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees
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may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Depositor. The principal executive office of the Trust is c/o CNA Plaza,
Chicago, Illinois 60685.
SECTION 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.
(a) The Trustees acknowledge receipt from the Depositor in connection
with the Original Trust Agreement of the sum of $10, which constituted the
initial Trust Property.
(b) The Depositor shall be responsible for and shall pay for all
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees as provided in Section 8.7 the costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, Paying Agent(s),
Securities Registrar, duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(c) The Depositor will pay any and all taxes of the Trust (other than
United States withholding taxes attributable to the Trust or its assets) and
all liabilities, costs and expenses with respect to such taxes.
(d) The Depositor's obligations under this Section 2.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. The Property Trustee
and any such Creditor may enforce the Depositor's obligations under this Section
2.3 directly against the Depositor and the Depositor irrevocably waives any
right or remedy to require that the Property Trustee or any such Creditor take
any action against the Trust or any other Person before proceeding against the
Depositor. The Depositor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 2.3.
(e) The Depositor shall make no claim upon the Trust Property for the
payment of such expenses.
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SECTION 2.4 ISSUANCE OF THE TRUST SECURITIES.
On __, 1999, the Depositor, on behalf of the Trust and pursuant to the
Original Trust Agreement, executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Underwriters named in the Underwriting Agreement
Preferred Securities Certificates, [registered in the name of the nominee of the
initial Clearing Agency,] in an aggregate amount of _________ Preferred
Securities having an aggregate Liquidation Amount of $____________, against
receipt of such aggregate purchase price of such Preferred Securities of
$_____________, which amount the Administrative Trustee shall promptly deliver
to the Property Trustee. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Depositor a Common
Securities Certificate, registered in the name of the Depositor, in an aggregate
amount of _________ Common Securities having an aggregate Liquidation Amount of
$______________ against payment by the Depositor of such amount, which amount
such Administrative Trustee shall promptly deliver to the Property Trustee.
SECTION 2.5 SUBSCRIPTION AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution of this Trust Agreement, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Junior Debt Securities, registered in the name of the Trust
and having an aggregate principal amount equal to $_____________, and, in
satisfaction of the purchase price for such Junior Debt Securities, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$_____________, such amount being the sum of the amounts delivered to the
Property Trustee pursuant to Section 2.4 and (ii) the first sentence of this
Section 2.5.
SECTION 2.6 DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the Junior
Debt Securities, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of any of the Trustees set forth herein except as required by
the Delaware Business Trust Act. The Delaware Trustee shall be one of the
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Trustees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 2.7, and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the exclusive power and authority to act on behalf of the Trust with
respect to the following matters:
(A) the issuance and sale of the Trust Securities, including
execution of any agreement, certificates evidencing Trust
Securities or other documents necessary or advisable with respect
to such issuance and sale;
(B) the purchase of the Junior Debt Securities
(C) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may
be necessary or desirable in connection with the purposes and
function of the Trust;
(D) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(E) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(F) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures
to the Securityholders in accordance with this Trust Agreement;
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(G) registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement (but only if at
such time the Property Trustee shall not be the Securities
Registrar);
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone or together
with any or all of the Administrative Trustees) any documents that
the Administrative Trustees have the power to execute pursuant to
this Trust Agreement; and
(J) the taking of any action incidental to the foregoing as
such Administrative Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust
Agreement for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment and maintenance of the Payment Account
and the appointment, subject to Section 5.9, of Paying Agents;
(B) the receipt and registered ownership of the Junior Debt
Securities;
(C) the receipt of payments of the purchase price of the Trust
Securities and the collection of interest, principal and any other
payments made in respect of the Junior Debt Securities and deposit
into the Payment Account;
(D) making Distributions and other payments to the
Securityholders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Junior Debt Securities, subject to the terms of the
Junior Indenture;
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(F) the sending of notices of default, redemption, Extension
Periods, Special Events, liquidation and other information
regarding the Trust Securities and the Junior Debt Securities to
the Securityholders in accordance with this Trust Agreement;
(G) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust, including, the
distribution of the Trust Property in accordance with the terms of
this Trust Agreement and the preparation, execution and filing of
the certificate of cancellation with the Secretary of State of the
State of Delaware;
(H) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time
to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder);
(I) so long as the Property Trustee is the Securities
Registrar, registering transfers and exchanges of the Preferred
Securities in accordance with this Trust Agreement; and
(J) except as otherwise provided in this Section 2.7(a)(ii) or
as required by the Trust Indenture Act, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of
the Administrative Trustees set forth in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not cause the Trust to
(i) acquire any assets or make any investments (other than the Junior Debt
Securities) or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action that
would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States Federal income tax purposes, (iv) make any loans (other than the
Junior Debt Securities) or incur any indebtedness for borrowed money or issue
any other debt, (v) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in the Trust other than the Trust
Securities or (vi) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
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(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the doing of any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and advising the
Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Trust or on behalf of the Trust, as the Depositor
deems necessary or advisable in order to comply with the applicable
laws of any such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to The New York Stock Exchange or
any other national stock exchange or The Nasdaq Stock Market for
listing upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments
thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so, that (i) the Trust will not be deemed to
be an "investment company" required to be registered under the 1940 Act (ii) the
Trust will be classified as a grantor trust for United States Federal income tax
purposes and (iii) the Junior Debt Securities will be treated as indebtedness of
the Depositor for United States Federal income tax purposes. In this connection,
the Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust, as amended from
time to time, or this Trust Agreement, that each of the Depositor and the
Administrative Trustees determines in their discretion to be necessary or
desirable for such purposes, as long as such
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action does not adversely affect in any material respect the interests of the
holders of the Preferred Securities.
SECTION 2.8 ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement;
provided that any Paying Agent shall have the right of withdrawal with respect
to the Payment Account solely for the purpose of making the payments
contemplated under Article Four. All monies and other property deposited or held
from time to time in the Payment Account shall be held by the Property Trustee
in the Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Junior Debt Securities and any
amounts paid to the Property Trustee pursuant to this Guarantee. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including any Additional Amounts) will
be made on the Trust
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Securities at the rate [(or manner of calculation of the rate)] and on the dates
that payments of interest (including any Additional Interest, as defined in the
Junior Indenture) are made on the Junior Debt Securities. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accumulate from ,
, and, except in the event that the Depositor exercises its right to
defer the payment of interest on the Junior Debt Securities pursuant to
the Junior Indenture, shall be payable [quarterly] [monthly]
[semi-annually] [annually] in arrears on [Insert Dates] of each year,
commencing on _________, . If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then
the payment of such Distribution shall be made on the next succeeding
day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall
be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on which
distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date"). [insert alternative floating rate convention, if
applicable]
Within two Business Days after receipt by the Property Trustee of notice of an
Extension Period pursuant to Section 3.11 of the Junior Indenture, the Property
Trustee shall give notice thereof to the Securityholders by first class mail,
postage prepaid.
(ii) Assuming payments of interest on the Junior Debt Securities
are made when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Trust Securities shall be payable at
a rate of ____% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any full period
shall be computed on the basis of a 360-day year of twelve 30-day
months. [insert alternative floating rate provisions, if applicable].
The amount of Distributions for any partial period shall be computed on
the basis of the number of days elapsed in a 360-day year of twelve
30-day months. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on
hand legally available in the Payment Account for the payment of such
Distributions.
(iv) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust Securities on the
relevant record date, which shall be [one Business Day prior to such
Distribution Date; provided, however, that in the event that the
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Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date] 15 days prior to the relevant
Distribution Date.
SECTION 4.2 REDEMPTION.
(a) Upon receipt by the Trust of a notice of redemption or other
acceleration of the maturity of the Junior Debt Securities, the Property
Trustee, subject to Section 4.3, will call for redemption a Like Amount of Trust
Securities on the Junior Debt Security Redemption Date and will call for
redemption all Outstanding Trust Securities on the stated maturity date of the
Junior Debt Securities, in each case at the applicable Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and (v) the place or places
where Trust Securities are to be surrendered for payment of the
Redemption Price;
(vi) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption or payment at maturity of Junior Debt Securities. Redemptions of the
Trust Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand legally
available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then[, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long
as the Preferred Securities are in book-entry-only form, irrevocably deposit
with the Clearing Agency for the Preferred Securities funds sufficient to pay
the applicable Redemption Price for the Preferred Securities
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being redeemed on such date and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
If the Preferred Securities are not in book-entry-only form,] the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders thereof upon surrender of their Preferred Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price, but
without interest, and such Securities will cease to be Outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
any Trust Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Trust Securities will be subject to the rights of Holders on the
close of business on the relevant record date in respect of a Distribution Date
occurring on or prior to such Redemption Date.
(j) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the Preferred Securities.
The particular Preferred Securities to be redeemed shall be selected) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method (including, without limitation, by lot) as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. If fewer than all of the Trust Securities represented by a Trust
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Securities Certificate are redeemed, an Administrative Trustee shall execute for
the Holder a new Trust Securities Certificate representing the unredeemed Trust
Securities. The Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price and/or Liquidation Distribution of, the
Trust Securities, as applicable, shall be made, subject to Section 4.2(j), pro
rata among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date, Redemption Date or Liquidation Date any Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price and/or Liquidation
Distribution of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment shall have been made or been provided for in full in cash of (i)
all accumulated and unpaid Distributions (including Additional Amounts, if
applicable) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, such Redemption Price on all Outstanding
Preferred Securities then being redeemed, as applicable, shall have been made or
provided for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price and/or
Liquidation Distribution of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default, the Holder
of Common Securities will be deemed to have waived any right to act with respect
to any such Event of Default under this Trust Agreement until the effect of such
Event of Default has been cured, waived or otherwise eliminated with respect to
the Preferred Securities. Until any such Event of Default under this Trust
Agreement has been so cured, waived or otherwise eliminated with respect to the
Preferred Securities, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
SECTION 4.4 PAYMENT PROCEDURES.
If the Preferred Securities are held by a Clearing Agency, payment of
Distributions and any Redemption Price or Liquidation Distribution shall be made
to the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments of the Redemption Price or
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Liquidation Distribution in respect of Definitive Preferred Securities held in
certificated form shall be made to the Holder thereof in immediately available
funds upon surrender of the Preferred Securities Certificate representing such
Definitive Preferred Securities at the Corporate Office of the Trustee. Payments
of Distributions (including Additional Amounts, if applicable) in respect of
Definitive Preferred Securities shall be made by check mailed to the address of
the Person entitled thereto as such address shall appear on the Securities
Register. Payments in respect of Common Securities shall be made in such manner
as shall be mutually agreed between the Property Trustee and the Common
Securityholder.
SECTION 4.5 TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States Federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided on such form. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns and reports promptly
after such filing or furnishing. The Administrative Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Junior Debt Securities of Additional Sums and
directions as to the payments of such Additional Sums, the Property Trustee
shall promptly pay, solely out of monies on deposit pursuant to this Trust
Agreement, any taxes, duties or governmental charges of whatsoever nature (other
than withholding taxes) imposed on the Trust by the United States or any other
taxing authority.
SECTION 4.7 REDUCTION FOR PAYMENTS UNDER JUNIOR INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities (and
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant to
Section 5.8 of the Junior Indenture, Section 5.14 of this Trust Agreement or the
Guarantee.
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ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 INITIAL OWNERSHIP.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2 THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in minimum
denominations of $___ Liquidation Amount and integral multiples of $___ in
excess thereof, and the Common Securities Certificate shall be issued in an
aggregate Liquidation Amount equal to $_________. Trust Securities Certificates
representing fractional interests shall not be issued. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
SECTION 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date, the Administrative Trustees shall cause Preferred
Securities Certificates and the Common Securities Certificates, in the
respective aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to
be executed on behalf of the Trust as provided in Section 5.2 and delivered to
or upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor.
SECTION 5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities
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Register") in which, the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and the Common
Securities Certificate (subject to Section 5.10 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Bank shall be the
initial Securities Registrar; any successor Securities Registrar shall be
appointed by the Administrative Trustees.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer
of any Preferred Securities that have been called for redemption. At the option
of a Holder, Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations and of a like
aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section V.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to Securities Registrar duly
executed by the Holder or his attorney duly authorized in writing. Each
Preferred Securities Certificate surrendered for registration of transfer or
exchange shall be cancelled and subsequently disposed of by the Securities
Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates (other than any exchange not involving a transfer).
SECTION 5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its reasonable satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
reasonably required by them to save each of them harmless, then in the absence
of notice that such Trust Securities Certificate shall have been acquired by a
bona fide purchaser, the Administrative Trustees, or any one of them, on behalf
of the Trust shall
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execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the Trust Property, as if originally issued, whether or
not the lost, stolen or destroyed Trust Securities Certificate shall be found at
any time.
SECTION 5.6 PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner and Holder of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and none of the Trustees, the Paying Agent or the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
(a) The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act. Each Securityholder, by receiving and
holding a Trust Securities Certificate, and each Owner shall be deemed to have
agreed not to hold the Depositor, the Property Trustee the Delaware Trustee, or
the Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
In the event that the Property Trustee is no longer the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of the most recent
record date and (a) the Property Trustee, quarterly not later than 10 days prior
to a Distribution Date and (b) to the Property Trustee, promptly after receipt
by the Administrative Trustees, promptly after receipt by the Administrative
Trustees or the Depositor of a request therefor from the Property Trustee in
order to enable the Paying Agent to pay Distributions in accordance with Section
4.1 hereof, in each case to the extent such information is in the possession or
control of the Administrative Trustees or the Depositor and is not identical to
a previously supplied list or has not otherwise been received by the Property
Trustee.
SECTION 5.8 MAINTENANCE OF OFFICE OR AGENCY.
The Property Trustee shall maintain in New York, New York and Chicago,
Illinois, an office or offices or agency or agencies where Preferred Securities
Certificates may be
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surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served, initially located at __________. The Property Trustees shall
give prompt written notice to the Depositor and to the Securityholders of any
change in the location of the Securities Register or any such office or agency.
SECTION 5.9 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions. The Administrative Trustees may revoke such power
and remove the Paying Agent if such Trustees determine in their sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect; provided that such revocation and
removal with respect to the sole Paying Agent shall not become effective until
the appointment of a successor. The Paying Agent shall initially be the Bank,
and any co-paying agent chosen by the Bank, and acceptable to the Administrative
Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees, the Property Trustee and the Depositor. In the event that the Bank
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee (in the case of a Paying
Agent other than the Bank) and the Depositor to act as Paying Agent (which shall
be a bank or trust company meeting the eligibility requirements set forth in
Section 6.9 of the Junior Indenture); provided that such resignation with
respect to the sole Paying Agent shall not become effective until the
appointment of a successor. The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply
to the Bank also in its role as Paying Agent, for so long as the Bank shall act
as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
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SECTION 5.10 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR; NO TRANSFER.
On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than in connection with a consolidation or merger of the Depositor
into another corporation, or any conveyance, transfer or lease by the Depositor
of its properties and assets substantially as an entirety to any Person,
pursuant to Section 8.1 of the Junior Indenture, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause the
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.11 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON SECURITIES
CERTIFICATE.
(a) The Preferred Securities Certificates, upon original issuance, will
be issued in the form of a Preferred Securities Certificate or Certificates
representing [Definitive Preferred Securities or] Book-Entry Preferred
Securities Certificates, to be delivered to The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Trust. Book-Entry Preferred
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Owner will receive a Definitive Preferred Securities
Certificate representing such Owner's interest in such Preferred Securities,
except as provided in Section 5.13. Unless and until Definitive Preferred
Securities Certificates have been issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including
the payment of the Redemption Price Amount of and Distributions on the
Book-Entry Preferred Securities and the giving of instructions or
directions to Owners of Book-Entry Preferred Securities) as the sole
Holder of Book-Entry Preferred Securities and shall have no obligations
to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants; provided, that solely for the
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purposes of determining whether the Holders of the requisite
Liquidation Amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, so long as Definitive Preferred
Security Certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the
Clearing Agency setting forth the Owners' votes or assigning the right
to vote on any matter to any other Persons either in whole or in part.
Pursuant to the Certificate Depository Agreement, unless and until
Definitive Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13 ISSUANCE OF DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Property Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Preferred Securities
Certificates or that the Clearing Agency is no longer registered or in good
standing under the Securities Act of 1934, as amended, or other applicable
statute or regulation, and the Depositor is unable to locate a qualified
successor within 90 days, (b) the Depositor at its option advises the Property
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or (c) after the occurrence of an Event of Default, Owners of
Book-Entry Preferred Securities Certificates representing beneficial interests
aggregating at least a majority of the Liquidation Amount advise the Property
Trustee in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interest of the Owners of Book-Entry
Preferred Securities Certificates, then the Property Trustee shall instruct the
Clearing Agency to notify all Owners of Preferred Securities Certificates and
the other Trustees of the occurrence of any such event and of the availability
of the Definitive Preferred Securities Certificates to Owners requesting the
same. Upon surrender to the Property Trustees of the Preferred Securities
Certificate or Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in authorized denominations in
accordance with the instructions of the Clearing Agency. Neither the Securities
Registrar nor the Trustees shall be liable for any
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delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders of
the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
SECTION 5.14 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Junior Debt Related Event of Default, the Junior Indenture Trustee fails
or the holders of not less than 25% in principal amount of the outstanding
Junior Debt Securities fail to declare the principal of all of the Junior Debt
Securities to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Preferred Securities then Outstanding shall have such
right by a notice in writing to the Depositor and the Junior Indenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Junior Debt Securities shall become immediately due and payable,
provided that the payment of principal and interest on such Junior Debt
Securities shall remain subordinated to the extent provided in the Junior
Indenture.
At any time after such a declaration of acceleration with respect to
the Junior Debt Securities has been made and before a judgment or decree for
payment of the money due has been obtained by the Junior Indenture Trustee as in
the Junior Indenture provided, the Holders of a majority in Liquidation Amount
of the Preferred Securities, by written notice to the Property Trustee, the
Depositor and the Junior Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture Trustee
a sum sufficient to pay
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(A) all overdue installments of interest (including any
Additional Interest (as defined in the Junior Indenture)) on all of
the Junior Debt Securities,
(B) the principal of (and premium, if any, on) any Junior Debt
Securities which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate then borne by the
Junior Debt Securities, and
(C) all sums paid or advanced by the Junior Indenture Trustee
under the Junior Indenture and the reasonable compensation,
expenses, disbursements and advances of the Junior Indenture
Trustee and the Property Trustee, their agents and counsel; and
(ii) all Events of Default, other than the non-payment of the principal
or premium, if any, of the Junior Debt Securities which has become due solely
by such acceleration, have been cured or waived as provided in Section 5.13 of
the Junior Indenture.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of the
Preferred Securities, a record date shall be established for determining Holders
of Outstanding Preferred Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
that, unless such declaration of acceleration, or rescission and annulment, as
the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day which is 90 days after
such record date, such notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new
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written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
The holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the holders of the Junior Debt
Securities and the Holders of the related Preferred Securities, waive any past
default under the Junior Indenture, except a default in they payment of
principal, premium, if any, or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest, premium, if any,
and principal due otherwise than by acceleration has been deposited with the
Junior Indenture Trustee) or a default in respect of a covenant or provision
which under the Junior Indenture cannot be modified or amended without the
consent of the holder of each outstanding Junior Debt Security. No such
recission shall affect any subsequent default or impair any right consequent
thereon.
(c) For so long as any Preferred Securities remain Outstanding, upon an
Event of Default specified in Sections 5.1(a) or 5.1(b) of the Junior Indenture,
any Holder of Preferred Securities shall have the right to institute a
proceeding directly against the Depositor pursuant to Section 5.8 of the Junior
Indenture for enforcement of payment to such Holders of the principal of or
premium, if any, or interest on the Junior Debt Securities having a principal
amount equal to the Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action").
Except as set forth in this Section 5.14(c) and Section 5.14(b) and
Sections 5.12, 9.2 and 10.5 of the Junior Indenture, the Holders of Preferred
Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Junior Debt Securities.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and 10.2
and in the Junior Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Junior Debt Securities are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Junior Indenture
Trustee, or executing any trust or power conferred on the Junior Indenture
Trustee with respect to the Junior Debt Securities, (ii) waive any past default
which is waivable under Section 5.13 of the Junior Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Junior
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Junior Indenture or the Junior Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in Liquidation Amount
of all Outstanding Preferred Securities, provided, however, that where a consent
under the Junior Indenture would require the consent of each holder of Junior
Debt Securities affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action
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previously authorized or approved by a vote of the Holders of Preferred
Securities, except by a subsequent vote of the Holders of Preferred Securities.
The Property Trustee shall notify all Holders of the Preferred Securities of any
notice of default received from the Junior Indenture Trustee with respect to the
Junior Debt Securities. In addition to obtaining the foregoing consents of the
Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will
continue to qualify as a grantor trust for United States Federal income tax
purposes after taking into account such action.
(c) Subject to Section 10.2(c) hereof, if any proposed amendment to the
Trust Agreement provides for, or the Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers,
preferences or special rights of the Preferred Securities, whether by way of
amendment to the Trust Agreement or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than pursuant to the terms of this
Trust Agreement, then the Holders of Outstanding Preferred Securities will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of the Holders of a majority in
Liquidation Amount of the Outstanding Preferred Securities. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
fail to qualify as a grantor trust for United States federal income tax
purposes.
SECTION 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at its
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3 MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
10% of the Outstanding Preferred Securities (based upon their Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any time
in their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
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If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders present, either in person or by proxy, at such
meeting shall constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4 VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $___ of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5 PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders shall be entitled to vote. When Trust Securities
are held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Securityholder shall be deemed valid unless challenged at
or prior to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding a majority of all Preferred
Trust Securities (based upon their Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
SECTION 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from
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time to time fix a date, not more than 90 days prior to the date of any meeting
of Securityholders or the payment of a Distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 6.8 ACTS OF SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
Without limiting the generality of this Section 6.8, unless otherwise
provided in or pursuant to this Trust Agreement, a Securityholder, including a
Clearing Agency, may make, give or take, by a proxy, or proxies, duly appointed
in writing, any request, demand, authorization, direction, notice, consent,
waiver or other act provided in or pursuant to this Trust Agreement to be made,
given or taken by Securityholders, and a Clearing Agency that is a
Securityholder may provide its proxy or proxies to the beneficial owners of
interest the Trust Securities owned by such Clearing Agency through such
Clearing Agency's standing instructions and customary practices.
The Administrative Trustees shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in any Trust
Securities held by a Clearing House entitled under the procedures of such
Clearing House to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other act provided in or pursuant to this Trust Agreement to be made, given
or taken by Securityholders. If such a record date is fixed, the Securityholders
on such record date or their duly appointed proxy or proxies, and only such
Persons, shall be entitled to make, give or take such request, demand,
authorization, direction, notice, consent, waiver or other act, whether or not
such Securityholders remain Securityholders after such record date. No such
request, demand, authorization, direction, notice, consent, waiver or other act
shall be valid or effective if made, given or taken more than 90 days after such
record date.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary
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public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to him or her the execution thereof. Where such execution is by a signer acting
in a capacity other than his or her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his or her authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article 6, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
SECTION 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE BANK
(DELAWARE).
The Bank and the Bank (Delaware), each severally on behalf of and as to
itself, hereby represents and warrants for the benefit of the Depositor and the
Securityholders that:
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(a) the Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States; The Bank
(Delaware) is a Delaware banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; and The Bank
(Delaware), as Delaware Trustee, fulfills for the trust the statutory
requirements of Section 3807 of the Delaware Business Trust Act;
(b) each of the Bank and the Bank (Delaware) has full corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Bank and the Bank (Delaware) and constitutes the valid and
legally binding agreement of the Bank and the Bank (Delaware) enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles;
(d) the execution, delivery and performance by each of the Bank and the
Bank (Delaware) of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Bank and the Bank
(Delaware), respectively, and do not require any approval of stockholders of the
Bank or the Bank (Delaware) and such execution, delivery and performance will
not (i) violate the Bank's or the Bank's (Delaware) Charter or By-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Bank or the Bank (Delaware) Trustee, as the case may be, is a party
or by which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware, as the case may be,
governing the corporate, banking or trust powers of the Bank or the Bank
(Delaware) (as appropriate in context) or any order, judgment or decree
applicable to the Bank or the Bank (Delaware);
(e) neither the authorization, execution or delivery by the Bank or the
Bank (Delaware) of this Trust Agreement nor the consummation of any of the
transactions by the Bank or the Bank (Delaware) (as the case may be)
contemplated herein requires the consent or approval of, the giving of notice
to, the registration with or the taking of any other action with respect to any
governmental authority or agency under any existing Federal law governing the
corporate, banking or trust powers of the Bank or the Bank (Delaware), as
appropriate in context, under the laws of the United States or the State of
Delaware;
(j) there are no proceedings pending or, to the best of each of the
Bank's and the Bank's (Delaware) knowledge, threatened against or affecting the
Bank or the Bank (Delaware) in any court or before any governmental authority,
agency or arbitration board or
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tribunal which, individually or in the aggregate, would materially and adversely
affect the Trust or would question the right, power and authority of the Bank or
the Bank (Delaware), as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on behalf of the Trust
have been duly authorized and have been, duly and validly executed, issued and
delivered by the Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders will be entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
To the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are
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agreed by the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) Except during the continuance of an Event of Default,
(i) each of the Property Trustee, the Delaware Trustee and the
Administrative Trustees undertakes to perform such duties and only such duties
as are specifically set forth in this Trust Agreement, and no implied covenants
or obligations shall be read into this Trust Agreement against any of the
Property Trustee; and
(ii) in the absence of bad faith on its part, the Property Trustee,
the Delaware Trustee and the Administrative Trustees may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to such Person and conforming
to the requirements of this ; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to any such Person, such Person shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this Trust
Agreement.
(c) In case an Event of Default has occurred and is continuing, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(d) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
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(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in Liquidation Amount
of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Junior Debt Securities
and the Payment Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 8.2 NOTICES OF DEFAULTS AND PAYMENT DEFERRALS.
Within ninety calendar days after the occurrence of any Event of
Default or Junior Debt Security Tax Event actually known to the Property
Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.8, notice of such Event of Default to the
Securityholders, the Administrative Trustees and the Depositor, unless such
Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Debt Securities pursuant to the Junior Indenture, the Administrative Trustee
shall transmit, in the manner and to the extent provided in Section 10.8, notice
of such exercise to the Securityholders and the Property Trustee, unless such
exercise shall have been revoked.
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SECTION 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section VIII.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if, other than during the occurrence and continuance of an Event of
Default, (i) in performing its duties under this Trust Agreement, the Property
Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions of this Trust Agreement the Property Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor and the Property Trustee shall be fully
protected in acting in accordance with such instructions; provided, however,
that if the Property Trustee does not receive such instructions of the Depositor
within ten Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent practicable
shall not be less than two Business Days), it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no liability
except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
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(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(j) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such 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 and in accordance with
such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property 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, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
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No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor, and the Trustees do not
assume any responsibility for their correctness (except to the extent they are
incorporated into the Statement of Eligibility on Form T-1 provided by the
Property Trustee to Depositor in connection herewith). The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Junior Debt Securities.
SECTION 8.5 MAY HOLD SECURITIES.
Except as provided in the definition of the term "Outstanding" in
Article I, any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6 COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, bad faith or wilful
misconduct; and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of
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defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee.
SECTION 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder. The
Property Trustee shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities 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) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
SECTION 8.8 CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. Subject to the foregoing, the Depositor and any Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders shall have no rights by virtue of this
Trust Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor nor any Trustee shall be obligated to present
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any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Trustee may
engage in any financial or other transaction with the Depositor or any Affiliate
of the Depositor, or may act as depository for, trustee or agent for, or act on
any committee or body of holders of, securities or other obligations of the
Depositor or its Affiliates.
SECTION 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default has occurred and is continuing,
the Property Trustee alone shall have power to make such appointment. Any
co-trustee or separate trustee appointed pursuant to this Section shall either
be (i) a natural person who is at least 21 years of age and a resident of the
United States or (ii) a legal entity with its principal place of business in the
United States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate trustee such property, title, right, or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) the Trust Securities shall be executed and delivered, and all
rights, powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee;
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(b) the rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee;
(c) the Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case an Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Depositor;
upon the written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal; and a successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder;
(e) the Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee; and
(j) any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the Relevant Trustee may petition, at the expense of the
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Depositor, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.
Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by Act of the Common Securityholder. If an
Event of Default shall have occurred and be continuing, the Property Trustee or
the Delaware Trustee, or both of them, may be removed at such time by Act of the
Holders of a majority in Liquidation Amount of the Outstanding Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to the
retiring Trustee, shall promptly appoint a successor Trustee or Trustees with
respect to the Trust Securities and the Trust, and the retiring Trustee shall
comply with the applicable requirements of Section 8.11. If the Property Trustee
or the Delaware Trustee shall resign, be removed or become incapable of
continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when an Event of Default shall have occurred and be
continuing, the Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees with respect to the Trust Securities and the Trust,
and such successor Trustee shall comply with the applicable requirements of
Section 8.11.
If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, regardless of whether an Event of
Default shall have occurred and be continuing, the Common Securityholder by Act
of the Common Securityholder delivered to the Administrative Trustee shall
promptly appoint a successor Administrative Trustee or Administrative Trustees
with respect to the Trust Securities and the Trust, and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee with respect to the Trust
Securities shall have been so appointed by the Common Securityholder or the
Preferred Securityholders and accepted appointment in the manner required by
Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee with respect to the Trust
Securities.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 8.7).
SECTION 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Depositor or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and if the Property Trustee is the
resigning Trustee shall duly assign, transfer and deliver to the successor
Trustee all property and money held by such retiring Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust Securities
shall execute and deliver an amendment hereto wherein each successor Relevant
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (b) shall add to or change any of the provisions of this Trust
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee with respect to the Trust Securities and the
Trust; but, on request of the Trust or any successor Relevant Trustee such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
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Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor (whether directly or indirectly Secured or Unsecured) of the
Depositor or the Trust (or any other obligor upon the Junior Debt Securities or
the Trust Securities), the Property Trustee or the Delaware Trustee, as the case
may be, shall be subject to and shall take all actions necessary in order to
comply with the provisions of the Trust Indenture Act regarding the collection
of claims against the Depositor or Trust (or any such other obligor).
SECTION 8.14 REPORTS BY PROPERTY TRUSTEE.
The Property Trustee shall transmit to Preferred Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. If required by Section 313(a) of
the Trust Indenture Act, the Property Trustee shall, within 60 days after each
_________ following the date of the Trust Agreement deliver to Holders a brief
report, dated as of ____________, which complies with the provisions of such
Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each stock exchange upon which
any Preferred Securities are then listed, with the Commission and with the
Trust. The Trust will promptly notify the Property Trustee when any Preferred
Securities are listed on any stock exchange.
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SECTION 8.15 REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust 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) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.17 NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees; provided, however, that there shall at all
times be at least one Administrative Trustee. The Property Trustee and the
Delaware Trustee may be the same Person if the Property Trustee meets the
applicable requirements.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
SECTION 8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any
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registration statement or amendment thereto filed with the Commission, or making
any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 8.19 VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically terminate on
____________, _____ (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2 EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution, liquidation or winding-up of, the Depositor;
(b) the direction to the Property Trustee from the Depositor at any
time (which direction is optional and wholly within the discretion of the
Depositor) to terminate the Trust and distribute a Like Amount of Junior Debt
Securities to Securityholders of Trust Securities.
(c) the redemption of all of the Trust Securities; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
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The direction of the Depositor pursuant to Section 9.2(b) shall be made
in writing by the Depositor and specify the date of distribution of the Junior
Debt Securities, which shall not be less than less than 30 days after the date
of the delivery of such direction.
The election of the Depositor pursuant to Section 9.2(b) shall be made
by the Depositor giving written notice to the Trustees not less than 30 days
prior to the date of distribution of the Junior Debt Securities. Such notice
shall specify the date of distribution of the Junior Debt Securities and shall
be accompanied by an Opinion of Counsel that such event will not be a taxable
event to the Holders of the Preferred Securities for Federal income tax
purposes.
SECTION 9.3 TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
SECTION 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Junior Debt
Securities, subject to clause (d) below. Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Junior Debt Securities; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Junior
Debt Securities or, if
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clause (d) below applies, receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) In order to effect the liquidation of the Trust and distribution of
the Junior Debt Securities to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Debt Securities in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or clause (d) below applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Junior Debt
Securities will be issued to holders of Trust Securities Certificates, upon
surrender of such certificates to the Administrative Trustees or their agent for
exchange, (iii) the Depositor shall use its commercially practicable efforts to
have the Junior Debt Securities listed on the New York Stock Exchange or on such
other exchange, interdealer quotation system or self-regulatory organization as
the Preferred Securities are then listed, if any, (iv) any Trust Securities
Certificates not so surrendered for exchange will be deemed to represent a Like
Amount of Junior Debt Securities, accruing interest at the rate provided for in
the Junior Debt Securities from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Junior Debt Securities) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Junior Debt Securities upon surrender of Trust
Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Junior Debt Securities
in the manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive the Liquidation Distribution upon any
such dissolution, winding-up or termination pro
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rata (determined as aforesaid) with Holders of Preferred Securities, except
that, if an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities, and no Liquidation
Distribution shall be paid to the Holders of the Common Securities unless and
until receipt by all Holders of the Preferred Securities of the entire
Liquidation Distribution payable in respect thereof.
SECTION 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except pursuant to this Section IX.5. At the request of the Depositor, with the
consent of only the Administrative Trustees and without the consent of the
Holders of the Preferred Securities, the Property Trustee or the Delaware
Trustee, the Trust may merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of the Trust with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities rank in priority with respect to Distributions and payments upon
liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Junior Debt Securities, (iii) the
Successor Securities are listed or traded, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
other organization on which the Preferred Securities are then listed or traded,
if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities (including any
Successor Securities) to be downgraded or placed under surveillance or review by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an Opinion of Counsel
to the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect, (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (c) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Trust (or any successor entity) will continue to be classified as a grantor
trust for United States Federal income tax purposes and (viii) the Depositor
owns all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the
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Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) to
cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Trust will be classified
for United States Federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust will not
be required to register as an investment company under the 1940 Act; provided,
however, that such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 6.1 and 10.2(c) hereof, any provision
of this Trust Agreement may be amended by the Trustees and the Depositor with
(i) the consent of Trust Securityholders representing a majority (based upon
Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for
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United States Federal income tax purposes or the Trust's exemption from status
of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Article Six hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) change the redemption provisions of the Trust Securities,
(iii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment contemplated in (i) or (ii) above on or after
such date, (iv) modify the first sentence of Section 2.6 hereof, (v) authorize
or issue any beneficial interest in the Trust other than as contemplated by this
Trust Agreement, (vi) change the conditions precedent for the Depositor to elect
to dissolve the Trust and distribute the Debentures to Holders of the Trust
Securities as set forth in Section 9.2, or (vii) affect the limited liability of
any Holder of Preferred Securities; and notwithstanding any other provision
herein, without the unanimous consent of the Securityholders (such consent being
obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, the Property Trustee or the Delaware
Trustee (as the case may be), this Trust Agreement may not be amended in a
manner which imposes any additional obligation on the Depositor, the Property
Trustee or the Delaware Trustee, respectively.
(j) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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SECTION 10.4 GOVERNING LAW.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust Agreement
and the Trust Securities shall be construed in accordance with and governed by
the laws of the State of Delaware without regard to conflict of laws principles.
SECTION 10.5 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date [insert alternative floating rate
conversion, if applicable].
SECTION 10.6 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Junior Indenture and pursuant to which the assignee agrees
in writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7 HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8 REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to CNA Financial
Corporation, CNA Plaza, Chicago, Illinois 60685, Attention: ________, facsimile
no.: (312) ______________. Any notice to Preferred Securityholders shall also be
given to such owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee for that
purpose. Such notice, demand or other
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communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to The First National Bank of Chicago,
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126 Attention:
Corporate Trust Department; (b) with respect to the Delaware Trustee, to First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801; and (c) with
respect to the Administrative Trustees, to them at the address above for notices
to the Depositor, marked "Attention Administrative Trustees of CNA Financial
Capital I." Such notice, demand or other communication to or upon the Trust or
the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 10.10 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND JUNIOR
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
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<PAGE> 62
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE JUNIOR INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
CNA Financial Corporation,
as Depositor
By:
-----------------------------------
Name:
Title:
The First National Bank of Chicago,
as Property Trustee
By:
-----------------------------------
Name: Steven M. Wagner
Title: First Vice President
First Chicago Delaware Inc.,
as Delaware Trustee
By:
-----------------------------------
Name: Steven M. Wagner
Title: First Vice President
-----------------------------------
Patricia S. Dempsey,
as Administrative Trustee
-----------------------------------
Donald P. Lofe, Jr.
as Administrative Trustee
Other Admin. Trustee
-57-
<PAGE> 1
EXHIBIT 4(k)
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
CNA FINANCIAL CORPORATION
(AS GUARANTOR)
AND
THE FIRST NATIONAL BANK OF CHICAGO
(AS TRUSTEE)
DATED AS OF
----------- --, -----
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED GUARANTEE AGREEMENT
<S> <C>
310(a)..............................................................4.1(a)
310(b).........................................................4.1(c), 2.8
310(c)........................................................Inapplicable
311(a)..............................................................2.2(b)
311(b)..............................................................2.2(b)
311(c)........................................................Inapplicable
312(a)..............................................................2.2(a)
312(b)..............................................................2.2(b)
313....................................................................2.3
314(a).................................................................2.4
314(b)........................................................Inapplicable
314(c).................................................................2.5
314(d)........................................................Inapplicable
314(e).......................................................1.1, 2.5, 3.2
314(f)............................................................2.1, 3.2
315(a)..............................................................3.1(d)
315(b).................................................................2.7
315(c).................................................................3.1
315(d)..............................................................3.1(d)
316(a).......................................................1.1, 2.6, 5.4
316(b).................................................................5.3
316(c).................................................................8.2
317(a)........................................................Inapplicable
317(b)........................................................Inapplicable
318(a)..............................................................2.1(b)
318(b).................................................................2.1
318(c)..............................................................2.1(a)
.........
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
-i-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS .........................................................1
Section 1.1. Definitions .................................................... 1
ARTICLE II. TRUST INDENTURE ACT ................................................4
Section 2.1. Trust Indenture Act; Application ................................4
Section 2.2. List of Holders..................................................4
Section 2.3. Reports by the Guarantee Trustee.................................5
Section 2.4. Periodic Reports to Guarantee Trustee............................5
Section 2.5. Evidence of Compliance with Conditions Precedent.................5
Section 2.6. Events of Default; Waiver........................................5
Section 2.7. Event of Default; Notice.........................................6
Section 2.8. Conflicting Interests............................................6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.................6
Section 3.1. Powers and Duties of the Guarantee Trustee.......................6
Section 3.2. Certain Rights of Guarantee Trustee..............................8
Section 3.3. Indemnity........................................................9
ARTICLE IV. GUARANTEE TRUSTEE..................................................10
Section 4.1. Guarantee Trustee; Eligibility..................................10
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee........................................................10
ARTICLE V. GUARANTEE...........................................................11
Section 5.1. Guarantee.......................................................11
Section 5.2. Waiver of Notice and Demand.....................................11
Section 5.3. Obligations Not Affected........................................11
Section 5.4. Rights of Holders...............................................12
Section 5.5. Guarantee of Payment............................................12
Section 5.6. Subrogation.....................................................13
Section 5.7. Independent Obligations.........................................13
ARTICLE VI. COVENANTS AND SUBORDINATION........................................13
Section 6.1. Subordination...................................................13
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Section 6.2. Ranking Relative to Other Securities............................13
ARTICLE VII. TERMINATION.......................................................13
Section 7.1. Termination.....................................................13
ARTICLE VIII. MISCELLANEOUS....................................................14
Section 8.1. Successors and Assigns..........................................14
Section 8.2. Amendments......................................................14
Section 8.3. Notices.........................................................14
Section 8.4. Benefit.........................................................15
Section 8.5. Interpretation..................................................15
Section 8.6. Governing Law...................................................16
</TABLE>
-iii-
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , , is executed and
delivered by CNA FINANCIAL CORPORATION, a Delaware corporation (the
"Guarantor"), having its principal office at CNA Plaza, Chicago, Illinois 60685,
and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of CNA
Financial Capital I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , , among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing $ aggregate liquidation amount of its % Preferred
Securities, Series (liquidation amount $ per security) (the "Preferred
Securities") having such terms as are set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Junior Debt
Securities (as defined in the Trust Agreement) of the Guarantor, which will be
deposited with The First National Bank of Chicago, as Property Trustee under the
Trust Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement and
pursuant to Section 5.1 hereof extends the Guarantee for the benefit of the
Holders from time to time of the Preferred Securities.
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 or
otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"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 an Affiliate of the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means
<PAGE> 6
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.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person whether incurred on or prior to the date hereof or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, futures
contracts, options and swaps and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise.
"Event of Default" means a default by the Guarantor on any Guarantee Payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), with
respect to the Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand legally available therefor at such
time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Junior Debt Securities are distributed to the
Holders or the Preferred Securities are otherwise exchanged or are redeemed in
accordance with their terms, the lesser of (a) the aggregate of the liquidation
amount of $ per Preferred Security plus accumulated and unpaid Distributions
on the Preferred Securities to the date of payment to the extent the Issuer
shall have funds on hand legally available to make such payment, at such time
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders after satisfaction of liabilities to creditors of the Issuer as
required by applicable law (in either case, the "Liquidation Distribution").
-2-
<PAGE> 7
"Guarantee Trustee" means The First National Bank of Chicago, until a
Successor Guarantee Trustee (as defined below) has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any Person in whose name a Preferred Security is registered
on the books and records of the Issuer; provided, however, that in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Subsidiary of the Guarantor.
"Junior Indenture" means the Junior Subordinated Indenture dated as of
, , as supplemented and amended between CNA Financial
Corporation, as issuer of debt securities thereunder, and The First National
Bank of Chicago, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate liquidation amount of
all then outstanding Preferred Securities issued by the Issuer, excluding any
Preferred Securities held by the Issuer, the Guarantor or any Subsidiary of the
Guarantor.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or any Senior Vice
President or Group Vice President, and by the Treasurer, and Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, 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, in the opinion of each officer, such
condition or covenant has been complied with.
"Other CNA Capital Trusts" means CNA Financial Capital II, CNA Financial
Capital III and other similar trusts established by the Guarantor.
-3-
<PAGE> 8
"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
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department 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 that officer's knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred including, without limitation, Debt issued pursuant to the Senior Debt
Indenture between CNA Financial Corporation and The First National Bank of
Chicago, the First Supplemental Indenture of the Senior Debt Indenture between
CNA Financial Corporation and The First National Bank of Chicago, and the
Subordinated Indenture between CNA Financial Corporation and The First National
Bank of Chicago, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligations
are pari passu or are not superior in right of payment to the Guarantee or to
other Debt which is pari passu with, or subordinated to, the Guarantee;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Guarantor which when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to
the Guarantor, (b) any Debt of the Guarantor to any of its Subsidiaries, (c)
Debt to any employee of the Guarantor, (d) any liability for taxes, (e) Debt or
other monetary obligations to trade creditors created or assumed by the
Guarantor or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and (f) Debt
issued under the Junior Indenture and (g) the Guarantee.
"Subsidiary" means a Person more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by CNAF or by one or more other
Subsidiaries, or by CNAF and one or more other Subsidiaries. For purposes of
this definition, "voting stock" means stock or other equity interests which
ordinarily has voting power for the election of directors, trustees or managers,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
-4-
<PAGE> 9
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 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before January 15 and July 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (b) 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 Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Within 60 days of May 15 of each year, commencing , the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, if and as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.
-5-
<PAGE> 10
SECTION 2.5. 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 an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the Preferred Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of 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 Event of Default or impair any right
consequent therefrom.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
notices of all Events of Default known to the Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice, provided,
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the best interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any Event
of Default unless the Guarantee Trustee shall have received written notice, or a
Responsible Officer charged with the administration of this Guarantee Agreement
shall have obtained written notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreements and the Guarantee Agreement for each of the other CNA
Capital Trusts 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.
-6-
<PAGE> 11
ARTICLE III. POWERS, DUTIES AND RIGHTS OF
THE 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, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to clause (iv) of Section 5.4 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) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default and
after the curing of all 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
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), 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.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
-7-
<PAGE> 12
requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act 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 Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
liquidation amount of the Preferred Securities 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 Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or
reasonable indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Guarantee Trustee may 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, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein;
(iii) whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved
or established before
-8-
<PAGE> 13
taking, suffering or omitting to take any action hereunder, the
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request
and rely upon an Officers' Certificate which, upon receipt of
such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion; and such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one
of its employees; and the Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent
jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in
the position of the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested
by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee Agreement;
(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, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(vii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee
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<PAGE> 14
(A) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (B) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected
in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
The provisions of this Section 3.3 shall survive the termination of the
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE: ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements
of Section 310(a) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
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<PAGE> 15
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) 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 THE GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantee Trustee and the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Guarantee Trustee
and delivered to the Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the
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<PAGE> 16
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the 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 Agreement 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 Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the deferral of any interest payment period on
the Junior Debt Securities as so provided in the Junior Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders, the Property Trustee or the Guarantee Trustee to enforce, assert or
exercise any right, privilege, power or remedy conferred on the Holders, the
Property Trustee or the Guarantee Trustee pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, 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;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
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<PAGE> 17
(g) 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 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; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities 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 exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may 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.
SECTION 5.5. GUARANTEE OF PAYMENT
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or as otherwise specified in Section 7.1 hereof.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which 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 be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
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<PAGE> 18
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
This Guarantee Agreement shall constitute an unsecured obligation of the
Guarantor and shall rank subordinate and junior in right of payment to all
Senior Debt of the Guarantor, it being understood that the terms of Article XIII
of the Junior Indenture shall apply to the obligation of the Guarantor under
this Guarantee Agreement as if set forth herein in full.
SECTION 6.2. RANKING RELATIVE TO OTHER SECURITIES.
This Guarantee Agreement shall rank (i) pari passu with any Debt other than
Senior Debt, with any guarantee agreements issued by the Guarantor on behalf of
the holders of preferred securities issued by the Other CNA Capital Trusts and
with the most senior preferred stock of the Guarantor and any guarantee issued
in respect of such preferred stock or preferred stock or interests of any
Affiliate of the Guarantor and (ii) senior to the common stock of the Guarantor
and, to the extent set forth therein, guarantee agreements issued by the
Guarantor on behalf of the holders of common securities of the Issuer and the
Other CNA Capital Trusts.
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred Securities
or the termination, winding-up or liquidation of the Issuer, immediately
following the distribution of Junior Debt Securities to the Holders in exchange
for all of the Preferred Securities or the full payment of the amounts payable
in accordance with the Trust Agreement. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
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<PAGE> 19
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger,
sale, transfer, conveyance or lease involving the Guarantor or its properties
and assets that is permitted under Article VIII of the Junior Indenture and
pursuant to which the Person formed by or surviving such consolidation or merger
or to which such sale, transfer, conveyance or lease shall have been made, if
other than the Guarantor, expressly agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of all the
outstanding Preferred Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to be given
hereunder shall be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice to the Holders:
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Facsimile No.: (312)
Attention:
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
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<PAGE> 20
CNA Financial Capital I
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Facsimile No.: (312)_________
Attention: ___________________
with a copy to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670
Facsimile No.: (312) 407-1708
Attention: Global Corporate Trust Services Division
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
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 Agreement is solely for the benefit of the Holders of the
Preferred Securities and is not separately transferable from the Preferred
Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, 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;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning
throughout;
(c) all references to "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;
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<PAGE> 21
(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 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
CNA Financial Corporation
By:
---------------------------------------
Name:
Title:
The First National Bank of Chicago, as
Guarantee Trustee
By:
---------------------------------------
Name: Steven M. Wagner
Title: First Vice President
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<PAGE> 1
EXHIBIT 4(l)
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
CNA FINANCIAL CORPORATION
(AS GUARANTOR)
AND
THE FIRST NATIONAL BANK OF CHICAGO
(AS TRUSTEE)
DATED AS OF
----------- --, -----
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED GUARANTEE AGREEMENT
<S> <C>
310(a)..............................................................4.1(a)
310(b).........................................................4.1(c), 2.8
310(c)........................................................Inapplicable
311(a)..............................................................2.2(b)
311(b)..............................................................2.2(b)
311(c)........................................................Inapplicable
312(a)..............................................................2.2(a)
312(b)..............................................................2.2(b)
313....................................................................2.3
314(a).................................................................2.4
314(b)........................................................Inapplicable
314(c).................................................................2.5
314(d)........................................................Inapplicable
314(e).......................................................1.1, 2.5, 3.2
314(f)............................................................2.1, 3.2
315(a)..............................................................3.1(d)
315(b).................................................................2.7
315(c).................................................................3.1
315(d)..............................................................3.1(d)
316(a).......................................................1.1, 2.6, 5.4
316(b).................................................................5.3
316(c).................................................................8.2
317(a)........................................................Inapplicable
317(b)........................................................Inapplicable
318(a)..............................................................2.1(b)
318(b).................................................................2.1
318(c)..............................................................2.1(a)
.........
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS .........................................................1
Section 1.1. Definitions .................................................... 1
ARTICLE II. TRUST INDENTURE ACT ................................................4
Section 2.1. Trust Indenture Act; Application ................................4
Section 2.2. List of Holders..................................................4
Section 2.3. Reports by the Guarantee Trustee.................................5
Section 2.4. Periodic Reports to Guarantee Trustee............................5
Section 2.5. Evidence of Compliance with Conditions Precedent.................5
Section 2.6. Events of Default; Waiver........................................5
Section 2.7. Event of Default; Notice.........................................6
Section 2.8. Conflicting Interests............................................6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.................6
Section 3.1. Powers and Duties of the Guarantee Trustee.......................6
Section 3.2. Certain Rights of Guarantee Trustee..............................8
Section 3.3. Indemnity........................................................9
ARTICLE IV. GUARANTEE TRUSTEE..................................................10
Section 4.1. Guarantee Trustee; Eligibility..................................10
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee........................................................10
ARTICLE V. GUARANTEE...........................................................11
Section 5.1. Guarantee.......................................................11
Section 5.2. Waiver of Notice and Demand.....................................11
Section 5.3. Obligations Not Affected........................................11
Section 5.4. Rights of Holders...............................................12
Section 5.5. Guarantee of Payment............................................12
Section 5.6. Subrogation.....................................................13
Section 5.7. Independent Obligations.........................................13
ARTICLE VI. COVENANTS AND SUBORDINATION........................................13
Section 6.1. Subordination...................................................13
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Section 6.2. Ranking Relative to Other Securities............................13
ARTICLE VII. TERMINATION.......................................................13
Section 7.1. Termination.....................................................13
ARTICLE VIII. MISCELLANEOUS....................................................14
Section 8.1. Successors and Assigns..........................................14
Section 8.2. Amendments......................................................14
Section 8.3. Notices.........................................................14
Section 8.4. Benefit.........................................................15
Section 8.5. Interpretation..................................................15
Section 8.6. Governing Law...................................................16
</TABLE>
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<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , , is executed and
delivered by CNA FINANCIAL CORPORATION, a Delaware corporation (the
"Guarantor"), having its principal office at CNA Plaza, Chicago, Illinois 60685,
and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of CNA
Financial Capital II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , , among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing $ aggregate liquidation amount of its % Preferred
Securities, Series (liquidation amount $ per security) (the "Preferred
Securities") having such terms as are set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Junior Debt
Securities (as defined in the Trust Agreement) of the Guarantor, which will be
deposited with The First National Bank of Chicago, as Property Trustee under the
Trust Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement and
pursuant to Section 5.1 hereof extends the Guarantee for the benefit of the
Holders from time to time of the Preferred Securities.
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 or
otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"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 an Affiliate of the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means
<PAGE> 6
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.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person whether incurred on or prior to the date hereof or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options
and swaps and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise.
"Event of Default" means a default by the Guarantor on any Guarantee Payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), with
respect to the Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand legally available therefor at such
time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Junior Debt Securities are distributed to the
Holders or the Preferred Securities are otherwise exchanged or are redeemed in
accordance with their terms, the lesser of (a) the aggregate of the liquidation
amount of $ per Preferred Security plus accumulated and unpaid Distributions
on the Preferred Securities to the date of payment to the extent the Issuer
shall have funds on hand legally available to make such payment, at such time
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders after satisfaction of liabilities to creditors of the Issuer as
required by applicable law (in either case, the "Liquidation Distribution").
-2-
<PAGE> 7
"Guarantee Trustee" means The First National Bank of Chicago, until a
Successor Guarantee Trustee (as defined below) has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any Person in whose name a Preferred Security is registered
on the books and records of the Issuer; provided, however, that in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Subsidiary of the Guarantor.
"Junior Indenture" means the Junior Subordinated Indenture dated as of
, , as supplemented and amended between CNA Financial
Corporation, as issuer of debt securities thereunder, and The First National
Bank of Chicago, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate liquidation amount of
all then outstanding Preferred Securities issued by the Issuer, excluding any
Preferred Securities held by the Issuer, the Guarantor or any Subsidiary of the
Guarantor.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or any Senior Vice
President or Group Vice President, and by the Treasurer, and Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, 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, in the opinion of each officer, such
condition or covenant has been complied with.
"Other CNA Capital Trusts" means CNA Financial Capital I, CNA Financial
Capital III and other similar trusts established by the Guarantor.
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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
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department 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 that officer's knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred including, without limitation, Debt issued pursuant to the Senior Debt
Indenture between CNA Financial Corporation and The First National Bank of
Chicago, the First Supplemental Indenture of the Senior Debt Indenture between
CNA Financial Corporation and The First National Bank of Chicago, and the
Subordinated Indenture between CNA Financial Corporation and The First National
Bank of Chicago, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligations
are pari passu or are not superior in right of payment to the Guarantee or to
other Debt which is pari passu with, or subordinated to, the Guarantee;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Guarantor which when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to
the Guarantor, (b) any Debt of the Guarantor to any of its Subsidiaries, (c)
Debt to any employee of the Guarantor, (d) any liability for taxes, (e) Debt or
other monetary obligations to trade creditors created or assumed by the
Guarantor or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and (f) Debt
issued under the Junior Indenture and (g) the Guarantee.
"Subsidiary" means a Person more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by CNAF or by one or more other
Subsidiaries, or by CNAF and one or more other Subsidiaries. For purposes of
this definition, "voting stock" means stock or other equity interests which
ordinarily has voting power for the election of directors, trustees or managers,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
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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 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before January 15 and July 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (b) 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 Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Within 60 days of May 15 of each year, commencing , the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, if and as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.
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SECTION 2.5. 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 an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the Preferred Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of 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 Event of Default or impair any right
consequent therefrom.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
notices of all Events of Default known to the Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice, provided,
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the best interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any Event
of Default unless the Guarantee Trustee shall have received written notice, or a
Responsible Officer charged with the administration of this Guarantee Agreement
shall have obtained written notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreements and the Guarantee Agreement for each of the other CNA
Capital Trusts 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.
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ARTICLE III. POWERS, DUTIES AND RIGHTS OF
THE 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, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to clause (iv) of Section 5.4 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) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default and
after the curing of all 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
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), 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.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
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requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act 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 Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
liquidation amount of the Preferred Securities 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 Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or
reasonable indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Guarantee Trustee may 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, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein;
(iii) whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved
or established before
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taking, suffering or omitting to take any action hereunder, the
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request
and rely upon an Officers' Certificate which, upon receipt of
such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion; and such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one
of its employees; and the Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent
jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in
the position of the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested
by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee Agreement;
(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, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(vii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee
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(A) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (B) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected
in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
The provisions of this Section 3.3 shall survive the termination of the
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE: ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements
of Section 310(a) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
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(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) 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 THE GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantee Trustee and the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Guarantee Trustee
and delivered to the Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the
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Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the 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 Agreement 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 Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the deferral of any interest payment period on
the Junior Debt Securities as so provided in the Junior Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders, the Property Trustee or the Guarantee Trustee to enforce, assert or
exercise any right, privilege, power or remedy conferred on the Holders, the
Property Trustee or the Guarantee Trustee pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, 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;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
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(g) 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 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; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities 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 exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may 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.
SECTION 5.5. GUARANTEE OF PAYMENT
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or as otherwise specified in Section 7.1 hereof.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which 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 be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
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SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
This Guarantee Agreement shall constitute an unsecured obligation of the
Guarantor and shall rank subordinate and junior in right of payment to all
Senior Debt of the Guarantor, it being understood that the terms of Article XIII
of the Junior Indenture shall apply to the obligation of the Guarantor under
this Guarantee Agreement as if set forth herein in full.
SECTION 6.2. RANKING RELATIVE TO OTHER SECURITIES.
This Guarantee Agreement shall rank (i) pari passu with any Debt other than
Senior Debt, with any guarantee agreements issued by the Guarantor on behalf of
the holders of preferred securities issued by the Other CNA Capital Trusts and
with the most senior preferred stock of the Guarantor and any guarantee issued
in respect of such preferred stock or preferred stock or interests of any
Affiliate of the Guarantor and (ii) senior to the common stock of the Guarantor
and, to the extent set forth therein, guarantee agreements issued by the
Guarantor on behalf of the holders of common securities of the Issuer and the
Other CNA Capital Trusts.
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred Securities
or the termination, winding-up or liquidation of the Issuer, immediately
following the distribution of Junior Debt Securities to the Holders in exchange
for all of the Preferred Securities or the full payment of the amounts payable
in accordance with the Trust Agreement. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
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ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger,
sale, transfer, conveyance or lease involving the Guarantor or its properties
and assets that is permitted under Article VIII of the Junior Indenture and
pursuant to which the Person formed by or surviving such consolidation or merger
or to which such sale, transfer, conveyance or lease shall have been made, if
other than the Guarantor, expressly agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of all the
outstanding Preferred Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to be given
hereunder shall be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice to the Holders:
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Facsimile No.: (312)
Attention:
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
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CNA Financial Capital I
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Facsimile No.: (312)_________
Attention: ___________________
with a copy to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670
Facsimile No.: (312) 407-1708
Attention: Global Corporate Trust Services Division
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
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 Agreement is solely for the benefit of the Holders of the
Preferred Securities and is not separately transferable from the Preferred
Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, 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;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning
throughout;
(c) all references to "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;
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<PAGE> 21
(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 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
CNA Financial Corporation
By:
---------------------------------------
Name:
Title:
The First National Bank of Chicago, as
Guarantee Trustee
By:
---------------------------------------
Name: Steven M. Wagner
Title: First Vice President
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<PAGE> 1
EXHIBIT 4(m)
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
CNA FINANCIAL CORPORATION
(AS GUARANTOR)
AND
THE FIRST NATIONAL BANK OF CHICAGO
(AS TRUSTEE)
DATED AS OF
----------- --, -----
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED GUARANTEE AGREEMENT
<S> <C>
310(a)..............................................................4.1(a)
310(b).........................................................4.1(c), 2.8
310(c)........................................................Inapplicable
311(a)..............................................................2.2(b)
311(b)..............................................................2.2(b)
311(c)........................................................Inapplicable
312(a)..............................................................2.2(a)
312(b)..............................................................2.2(b)
313....................................................................2.3
314(a).................................................................2.4
314(b)........................................................Inapplicable
314(c).................................................................2.5
314(d)........................................................Inapplicable
314(e).......................................................1.1, 2.5, 3.2
314(f)............................................................2.1, 3.2
315(a)..............................................................3.1(d)
315(b).................................................................2.7
315(c).................................................................3.1
315(d)..............................................................3.1(d)
316(a).......................................................1.1, 2.6, 5.4
316(b).................................................................5.3
316(c).................................................................8.2
317(a)........................................................Inapplicable
317(b)........................................................Inapplicable
318(a)..............................................................2.1(b)
318(b).................................................................2.1
318(c)..............................................................2.1(a)
.........
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
-i-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS .........................................................1
Section 1.1. Definitions .................................................... 1
ARTICLE II. TRUST INDENTURE ACT ................................................4
Section 2.1. Trust Indenture Act; Application ................................4
Section 2.2. List of Holders..................................................4
Section 2.3. Reports by the Guarantee Trustee.................................5
Section 2.4. Periodic Reports to Guarantee Trustee............................5
Section 2.5. Evidence of Compliance with Conditions Precedent.................5
Section 2.6. Events of Default; Waiver........................................5
Section 2.7. Event of Default; Notice.........................................6
Section 2.8. Conflicting Interests............................................6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.................6
Section 3.1. Powers and Duties of the Guarantee Trustee.......................6
Section 3.2. Certain Rights of Guarantee Trustee..............................8
Section 3.3. Indemnity........................................................9
ARTICLE IV. GUARANTEE TRUSTEE..................................................10
Section 4.1. Guarantee Trustee; Eligibility..................................10
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee........................................................10
ARTICLE V. GUARANTEE...........................................................11
Section 5.1. Guarantee.......................................................11
Section 5.2. Waiver of Notice and Demand.....................................11
Section 5.3. Obligations Not Affected........................................11
Section 5.4. Rights of Holders...............................................12
Section 5.5. Guarantee of Payment............................................12
Section 5.6. Subrogation.....................................................13
Section 5.7. Independent Obligations.........................................13
ARTICLE VI. COVENANTS AND SUBORDINATION........................................13
Section 6.1. Subordination...................................................13
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Section 6.2. Ranking Relative to Other Securities............................13
ARTICLE VII. TERMINATION.......................................................13
Section 7.1. Termination.....................................................13
ARTICLE VIII. MISCELLANEOUS....................................................14
Section 8.1. Successors and Assigns..........................................14
Section 8.2. Amendments......................................................14
Section 8.3. Notices.........................................................14
Section 8.4. Benefit.........................................................15
Section 8.5. Interpretation..................................................15
Section 8.6. Governing Law...................................................16
</TABLE>
-iii-
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , , is executed and
delivered by CNA FINANCIAL CORPORATION, a Delaware corporation (the
"Guarantor"), having its principal office at CNA Plaza, Chicago, Illinois 60685,
and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of CNA
Financial Capital I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , , among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing $ aggregate liquidation amount of its % Preferred
Securities, Series (liquidation amount $ per security) (the "Preferred
Securities") having such terms as are set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Junior Debt
Securities (as defined in the Trust Agreement) of the Guarantor, which will be
deposited with The First National Bank of Chicago, as Property Trustee under the
Trust Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement and
pursuant to Section 5.1 hereof extends the Guarantee for the benefit of the
Holders from time to time of the Preferred Securities.
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 or
otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"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 an Affiliate of the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means
<PAGE> 6
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.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person whether incurred on or prior to the date hereof or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options
and swaps and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise.
"Event of Default" means a default by the Guarantor on any Guarantee Payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), with
respect to the Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand legally available therefor at such
time, and (iii) upon a voluntary or involuntary termination, winding-up or
liquidation of the Issuer, unless Junior Debt Securities are distributed to the
Holders or the Preferred Securities are otherwise exchanged or are redeemed in
accordance with their terms, the lesser of (a) the aggregate of the liquidation
amount of $ per Preferred Security plus accumulated and unpaid Distributions
on the Preferred Securities to the date of payment to the extent the Issuer
shall have funds on hand legally available to make such payment, at such time
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders after satisfaction of liabilities to creditors of the Issuer as
required by applicable law (in either case, the "Liquidation Distribution").
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<PAGE> 7
"Guarantee Trustee" means The First National Bank of Chicago, until a
Successor Guarantee Trustee (as defined below) has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any Person in whose name a Preferred Security is registered
on the books and records of the Issuer; provided, however, that in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Subsidiary of the Guarantor.
"Junior Indenture" means the Junior Subordinated Indenture dated as of
, , as supplemented and amended between CNA Financial
Corporation, as issuer of debt securities thereunder, and The First National
Bank of Chicago, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the aggregate liquidation amount of
all then outstanding Preferred Securities issued by the Issuer, excluding any
Preferred Securities held by the Issuer, the Guarantor or any Subsidiary of the
Guarantor.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or any Senior Vice
President or Group Vice President, and by the Treasurer, and Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, 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, in the opinion of each officer, such
condition or covenant has been complied with.
"Other CNA Capital Trusts" means CNA Financial Capital I, CNA Financial
Capital II and other similar trusts established by the Guarantor.
-3-
<PAGE> 8
"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
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department 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 that officer's knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred including, without limitation, Debt issued pursuant to the Senior Debt
Indenture between CNA Financial Corporation and The First National Bank of
Chicago, the First Supplemental Indenture of the Senior Debt Indenture between
CNA Financial Corporation and The First National Bank of Chicago, and the
Subordinated Indenture between CNA Financial Corporation and The First National
Bank of Chicago, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligations
are pari passu or are not superior in right of payment to the Guarantee or to
other Debt which is pari passu with, or subordinated to, the Guarantee;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Guarantor which when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to
the Guarantor, (b) any Debt of the Guarantor to any of its Subsidiaries, (c)
Debt to any employee of the Guarantor, (d) any liability for taxes, (e) Debt or
other monetary obligations to trade creditors created or assumed by the
Guarantor or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and (f) Debt
issued under the Junior Indenture and (g) the Guarantee.
"Subsidiary" means a Person more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by CNAF or by one or more other
Subsidiaries, or by CNAF and one or more other Subsidiaries. For purposes of
this definition, "voting stock" means stock or other equity interests which
ordinarily has voting power for the election of directors, trustees or managers,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
-4-
<PAGE> 9
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 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before January 15 and July 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (b) 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 Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Within 60 days of May 15 of each year, commencing , the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, if and as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.
-5-
<PAGE> 10
SECTION 2.5. 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 an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the Preferred Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of 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 Event of Default or impair any right
consequent therefrom.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders
notices of all Events of Default known to the Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice, provided,
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the best interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any Event
of Default unless the Guarantee Trustee shall have received written notice, or a
Responsible Officer charged with the administration of this Guarantee Agreement
shall have obtained written notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreements and the Guarantee Agreement for each of the other CNA
Capital Trusts 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.
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<PAGE> 11
ARTICLE III. POWERS, DUTIES AND RIGHTS OF
THE 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, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to clause (iv) of Section 5.4 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) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default and
after the curing of all 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
Agreement against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6), 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.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the
-7-
<PAGE> 12
requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act 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 Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
liquidation amount of the Preferred Securities 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 Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or
reasonable indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Guarantee Trustee may 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, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein;
(iii) whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved
or established before
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<PAGE> 13
taking, suffering or omitting to take any action hereunder, the
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request
and rely upon an Officers' Certificate which, upon receipt of
such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion; and such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one
of its employees; and the Guarantee Trustee shall have the right
at any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent
jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in
the position of the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested
by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee Agreement;
(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, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(vii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it
hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee
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<PAGE> 14
(A) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (B) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected
in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
The provisions of this Section 3.3 shall survive the termination of the
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE: ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements
of Section 310(a) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
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(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) 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 THE GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantee Trustee and the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Guarantee Trustee
and delivered to the Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the
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Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the 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 Agreement 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 Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the deferral of any interest payment period on
the Junior Debt Securities as so provided in the Junior Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders, the Property Trustee or the Guarantee Trustee to enforce, assert or
exercise any right, privilege, power or remedy conferred on the Holders, the
Property Trustee or the Guarantee Trustee pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, 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;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
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(g) 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 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; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities 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 exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may 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.
SECTION 5.5. GUARANTEE OF PAYMENT
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or as otherwise specified in Section 7.1 hereof.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which 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 be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
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SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
This Guarantee Agreement shall constitute an unsecured obligation of the
Guarantor and shall rank subordinate and junior in right of payment to all
Senior Debt of the Guarantor, it being understood that the terms of Article XIII
of the Junior Indenture shall apply to the obligation of the Guarantor under
this Guarantee Agreement as if set forth herein in full.
SECTION 6.2. RANKING RELATIVE TO OTHER SECURITIES.
This Guarantee Agreement shall rank (i) pari passu with any Debt other than
Senior Debt, with any guarantee agreements issued by the Guarantor on behalf of
the holders of preferred securities issued by the Other CNA Capital Trusts and
with the most senior preferred stock of the Guarantor and any guarantee issued
in respect of such preferred stock or preferred stock or interests of any
Affiliate of the Guarantor and (ii) senior to the common stock of the Guarantor
and, to the extent set forth therein, guarantee agreements issued by the
Guarantor on behalf of the holders of common securities of the Issuer and the
Other CNA Capital Trusts.
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred Securities
or the termination, winding-up or liquidation of the Issuer, immediately
following the distribution of Junior Debt Securities to the Holders in exchange
for all of the Preferred Securities or the full payment of the amounts payable
in accordance with the Trust Agreement. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
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ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger,
sale, transfer, conveyance or lease involving the Guarantor or its properties
and assets that is permitted under Article VIII of the Junior Indenture and
pursuant to which the Person formed by or surviving such consolidation or merger
or to which such sale, transfer, conveyance or lease shall have been made, if
other than the Guarantor, expressly agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of a Majority in liquidation amount of all the
outstanding Preferred Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to be given
hereunder shall be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice to the Holders:
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Facsimile No.: (312)
Attention:
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
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CNA Financial Capital I
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Facsimile No.: (312)_________
Attention: ___________________
with a copy to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670
Facsimile No.: (312) 407-1708
Attention: Global Corporate Trust Services Division
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
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 Agreement is solely for the benefit of the Holders of the
Preferred Securities and is not separately transferable from the Preferred
Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, 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;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning
throughout;
(c) all references to "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;
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<PAGE> 21
(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 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
CNA Financial Corporation
By:
---------------------------------------
Name:
Title:
The First National Bank of Chicago, as
Guarantee Trustee
By:
---------------------------------------
Name: Steven M. Wagner
Title: First Vice President
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EXHIBIT 5(a)
[Letterhead of CNA]
April 19, 1999
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Ladies and Gentlemen:
I am providing this opinion as Senior Vice President, Secretary and
General Counsel of CNA Financial Corporation, a Delaware corporation
(the"Company"), in connection with the preparation of the Registration Statement
on Form S-3 (Reg. No. 333-69741) (the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the contemplated
issuance by the Company from time to time of (i) unsecured senior debt
securities, subordinated debt securities and subordinated junior debt securities
(the "Debt Securities"), which may be issued pursuant to an Indenture, dated as
of March 1, 1991, between the Company and The First National Bank of Chicago, as
trustee, as supplemented by a supplemental indenture, dated as of October 15,
1993 (as so supplemented, the "Senior Indenture"), a Subordinated Indenture, as
supplemented from time to time, between the Company and The First National Bank
of Chicago, as trustee (as so supplemented, the "Subordinated Indenture") and a
Junior Subordinated Indenture, as supplemented from time to time, between the
Company and The First National Bank of Chicago, as trustee (as so supplemented,
the "Junior Subordinated Indenture" and, together with the Senior Indenture and
Subordinated Indenture, the "Indentures"); (ii) shares of preferred stock, no
par value per share (the "Preferred Stock"), which may be represented by
depositary shares (the "Depositary Shares") evidenced by depositary receipts
(the "Receipts"); (iii) shares of common stock of the Company, par value $2.50
per share (the "Common Stock"); (iv) warrants to purchase any of the foregoing
Debt Securities, Preferred Stock, Common Stock or Depository Shares (the
"Warrants"), (v) preferred securities of CNA Financial Capital I, CNA Financial
Capital II and CNA Financial Capital III (the "CNA Capital Trusts"), (vi)
purchase contracts ("Purchase Contracts") to purchase any of the Debt
Securities, Common Stock, Preferred Stock, Depository Shares, Warrants and
Preferred Securities ("Trust Preferred Securities") of the CNA Capital Trusts
(collectively, the "Purchase Contract Securities") or (vii) purchase units
("Purchase Units"), each representing ownership of a Purchase Contract and any
of (x) Debt Securities, (y) debt obligations of third parties, including
treasury bonds or similar obligations of the U.S. and/or (z) Trust Preferred
Securities, and (viii) guarantees of the Company of Trust Preferred Securities
of the CNA Capital Trusts which may be issued pursuant to Guarantee Agreements
(the "Guarantee Agreements") to be executed by the Company.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as I have deemed necessary for the purpose of
rendering this opinion. In addition, this opinion is based upon the assumption
that the Registration Statement and any required post-effective amendments
thereto have become effective under the Securities Act.
<PAGE> 2
On the basis of the foregoing I am of the opinion that:
1. Assuming that the Indentures, any Debt Securities, and any Board
Resolution (as defined in the applicable Indenture) or supplemental indenture
with respect to the issuance of such Debt Securities have been duly authorized,
when (i) the Registration Statement has become effective under the Securities
Act; (ii) a Board Resolution or supplemental indenture in respect of the Debt
Securities has been duly authorized, executed and delivered; (iii) the terms of
the Debt Securities and of their issuance and sale have been duly established in
conformity with the applicable Indenture and the applicable Board Resolution or
supplemental indenture relating to such Debt Securities so as not to violate any
applicable law or result in a default under or breach of any agreement or
instrument binding upon the Company and so as to comply with any requirement or
restriction imposed by any court or governmental or regulatory body having
jurisdiction over the Company; and (iv) the Debt Securities have been duly
executed and authenticated in accordance with the applicable Indenture and the
applicable Board Resolution or supplemental indenture relating to such Debt
Securities, and duly issued, sold and paid for as contemplated by the
Registration Statement and any prospectus supplement relating thereto, the Debt
Securities (including any Debt Securities duly issued (x) upon the exchange or
conversion of any shares of Preferred Stock that are exchangeable or convertible
into Debt Securities, (y) upon exercise of any Warrants exercisable for Debt
Securities or (z) as part of Purchase Units) will constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms,
subject to (a) bankruptcy,insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors rights generally, (b) general principles of equity
(regardless of whether considered in a proceeding at law or in equity) and (c)
the qualification that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
2. Assuming that a Deposit Agreement relating to the Depositary Shares
(the "Deposit Agreement") has been duly authorized, when (i) the Registration
Statement has become effective under the Securities Act; (ii) the Deposit
Agreement has been duly executed and delivered; (iii) the terms of the
Depositary Shares and of their issuance and sale have been duly established in
conformity with the Deposit Agreement relating to such Depositary Shares so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company; (iv) the Preferred Stock has been
duly and properly authorized for issuance and Articles of Amendment to the
Articles of Incorporation of the Company classifying the Preferred Stock and
setting forth the terms thereof have been filed and accepted for record; (v)
such shares of Preferred Stock have been duly issued, sold and paid for in the
manner contemplated in the Registration Statement and any prospectus supplement
relating thereto; and (vi) the Receipts evidencing the Depositary Shares are
duly issued against the deposit of the Preferred Stock in accordance with the
Deposit Agreement, such Receipts will be validly issued and will entitle the
holders thereof to the rights specified therein and in the Deposit Agreement.
3. Assuming that a Warrant Agreement relating to the Warrants (the
"Warrant Agreement") has been duly authorized, when (i) the Registration
Statement has become effective under the Securities Act; (ii) the Warrant
Agreement has been duly executed and delivered; (iii) the terms of the Warrants
and of their issuance and sale have been duly established in conformity with the
Warrant Agreement relating to such Warrants so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental or regulatory body having jurisdiction over
the Company; and (iv) the Warrants have been duly executed and
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<PAGE> 3
countersigned in accordance with the Warrant Agreement relating to such
Warrants, and issued and sold in the form and in the manner contemplated in the
Registration Statement and any prospectus supplement relating thereto, such
Warrants will constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to (a) bankruptcy,
insolvency, reorganization,fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, (b) general principles of equity (regardless of whether considered in
a proceeding at law or in equity) and (c) the qualification that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4. When (i) the Registration Statement has become effective under the
Securities Act; (ii) the terms of the Preferred Stock have been duly and
properly authorized for issuance and Articles of Amendment to the Articles of
Incorporation of the Company classifying the Preferred Stock and setting forth
the terms thereof have been filed; and (iii) such shares of Preferred Stock have
been duly issued, sold and paid for in the manner contemplated in the
Registration Statement and any prospectus supplement relating thereto, such
shares of Preferred Stock will be validly issued, fully paid and nonassessable.
5. When (i) the Registration Statement has become effective under the
Securities Act; (ii) the shares of Common Stock have been duly and properly
authorized for issuance; and (iii) the shares of Common Stock have been duly
issued, sold and paid for as contemplated in the Registration Statement and any
prospectus supplement relating thereto, the shares of Common Stock (including
any Common Stock duly issued (w) upon the exchange or conversion of any shares
of Preferred Stock that are exchangeable or convertible into Common Stock, (x)
upon the exercise of any Warrants exercisable for Common Stock, (y) upon the
conversion or exchange of any Debt Securities that are convertible or
exchangeable into Common Stock or (z) pursuant to Purchase Contracts), will be
validly issued, fully paid and nonassessable.
6. Assuming that a Purchase Contract Agreement relating to the Purchase
Contracts (the "Purchase Contract Agreement") and such Purchase Contracts have
been duly authorized, when (i) the Registration Statement has become effective
under the Securities Act; (ii) the Purchase Contract Agreement has been duly
executed and delivered; (iii) the terms of the Purchase Contracts have been duly
established so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
or regulatory body having jurisdiction over the Company; (iv) the Purchase
Contracts have been duly executed and issued in accordance with the Purchase
Contract Agreement relating to such Purchase Contracts, and issued and sold in
the form and in the manner contemplated in the Registration Statement and any
prospectus supplement relating thereto, such Purchase Contracts will constitute
valid and binding obligations of the Company, enforceable in accordance with
their terms, subject to (a) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (b) general principles of equity
(regardless of whether considered in a proceeding at law or in equity) and (c)
the qualification that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
7. Assuming that the Purchase Units, a Purchase Contract Agreement
relating to the Purchase Contracts comprising a part of the Purchase Units and
such Purchase Contracts have been duly authorized, when (i) the Registration
Statement has become effective under the Securities Act; (ii) the Purchase
Contract Agreement has been duly executed and delivered; (iii) the terms of the
Purchase Contracts and of their issuance and sale have been duly established in
conformity with the Purchase Contract Agreement so as not to violate any
applicable law or result in a default under or
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<PAGE> 4
breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
or regulatory body having jurisdiction over the Company; (iv) the terms of the
collateral arrangements relating to such Purchase Units have been duly
established and the agreement(s) relating thereto has been duly executed and
delivered, in each case so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company, and the
collateral has been deposited with the collateral agent in accordance with such
arrangements; and (v) the Purchase Contracts have been duly executed and issued
in accordance with the Purchase Contract Agreement relating to such Purchase
Contracts, and issued and sold in the form and in the manner contemplated in the
Registration Statement and any prospectus supplement relating thereto, such
Purchase Units will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, (b) general principles of equity (regardless of whether considered in
a proceeding at law or in equity) and (c) the qualification that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
8. Assuming that the Guarantees have been duly authorized, when (i) the
Registration Statement has become effective under the Securities Act; (ii) the
applicable Guarantee Agreement has been duly executed and delivered, so as not
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company; and (iii) the Preferred Securities
have been duly issued and delivered by the applicable CNA Capital Trust as
contemplated by the Registration Statement and any prospectus supplement
relating thereto, the Guarantees will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to (a) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, (b) general principles of equity (regardless of
whether considered in a proceeding at law or in equity) and (c) the
qualification that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
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<PAGE> 5
This opinion is limited to the federal laws of the United States of
America and the State of New York and Delaware General Corporation Law. This
opinion is limited in all respects to the laws and facts existing on the date
hereof. I hereby consent to the filing of this opinion as Exhibit 5(a) to the
Registration Statement and to the reference to my name under the caption "Legal
Matter" in the Prospectus constituting a part thereof, as originally filed or as
subsequently amended or supplemented. This opinion may not be relied upon by you
for any other purpose, or relied upon by any other person, firm or corporation
or quoted, filed with any governmental authority or other regulatory agency or
otherwise circulated or utilized for any other purpose without our prior written
consent.
Very truly yours,
/s/ Jonathan D. Kantor
Jonathan D. Kantor, Esq.
Senior Vice President, Secretary
and General Counsel
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<PAGE> 1
EXHIBIT 5(b)
[YOUNG CONAWAY STARGATT & TAYLOR, LLP LETTERHEAD]
FAX: (302) 571-0453
March 30, 1999
CNA Financial Capital I
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60606
Re: CNA Financial Capital I
Ladies and Gentlemen:
We have acted as Delaware special counsel for CNA Financial
Capital I, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. This opinion is furnished to you at your request.
In connection with the opinions set forth herein, our examination
has been limited to a review of originals or copies of the following documents:
(a) The Certificate of Trust of the Trust, dated December 23,
1998 (the "Certificate"), as filed with the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on December 23, 1998;
(b) The Trust Agreement of the Trust, dated as of December 23,
1998, among CNA Financial Corporation, a Delaware corporation ("CNA Financial"),
as depositor, and The First National Bank of Chicago, a national banking
association, First Chicago Delaware, Inc., a Delaware Banking corporation,
Pamela S. Dempsey, and Donald P. Lofe, Jr., as trustees (collectively the
"Trustees").
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus ("Prospectus"), relating to the
Preferred
<PAGE> 2
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust I
March 30, 1999
Page 2
Securities of the Trust representing preferred undivided beneficial interests in
the Trust (each a "Preferred Security" and collectively, the "Preferred
Securities"), as filed by CNA Financial, the Trust, and others as set forth
therein with the Securities and Exchange Commission on December 24, 1998;
(d) A form of Amended and Restated Trust Agreement of the Trust
(the "Trust Agreement"), to be entered into among CNA Financial, the Trustees of
the Trust, and the holders, from time to time, of undivided beneficial interests
in the Trust; and
(e) A Certificate of Good Standing for the Trust, dated the date
hereof, obtained from the Secretary of State.
Initially capitalized terms herein used and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents herein listed, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions herein stated. We have conducted no independent
factual investigation of our own, but, rather, have relied solely upon the
documents listed herein, the statements and information set forth in such
documents, and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete, and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including agreements with respect to the
creation, operation and termination of the Trust, and that the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization, or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due
<PAGE> 3
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust I
March 30, 1999
Page 3
authorization, execution, and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a Preferred Security is
to be issued by the Trust (collectively, the "Preferred Security Holders") of a
Preferred Security Certificate for such Preferred Security and the payment for
the Preferred Security acquired by it, in accordance with the Trust Agreement
and the Registration Statement, and (vii) that the Preferred Securities are
issued and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware
(specifically excluding the securities laws of the State of Delaware), and we
have not considered, and express no opinion on, the laws of any other
jurisdiction, including, without limitation, federal laws, rules, and
regulations relating thereto. Our opinions are rendered only with respect to
Delaware laws and rules, regulations, and orders thereunder that are currently
in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to all assumptions, qualifications,
limitations and exceptions herein set forth, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 Del.
C. Section 3801, et seq.
2. The Preferred Securities will represent valid, fully paid, and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Securities"
in the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission
<PAGE> 4
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust I
March 30, 1999
Page 4
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Sincerely,
YOUNG, CONAWAY STARGATT & TAYLOR, LLP
<PAGE> 1
EXHIBIT 5(c)
[YOUNG CONAWAY STARGATT & TAYLOR, LLP LETTERHEAD]
FAX: (302) 571-0453
March 30, 1999
CNA Financial Capital II
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60606
Re: CNA Financial Capital II
Ladies and Gentlemen:
We have acted as Delaware special counsel for CNA Financial
Capital II, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. This opinion is furnished to you at your request.
In connection with the opinions set forth herein, our examination
has been limited to a review of originals or copies of the following documents:
(a) The Certificate of Trust of the Trust, dated December 23,
1998 (the "Certificate"), as filed with the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on December 23, 1998;
(b) The Trust Agreement of the Trust, dated as of December 23,
1998, among CNA Financial Corporation, a Delaware corporation ("CNA Financial"),
as depositor, and The First National Bank of Chicago, a national banking
association, First Chicago Delaware, Inc., a Delaware Banking corporation,
Pamela S. Dempsey, and Donald P. Lofe, Jr., as trustees (collectively the
"Trustees").
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus ("Prospectus"), relating to the
Preferred
<PAGE> 2
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust II
March 30, 1999
Page 2
Securities of the Trust representing preferred undivided beneficial interests in
the Trust (each a "Preferred Security" and collectively, the "Preferred
Securities"), as filed by CNA Financial, the Trust, and others as set forth
therein with the Securities and Exchange Commission on December 24, 1998;
(d) A form of Amended and Restated Trust Agreement of the Trust
(the "Trust Agreement"), to be entered into among CNA Financial, the Trustees of
the Trust, and the holders, from time to time, of undivided beneficial interests
in the Trust; and
(e) A Certificate of Good Standing for the Trust, dated the date
hereof, obtained from the Secretary of State.
Initially capitalized terms herein used and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents herein listed, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions herein stated. We have conducted no independent
factual investigation of our own, but, rather, have relied solely upon the
documents listed herein, the statements and information set forth in such
documents, and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete, and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including agreements with respect to the
creation, operation and termination of the Trust, and that the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization, or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due
<PAGE> 3
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust II
March 30, 1999
Page 3
authorization, execution, and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a Preferred Security is
to be issued by the Trust (collectively, the "Preferred Security Holders") of a
Preferred Security Certificate for such Preferred Security and the payment for
the Preferred Security acquired by it, in accordance with the Trust Agreement
and the Registration Statement, and (vii) that the Preferred Securities are
issued and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware
(specifically excluding the securities laws of the State of Delaware), and we
have not considered, and express no opinion on, the laws of any other
jurisdiction, including, without limitation, federal laws, rules, and
regulations relating thereto. Our opinions are rendered only with respect to
Delaware laws and rules, regulations, and orders thereunder that are currently
in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to all assumptions, qualifications,
limitations and exceptions herein set forth, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 Del.
C. Section 3801, et seq.
2. The Preferred Securities will represent valid, fully paid, and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Securities"
in the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission
<PAGE> 4
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust II
March 30, 1999
Page 4
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Sincerely,
YOUNG, CONAWAY STARGATT & TAYLOR, LLP
<PAGE> 1
EXHIBIT 5(d)
[YOUNG CONAWAY STARGATT & TAYLOR, LLP LETTERHEAD]
FAX: (302) 571-0453
March 30, 1999
CNA Financial Capital III
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60606
Re: CNA Financial Capital III
Ladies and Gentlemen:
We have acted as Delaware special counsel for CNA Financial
Capital III, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. This opinion is furnished to you at your request.
In connection with the opinions set forth herein, our examination
has been limited to a review of originals or copies of the following documents:
(a) The Certificate of Trust of the Trust, dated December 23,
1998 (the "Certificate"), as filed with the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on December 23, 1998;
(b) The Trust Agreement of the Trust, dated as of December 23,
1998, among CNA Financial Corporation, a Delaware corporation ("CNA Financial"),
as depositor, and The First National Bank of Chicago, a national banking
association, First Chicago Delaware, Inc., a Delaware Banking corporation,
Pamela S. Dempsey, and Donald P. Lofe, Jr., as trustees (collectively the
"Trustees").
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus ("Prospectus"), relating to the
Preferred
<PAGE> 2
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust III
March 30, 1999
Page 2
Securities of the Trust representing preferred undivided beneficial interests in
the Trust (each a "Preferred Security" and collectively, the "Preferred
Securities"), as filed by CNA Financial, the Trust, and others as set forth
therein with the Securities and Exchange Commission on December 24, 1998;
(d) A form of Amended and Restated Trust Agreement of the Trust
(the "Trust Agreement"), to be entered into among CNA Financial, the Trustees of
the Trust, and the holders, from time to time, of undivided beneficial interests
in the Trust; and
(e) A Certificate of Good Standing for the Trust, dated the date
hereof, obtained from the Secretary of State.
Initially capitalized terms herein used and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents herein listed, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions herein stated. We have conducted no independent
factual investigation of our own, but, rather, have relied solely upon the
documents listed herein, the statements and information set forth in such
documents, and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete, and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including agreements with respect to the
creation, operation and termination of the Trust, and that the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization, or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due
<PAGE> 3
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust III
March 30, 1999
Page 3
authorization, execution, and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a Preferred Security is
to be issued by the Trust (collectively, the "Preferred Security Holders") of a
Preferred Security Certificate for such Preferred Security and the payment for
the Preferred Security acquired by it, in accordance with the Trust Agreement
and the Registration Statement, and (vii) that the Preferred Securities are
issued and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of Delaware
(specifically excluding the securities laws of the State of Delaware), and we
have not considered, and express no opinion on, the laws of any other
jurisdiction, including, without limitation, federal laws, rules, and
regulations relating thereto. Our opinions are rendered only with respect to
Delaware laws and rules, regulations, and orders thereunder that are currently
in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to all assumptions, qualifications,
limitations and exceptions herein set forth, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 Del.
C. Section 3801, et seq.
2. The Preferred Securities will represent valid, fully paid, and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Securities"
in the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission
<PAGE> 4
YOUNG CONAWAY STARGATT & TAYLOR, LLP
CNA Financial Trust III
March 30, 1999
Page 4
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other Person
for any purpose.
Sincerely,
YOUNG, CONAWAY STARGATT & TAYLOR, LLP
<PAGE> 1
EXHIBIT 23(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
this Registration Statement of CNA Financial Corporation on Form S-3 of our
reports, dated February 10, 1999, appearing in the Annual Report to Shareholders
and in Form 10-K of CNA Financial Corporation for the year ended December 31,
1998 and to the reference to Deloitte & Touche LLP under the heading "Experts"
in the Prospectus dated April 19, 1999, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Chicago, Illinois
April 19, 1999
<PAGE> 1
Exhibit 25(c)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
CNA Financial Corporation
(Exact name of obligor as specified in its charter)
Delaware 36-6169860
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
Junior Subordinated Debentures
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
- ------------------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical number in Item 16 of the Form T-1 of The First
National Bank of Chicago, filed as Exhibit 25 to the Registration
Statement on Form S-3 of U S WEST Capital Funding, Inc., filed with the
Securities and Exchange Commission on May 6, 1998 (Registration No.
333-51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between CNA Financial
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 25(d)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
CNA Financial Capital I
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware To be Applied For
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number)
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
</TABLE>
Preferred Securities
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not Applicable.
9. Not Applicable.
- --------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical number in Item 16 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 25 to the Registration Statement on Form
S-3 of U S WEST Capital Funding, Inc., filed with the Securities and
Exchange Commission on May 6, 1998 (Registration No. 333-51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
------------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of CNA
Financial Capital I, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
-------------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 25(e)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
CNA Financial Capital II
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware To be Applied For
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number)
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
</TABLE>
Preferred Securities
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
- --------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical number in Item 16 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 25 to the Registration Statement on Form
S-3 of U S WEST Capital Funding, Inc., filed with the Securities and
Exchange Commission on May 6, 1998 (Registration No. 333- 51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
--------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of CNA
Financial Capital II, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
-----------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 25(f)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
CNA Financial Capital III
(Exact name of obligor as specified in its charter)
Delaware To be Applied For
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
c/o CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
- ------------------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to
Exhibits bearing identical number in Item 16 of the Form T-1 of The
First National Bank of Chicago, filed as Exhibit 25 to the
Registration Statement on Form S-3 of U S WEST Capital Funding,
Inc., filed with the Securities and Exchange Commission on May 6,
1998 (Registration No. 333-51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of CNA
Financial Capital III, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 25(g)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
CNA Financial Corporation
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 36-6169860
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number)
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
</TABLE>
Guarantee of Preferred Securities of CNA Financial Capital I
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
8. Not Applicable.
9. Not Applicable.
- --------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical number in Item 16 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 25 to the Registration Statement on Form
S-3 of U S WEST Capital Funding, Inc., filed with the Securities and
Exchange Commission on May 6, 1998 (Registration No. 333-51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
------------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between CNA Financial
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
----------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 25(h)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
Delaware 36-6169860
(State or other jurisdiction (I.R.S. employer identification number)
of incorporation or organization)
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
Guarantee of Preferred Securities of CNA Financial Capital II
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
- ------------------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical number in Item 16 of the Form T-1 of The First
National Bank of Chicago, filed as Exhibit 25 to the Registration
Statement on Form S-3 of U S WEST Capital Funding, Inc., filed with the
Securities and Exchange Commission on May 6, 1998 (Registration No.
333-51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between CNA
Financial Corporation and The First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 1
Exhibit 25(i)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ______
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association
36-0899825
(I.R.S. employer identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department
Attn: (312) 732-6919
(Name, address and telephone number of agent for service)
CNA Financial Corporation
(Exact name of obligor as specified in its charter)
Delaware 36-6169860
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
CNA Plaza
Chicago, Illinois 60685
(Address of principal executive offices) (Zip Code)
Guarantee of Preferred Securities of CNA Financial Capital III
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
- ------------------
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical number in Item 16 of the Form T-1 of The First
National Bank of Chicago, filed as Exhibit 25 to the Registration
Statement on Form S-3 of U S WEST Capital Funding, Inc., filed with the
Securities and Exchange Commission on May 6, 1998 (Registration No.
333-51907-1).
2
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 10th day of February, 1999.
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 10, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between CNA Financial
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago,
Trustee
By: /s/ Steven M. Wagner
-------------------------
Steven M. Wagner
First Vice President
4
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State, Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day
of the quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
ASSETS ---- ------------
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under
agreements to resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
(from Schedule RC-C)............................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 153,385 8.
9. Customers' liability in this bank on acceptances outstanding........ 2155 352,324 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................ 2170 61,971,271 12.
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago
Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste. 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
--------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-B, part 1).............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,191,662 13.a1
(2) Interest-bearing..................................................... 6636 11,773,462 13.a2
b. In foreign offices. Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)....................................... 2200 15,912,956 13.b
(1) Noninterest bearing.................................................. 6631 475,182 13.b1
(2) Interest-bearing..................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:.............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year of less............................... 2332 4,603,402 16.a
b. With original maturity of more than one year............................. A547 328,001 16.b
c. With original maturity of more than three years.......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 352,324 18.
19. Subordinated notes and debentures........................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) in available-for-sale securities... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22 and 28)........................................ 3300 61,971,271 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996........................RCFD 6724 [ N/A ] M.I.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Completion of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
