<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 6, 1997
333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
AON CORPORATION AON CAPITAL A
(EXACT NAME OF REGISTRANT AS SPECIFIED (EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER) IN ITS TRUST AGREEMENT)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
6399 6719
(PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER)
36-3051915 APPLIED FOR
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
123 N. WACKER DRIVE C/O AON CORPORATION
CHICAGO, ILLINOIS 60606 123 N. WACKER DRIVE
(312) 701-3000 CHICAGO, ILLINOIS 60606
(ADDRESS, INCLUDING ZIP CODE, AND (312) 701-3000
TELEPHONE NUMBER, INCLUDING AREA CODE, (ADDRESS, INCLUDING ZIP CODE, AND
OF REGISTRANT'S PRINCIPAL EXECUTIVE TELEPHONE NUMBER, INCLUDING AREA CODE,
OFFICES) OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
RAYMOND I. SKILLING
123 N. WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 701-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF EACH REGISTRANT)
COPY TO:
JIM L. KAPUT
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Securities of
Aon Capital A......... $800,000,000 100% $800,000,000 $242,425
- ---------------------------------------------------------------------------------
Junior Subordinated
Deferrable Interest
Debentures of Aon
Corporation(2)........ -- -- -- N/A
- ---------------------------------------------------------------------------------
Aon Corporation
Guarantee with respect
to Capital
Securities(3)......... -- -- -- N/A
- ---------------------------------------------------------------------------------
Total(4)............... $800,000,000(5) 100% $800,000,000(5) $242,425
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures issued by Aon
Corporation on January 13, 1997 were originally purchased by Aon Capital A
with the proceeds of the sale of the Capital Securities issued by Aon
Capital A on January 13, 1997. No separate consideration will be received
for the Junior Subordinated Deferrable Interest Debentures of Aon
Corporation covered hereby (the "Junior Subordinated Debentures")
distributed upon any liquidation of Aon Capital A.
(3) No separate consideration will be received for the Aon Corporation
Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Debentures, the rights of holders of Junior Subordinated Debentures under
the Indenture related thereto, the rights of holders of Capital Securities
of Aon Capital A under a Trust Agreement, the rights of holders of the
Capital Securities under the Guarantee, the Expense Agreement entered into
by Aon Corporation and certain backup undertakings as described herein.
(5) Such amount represents the initial public offering price of the Aon
Capital A Capital Securities to be exchanged hereunder and the principal
amount of Junior Subordinated Debentures that may be distributed to
holders of Capital Securities upon any liquidation of Aon Capital A.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997
PROSPECTUS
AON CAPITAL A
OFFER TO EXCHANGE ITS 8.205% CAPITAL SECURITIES WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 8.205%
CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY AON CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 1997, UNLESS EXTENDED.
Aon Capital A, a trust created under the laws of the State of Delaware (the
"Trust"), hereby offers, upon the terms and subject to the conditions set forth
in this Prospectus (as the same may be amended or supplemented from time to
time, the "Prospectus") and in the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer"), to exchange up to $800,000,000
aggregate Liquidation Amount of its 8.205% Capital Securities (the "New Capital
Securities") which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement (as
defined under "Available Information") of which this Prospectus constitutes a
part, for a like aggregate Liquidation Amount of its outstanding 8.205% Capital
Securities (the "Old Capital Securities"), of which $800,000,000 aggregate
Liquidation Amount is outstanding. Pursuant to the Exchange Offer, Aon
Corporation, a Delaware corporation (the "Company" or "Aon"), will exchange its
guarantee of the payment of Distributions and payments on liquidation or
redemption of the Old Capital Securities (the "Old Guarantee") for a like
guarantee of the New Capital Securities (the "New Guarantee") and all of its
8.205% Junior Subordinated Deferrable Interest Debentures (the "Old Junior
Subordinated Debentures"), of which $824,000,000 aggregate principal amount is
outstanding, for a like aggregate principal amount of its 8.205% Junior
Subordinated Deferrable Interest Debentures (the "New Junior Subordinated
Debentures"), which New Guarantee and New Junior Subordinated Debentures also
have been registered under the Securities Act. The Old Capital Securities, the
Old Guarantee and the Old Junior Subordinated Debentures are collectively
referred to herein as the "Old Securities" and the New Capital Securities, the
New Guarantee and the New Junior Subordinated Debentures are collectively
referred to herein as the "New Securities."
The forms and terms of the New Securities are identical in all material
respects to the respective forms and terms of the Old Securities, except that
(i) the New Securities have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer applicable to
the Old Securities, (ii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon and (iii) the New Junior Subordinated
Debentures will not provide for any increase in the interest rate thereon. See
"Description of Securities" and "Description of Old Securities." The New
Capital Securities are being offered for exchange, and the New Guarantee and
New Junior Subordinated Debentures will be exchanged, in order to satisfy
certain obligations of the Company and the Trust under three Registration
Rights Agreements, each dated as of January 13, 1997 (collectively, the
"Registration Rights Agreement"), among the Company, the Trust and the Initial
Purchasers (as defined herein). In the event that the Exchange Offer is
consummated, any Old Capital Securities that remain outstanding and the New
Capital Securities issued in the Exchange Offer will vote together as a single
class for purposes of determining whether holders of the requisite percentage
in outstanding Liquidation Amount thereof have taken certain actions or
exercised certain rights under the Amended and Restated Trust Agreement of the
Trust. In the event the Exchange Offer is consummated, (i) the New Guarantee
will apply to any Old Capital Securities that remain outstanding and to any New
Capital Securities issued in the Exchange Offer, (ii) the Old Junior
Subordinated Debentures will be retired and canceled and (iii) the New Junior
Subordinated Debentures will be issued to The Bank of New York, as Property
Trustee under the Trust.
-----------
SEE "RISK FACTORS" COMMENCING ON PAGE 17 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE
OFFER.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is , 1997.
<PAGE>
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Company and the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain conditions which
may be waived by the Company and the Trust in their sole discretion and to the
terms and provisions of the Registration Rights Agreement. Old Capital
Securities may be tendered for exchange in whole or in part having a
Liquidation Amount of not less than $100,000 (100 Old Capital Securities) or
any integral multiple of $1,000 Liquidation Amount (1 Old Capital Security) in
excess thereof. The Company has agreed to pay all expenses of the Exchange
Offer. See "The Exchange Offer--Fees and Expenses." Each New Capital Security
will accumulate Distributions from the most recent Distribution Date (as
defined in "Description of Securities--Description of Capital Securities--
Distributions") on the Old Capital Securities surrendered in exchange for such
New Capital Securities or, if no Distributions have been paid or provided for
on such Old Capital Securities, from January 1, 1997. As a result, holders of
Old Capital Securities that are accepted for exchange will not receive
accumulated Distributions on such Old Capital Securities for any period from
and after the most recent Distribution Date on such Old Capital Securities or,
if no Distributions have been paid or provided for on such Old Capital
Securities, from and after January 1, 1997, and such holders will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities. This Prospectus, together with the Letter of Transmittal, is being
sent to all registered holders of Old Capital Securities as of , 1997.
Neither the Company nor the Trust will receive any cash or other proceeds
from the issuance of the New Capital Securities offered hereby. No dealer-
manager is being used in connection with this Exchange Offer. See "Use of
Proceeds From Sale of Old Capital Securities" and "Plan of Distribution."
As the context may require, unless expressly stated otherwise, (i) "Capital
Securities" means the Old Capital Securities and, in the event the Exchange
Offer is consummated, the New Capital Securities, (ii) "Junior Subordinated
Debentures" means the Old Junior Subordinated Debentures and, in the event the
Exchange Offer is consummated, the New Junior Subordinated Debentures, (iii)
"Guarantee" means the Old Guarantee and, in the event the Exchange Offer is
consummated, the New Guarantee and (iv) "Securities" means the Old Securities
and, in the event the Exchange Offer is consummated, the New Securities. In
addition, as used herein, (i) the "Indenture" means the Junior Subordinated
Indenture dated as of January 13, 1997, as amended and supplemented from time
to time, between the Company and The Bank of New York, as trustee (the
"Debenture Trustee"), (ii) the "Trust Agreement" means the Amended and
Restated Trust Agreement dated as of January 13, 1997 relating to the Trust
among the Company, as Depositor, The Bank of New York, as Property Trustee
(the "Property Trustee"), The Bank of New York (Delaware), as Delaware Trustee
(the "Delaware Trustee"), the Administrative Trustees named therein (the
"Administrative Trustees" and, collectively with the Property Trustee and
Delaware Trustee, the "Issuer Trustees") and the holders, from time to time,
of the Capital Securities, (iii) the "Guarantee Agreement" means the Capital
Securities Guarantee Agreement dated as of January 13, 1997 (the "Old
Guarantee Agreement") between the Company and The Bank of New York, as trustee
(the "Guarantee Trustee"), and, in the event the Exchange Offer is
consummated, the Capital Securities Guarantee Agreement to be entered into
between the Company and the Guarantee Trustee (the "New Guarantee Agreement")
relating to the Old Guarantee and the New Guarantee, respectively, and (iv)
the "Expense Agreement" means the Agreement as to Expenses and Liabilities
dated as of January 13, 1997 between the Company and the Trust.
The Capital Securities represent undivided beneficial interests in the
assets of the Trust. The Company is the owner of all of the beneficial
interests represented by common securities of the Trust (the "Common
Securities" and, collectively with the Capital Securities, the "Trust
Securities"). The Bank of New York is the Property Trustee. The Trust exists
for the purpose of issuing the Trust Securities and investing the proceeds
thereof in the Junior Subordinated Debentures. The Junior Subordinated
Debentures mature on January 1, 2027
2
<PAGE>
(the "Stated Maturity"). The Capital Securities have a preference under
certain circumstances with respect to cash distributions and amounts payable
on liquidation, redemption or otherwise over the Common Securities. See
"Description of Securities--Description of Capital Securities--Subordination
of Common Securities."
Holders of Capital Securities are entitled to receive preferential
cumulative cash distributions and the holder of the Common Securities is
entitled to receive cumulative cash distributions arising from the payment of
interest on the Junior Subordinated Debentures accumulating from January 1,
1997 and payable semi-annually in arrears on the 1st day of January and July
of each year, commencing July 1, 1997, at the annual rate of 8.205% of the
Liquidation Amount of $1,000 per Capital Security and at the annual rate of
8.205% of the Liquidation Amount of $1,000 per Common Security
("Distributions"). The Company has the right to defer payments of interest on
the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 10 consecutive semi-annual periods with respect to each
deferral period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity or any earlier prepayment date.
At any time following the termination of any Extension Period and the payment
of all amounts then due, the Company may elect to begin a new Extension
Period, subject to the foregoing requirements. If interest payments on the
Junior Subordinated Debentures are so deferred, Distributions on the Capital
Securities and on the Common Securities will also be deferred and the Company
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Company's capital
stock (which includes common and preferred stock) or to make any payment with
respect to debt securities of the Company that rank on a parity with or junior
to the Junior Subordinated Debentures. During an Extension Period, interest on
the Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Capital Securities are entitled will
accumulate) at the rate of 8.205% per annum, compounded semi-annually, and
holders of Capital Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of Securities--
Description of Junior Subordinated Debentures--Option to Defer Interest
Payments" and "Certain Federal Income Tax Consequences--Interest Income and
Original Issue Discount."
The Company has, through the Guarantee, the Guarantee Agreement, the Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreement, taken together, fully, irrevocably and unconditionally guaranteed
on a subordinated basis all of the Trust's obligations under the Capital
Securities. See "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee--Full and Unconditional Guarantee."
The Guarantee of the Company guarantees the payment of Distributions and
payments on liquidation or redemption of the Capital Securities, but only in
each case to the extent of funds held by the Trust, as described herein. See
"Description of Securities--Description of Guarantee." If the Company does not
make interest payments on the Junior Subordinated Debentures held by the
Trust, the Trust will have insufficient funds to pay Distributions on the
Capital Securities. The Guarantee does not cover payment of Distributions when
the Trust does not have sufficient funds to pay such Distributions. In the
event of a Debenture Event of Default (as defined in "Description of
Securities--Description of Junior Subordinated Debentures--Debenture Events of
Default") under the Indenture, a holder of Capital Securities may institute a
legal proceeding directly against the Company to enforce payment of such
Distributions to such holder. See "Description of Securities--Description of
Junior Subordinated Debentures--Enforcement of Certain Rights By Holders of
Capital Securities." The obligations of the Company under the Guarantee and
the Junior Subordinated Debentures are unsecured and are subordinate and
junior in right of payment to all Senior Indebtedness (as defined in
"Description of Securities--Description of Junior Subordinated Debentures--
Subordination") of the Company. Senior Indebtedness of the Company includes
existing and future senior debt, senior subordinated debt and subordinated
debt of the Company. As of September 30, 1996, there was approximately $583
million of Senior Indebtedness of the Company outstanding.
The Capital Securities are subject to mandatory redemption in whole but not
in part (i) at the Stated Maturity upon repayment of the Junior Subordinated
Debentures at a redemption price equal to the principal amount of, plus
accrued interest on, the Junior Subordinated Debentures (the "Maturity
Redemption Price") and (ii) contemporaneously with the optional prepayment by
the Company of the Junior Subordinated Debentures upon the occurrence and
continuation of a Tax Event or an Investment Company Event (each as
3
<PAGE>
defined in "Risk Factors--Tax Event or Investment Company Event Redemption")
at a redemption price equal to the Event Prepayment Price (as defined below)
(the "Event Redemption Price"). The Maturity Redemption Price and the Event
Redemption Price may be referred to herein as the "Redemption Price." See
"Description of Securities--Description of Capital Securities--Redemption."
The Junior Subordinated Debentures are prepayable prior to the Stated Maturity
at the option of the Company at any time, in whole but not in part, upon the
occurrence and continuation of a Tax Event or an Investment Company Event at
the Event Prepayment Price equal to the greater of (a) 100% of the principal
amount thereof or (b) as determined by the Quotation Agent (as defined in
"Description of Securities--Description of Junior Subordinated Debentures--Tax
Event or Investment Company Event Prepayment"), the sum of the present value
of 100% of the principal amount that would be payable on January 1, 2027,
together with the present values of scheduled payments of interest from the
prepayment date to January 1, 2027, in each case, discounted to the prepayment
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-
day months) at the Adjusted Treasury Rate (as defined in "Description of
Securities--Description of Junior Subordinated Debentures--Tax Event or
Investment Company Event Prepayment"), plus, in each case, accrued interest
thereon to but excluding the date of prepayment. The Event Prepayment Price
may also be referred to herein as the "Prepayment Price." See "Description of
Securities--Description of Junior Subordinated Debentures" and "--Tax Event or
Investment Company Event Prepayment."
The Company has the right to terminate the Trust at any time and, after
satisfaction of liabilities to creditors of the Trust as required by
applicable laws, cause the Junior Subordinated Debentures to be distributed to
the holders of the Capital Securities in liquidation of the Trust subject to
the Company having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital Securities. See
"Description of Securities--Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures" and "Certain Federal Income
Tax Consequences--Distribution of Junior Subordinated Debentures to Holders of
Capital Securities."
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. Although Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.,
the initial purchasers of the Old Capital Securities (the "Initial
Purchasers"), have advised the Company and the Trust that they currently
intend to make a market in the New Capital Securities, the Initial Purchasers
are not obligated to do so, and any market-making activity with respect to the
New Capital Securities may be interrupted or discontinued at any time without
notice. Accordingly, no assurance can be given that an active public or other
market will develop for the New Capital Securities or as to the liquidity of
or the trading market for the New Capital Securities. The Company and the
Trust currently do not intend to apply for listing of the New Capital
Securities on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to the same rights and will be
subject to the same limitations applicable thereto under the Trust Agreement
(except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of any Old
Capital Securities that remain outstanding will continue to be subject to all
of the existing restrictions upon transfer thereof and neither the Company nor
the Trust will have any further obligation to such holders (other than under
certain limited circumstances) to provide for registration under the
Securities Act of the Old Capital Securities held by them. To the extent that
Old Capital Securities are tendered and accepted in the Exchange Offer, a
holder's ability to sell untendered Old Capital Securities could be adversely
affected. See "Risk Factors--Consequences of a Failure to Exchange Old Capital
Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
4
<PAGE>
----------------
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA
(THE "NORTH CAROLINA INSURANCE COMMISSIONER") NOR HAS THE NORTH CAROLINA
INSURANCE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
----------------
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 NEW CAPITAL
SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF NEW CAPITAL SECURITIES
IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED
TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF SUCH NEW CAPITAL SECURITIES FOR ANY PURPOSE,
INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH NEW CAPITAL
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN SUCH NEW CAPITAL SECURITIES.
5
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed
rates by writing to the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. In addition, such reports, proxy statements and other
information can be inspected at the offices of the New York Stock Exchange on
which certain of the Company's securities are listed.
No separate financial statements of the Trust have been included herein. The
Company and the Trust do not consider that such financial statements would be
material to holders of the Capital Securities because the Trust is a newly
formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any
activity other than holding as trust assets the Junior Subordinated Debentures
and issuing the Trust Securities. See "Aon Capital A" and "Description of
Securities." In addition, the Company does not expect that the Trust will file
reports under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission,
and reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
New Securities. Any statements contained herein concerning the provisions of
any document are not necessarily complete, and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following reports filed with the Commission pursuant to Section 13 of the
Exchange Act:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1996; and
(c) the Company's Current Report on Form 8-K dated January 15, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the New Securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
AON CORPORATION, 123 NORTH WACKER DRIVE, CHICAGO, ILLINOIS 60606, TELEPHONE:
(312) 701-3000, ATTENTION: TREASURER. IN ORDER TO ENSURE TIMELY DELIVERY OF
THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY , 1997.
6
<PAGE>
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of
any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
7
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus or incorporated by reference
herein.
AON CAPITAL A
The Trust is a statutory business trust, created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State,
which is governed by the Trust Agreement. The Trust's business and affairs are
conducted by the Issuer Trustees: The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, and three individual
Administrative Trustees who are employees or officers of or affiliated with the
Company. The Trust exists for the exclusive purposes of (i) issuing and selling
the Trust Securities, (ii) using the proceeds from the sale of the Common
Securities and Old Capital Securities to acquire the Old Junior Subordinated
Debentures, (iii) exchanging the Old Junior Subordinated Debentures for New
Junior Subordinated Debentures in the Exchange Offer pursuant to the Indenture
and (iv) engaging in only those other activities necessary, convenient or
incidental thereto (such as registering the transfer of Capital Securities).
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust, and payments by the Company under the Junior Subordinated Debentures and
the Expense Agreement will be the sole revenues of the Trust. All of the Common
Securities are owned by the Company.
The principal executive office of the Trust is c/o Aon Corporation, 123 N.
Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312)
701-3000.
AON CORPORATION
Aon Corporation (the "Company") is an insurance services holding company that
comprises a family of insurance brokerage, consulting and consumer insurance
companies. Through its insurance brokerage operations, the Company offers
commercial insurance brokerage, alternative risk solutions, risk management,
employee benefit and human resources consulting and managing general
underwriting services. In addition, the Company's insurance underwriting
businesses provide a variety of insurance products, including accident and
health coverage, traditional life insurance, extended warranties and credit
insurance. The Company's revenues were $3.5 billion in 1995 and $2.8 billion
for the nine-month period ended September 30, 1996. Based on 1995 insurance
brokerage and consulting revenues and without giving effect to the acquisition
of Alexander & Alexander Services Inc. ("A&A"), management believes that the
Company is the second largest insurance brokerage company in the world.
The principal executive offices of the Company are located at 123 N. Wacker
Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-
3000.
ACQUISITION OF ALEXANDER & ALEXANDER
On January 15, 1997, Subsidiary Corporation, Inc. ("Purchaser"), a wholly
owned subsidiary of the Company, consummated its cash tender offer (the
"Offer") for all the outstanding shares of Common Stock, par value $1.00 per
share (the "Common Stock"), and associated preferred stock purchase rights
(collectively, the "Shares"), of A&A at a price of $17.50 net cash per Share.
Pursuant to the Offer, Purchaser acquired approximately 44,293,552 Shares, or
97% of the outstanding Shares. All Shares validly tendered and not withdrawn
before expiration of the Offer at 12:00 midnight, New York City time, on
January 14, 1997, were accepted for payment, including approximately 1,846,882
Shares tendered pursuant to guaranteed delivery
8
<PAGE>
procedures. The Offer was made pursuant to the Agreement and Plan of Merger,
dated December 11, 1996, as amended (the "Merger Agreement"), among the
Company, Purchaser and A&A.
On December 11, 1996, the Company and American International Group, Inc.
("AIG") entered into the Stock Purchase and Sale Agreement ("Stock Purchase and
Sale Agreement"). Pursuant to the Stock Purchase and Sale Agreement, the
Company agreed to buy and AIG agreed to sell for $317.5 million, plus accrued
dividends, all outstanding shares of 8% Series B Cumulative Convertible
Preferred Stock, par value $1.00 per share (the "Series B Preferred Stock"), of
A&A. On January 17, 1997, the Company purchased all 4,846,232 shares of Series
B Preferred Stock. Each share of Series B Preferred Stock is currently
convertible into approximately 2.94 shares of Class D Common Stock of A&A,
which Class D Common Stock is exchangeable for Common Stock on a share-for-
share basis.
The Merger Agreement provides for the Offer to be followed by a merger of
Purchaser into A&A, pursuant to which all remaining Shares (other than stock of
A&A owned by A&A, the Company or any of their respective subsidiaries and stock
as to which appraisal rights are available and properly exercised under
Maryland law) will be converted into a right to receive $17.50 cash per Share
(the "Merger"). A special meeting of A&A's stockholders will be held on or
about February 20, 1997 to vote upon the Merger. Pursuant to the provisions of
A&A's Charter and applicable Maryland corporation law, the affirmative vote of
the holders of a majority of the voting power of the outstanding shares of
Common Stock, Class A Common Stock, par value $.00001 per share, of A&A (the
"Class A Stock"), Class C Common Stock, par value $1.00 per share (the "Class C
Stock" and, together with the Common Stock and the Class A Stock, the "Common
Capital Stock"), of A&A and the Series B Preferred Stock, voting together as a
single class, is required for approval of the Merger. Because the Company and
Purchaser own all of the Series B Preferred Stock and 97% of the outstanding
shares of Common Capital Stock, the Company and Purchaser have the ability to
approve the Merger without the vote of any other stockholder. The Merger
Agreement obligates the Company to cause all the capital stock of A&A owned by
the Company and its subsidiaries to be voted in favor of the Merger. The Merger
will be effected promptly after stockholder approval of the Merger.
Purchaser's payment of approximately $775 million for the aggregate purchase
price of the Shares purchased by Purchaser in the Offer was funded with capital
contributions to Purchaser by the Company. The Company derived the funds
necessary for such capital contribution and the funds necessary to purchase the
Series B Preferred Stock from cash on hand, the proceeds from the sale of
commercial paper and fixed maturities and the proceeds of the sale of the Old
Capital Securities. See "Pro Forma Consolidated Financial Information."
A&A is an insurance holding company which, through its subsidiaries, provides
professional risk management consulting, insurance brokerage and human resource
management consulting on a global basis. A&A's revenues were $1.3 billion in
1995 and $1.0 billion for the nine-month period ended September 30, 1996. Based
on 1995 revenues, management of the Company believes that A&A is the fourth
largest brokerage company in the world. Since 1994, A&A has engaged in a
significant restructuring of its operations and, for the nine months ended
September 30, 1996, A&A reported net income of $47.7 million, a 41.7% decrease
from its net income of $81.9 million for the same period in the previous year.
THE EXCHANGE OFFER
The Exchange Offer.......... Up to $800,000,000 aggregate Liquidation Amount
of New Capital Securities are being offered in
exchange for a like aggregate Liquidation Amount
of Old Capital Securities. Old Capital Securities
may be tendered for exchange in whole or in part
having a Liquidation Amount of not less than
$100,000 (100 Old Capital Securities) or any in-
tegral multiple of $1,000 Liquidation Amount (1
Old Capital
9
<PAGE>
Security) in excess thereof. The Company and the
Trust are making the Exchange Offer in order to
satisfy their obligations under the Registration
Rights Agreement relating to the Old Securities.
For a description of the procedures for tendering
Old Capital Securities, see "The Exchange Offer--
Procedures for Tendering Old Capital Securities."
Expiration Date............. 5:00 p.m., New York City time, on , 1997 (such
time on such date being hereinafter called the
"Expiration Date") unless the Exchange Offer is
extended by the Company and the Trust (in which
case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer
is extended). See "The Exchange Offer--Expiration
Date; Extensions; Amendments."
Conditions to the Exchange The Exchange Offer is subject to certain condi-
Offer...................... tions which may be waived by the Company and the
Trust in their sole discretion and to the terms
and conditions of the Registration Rights Agree-
ment. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Se-
curities being tendered for exchange. See "The
Exchange Offer--Conditions to the Exchange Of-
fer."
The Company and the Trust expressly reserve the
right in their sole and absolute discretion, sub-
ject to applicable law, at any time and from time
to time, (i) to delay the acceptance of the Old
Capital Securities for exchange, (ii) to termi-
nate the Exchange Offer (whether or not any Old
Capital Securities have been accepted for ex-
change) if the Company or the Trust determines,
in its sole and absolute discretion, that any of
the conditions referred to under "The Exchange
Offer--Conditions to the Exchange Offer" have oc-
curred or exist or have not been satisfied, (iii)
to extend the Expiration Date and retain all Old
Capital Securities tendered pursuant to the Ex-
change Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw
their tendered Old Capital Securities, and (iv)
to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. See
"The Exchange Offer--Expiration Date; Extensions;
Amendments."
Procedures for Tendering
Old Capital Securities..... Brokers, dealers, commercial banks, trust compa-
nies and other nominees who hold Old Capital Se-
curities through The Depository Trust Company
("DTC") may effect tenders by book-entry transfer
in accordance with DTC's Automated Tender Offer
Program ("ATOP"). Holders of such Old Capital Se-
curities registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee are urged to contact such person promptly
if they wish to tender Old Capital Securities. In
order for Old Capital Securities to be tendered
by a means other than by book-entry transfer, a
Letter of Transmittal must be completed and
signed in accordance with the instructions con-
tained therein. The Letter of Transmittal and any
other documents required by the Letter of Trans-
mittal must be de-
10
<PAGE>
livered to the Exchange Agent by mail, facsimile,
hand delivery or overnight carrier and either
such Old Capital Securities must be delivered to
the Exchange Agent or specified procedures for
guaranteed delivery must be complied with. See
"The Exchange Offer--Procedures for Tendering Old
Capital Securities."
Letters of Transmittal, certificates for Old Cap-
ital Securities and any other documents required
by the Letter of Transmittal should not be deliv-
ered to the Company or the Trust. Such documents
should only be delivered to the Exchange Agent.
Questions regarding how to tender and requests
for information should be directed to the Ex-
change Agent. See "The Exchange Offer--Exchange
Agent."
Withdrawal Rights........... Tenders of Old Capital Securities may be with-
drawn at any time on or prior to the Expiration
Date by delivering a written notice of such with-
drawal to the Exchange Agent in conformity with
certain procedures set forth below under "The Ex-
change Offer--Withdrawal Rights."
Resales of New Capital Based on certain interpretations by the staff of
Securities................. the Division of Corporation Finance of the Secu-
rities and Exchange Commission (the "Commis-
sion"), and subject to the two immediately fol-
lowing sentences, the Company and the Trust
believe that New Capital Securities issued pursu-
ant to the Exchange Offer in exchange for Old
Capital Securities may be offered for resale, re-
sold and otherwise transferred by a holder
thereof (other than a holder who is a broker-
dealer) without further compliance with the reg-
istration and prospectus delivery requirements of
the Securities Act, provided that such New Capi-
tal Securities are acquired in the ordinary
course of such holder's business and that such
holder is not participating, and has no arrange-
ment or understanding with any person to partici-
pate, in a distribution (within the meaning of
the Securities Act) of such New Capital Securi-
ties. However, any holder of Old Capital Securi-
ties who is an "affiliate" of the Company or the
Trust or who intends to participate in the Ex-
change Offer for the purpose of distributing the
New Capital Securities, or any broker-dealer who
purchased the Old Capital Securities from the
Trust to resell pursuant to Rule 144A under the
Securities Act ("Rule 144A") or any other avail-
able exemption under the Securities Act, (a) will
not be able to rely on the interpretations of the
staff of the Division of Corporation Finance of
the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted
or entitled to tender such Old Capital Securities
in the Exchange Offer and (c) must comply with
the registration and prospectus delivery require-
ments of the Securities Act in connection with
any sale or other transfer of such Old Capital
Securities unless such sale is made pursuant to
an exemption from such requirements. In addition,
if any broker-dealer holds Old Capital Securities
acquired for its own account as a result of mar-
ket-making or other trading activities and ex-
changes such Old Capital Securities for New Capi-
tal Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of
the
11
<PAGE>
Securities Act in connection with any resales of
such New Capital Securities. See "The Exchange
Offer--Resales of the New Capital Securities."
The Company and the Trust believe that broker-
dealers who acquired Old Capital Securities for
their own accounts as a result of market-making
activities or other trading activities ("Partici-
pating Broker-Dealers") may fulfill their pro-
spectus delivery requirements with respect to the
New Capital Securities received upon exchange of
such Old Capital Securities (other than Old Capi-
tal Securities which represent an unsold allot-
ment from the original sale of the Old Capital
Securities) with this Prospectus, as it may be
amended or supplemented from time to time. This
Prospectus may be used by a Participating Broker-
Dealer during the 90-day period referred to below
in connection with resales of New Capital Securi-
ties received in exchange for Old Capital Securi-
ties where such Old Capital Securities were ac-
quired by such Participating Broker-Dealer for
its own account as a result of market-making or
other trading activities. Subject to certain pro-
visions set forth in the Registration Rights
Agreement and to the limitations described under
"The Exchange Offer--Resale of New Capital Secu-
rities," the Company and the Trust have agreed
that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with
resales of such New Capital Securities for a pe-
riod ending 90 days after the Expiration Date or,
if earlier, when all such New Capital Securities
have been disposed of by such Participating Bro-
ker-Dealer. See "Plan of Distribution" and "The
Exchange Offer--Resales of New Capital Securi-
ties."
In that regard, each Participating Broker-Dealer
who surrenders Old Capital Securities pursuant to
the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or de-
livery of an Agent's Message (as defined under
"The Exchange Offer--Acceptance For Exchange and
Issuance of New Capital Securities") in lieu
thereof, that, upon receipt of notice from the
Company or the Trust of the occurrence of any
event or the discovery of any fact which makes
any statement contained or incorporated by refer-
ence in this Prospectus untrue in any material
respect or which causes this Prospectus to omit
to state a material fact necessary in order to
make the statements contained or incorporated by
reference herein, in light of the circumstances
under which they were made, not misleading or of
the occurrence of certain other events specified
in the Registration Rights Agreement, such Par-
ticipating Broker-Dealer will suspend the sale of
New Capital Securities (or the New Guarantee or
the New Junior Subordinated Debentures, as appli-
cable) pursuant to this Prospectus until the Com-
pany or the Trust has amended or supplemented
this Prospectus to correct such misstatement or
omission and has furnished copies of the amended
or supplemented Prospectus to such Participating
Broker-Dealer or the Company or the Trust has
given notice that the sale of the New Capital Se-
curities (or
12
<PAGE>
the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the
case may be. See "The Exchange Offer--Resales of
New Capital Securities."
Exchange Agent.............. The exchange agent with respect to the Exchange
Offer is The Bank of New York (the "Exchange
Agent"). The addresses and telephone and facsim-
ile numbers of the Exchange Agent are set forth
in "The Exchange Offer--Exchange Agent" and in
the Letter of Transmittal.
Use of Proceeds............. Neither the Company nor the Trust will receive
any cash or other proceeds from the issuance of
the New Capital Securities offered hereby. See
"Use of Proceeds From Sale of Old Capital Securi-
ties."
Certain United States
Federal Income Tax
Considerations; ERISA
Considerations.............
Holders of Old Capital Securities should review
the information set forth under "Certain United
States Federal Income Tax Considerations" and
"ERISA Considerations" prior to tendering Old
Capital Securities in the Exchange Offer.
THE CAPITAL SECURITIES
Securities Offered.......... Up to $800,000,000 aggregate Liquidation Amount
of the Trust's 8.205% Capital Securities which
have been registered under the Securities Act
(Liquidation Amount $1,000 per Capital Security).
The New Capital Securities will be issued and the
Old Capital Securities were issued under the
Trust Agreement. The New Capital Securities and
any Old Capital Securities that remain outstand-
ing after consummation of the Exchange Offer will
constitute a single series of Capital Securities
under the Trust Agreement and, accordingly, will
vote together as a single class for purposes of
determining whether holders of the requisite per-
centage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain
rights under the Trust Agreement. See "Descrip-
tion of Securities--Description of Capital Secu-
rities--General." The forms and terms of the New
Securities are identical in all material respects
to the respective forms and terms of the Old Se-
curities, except that (i) the New Securities have
been registered under the Securities Act and
therefore are not subject to certain restrictions
on transfer applicable to the Old Securities,
(ii) the New Capital Securities will not provide
for any increase in the Distribution rate thereon
and (iii) the New Junior Subordinated Debentures
will not provide for any increase in the interest
rate thereon. Accordingly, as the context may re-
quire, unless expressly stated otherwise, (i)
"Capital Securities" means the Old Capital Secu-
rities and, in the event the Exchange Offer is
consummated, the New Capital Securities, (ii)
"Junior Subordinated Debentures" means the Old
Junior Subordinated Debentures and, in the event
the Exchange Offer is consummated, the New Junior
Subordinated Debentures, (iii) "Guarantee" means
the Old Guarantee
13
<PAGE>
and, in the event the Exchange Offer is consum-
mated, the New Guarantee and (iv) "Securities"
means the Old Securities and, in the event the
Exchange Offer is consummated, the New Securi-
ties. See "The Exchange Offer--Purpose of the Ex-
change Offer," "Description of Securities" and
"Description of Old Securities."
Distribution Dates.......... January 1 and July 1 of each year, commencing
July 1, 1997.
Extension Periods........... Distributions on Capital Securities will be de-
ferred for the duration of any Extension Period
elected by the Company with respect to the pay-
ment of interest on the Junior Subordinated De-
bentures. No Extension Period will exceed 10 con-
secutive semi-annual periods or extend beyond the
Stated Maturity or any earlier prepayment date.
See "Description of Securities--Description of
Junior Subordinated Debentures--Option to Defer
Interest Payments" and "Certain Federal Income
Tax Consequences--Interest Income and Original
Issue Discount."
Ranking..................... The Capital Securities rank on a parity, and pay-
ments thereon will be made pro rata, with the
Common Securities except as described under "De-
scription of Securities--Description of Capital
Securities--Subordination of Common Securities."
The Junior Subordinated Debentures rank on a par-
ity with all other junior subordinated debentures
which may be issued by the Company with substan-
tially similar subordination terms ("Other Deben-
tures") and which may be issued and sold (if at
all) to other trusts to be established by the
Company (if any) ("Other Trusts"), and are
unsecured and subordinate and junior in right of
payment to all Senior Indebtedness to the extent
and in the manner set forth in the Indenture. Se-
nior Indebtedness of the Company includes exist-
ing and future senior debt, senior subordinated
debt and subordinated debt of the Company. As of
September 30, 1996, there was approximately $583
million of Senior Indebtedness of the Company
outstanding. See "Description of Securities--De-
scription of Junior Subordinated Debentures." The
Guarantee ranks on a parity with all other guar-
antees (if any), which may be issued by the Com-
pany with respect to capital securities (if any),
to be issued by Other Trusts ("Other Guarantees")
and will constitute an unsecured obligation of
the Company and will rank subordinate and junior
in right of payment to all liabilities of the
Company to the extent and in the manner set forth
in the Guarantee Agreement. See "Description of
Securities--Description of Guarantee."
Redemption.................. The Capital Securities are subject to mandatory
redemption in whole but not in part (i) at the
Stated Maturity upon repayment of the Junior Sub-
ordinated Debentures and (ii) contemporaneously
with the optional prepayment by the Company of
the Junior Subordinated Debentures upon the oc-
currence and continuation of a Tax Event or an
Investment Company Event, in each case at the ap-
plicable Redemption Price. See "Description of
Securities--Description of Capital Securities--
Redemption."
14
<PAGE>
Rating...................... The Capital Securities have not been rated by
Standard & Poor's Ratings Services ("S&P") or by
Moody's Investors Services, Inc. ("Moody's"). On
February 4, 1997, S&P announced that the pre-
ferred stock of the Company was downgraded from
"AA-" to "A" and that the Company was removed
from CreditWatch (where it had been placed fol-
lowing the Company's announcement that it had en-
tered into the Merger Agreement with A&A). The
preferred stock of the Company is currently rated
"a3" by Moody's (which is currently reviewing for
downgrade its ratings on the securities of the
Company).
Transfer Restrictions....... The New Capital Securities will be issued, and
may be transferred, only in blocks having a Liq-
uidation Amount of not less than $100,000 (100
New Capital Securities). See "Description of Se-
curities--Description of Capital Securities--Re-
strictions on Transfer." Any transfer, sale or
other disposition of Capital Securities in a
block having a Liquidation Amount of less than
$100,000 shall be deemed to be void and of no le-
gal effect whatsoever.
Absence of Market for the
Capital Securities......... The New Capital Securities will be a new issue of
securities for which there currently is no mar-
ket. Although the Initial Purchasers have advised
the Company and the Trust that they currently in-
tend to make a market in the New Capital Securi-
ties, the Initial Purchasers are not obligated to
do so, and any market-making activity with re-
spect to the New Capital Securities may be inter-
rupted or discontinued at any time without no-
tice. Accordingly, no assurance can be given that
an active public or other market will develop for
the New Capital Securities or as to the liquidity
of or the trading market for the New Capital Se-
curities. The Company and the Trust currently do
not intend to apply for listing of the New Capi-
tal Securities on any securities exchange or for
quotation through the National Association of Se-
curities Dealers Automated Quotation System.
For additional information regarding the New Securities, see "Description of
Securities" and "Certain Federal Income Tax Consequences."
RISK FACTORS
Holders tendering Old Capital Securities in the Exchange Offer should
carefully consider the matters set forth under "Risk Factors" beginning on page
17.
15
<PAGE>
SELECTED FINANCIAL DATA
AON CORPORATION
CONSOLIDATED SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth selected historical financial data for Aon for
each of the five years in the period ended December 31, 1995 and for the nine-
month periods ended September 30, 1995 and 1996. The data for each of the five
years in the period ended December 31, 1995 have been derived from the audited
financial statements and the notes thereto, and should be read in conjunction
with, the audited consolidated financial statements and other financial
information contained in Aon's Annual Report on Form 10-K for the year ended
December 31, 1995, incorporated by reference herein. The data for the nine-
month periods ended September 30, 1995 and 1996 have been derived from the
unaudited consolidated interim financial statements, including the notes
thereto, contained in Aon's Quarterly Report on Form 10-Q for the period ended
September 30, 1996, incorporated by reference herein. Such unaudited
consolidated interim financial statements reflect all adjustments (consisting
only of normally recurring accruals) which management of the Company considers
necessary to present fairly the financial information for such periods. See
"Available Information" and "Incorporation of Certain Documents By Reference."
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------- ---------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- ------- ------- ------- ------- -------
(MILLIONS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA*
Brokerage commissions
and fees............... $ 1,368 $ 1,226 $ 1,651 $ 1,389 $ 1,190 $ 714 $ 391
Premiums earned......... 1,141 1,059 1,427 1,322 1,278 1,275 1,214
Net investment income... 270 245 329 257 227 223 215
Realized investment
gains.................. 3 9 13 19 30 24 27
Other income............ 37 32 46 54 46 42 78
-------- -------- ------- ------- ------- ------- -------
Total revenue......... $ 2,819 $ 2,571 $ 3,466 $ 3,041 $ 2,771 $ 2,278 $ 1,925
======== ======== ======= ======= ======= ======= =======
Income from continuing
operations............. $ 246 $ 239 $ 304 $ 269 $ 228 $ 134 $ 185
Income from discontinued
operations............. 43 71 99 91 96 72 57
-------- -------- ------- ------- ------- ------- -------
Net income.............. $ 289 $ 310 $ 403 $ 360 $ 324 $ 127 $ 242
======== ======== ======= ======= ======= ======= =======
BALANCE SHEET DATA
Total assets............ $ 12,227 $ 19,640 $19,736 $17,922 $16,279 $14,290 $11,633
======== ======== ======= ======= ======= ======= =======
Liabilities and Stock-
holders' Equity Policy
liabilities............ $ 3,795 $ 9,544 $ 9,556 $ 9,310 $ 8,776 $ 7,759 $ 7,342
Notes payable.......... 523 553 554 561 594 556 501
General liabilities.... 5,141 6,921 6,902 5,744 4,621 3,871 2,015
-------- -------- ------- ------- ------- ------- -------
Total liabilities..... 9,459 17,018 17,012 15,615 13,991 12,186 9,858
Redeemable preferred
stock................. 50 50 50 50 -- -- --
Stockholders' equity... 2,718 2,572 2,674 2,257 2,288 2,104 1,775
-------- -------- ------- ------- ------- ------- -------
Total liabilities and
stockholders' equity... $ 12,227 $ 19,640 $19,736 $17,922 $16,279 $14,290 $11,633
======== ======== ======= ======= ======= ======= =======
PER SHARE DATA
Income from continuing
operations............. $ 2.11 $ 2.03 $ 2.57 $ 2.28 $ 1.91 $ 1.24 $ 1.89
Net income.............. 2.50 2.68 3.48 3.14 2.81 1.17 2.47
Stockholders' equity.... 23.29 21.89 22.77 18.30 18.95 17.48 17.39
Dividends paid on Common
Stock.................. 1.06 1.00 1.34 1.26 1.18 1.11 1.05
</TABLE>
- --------
* Certain prior period amounts have been reclassified to conform to the
current presentation.
16
<PAGE>
RISK FACTORS
Holders tendering Old Capital Securities in the Exchange Offer should
carefully review the information contained elsewhere in this Prospectus and
should particularly consider the matters set forth below. The forms and terms
of the New Securities are identical in all material respects to the respective
forms and terms of the Old Securities, except that (i) the New Securities have
been registered under the Securities Act and therefore will not be subject to
certain restrictions on transfer applicable to the Old Securities, (ii) the
New Capital Securities will not provide for any increase in the Distribution
rate thereon and (iii) the New Junior Subordinated Debentures will not provide
for any increase in the interest rate thereon. Accordingly, as the context may
require, unless expressly stated otherwise, (i) "Capital Securities" means the
Old Capital Securities and, in the event the Exchange Offer is consummated,
the New Capital Securities, (ii) "Junior Subordinated Debentures" means the
Old Junior Subordinated Debentures and, in the event the Exchange Offer is
consummated, the New Junior Subordinated Debentures, (iii) "Guarantee" means
the Old Guarantee and, in the event the Exchange Offer is consummated, the New
Guarantee and (iv) "Securities" means the Old Securities and, in the event the
Exchange Offer is consummated, the New Securities.
RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED
DEBENTURES
The obligations of the Company under the Junior Subordinated Debentures are
unsecured and rank subordinate and junior in right of payment to all Senior
Indebtedness of the Company. The obligations of the Company under the
Guarantee are unsecured and rank subordinate and junior in right of payment to
all liabilities of the Company, including obligations under the Junior
Subordinated Debentures, other than any liabilities which expressly by their
terms are made pari passu with or subordinate to the obligations of the
Company under the Guarantee. At September 30, 1996, the aggregate outstanding
Senior Indebtedness of the Company was approximately $583 million. None of the
Indenture, the Guarantee or the Trust Agreement places any limitation on the
amount of secured or unsecured debt, including Senior Indebtedness, that may
be incurred by the Company. See "Description of Securities--Description of
Guarantee--Status of the Guarantee" and "Description of Securities--
Description of Junior Subordinated Debentures--Subordination." Since the
Company is a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of Capital
Securities to benefit indirectly from such distribution) is subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Company may itself be a creditor of that subsidiary. Claims on the Company's
subsidiaries by creditors other than the Company include long-term debt and
certain other short-term borrowings. Accordingly, the Junior Subordinated
Debentures and the Company's obligations under the Guarantee will be
effectively subordinated to all existing and future liabilities of the
Company's subsidiaries, and holders of Junior Subordinated Debentures and
claimants under the Guarantee should look only to the assets of the Company
for payments on the Junior Subordinated Debentures or the Guarantee.
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Company making payments on the Junior Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Debenture Event of Default has occurred or is continuing, the
Company has the right under the Indenture to defer the payment of interest on
the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 10 consecutive semi-annual periods, during which
Extension Period the Company has the right to make partial payments of
interest on any Interest Payment Date. No Extension Period may extend beyond
the Stated Maturity or any earlier prepayment date. As a consequence of any
such deferral, semi-annual Distributions on the Capital Securities by the
Trust will be deferred during any Extension Period. Distributions to which
holders of the Capital Securities are entitled will accumulate additional
Distributions thereon ("Additional Distributions") at the rate of 8.205% per
annum, compounded semi-annually from the relevant payment date for such
Distributions, but not exceeding the interest rate then accruing on the Junior
Subordinated Debentures.
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During any such Extension Period, the Company may not, and may not permit
any subsidiary of the Company to (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank on a parity with or junior to the
Junior Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company (including Other Guarantees) if such guarantee ranks on a parity with
or junior to the Junior Subordinated Debentures (other than (a) dividends or
distributions in common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of capital stock under any such plan, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee and (d) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers, employees, consultants or advisers). Prior to the termination of any
such Extension Period, the Company may further extend such Extension Period,
provided that such extension does not cause such Extension Period to exceed 10
consecutive semi-annual periods or to extend beyond the Stated Maturity or any
earlier prepayment date. At any time following the termination of any
Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to the foregoing requirements.
There is no limitation on the number of times that the Company may elect to
begin an Extension Period. See "Description of Securities--Description of
Capital Securities--Distributions" and "Description of Securities--Description
of Junior Subordinated Debentures--Option to Defer Interest Payments."
Should an Extension Period occur, a holder of Capital Securities will
continue to accrue income for United States federal income tax purposes (in
the form of original issue discount) in respect of its pro rata share of the
Junior Subordinated Debentures held by the Trust. As a result, a holder of
Capital Securities will include such income in gross income for United States
federal income tax purposes in advance of the receipt of cash, and will not
receive the cash related to such income from the Trust if the holder disposes
of the Capital Securities prior to the record date for the payment of
Distributions. See "Certain Federal Income Tax Consequences--Interest Income
and Original Issue Discount" and "--Sales or Redemptions of Capital
Securities."
The Company has no present intention of exercising its right to defer
payments of interest. However, should the Company elect to exercise such right
in the future, the market price of the Capital Securities is likely to be
affected. A holder that disposes of any Capital Securities during an Extension
Period, therefore, might not receive the same return on its investment as a
holder that continues to hold its Capital Securities. In addition, as a result
of the existence of the Company's right to defer interest payments, the market
price of the Capital Securities (which represent undivided beneficial
interests in the assets of the Trust) may be more volatile than the market
prices of other securities on which original issue discount accrues that are
not subject to such deferrals.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION
Upon the occurrence and continuation of a Tax Event or an Investment Company
Event, the Company has the right to prepay the Junior Subordinated Debentures
in whole (but not in part) within 90 days of the occurrence of such Tax Event
or Investment Company Event and therefore cause a mandatory redemption of all
Capital Securities at the Event Redemption Price. See "Description of
Securities--Description of Capital Securities--Redemption."
A "Tax Event" means the receipt by the Company and the 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 or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after January 13, 1997,
there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days after the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, (ii) interest
18
<PAGE>
payable by the Company on the Junior Subordinated Debentures is not, or within
90 days after the date of such opinion, will not be, deductible by the
Company, in whole or in part, for United States federal income tax purposes or
(iii) the Trust is, or will be within 90 days after the date of such opinion,
subject to more than a de minimis amount of other taxes, duties, assessments
or other governmental charges.
See "--Possible Tax Law Changes Affecting the Capital Securities" for a
discussion of certain legislative proposals that, if adopted, could give rise
to a Tax Event, which may permit the Company to cause a redemption of all
Capital Securities prior to January 1, 2027.
An "Investment Company Event" means the receipt by the 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 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"), the Trust is or
will be considered an investment company that is required to be registered
under the Investment Company Act of 1940, as amended, which Change in 1940 Act
Law becomes effective on or after January 13, 1997.
EXCHANGE OF JUNIOR SUBORDINATED DEBENTURES FOR CAPITAL SECURITIES
The Company has the right to terminate the Trust at any time and, after
satisfaction of liabilities to creditors as required by applicable law, cause
the Junior Subordinated Debentures to be distributed to the holders of the
Capital Securities in liquidation of the Trust. The exercise of such right is
subject to the Company having received an opinion of counsel to the effect
that such distribution will not be a taxable event to holders of Capital
Securities for United States federal income tax purposes. See "Description of
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE
The Bank of New York acts as the Guarantee Trustee and will hold the New
Guarantee for the benefit of the holders of all Capital Securities. The Bank
of New York also acts as Debenture Trustee for the Junior Subordinated
Debentures and as Property Trustee under the Trust Agreement and its affiliate
The Bank of New York (Delaware) acts as Delaware Trustee under the Trust
Agreement. The Guarantee guarantees to the holders of the Capital Securities
the following payments, to the extent not paid by or on behalf of the Trust:
(i) any accumulated and unpaid Distributions required to be paid on the
Capital Securities, to the extent the Trust has funds on hand available
therefor at such time, (ii) the applicable Redemption Price with respect to
Capital Securities called for redemption, to the extent the Trust has funds on
hand available therefor at such time and (iii) upon a voluntary or involuntary
termination, dissolution, winding-up or liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and
accumulated and unpaid Distributions on the Capital Securities to the date of
payment, to the extent the Trust has funds on hand available therefor at such
time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities in liquidation of the Trust.
The holders of not less than a majority in aggregate Liquidation Amount of
the Capital 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 the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee Agreement. Any holder
of Capital Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee, without first instituting a
proceeding against the Trust, the Guarantee Trustee or any other person or
entity. If the Company were to default on its obligation to pay amounts
payable under the Junior Subordinated Debentures, the Trust would lack funds
for the payment of Distributions or amounts payable on redemption of the
Capital Securities or otherwise, and, in such event, holders of the Capital
Securities would not be able to rely upon the Guarantee for payment of such
amounts. Instead, in the event a Debenture Event of Default shall have
occurred and be continuing and such event is attributable to the failure of
the Company to pay interest on or principal of the Junior Subordinated
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<PAGE>
Debentures on the payment date on which such payment is due and payable, then
a holder of Capital Securities may institute a suit directly against the
Company for enforcement of payment to such holder of the principal of or
interest on such Junior Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Capital Securities of such
holder (a "Direct Action"). Notwithstanding any payments made to a holder of
Capital Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Junior Subordinated Debentures, and the Company shall be subrogated to the
rights of the holder of such Capital Securities with respect to payments on
the Capital Securities to the extent of any payments made by the Company to
such holder in any Direct Action. Except as described herein, holders of
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures or assert
directly any other rights in respect of the Junior Subordinated Debentures.
See "Description of Securities--Description of Junior Subordinated
Debentures--Enforcement of Certain Rights by Holders of Capital Securities,"
"Description of Securities--Description of Junior Subordinated Debentures--
Debenture Events of Default" and "Description of Securities--Description of
Guarantee." The Trust Agreement provides that each holder of Capital
Securities by acceptance thereof agrees to the provisions of the Guarantee
Agreement and the Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities and the exercise
of the Trust's rights as holder of Junior Subordinated Debentures. Holders of
Capital Securities will have limited authority to vote to remove or replace
the Issuer Trustees. The Property Trustee, the Administrative Trustees and the
Company may amend the Trust Agreement without the consent of holders of
Capital Securities to ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust provided that such
action does not adversely affect the interests of such holders. See
"Description of Securities--Description of Capital Securities--Voting Rights;
Amendment of the Trust Agreement" and "Description of Securities--Description
of Capital Securities--Removal of Issuer Trustees; Appointment of Successors."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities Act
or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption therefrom or in a transaction not subject thereto, and in each
case in compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Company and the Trust do not intend to register under
the Securities Act any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
through Automatic Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer,
any trading market for Old Capital Securities which remain outstanding after
the Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Trust Agreement and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement.
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<PAGE>
The Old Capital Securities provide that, if the Exchange Offer is not
consummated by August 11, 1997, the Distribution rate borne by the Old Capital
Securities will increase by 0.25% per annum commencing on August 12, 1997,
until the Exchange Offer is consummated. See "Description of Old Capital
Securities." Following consummation of the Exchange Offer, neither the Old
Capital Securities nor the New Capital Securities will be entitled to any
increase in the Distribution rate thereon.
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will
continue to be subject to restrictions on transferability to the extent that
they are not exchanged for New Capital Securities. Although the New Capital
Securities will generally be permitted to be resold or otherwise transferred
by the holders (who are not affiliates of the Company or the Trust) without
compliance with the registration requirements under the Securities Act, they
will constitute a new issue of securities with no established trading market.
Capital Securities may be transferred by the holders thereof only in blocks
having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). The Company and the Trust have been advised by the Initial
Purchasers that the Initial Purchasers currently intend to make a market in
the New Capital Securities. However, the Initial Purchasers are not obligated
to do so and any market-making activity with respect to the New Capital
Securities may be interrupted or discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the New Capital Securities or the Old Capital
Securities or as to the liquidity of or the trading market for the New Capital
Securities or the Old Capital Securities. If an active public market does not
develop, the market price and liquidity of the New Capital Securities may be
adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including,
among other things, prevailing interest rates, results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Company, the New Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Company or the Trust may publicly offer for sale or
resell the New Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act.
Each broker-dealer that receives New Capital Securities for its own account
in exchange for Old Capital Securities, where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such New Capital Securities. See "Plan of
Distribution."
EXCHANGE OFFER PROCEDURES
Subject to the conditions set forth under "The Exchange Offer--Conditions to
the Exchange Offer," delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i)
certificates for Old Capital Securities or a book-entry confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC, including an Agent's Message (as defined under "The Exchange
Offer--Acceptance for Exchange and Issuance of New Capital Securities") if the
tendering holder does not deliver a Letter of Transmittal, (ii) a completed
and signed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message in lieu of the Letter of Transmittal, and (iii) any other documents
required by the Letter of Transmittal. Therefore, holders of Old Capital
Securities desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to ensure timely delivery.
Neither the Company nor the Trust is under a duty to give notification of
defects or irregularities with respect to the tenders of Old Capital
Securities for exchange.
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<PAGE>
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill")
proposed by the Clinton administration was released. The Bill would, among
other things, generally deny interest deductions for United States federal
income tax purposes for interest on an instrument issued by a corporation that
has a maximum term of more than 20 years and that is not shown as indebtedness
on the separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. The above-mentioned provision of the
Bill was proposed to be effective generally for instruments issued on or after
December 7, 1995. If such provision were to apply to the Junior Subordinated
Debentures, the Company would be unable to deduct interest on the Junior
Subordinated Debentures for United States federal income tax purposes.
However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, will be no earlier than the date of appropriate Congressional action.
The proposals were not enacted in the recently concluded session of Congress
and, under current law, the Company believes it will be able to deduct
interest on the Junior Subordinated Debentures. There can be no assurance,
however, that final legislation similar to the Bill or future legislative
proposals, future regulations or official administrative pronouncements or
future judicial decisions will not affect the ability of the Company to deduct
interest on the Junior Subordinated Debentures. Such a change could give rise
to a Tax Event, which may permit the Company to cause a redemption of the
Capital Securities. See "Description of Securities--Description of Capital
Securities--Redemption" and "Certain Federal Income Tax Consequences--Possible
Tax Law Changes."
USE OF PROCEEDS FROM THE SALE OF THE OLD CAPITAL SECURITIES
Neither the Company nor the Trust will receive any cash or other proceeds
from the issuance of the New Capital Securities offered hereby. In
consideration for issuing the New Capital Securities in exchange for Old
Capital Securities as described in this Prospectus, the Trust will receive Old
Capital Securities in like Liquidation Amount. The Old Capital Securities
surrendered in exchange for the New Capital Securities will be retired and
cancelled.
The proceeds to the Trust from the offering of the Old Capital Securities
was approximately $800,000,000. All of the proceeds from the sale of Old
Capital Securities were invested by the Trust in Old Junior Subordinated
Debentures. The net proceeds from the sale of the Old Junior Subordinated
Debentures were used by the Company to finance, in part, the acquisition of
Common Stock of A&A and the purchase by the Company of the Series B Preferred
Stock. See "Acquisition of Alexander & Alexander." The Company paid or
reimbursed the Trust for the expenses associated with the offering of the Old
Capital Securities and the compensation to the Initial Purchasers.
AON CAPITAL A
Aon Capital A is a statutory business trust, created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary
of State, which is governed by the Trust Agreement. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using
the proceeds from the sale of Common Securities and the Old Capital Securities
to acquire the Old Junior Subordinated Debentures, (iii) exchanging the Old
Junior Subordinated Debentures for New Junior Subordinated Debentures in the
Exchange Offer pursuant to the Indenture and (iv) engaging in only those other
activities necessary, convenient or incidental thereto (such as registering
the transfer of Capital Securities). Accordingly, the Junior Subordinated
Debentures will be the sole assets of the Trust and payments by the Company
under the Junior Subordinated Debentures and the Expense Agreement will be the
sole revenues of the Trust. All of the Common Securities are owned by the
Company. The Common Securities rank on a parity, and payments are made thereon
pro rata,
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with the Capital Securities except that upon the occurrence and continuance of
an event of default under the Trust Agreement resulting from a Debenture Event
of Default, the rights of the Company 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 Capital
Securities. See "Description of Securities--Description of Capital
Securities--Subordination of Common Securities." The Company owns Common
Securities in an aggregate liquidation amount equal to 3% of the outstanding
Capital Securities.
The Trust has a term of approximately 31 years, but may terminate earlier as
provided in the Trust Agreement. The Trust's business and affairs are
conducted by its trustees, each appointed by the Company as holder of the
Common Securities. Under the Trust Agreement, the trustees for the Trust are
The Bank of New York, as the Property Trustee, The Bank of New York
(Delaware), as the Delaware Trustee, and three individual Administrative
Trustees who are employees or officers of or affiliated with the Company
(collectively, the "Issuer Trustees"). The Bank of New York also acts as
trustee under the Indenture and the Old Guarantee Agreement and will act as
trustee under the New Guarantee Agreement. See "Description of Securities--
Description of Guarantee" and "Description of Securities--Description of
Junior Subordinated Debentures." The duties and obligations of each Issuer
Trustee are governed by the Trust Agreement. The Company will pay all fees and
expenses related to the Trust, the offering of the Old Capital Securities and
this Exchange Offer and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Trust.
Pursuant to the Expense Agreement, the Company has irrevocably and
unconditionally guaranteed to each person or entity to whom the Trust becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
the Trust, other than obligations of the Trust to pay to the holders of any
Capital Securities or other similar interests in the Trust of the amounts due
such holders pursuant to the terms of the Capital Securities or such other
similar interests, as the case may be.
The principal executive office of the Trust is c/o Aon Corporation, 123 N.
Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312)
701-3000.
AON CORPORATION
The Company is an insurance services holding company that comprises a family
of insurance brokerage, consulting and consumer insurance companies. Through
its insurance brokerage operations, the Company offers commercial insurance
brokerage, alternative risk solutions, risk management, employee benefit and
human resources consulting and managing general underwriting services. In
addition, the Company's insurance underwriting businesses provide a variety of
insurance products, including accident and health coverage, traditional life
insurance, extended warranties and credit insurance. The Company's revenues
were $3.5 billion in 1995 and $2.8 billion for the nine-month period ended
September 30, 1996. Based on 1995 insurance brokerage and consulting revenues
and without giving effect to the acquisition of A&A, management believes that
the Company is the second largest insurance brokerage company in the world.
The principal executive offices of the Company are located at 123 N. Wacker
Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-
3000.
ACQUISITION OF ALEXANDER & ALEXANDER
On January 15, 1997, Purchaser, a wholly owned subsidiary of the Company,
consummated the Offer for all the outstanding Shares of A&A at a price of
$17.50 net cash per Share. Pursuant to the Offer, Purchaser acquired
approximately 44,293,552 Shares, or 97% of the outstanding Shares. All Shares
validly tendered and not withdrawn before expiration of the Offer at 12:00
midnight, New York City time, on January 14, 1997, were accepted for payment,
including approximately 1,846,882 Shares tendered pursuant to guaranteed
delivery procedures. The Offer was made pursuant to the Merger Agreement among
the Company, Purchaser and A&A.
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<PAGE>
On December 11, 1996, the Company and AIG entered into the Stock Purchase
and Sale Agreement. Pursuant to the Stock Purchase and Sale Agreement, the
Company agreed to buy and AIG agreed to sell for $317.5 million, plus accrued
dividends, all outstanding shares of 8% Series B Preferred Stock, par value
$1.00 of A&A. On January 17, 1997, the Company purchased all 4,846,232 shares
of Series B Preferred Stock. Each share of Series B Preferred Stock is
currently convertible into approximately 2.94 shares of Class D Common Stock,
which Class D Common Stock is exchangeable for Common Stock on a share-for-
share basis.
The Merger Agreement provides for the Offer to be followed by a merger of
Purchaser into A&A pursuant to which all remaining Shares (other than stock of
A&A owned by A&A, the Company or any of their respective subsidiaries and
stock as to which appraisal rights are available and properly exercised under
Maryland law) will be converted into a right to receive $17.50 cash per Share.
A special meeting of A&A's stockholders will be held on or about February 20,
1997 to vote upon the Merger. Pursuant to the provisions of A&A's Charter and
applicable Maryland corporation law, the affirmative vote of the holders of a
majority of the voting power of the outstanding shares of Common Stock, Class
A Common Stock, Class C Common Stock and the Series B Preferred Stock, voting
together as a single class, is required for approval of the Merger. Because
the Company and Purchaser own all of the Series B Preferred Stock and 97% of
the outstanding shares of Common Capital Stock, the Company and Purchaser have
the ability to approve the Merger without the vote of any other stockholder.
The Merger Agreement obligates the Company to cause all the capital stock of
A&A owned by the Company and its subsidiaries to be voted in favor of the
Merger. The Merger will be effected promptly after stockholder approval of the
Merger.
Purchaser's payment of approximately $775 million for the aggregate purchase
price of the Shares purchased by Purchaser in the Offer was funded with
capital contributions to Purchaser by the Company. The Company derived the
funds necessary for such capital contribution and the funds necessary to
purchase the Series B Preferred Stock from cash on hand, the proceeds from the
sale of commercial paper and fixed maturities and the proceeds of the sale of
the Old Capital Securities. See "Pro Forma Consolidated Financial
Information."
A&A is an insurance holding company which, through its subsidiaries,
provides professional risk management consulting, insurance brokerage and
human resource management consulting on a global basis. A&A's revenues were
$1.3 billion in 1995 and $1.0 billion for the nine-month period ended
September 30, 1996. Based on 1995 revenues, management of the Company believes
that A&A is the fourth largest brokerage company in the world. Since 1994, A&A
has engaged in a significant restructuring of its operations and, for the nine
months ended September 30, 1996, A&A reported net income of $47.7 million, a
41.7% decrease from its net income of $81.9 million for the same period in the
previous year.
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PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information for the
Company is based on historical financial statements of the Company and of A&A
which are incorporated by reference into this Prospectus. The unaudited pro
forma condensed consolidated statement of financial position at September 30,
1996 has been prepared as if the acquisition of A&A and the issuance of the
Capital Securities and other financing had been consummated on September 30,
1996, and the unaudited pro forma condensed consolidated statements of income
for the year ended December 31, 1995 and the nine months ended September 30,
1996 have been prepared as if the acquisition of A&A and the issuance of the
Capital Securities and other financing had been consummated on January 1,
1995. Unaudited pro forma financial data do not purport to be indicative of
either the future results of operations or the results of operations that
would have occurred if these transactions had been consummated on the
indicated dates. The pro forma adjustments are based upon available
information and certain assumptions that the Company believes to be
reasonable.
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AON CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 1996
(IN MILLIONS)
<TABLE>
<CAPTION>
HISTORICAL
---------------------
ALEXANDER
AON & PRO FORMA PRO FORMA
CORPORATION ALEXANDER ADJUSTMENTS CONSOLIDATED(1)
----------- --------- ----------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities avail-
able for sale........... $ 2,707.4 $ -- $(200.0)(1) $ 2,507.4
Equity securities........ 821.3 -- -- 821.3
Short-term investments... 1,174.2 286.1 -- 1,460.3
Other investments........ 219.6 21.4 -- 241.0
Cash..................... 226.4 758.2 (100.0)(1) 884.6
Brokerage and other re-
ceivables............... 3,920.2 1,200.7 -- 5,120.9
Intangible assets includ-
ing goodwill............ 1,393.4 221.2 850.5 (2) 2,465.1
Assets held under special
contracts............... 305.9 -- -- 305.9
Other assets............. 1,458.6 434.4 -- 1,893.0
--------- -------- ------- ---------
Total Assets......... $12,227.0 $2,922.0 $ 550.5 $15,699.5
========= ======== ======= =========
LIABILITIES AND STOCKHOLD-
ERS' EQUITY
Total policy liabilities. $ 3,795.2 $ -- $ -- $ 3,795.2
Insurance premiums pay-
able.................... 3,394.1 1,775.9 -- 5,170.0
Short term borrowings.... 59.6 21.5 153.0 (1) 234.1
Notes payable and debt
guarantee of employee
stock ownership plan.... 522.9 142.4 -- 665.3
Liabilities held under
special contracts....... 305.9 -- -- 305.9
Other liabilities........ 1,381.2 519.7 60.0 (2) 1,960.9
--------- -------- ------- ---------
Total Liabilities.... 9,458.9 2,459.5 213.0 12,131.4
--------- -------- ------- ---------
Redeemable Preferred Stock. 50.0 -- -- 50.0
Company-obligated
Mandatorily Redeemable
Preferred Capital Securi-
ties of Subsidiary........ -- -- 800.0 (1) 800.0
STOCKHOLDERS' EQUITY
Preferred stock
8% cumulative perpetual
preferred stock....... 5.5 -- -- 5.5
6.25% cumulative
convertible
exchangeable preferred
stock................. 2.1 -- -- 2.1
Series A Preferred
Stock................. -- 2.3 (2.3)(3) --
Series B Preferred
Stock................. -- 4.8 (4.8)(4) --
Common stock............. 111.5 43.4 (43.4) 111.5
Paid-in additional capi-
tal..................... 454.1 666.7 (666.7) 454.1
Retained earnings and
other less treasury
stock................... 2,144.9 (254.7) 254.7 2,144.9
--------- -------- ------- ---------
Total Stockholders'
Equity.............. 2,718.1 462.5 (462.5)(2) 2,718.1
--------- -------- ------- ---------
Total Liabilities and
Stockholders' Equi-
ty.................. $12,227.0 $2,922.0 $ 550.5 $15,699.5
========= ======== ======= =========
</TABLE>
See accompanying notes.
26
<PAGE>
AON CORPORATION
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 1996
1. Reflects the acquisition of A&A at a price of $1,253 million and funding
sources for the acquisition as follows (in millions):
<TABLE>
<S> <C>
Sale of fixed maturities........................................ $ 200.0
Issuance of commercial paper.................................... 153.0
Issuance of Capital Securities.................................. 800.0
A&A cash used to finance transaction............................ 100.0
--------
Purchase Price................................................ $1,253.0
========
</TABLE>
The effect of Aon's acquisition of the Bain Hogg Group plc ("Bain Hogg") on
October 18, 1996 is not included. The purchase price was $260 million. Bain
Hogg's total assets as of September 30, 1996 were approximately $1.0 billion.
2. Assumes that Aon's purchase price allocation resulted in additional
goodwill of $850.5 million which was calculated as follows (in millions):
<TABLE>
<S> <C>
Purchase price.................................................. $1,253.0
A&A stockholders' equity........................................ (462.5)
Purchase related liabilities net of tax......................... 60.0
--------
Goodwill........................................................ $ 850.5
========
</TABLE>
3. Assumes that all of the Series A Preferred Stock was converted to cash at
a cost of $121 million to Aon.
4. Reflects the purchase by Aon of all of the Series B Preferred Stock for
$318 million.
27
<PAGE>
AON CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1995
(MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
-----------------------
ALEXANDER
AON & PRO FORMA PRO FORMA
CORPORATION ALEXANDER ADJUSTMENTS CONSOLIDATED(1)
----------- --------- ----------- ---------------
<S> <C> <C> <C> <C>
REVENUE
Brokerage commissions
and fees.............. $1,651.3(2) $1,219.5 $ -- $2,870.8
Premiums earned........ 1,426.5 -- -- 1,426.5
Net investment income.. 329.4 82.1 (20.3)(3) 391.2
Realized investment
gains................. 13.1 -- -- 13.1
Other income........... 45.4(2) 32.7 -- 78.1
-------- -------- ------ --------
Total Revenue........ 3,465.7 1,334.3 (20.3) 4,779.7
-------- -------- ------ --------
BENEFITS AND EXPENSES
Commissions and general
expenses.............. 1,982.3 1,147.4 -- 3,129.7
Benefits to policyhold-
ers................... 698.5 -- -- 698.5
Interest expense....... 37.3 18.6 8.2 (4) 64.1
Amortization of de-
ferred policy acquisi-
tion costs............ 207.5 -- -- 207.5
Amortization of intan-
gible assets.......... 82.1 12.3 34.1 (5) 128.5
-------- -------- ------ --------
Total Benefits and
Expenses............ 3,007.7 1,178.3 42.3 4,228.3
-------- -------- ------ --------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAX AND MINORITY INTER-
EST..................... 458.0 156.0 (62.6) 551.4
Provision for income
tax (benefit)......... 154.3 60.9 (10.6)(6) 204.6
-------- -------- ------ --------
INCOME FROM CONTINUING
OPERATIONS BEFORE MINOR-
ITY INTEREST............ 303.7 95.1 (52.0) 346.8
Minority interest, in-
cluding subsidiary dis-
tributions.............. -- (5.7) (41.3)(7) (47.0)
-------- -------- ------ --------
INCOME FROM CONTINUING
OPERATIONS............... 303.7 89.4(8) (93.3) 299.8
Preferred stock divi-
dends................... (24.7) (25.4) 25.4 (9) (24.7)
-------- -------- ------ --------
INCOME FROM CONTINUING
OPERATIONS ATTRIBUTABLE
TO COMMON STOCKHOLDERS.. $ 279.0 $ 64.0 $(67.9) $ 275.1
======== ======== ====== ========
Income from continuing
operations per share
attributable to common
stockholders............ $ 2.57 $ 2.53
Average common and common
equivalent shares
outstanding............. 108.7 108.7
</TABLE>
See accompanying notes.
28
<PAGE>
AON CORPORATION
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1995
1. Reflects the acquisition of A&A at a price of $1,253 million and funding
sources for the acquisition as follows (in millions):
<TABLE>
<S> <C>
Sale of fixed maturities........................................ $ 200.0
Issuance of commercial paper.................................... 153.0
Issuance of Capital Securities.................................. 800.0
A&A cash used to finance transaction............................ 100.0
--------
Purchase Price.................................................. $1,253.0
========
</TABLE>
The effect of Aon's acquisition of Bain Hogg on October 18, 1996 is not
included. The purchase price was $260 million. Bain Hogg's revenue and pretax
income for the year ended December 31, 1995 were $333 million and $33 million,
respectively.
The unaudited pro forma condensed consolidated statement of income does not
include the potential effect of one-time restructuring charges which
management of Aon expects to be incurred in the next twelve months in the
range of $100 to $150 million related to the A&A and Bain Hogg acquisitions.
This statement also does not include any anticipated cost savings that may be
realized as a result of the restructuring. Management of Aon estimates cost
savings related to the A&A and Bain Hogg acquisitions should be in excess of
$100 million annually.
2. Certain historical amounts have been reclassified to conform to the
presentation for the nine months ended September 30, 1996.
3. Reflects foregone investment income on cash of $100 million at an assumed
rate of 5.35% held by A&A and on fixed maturities of $200 million at an
assumed rate of 7.5% held by Aon.
4. Reflects interest expense on $153 million of commercial paper at an
assumed rate of 5.35%.
5. Assumes Aon amortizes intangible assets over a 25 year period.
6. Assumes an effective tax rate of 37% on the pro forma adjustments
excluding amortization of intangible assets.
7. Reflects Distributions on the Capital Securities of $65.6 million net of
a tax benefit of $24.3 million.
8. Includes non-recurring revenues of $30.4 million ($20.1 million after
tax) related to A&A's sale of certain operations and non-recurring
restructuring and special charges of $17.6 million.
9. Reflects elimination of the dividends on the Series A Preferred Stock and
the Series B Preferred Stock.
29
<PAGE>
AON CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1996
(MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
---------------------
ALEXANDER
AON & PRO FORMA PRO FORMA
CORPORATION ALEXANDER ADJUSTMENTS CONSOLIDATED(1)
----------- --------- ----------- ---------------
<S> <C> <C> <C> <C>
REVENUE
Brokerage commissions
and fees............... $1,368.0 $920.6 $ -- $2,288.6
Premiums earned......... 1,141.4 -- -- 1,141.4
Net investment income... 269.7 57.4 (15.2)(2) 311.9
Realized investment in-
come................... 3.1 -- -- 3.1
Other income............ 36.6 0.6 -- 37.2
-------- ------ ------ --------
Total Revenue......... 2,818.8 978.6 (15.2) 3,782.2
-------- ------ ------ --------
BENEFITS AND EXPENSES
Commissions and general
expenses............... 1,621.4 867.4 -- 2,488.8
Benefits to policyhold-
ers.................... 582.1 -- -- 582.1
Interest expense........ 28.4 11.8 6.1 (3) 46.3
Amortization of deferred
policy acquisition
costs.................. 156.4 -- -- 156.4
Amortization of intangi-
ble assets............. 55.6 11.7 25.5 (4) 92.8
-------- ------ ------ --------
Total Benefits and Ex-
penses............... 2,443.9 890.9 31.6 3,366.4
-------- ------ ------ --------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAX AND MINORITY
INTEREST................. 374.9 87.7 (46.8) 415.8
Provision for income tax
(benefit).............. 129.3 35.0 (7.9)(5) 156.4
-------- ------ ------ --------
INCOME FROM CONTINUING OP-
ERATIONS BEFORE MINORITY
INTEREST................. 245.6 52.7 (38.9) 259.4
Minority interest, includ-
ing subsidiary distribu-
tions.................... -- (5.0) (31.0)(6) (36.0)
-------- ------ ------ --------
INCOME FROM CONTINUING OP-
ERATIONS................. 245.6 47.7 (69.9) 223.4
Preferred stock dividends. (15.2) (19.9) 19.9 (7) (15.2)
-------- ------ ------ --------
INCOME FROM CONTINUING OP-
ERATIONS ATTRIBUTABLE TO
COMMON STOCKHOLDERS...... $ 230.4 $ 27.8 $(50.0) $ 208.2
======== ====== ====== ========
Income from continuing op-
erations per share at-
tributable to common
stockholders............. $ 2.11 $ 1.90
Average common and common
equivalent shares
outstanding.............. 109.7 109.7
</TABLE>
See accompanying notes.
30
<PAGE>
AON CORPORATION
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1996
1. Reflects the acquisition of A&A at a price of $1,253 million and funding
sources for the acquisition as follows (in millions):
<TABLE>
<S> <C>
Sale of fixed maturities........................................ $ 200.0
Issuance of commercial paper.................................... 153.0
Issuance of Capital Securities.................................. 800.0
A&A cash used to finance transaction............................ 100.0
--------
Purchase Price................................................ $1,253.0
========
</TABLE>
The effect of Aon's acquisition of Bain Hogg on October 18, 1996 is not
included. The purchase price was $260 million. Bain Hogg's revenue and pretax
income for the nine months ended September 30, 1996 were $245 million and $16
million, respectively.
The unaudited pro forma condensed consolidated statement of income does not
include the potential effect of one-time restructuring charges which
management of Aon expects to be incurred in the next twelve months in the
range of $100 to $150 million related to the A&A and Bain Hogg acquisitions.
This statement also does not include any anticipated cost savings that may be
realized as a result of restructuring. Management of Aon estimates cost
savings related to the A&A and Bain Hogg acquisitions should be in excess of
$100 million annually.
2. Reflects foregone investment income on cash of $100 million held by A&A
at an assumed rate of 5.35% and on fixed maturities of $200 million held by
Aon at an assumed rate of 7.5%.
3. Reflects interest expense on $153 million of commercial paper at an
assumed rate of 5.35%.
4. Assumes that Aon amortizes intangible assets over a 25 year period.
5. Assumes an effective tax rate of 37% on the pro forma adjustments
excluding amortization of intangible assets.
6. Reflects Distributions on the Capital Securities of $49.2 million net of
a tax benefit of $18.2 million.
7. Reflects elimination of the dividends on the Series A Preferred Stock and
the Series B Preferred Stock.
31
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth Aon's historical ratios of Earnings to Fixed
Charges for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ ------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratios of Earnings to
Fixed Charges.......... 7.6 6.7 6.6 5.9 5.4 3.6 4.8
</TABLE>
The following table sets forth Aon's pro forma ratios of Earnings to Fixed
Charges for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Pro Forma Ratios of Earnings to Fixed Charges (1)... 4.1 3.7
Supplemental Pro Forma Ratios of Earnings to Fixed
Charges (2)........................................ 3.5 3.4
</TABLE>
- --------
(1) Gives effect to the increase in Fixed Charges as a result of the issuance
of the Capital Securities.
(2) Gives effect to the increase in Fixed Charges as a result of the issuance
of the Capital Securities and the acquisition of A&A as reflected in the
pro forma condensed consolidated statements of income. The supplemental
pro forma ratios exclude any restructuring charges that may be incurred
and any cost savings Aon may realize. See "Pro Forma Consolidated
Financial Information."
For purposes of computing the foregoing ratios: (i) Earnings consist of
income from continuing operations before provision for income taxes and
excluding cumulative effects of accounting changes plus Fixed Charges; and
(ii) Fixed Charges consist of interest on indebtedness, the portion of rental
payments on operating leases estimated to represent an interest component and
interest related to the Company's guarantees of the debt of its Employee Stock
Ownership Plan.
32
<PAGE>
ACCOUNTING TREATMENT FOR THE TRUST
For financial reporting purposes, the Trust is treated as a subsidiary of
the Company and, accordingly, the accounts of the Trust are included in the
consolidated financial statements of the Company. The Capital Securities will
be presented as a separate line item in the consolidated balance sheet of the
Company and appropriate disclosures about the Capital Securities, the
Guarantee and the Junior Subordinated Debentures will be included in the notes
to the consolidated financial statements. For financial reporting purposes,
the Company will record Distributions payable on the Capital Securities as a
charge in the consolidated statement of income.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Company and
the Trust entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Company and the Trust agreed to file and to
use their reasonable best efforts to cause to become effective with the
Commission a registration statement with respect to the exchange of the Old
Capital Securities for capital securities with terms identical in all material
respects to the terms of the Old Capital Securities. A copy of the
Registration Rights Agreement has been filed as an Exhibit to the Registration
Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Company and the Trust under the Registration Rights Agreement. The forms
and terms of the New Capital Securities are identical in all material respect
to the forms and terms of the Old Capital Securities, except that the New
Capital Securities have been registered under the Securities Act and therefore
will not be subject to certain restrictions on transfer applicable to the Old
Capital Securities and will not provide for any increase in the Distribution
rate thereon. In that regard, the Old Capital Securities provide, among other
things, that, if the Exchange Offer is not consummated by August 11, 1997, the
Distribution rate borne by the Old Capital Securities commencing on August 12,
1997, will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Risk Factors--Consequences
of a Failure to Exchange Old Capital Securities" and "Description of Old
Capital Securities."
The Exchange Offer is not being made to, nor will the Trust or the Company
accept tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered holder, or any person who
beneficially owns Old Capital Securities which are held of record by DTC who
desires to deliver such Old Capital Securities by book-entry transfer into the
Exchange Agent's account at DTC, or any person who beneficially owns Old
Capital Securities which are held of record by a nominee other than DTC (or
its nominee).
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee and
all of the Old Junior Subordinated Debentures, of which $824,000,000 aggregate
principal amount is outstanding, for a like aggregate principal amount of the
New Junior Subordinated Debentures. The New Guarantee and New Junior
Subordinated Debentures have been registered under the Securities Act.
TERMS OF THE EXCHANGE
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $800,000,000 aggregate Liquidation Amount of New
33
<PAGE>
Capital Securities for a like aggregate Liquidation Amount of Old Capital
Securities properly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the procedures described below. The
Trust will issue, promptly after the Expiration Date, an aggregate Liquidation
Amount of up to $800,000,000 of New Capital Securities in exchange for a like
aggregate Liquidation Amount of outstanding Old Capital Securities tendered
and accepted in connection with the Exchange Offer. Holders may tender their
Old Capital Securities for exchange in whole or in part having a Liquidation
Amount of not less than $100,000 (100 Old Capital Securities) or any integral
multiple of $1,000 (1 Old Capital Security) in excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. As of the date of this Prospectus,
$800,000,000 aggregate Liquidation Amount of Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered for or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and remain entitled to the benefits of
the Trust Agreement, but will not be entitled to any further registration
rights under the Registration Rights Agreement, except under limited
circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old
Capital Securities" and "Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange because
of an invalid tender, the occurrence of certain other events set forth herein
or otherwise, certificates for any such unaccepted Old Capital Securities will
be returned, without expense, to the tendering holder thereof promptly after
the Expiration Date. Holders who tender Old Capital Securities in connection
with the Exchange Offer will not be required to pay brokerage commissions or
fees or transfer taxes with respect to the exchange of Old Capital Securities
in connection with the Exchange Offer, except under those circumstances
described in the Letter of Transmittal. The Company will pay all charges and
expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "--Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE TRUSTEES OF THE TRUST
MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND
CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION
AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on , 1997
unless the Exchange Offer is extended by the Company and the Trust (in which
case the term "Expiration Date" shall mean the latest date and time to which
the Exchange Offer is extended).
The Company and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital
Securities have been accepted for exchange) if the Company or the Trust
determines, in its sole and absolute discretion, that any of the conditions
referred to under "--Conditions to the Exchange Offer" have occurred or exist
or have not been satisfied, (iii) to extend the Expiration Date and retain all
Old Capital Securities tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Capital Securities to withdraw their
tendered Old Capital Securities as described under "--Withdrawal Rights," and
(iv) to waive any condition or otherwise
34
<PAGE>
amend the terms of the Exchange Offer in any respect. If the Exchange Offer is
amended in a manner determined by the Company and the Trust to constitute a
material change, or if the Company and the Trust waive a material condition of
the Exchange Offer, the Company and the Trust will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
registered holders of the Old Capital Securities, and the Company and the
Trust will extend the Exchange Offer to the extent required by Rule 14e-1
under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Company and the Trust may choose to make any
public announcement and subject to applicable law, the Company and the Trust
shall have no obligation to publish, advertise or otherwise communicate any
such public announcement other than by issuing a release to an appropriate
news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange New Capital Securities for Old Capital Securities validly
tendered and not withdrawn (pursuant to the withdrawal rights described under
"--Withdrawal Rights") promptly after the Expiration Date.
Subject to the conditions set forth under "--Conditions to the Exchange
Offer," delivery of New Capital Securities in exchange for Old Capital
Securities tendered and accepted for exchange pursuant to the Exchange Offer
will be made only after timely receipt by the Exchange Agent of (i)
certificates for Old Capital Securities or a book-entry confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC, including an Agent's Message if the tendering holder does not
deliver a Letter of Transmittal, (ii) a completed and signed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message in lieu of the
Letter of Transmittal, and (iii) any other documents required by the Letter of
Transmittal. Accordingly, the delivery of New Capital Securities might not be
made to all tendering holders at the same time, and will depend upon when
certificates for Old Capital Securities, book-entry confirmations with respect
to Old Capital Securities and other required documents are received by the
Exchange Agent.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC. See "--Procedures for Tendering Old Capital Securities--Book-Entry
Transfer." The term "Agent's Message" means a message, transmitted by DTC to
and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment
from the tendering participant, which acknowledgment states that such
participant has received and agrees to be bound by the Letter of Transmittal
and that the Trust and the Company may enforce such Letter of Transmittal
against such participant.
Subject to the terms and conditions of the Exchange Offer, the Company and
the Trust will be deemed to have accepted for exchange, and thereby exchanged,
Old Capital Securities validly tendered and not withdrawn as, if and when the
Trust gives oral or written notice to the Exchange Agent of the Company's and
the Trust's acceptance of such Old Capital Securities for exchange pursuant to
the Exchange Offer. The Exchange Agent will act as agent for the Company and
the Trust for the purpose of receiving tenders of Old Capital Securities,
Letters of Transmittal and related documents, and as agent for tendering
holders for the purpose of receiving Old Capital Securities, Letters of
Transmittal and related documents and transmitting New Capital Securities
which will not be held in global form by DTC or a nominee of DTC to validly
tendering holders. Such exchange will be made promptly after the Expiration
Date. If for any reason whatsoever, acceptance for exchange or the exchange of
any Old Capital Securities tendered pursuant to the Exchange Offer is delayed
(whether before or after the Company's and the Trust's acceptance for exchange
of Old Capital Securities) or the Company and the Trust extend the Exchange
Offer or are unable to accept for exchange or exchange Old Capital Securities
35
<PAGE>
tendered pursuant to the Exchange Offer, then, without prejudice to the
Company's and the Trust's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Company and the Trust and subject to Rule 14e-
1(c) under the Exchange Act, retain tendered Old Capital Securities and such
Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "--Withdrawal
Rights."
Pursuant to an Agent's Message or a Letter of Transmittal, a holder of Old
Capital Securities will represent, warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Old Capital Securities, that the Trust will acquire good,
marketable and unencumbered title to the tendered Old Capital Securities, free
and clear of all liens, restrictions, charges and encumbrances, and the Old
Capital Securities tendered for exchange are not subject to any adverse claims
or proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the Old Capital Securities tendered pursuant to
the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital Securities
to be validly tendered by book-entry transfer, an Agent's Message or a
completed and signed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, and in either case any other documents required
by the Letter of Transmittal, must be delivered to the Exchange Agent by mail,
facsimile, hand delivery or overnight carrier at one of the Exchange Agent's
addresses set forth under "--Exchange Agent" on or prior to the Expiration
Date and either (i) such Old Capital Securities must be tendered pursuant to
the procedures for book-entry transfer set forth below or (ii) the guaranteed
delivery procedures set forth below must be complied with.
Except as set forth below, in order for Old Capital Securities to be validly
tendered by a means other than by book-entry transfer, a completed and signed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, and any other documents required by the Letter of Transmittal,
must be delivered to the Exchange Agent by mail, facsimile, hand delivery or
overnight carrier at one of the Exchange Agent's addresses set forth under "--
Exchange Agent" on or prior to the Expiration Date and either (i) such Old
Capital Securities must be delivered to the Exchange Agent on or prior to the
Expiration Date or (ii) the guaranteed delivery procedures set forth below
must be complied with.
If less than all Old Capital Securities are tendered, a tendering holder
should fill in the amount of Old Capital Securities being tendered in the
appropriate box on the Letter of Transmittal. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS TO BE BY MAIL, THE USE OF REGISTERED MAIL,
RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent and DTC have confirmed that any
Participant (as defined in "Description of Securities--Description of Capital
Securities--Form, Denomination, Book-Entry Procedures and Transfer--Depositary
Procedures") in DTC's book-entry transfer facility system may utilize DTC's
ATOP procedures to tender Old Capital Securities. The Exchange Agent will
establish an account with respect to the Old Capital Securities at DTC for
purposes of the Exchange Offer within two business days after the date of this
Prospectus. Any Participant may make a book-entry delivery of the Old Capital
Securities by causing DTC to transfer such Old Capital Securities into the
Exchange Agent's account at DTC in accordance with DTC's ATOP procedures for
transfer. However, although delivery of Old Capital Securities may be effected
through book-entry
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transfer into the Exchange Agent's account at DTC, an Agent's Message or a
completed and signed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees and any other documents required by the Letter of
Transmittal, must in any case be delivered to and received by the Exchange
Agent at one of its addresses set forth under "--Exchange Agent" on or prior to
the Expiration Date, or the guaranteed delivery procedure set forth below must
be complied with. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for Old Capital Securities need not be
endorsed and signature guarantees on a Letter of Transmittal are unnecessary
unless (a) a certificate for the Old Capital Securities is registered in a name
other than that of the person surrendering the certificate or (b) such
registered holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of
(a) or (b) above, such certificates for Old Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the endorsement
or signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined
therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer; (iii) a credit union; (iv) a
national securities exchange, registered securities association or clearing
agency; or (v) a savings association that is a participant in a Securities
Transfer Association (an "Eligible Institution"), unless surrendered on behalf
of such Eligible Institution. See Instructions 4 and 7 to the Letter of
Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a completed and signed Notice of Guaranteed Delivery, substantially
in the form accompanying the Letter of Transmittal, is delivered to the
Exchange Agent, as provided below, on or prior to Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a completed and signed Letter of Transmittal (or facsimile thereof) or, in
the case of a book-entry transfer, an Agent's Message in lieu of the Letter
of Transmittal, with any required signature guarantees and any other
documents required by the Letter of Transmittal, are received by the
Exchange Agent within five New York Stock Exchange trading days after the
date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
The Company's and the Trust's acceptance for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder, the Company and
the Trust upon the terms and subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Company and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Company and the Trust reserve the absolute right,
in their sole and absolute discretion, to reject any and all tenders determined
by them not to be in proper form or the acceptance of which, or exchange for,
may, in the view of counsel to the Company and the Trust, be unlawful. The
Company and the Trust also reserve the absolute right, subject to applicable
law, to waive any of the conditions of the Exchange Offer as set forth under
"--Conditions to the Exchange Offer" or any condition, defect or irregularity
in any tender of Old Capital Securities of any particular holder whether or not
similar conditions, defects or irregularities are waived in the case of other
holders.
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The Company's and the Trust's interpretation of the terms and conditions of
the Exchange Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding on all parties. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Company, the
Trust, any affiliates or assigns of the Company or the Trust, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any defects or irregularities in tenders or incur any liability for failure to
give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and, unless waived by the Company
and the Trust, proper evidence satisfactory to the Company and the Trust, in
their sole discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Capital Securities in reliance
on the position of the staff of the Division of Corporation Finance of the
Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Company nor the Trust
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Company and the Trust believe that New Capital Securities issued
pursuant to this Exchange Offer in exchange for Old Capital Securities may be
offered for resale, resold and otherwise transferred by a holder thereof (other
than a holder who is a broker-dealer) without further compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary course
of such holder's business and that such holder is not participating, and has no
arrangement or understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such New Capital Securities.
However, any holder of Old Capital Securities who is an "affiliate" of the
Company or the Trust or who intends to participate in the Exchange Offer for
the purpose of distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Trust to resell pursuant to Rule 144A
or any other available exemption under the Securities Act, (a) will not be able
to rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive
letters, (b) will not be permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
sale or other transfer of such Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In addition, as described
below, if any broker-dealer holds Old Capital Securities acquired for its own
account as a result of market-making or other trading activities and exchanges
such Old Capital Securities for New Capital Securities, then such broker-dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an "affiliate" of the Company or the Trust, (ii)
any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such New
Capital Securities. The Letter of Transmittal contains the foregoing
representations.
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In addition, the Company and the Trust may require a holder, as a condition to
such holder's eligibility to participate in the Exchange Offer, to furnish to
the Company and the Trust (or an agent thereof) in writing information as to
the number of "beneficial owners" (within the meaning of Rule 13d-3 under the
Exchange Act) on behalf of whom such holder holds the Capital Securities to be
exchanged in the Exchange Offer. Each broker-dealer that receives New Capital
Securities for its own account pursuant to the Exchange Offer must acknowledge
that it acquired the Old Capital Securities for its own account as the result
of market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. Based on the position taken by the staff of
the Division of Corporation Finance of the Commission in the interpretive
letters referred to above, the Company and the Trust believe that broker-
dealers who acquired Old Capital Securities for their own accounts as a result
of market-making activities or other trading activities ("Participating Broker-
Dealers") may fulfill their prospectus delivery requirements with respect to
the New Capital Securities received upon exchange of such Old Capital
Securities (other than Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains a description
of the plan of distribution with respect to the resale of such New Capital
Securities. Accordingly, this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer during the 90-
day period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its
own account as a result of market-making or other trading activities. Subject
to certain provisions set forth in the Registration Rights Agreement and to the
limitations described herein, the Company and the Trust have agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 90 days after the Expiration Date or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." Any person, including
any Participating Broker-Dealer, who is an "affiliate" of the Company or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of any Agent's Message in
lieu thereof, that, upon receipt of notice from the Company or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any
material respect or which causes this Prospectus to omit to state a material
fact necessary in order to make the statements contained or incorporated by
reference herein, in light of the circumstances under which they were made, not
misleading or of the occurrence of certain other events specified in the
Registration Rights Agreement, such Participating Broker-Dealer will suspend
the sale of New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) pursuant to this Prospectus until the
Company or the Trust has amended or supplemented this Prospectus to correct
such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer or the Company or
the Trust has given notice that the sale of the New Capital Securities (or the
New Guarantee or the New Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
WITHDRAWAL RIGHTS
As set forth below, tenders of Old Capital Securities may be withdrawn at any
time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile transmission
of such notice of withdrawal must be received by the Exchange Agent at one of
its addresses set forth under "--Exchange Agent" on or prior to the Expiration
Date. Any such notice of withdrawal must specify the name of the person who
tendered
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the Old Capital Securities to be withdrawn, the aggregate Liquidation Amount of
Old Capital Securities to be withdrawn, and (if certificates for such Old
Capital Securities have been tendered) the name of the registered holder of the
Old Capital Securities as set forth on the certificate for the Old Capital
Securities, if different from that of the person who tendered such Old Capital
Securities. If certificates for the Old Capital Securities have been delivered
or otherwise identified to the Exchange Agent, then prior to the physical
release of such certificates for the Old Capital Securities, the tendering
holder must submit the serial numbers shown on the particular certificates for
the Old Capital Securities to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Old Capital Securities tendered for the account of an Eligible Institution. If
Old Capital Securities have been tendered pursuant to the procedures for book-
entry transfer set forth in "--Procedures for Tendering Old Capital
Securities," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawn Old Capital Securities.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described
above under "--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. Neither the Company, the Trust, any affiliates or assigns of
the Company or the Trust, the Exchange Agent nor any other person shall be
under any duty to give any notification of any irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
Any Old Capital Securities which have been tendered but which are withdrawn
will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON NEW CAPITAL SECURITIES
Each New Capital Security will accumulate Distributions from the most recent
Distribution Date on the Old Capital Securities surrendered in exchange for
such New Capital Securities or, if no Distributions have been paid or provided
for on such Old Capital Securities, from January 1, 1997. As a result, holders
of Old Capital Securities that are accepted for exchange will not receive
accumulated Distributions on such Old Capital Securities for any period from
and after the most recent Distribution Date on such Old Capital Securities or,
if no Distributions have been paid or provided for on such Old Capital
Securities, from and after January 1, 1997, and such holders will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Company and the Trust will not be required to accept
any Old Capital Securities for exchange or to exchange any New Capital
Securities for any Old Capital Securities, and, as described below, may
terminate the Exchange Offer (whether or not any Old Capital Securities have
been accepted for exchange) or may waive any conditions to or amend the
Exchange Offer, if any of the following conditions have occurred or exists or
have not been satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the New Capital Securities issued pursuant
to the Exchange Offer in exchange for Old Capital Securities to be offered
for resale, resold and otherwise transferred by holders thereof (other than
broker-dealers and any such holder which is an "affiliate" of the Company
or the Trust within the meaning of Rule 405 under the Securities Act)
without compliance with the registration and prospectus delivery provisions
of the Securities Act provided that such New Capital Securities are
acquired in the ordinary course of such holders' business and such holders
have no arrangement or understanding with any person to participate in the
distribution of such New Capital Securities;
(b) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in the Company's and the Trust's judgment, would
reasonably be expected to impair the ability of the Company or the Trust to
proceed with the Exchange Offer;
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(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Company's and the Trust's judgment, would reasonably
be expected to impair the ability of the Company or the Trust to proceed
with the Exchange Offer;
(d) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Company's and
the Trust's judgment, would reasonably be expected to impair the ability of
the Company or the Trust to proceed with the Exchange Offer;
(e) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Company or the Trust, threatened for that purpose, or any governmental
approval has not been obtained, which approval the Company and the Trust
shall, in their sole discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby; or
(f) any change, or any development involving a prospective change, in the
business or financial affairs of the Company or any of its subsidiaries has
occurred which, in the sole judgment of the Company and the Trust, might
materially impair the ability of the Company or the Trust to proceed with
the Exchange Offer.
If the Company and the Trust determine in their sole and absolute discretion
that any of the foregoing events or conditions has occurred or exists or has
not been satisfied, the Company and the Trust may, subject to applicable law,
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such waiver
or amendment constitutes a material change to the Exchange Offer, the Company
and the Trust will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered holders of the Old
Capital Securities, and the Company and the Trust will extend the Exchange
Offer to the extent required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Delivery of a Letter of Transmittal and any other documents required by
the Letter of Transmittal, questions, requests for assistance, and requests
for additional copies of this Prospectus or of a Letter of Transmittal should
be directed to the Exchange Agent as follows:
By Registered or By Facsimile: By Hand/Overnight
Certified Mail: Carrier:
The Bank of New York
The Bank of New York Attn: Enrique Lopez The Bank of New York
101 Barclay Street--7E (212) 571-3080 101 Barclay Street
New York, New York 10286 Corporate Trust Services
Window
Attn: Reorganization (For Eligible
Section Institutions Only) Ground Level
Confirm by Telephone New York, New York 10286
(212) 815-6333 Attn: Reorganization
Section
For Information Call:
(212) 815-6333
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay
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brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this
Prospectus and related documents to the beneficial owners of Old Capital
Securities, and in handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Capital Securities in connection with the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering holder.
Neither the Company nor the Trust will make any payment to brokers, dealers
or others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF SECURITIES
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Trust has issued Old
Capital Securities and Common Securities and, in the event the Exchange Offer
is consummated, will issue New Capital Securities. New Capital Securities will
represent undivided beneficial interests in the assets of the Trust and the
holders thereof will be entitled to a preference in certain circumstances with
respect to Distributions and amounts payable on redemption of the Trust
Securities or liquidation of the Trust over the Common Securities. See "--
Subordination of Common Securities." The Trust Agreement has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The forms and terms of the New Capital Securities are identical in all
material respects to the forms and terms of the Old Capital Securities, except
that the New Capital Securities have been registered under the Securities Act
and therefore are not subject to certain restrictions on transfer applicable
to the Old Capital Securities and will not provide for any increase in the
Distribution rate thereon. Accordingly, as the context may require, unless
expressly stated otherwise, "Capital Securities" means the Old Capital
Securities and, in the event the Exchange Offer is consummated, the New
Capital Securities. This summary of certain provisions of the Capital
Securities, the Common Securities and the Trust Agreement does not purport to
be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Trust Agreement, including the definitions
therein of certain terms.
GENERAL
The Capital Securities (including the Old Capital Securities and the New
Capital Securities) are limited to $800,000,000 aggregate Liquidation Amount
at any one time outstanding. The Capital Securities rank on a parity, and
payments are made thereon pro rata, with the Common Securities except as
described under "--Subordination of Common Securities." The New Capital
Securities and any Old Capital Securities that remain outstanding after
consummation of the Exchange Offer will constitute a single series of Capital
Securities under the Trust Agreement and, accordingly, will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement. Legal title to
the Old Junior Subordinated Debentures is (and legal title to the New Junior
Subordinated Debentures will be) held by the Property Trustee in trust for the
benefit of the holders of Capital Securities and Common Securities. The New
Guarantee to be executed by the Company for the benefit of the holders of
Capital Securities will be a guarantee on a subordinated basis but will not
guarantee payment of Distributions or amounts payable on redemption of Capital
Securities or on liquidation of the Trust when the Trust does not have funds
on hand available to make such payments. See "Description of Guarantee."
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DISTRIBUTIONS
Distributions on the Capital Securities are cumulative, accumulate from
January 1, 1997 and are payable semi-annually in arrears at the annual rate of
8.205% of the Liquidation Amount on January 1 and July 1 of each year,
commencing July 1, 1997, to the holders of the Capital Securities on the
relevant record dates. The record dates are the immediately preceding December
15 and June 15, respectively. The amount of Distributions payable for any
period is computed on the basis of a 360-day year of twelve 30-day months. In
the event that any date on which Distributions are payable on the Capital
Securities is not a Business Day (as defined below), 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), 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" means any day which is not
a Saturday or Sunday and which is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by law
or executive order to close or a day on which the principal corporate trust
office of the Property Trustee or the Debenture Trustee is closed for
business.
So long as no Debenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture to defer the payment of interest on
the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 10 consecutive semi-annual periods, during which
Extension Period the Company has the right to make partial payments of
interest on any Interest Payment Date. No Extension Period may extend beyond
the Stated Maturity or any earlier prepayment date. As a consequence of any
such deferral, semi-annual Distributions on the Capital Securities by the
Trust will be deferred during any such Extension Period. Distributions to
which holders of the Capital Securities are entitled will accumulate
Additional Distributions at the rate of 8.205% per annum, compounded semi-
annually from the relevant payment date for such Distributions, but not
exceeding the interest rate then accruing on the Junior Subordinated
Debentures. The term "Distributions" as used herein shall include any such
Additional Distributions and Additional Tax Sums, if applicable.
During any such Extension Period, the Company may not, and may not permit
any subsidiary of the Company to (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank on a parity with or junior to the
Junior Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company (including Other Guarantees) if such guarantee ranks on a parity with
or junior to the Junior Subordinated Debentures (other than (a) dividends or
distributions in common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of capital stock under any such plan, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee and (d) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers, employees, consultants or advisers).
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity or any earlier prepayment date. At any time
following the termination of any such Extension Period and the payment of all
amounts then due, the Company may elect to begin a new Extension Period,
subject to the foregoing requirements. The Company must give the Property
Trustee and the Debenture Trustee notice of its election to begin or extend
any Extension Period at least five Business Days prior to the earlier of (i)
the next succeeding date the Distributions on the Capital Securities would
have been payable but for the election to begin or extend such Extension
Period 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 Capital Securities of the record date or the
date such Distributions are payable, but in any event not fewer than five
Business Days prior to such record date. There is no limitation on the number
of times that
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the Company may elect to begin an Extension Period. See "Description of Junior
Subordinated Debentures--Option to Defer Interest Payments" and "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount."
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debentures. See "Description of Junior Subordinated Debentures--General." If
the Company does not make interest payments on the Junior Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Capital Securities. The payment of Distributions (if and
to the extent the Trust has funds legally available for the payment of such
Distributions and cash sufficient to make such payments) is guaranteed by the
Company on a subordinated basis as set forth under "Description of Guarantee."
REDEMPTION
Upon the repayment in full at the Stated Maturity or prepayment in whole
(but not in part) of the Junior Subordinated Debentures, the proceeds from
such repayment or prepayment shall be applied by the Property Trustee to
redeem the Trust Securities, upon not less than 15 nor more than 60 days'
notice of a date of redemption (the "Redemption Date"), at the applicable
Redemption Price, which shall be equal to (i) in the case of the repayment in
full of the Junior Subordinated Debentures at the Stated Maturity, the
Maturity Redemption Price (equal to the principal of, and accrued interest on,
the Junior Subordinated Debentures) or (ii) in the case of the optional
prepayment by the Company in whole but not in part of the Junior Subordinated
Debentures upon the occurrence and continuation of a Tax Event or an
Investment Company Event at the Event Redemption Price (which is equal to the
Event Prepayment Price in respect of the Junior Subordinated Debentures) (see
"Description of Junior Subordinated Debentures--Tax Event or Investment
Company Event Prepayment").
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Company has the right to terminate the Trust at any time and, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, cause the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Such right is
subject to the Company's having received an opinion of counsel to the effect
that such distribution will not be a taxable event to holders of Capital
Securities for United States federal income tax purposes.
Under current United States federal income tax law and interpretations and
assuming, as expected, the Trust is treated as a grantor trust, a distribution
of the Junior Subordinated Debentures will not be a taxable event to holders
of the Capital Securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or other circumstances, however, the distribution
could be a taxable event to holders of the Capital Securities. See "Certain
Federal Income Tax Consequences--Distribution of Junior Subordinated
Debentures to Holders of Capital Securities."
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, a receivership of the Company or dissolution or
liquidation of the Company; (ii) the dissolution or liquidation of the
Company; (iii) distribution of a Like Amount (as defined below) of the Junior
Subordinated Debentures to the holders of the Trust Securities if the Company,
as Depositor, has given written direction to the Property Trustee to terminate
the Trust (which direction is optional and wholly within the discretion of the
Company, as Depositor, subject to the requirement that the Company receive an
opinion of counsel to the effect that such distribution will not be a taxable
event to holders of Capital Securities for United States federal income tax
purposes); (iv) redemption of all of the Trust Securities in connection with
the repayment of all Junior Subordinated Debentures as described above under
"--Redemption"; (v) the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction and (vi) the expiration of the term of the
Trust on January 1, 2028.
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If a termination occurs as described in clause (i), (ii), (iii) or (v)
above, the 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 the Trust as provided by
applicable law, to the holders of the Trust Securities a Like Amount of the
Junior Subordinated Debentures, unless such distribution is determined by the
Property Trustee not to be practicable, in which event such holders will be
entitled to receive out of the liquidation of the assets of the Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated 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 the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Trust Securities shall be paid on a pro rata basis. The holder(s)
of the Common Securities will be entitled to receive Liquidation Distributions
upon any such liquidation pro rata with the holders of the Capital Securities,
except that if a Debenture Event of Default has occurred and is continuing,
the Capital Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
"Like Amount" means Junior Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Junior Subordinated Debentures are distributed.
If there is no early termination of the Trust, the Capital Securities will
remain outstanding until the repayment of the Junior Subordinated Debentures
at the Stated Maturity.
After the liquidation date for any distribution of Junior Subordinated
Debentures to holders of the Trust Securities, (i) the Capital Securities will
no longer be deemed to be outstanding, (ii) DTC or its nominee, as the record
holder of the Capital Securities, will receive a registered global certificate
or certificates representing the Junior Subordinated Debentures to be
delivered upon such distribution and (iii) any certificates representing
Capital Securities not held by DTC or its nominee will be deemed to represent
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of such Capital Securities and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on such
Capital Securities until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon the Company will issue to
such holder, and the Debenture Trustee will authenticate, a certificate
representing such Junior Subordinated Debentures.
REDEMPTION PROCEDURES
Trust Securities shall be redeemed, if at all, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or prepayment of
the Junior Subordinated Debentures. Redemptions of the Trust Securities shall
be made and the applicable Redemption Price shall be payable on the Redemption
Date only to the extent that the Trust has funds on hand available for the
payment of such applicable Redemption Price. See "--Subordination of Common
Securities."
If the Property Trustee gives a notice of redemption in respect of any
Capital Securities, then, by 10:00 a.m., New York City time, on the Redemption
Date, the Company shall deposit sufficient funds with the Property Trustee to
pay the applicable Redemption Price. If such deposit has been made, then by
12:00 noon, New York City time, on the Redemption Date, to the extent funds
are available, with respect to the Capital Securities held in global form, the
Property Trustee will irrevocably deposit with DTC funds sufficient to pay the
applicable Redemption Price and will give DTC irrevocable instructions and
authority to pay the applicable Redemption Price to the holders of the Capital
Securities. See "--Form, Denomination, Book-Entry Procedures and Transfer" and
"--Payment and Paying Agency." With respect to the Capital Securities held in
certificated form, the Property Trustee, to the extent funds are available,
will irrevocably deposit with the paying agent for the Capital Securities
funds sufficient to pay the applicable Redemption Price and will give such
paying agent irrevocable instructions and authority to pay the applicable
Redemption Price to the holders thereof upon surrender of their certificates
evidencing the Capital Securities. See "--Payment and Paying Agency."
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Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Capital Securities called for redemption shall be
payable to the holders of such Capital 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 the Capital Securities will cease, except the right
of the holders of the Capital Securities to receive the applicable Redemption
Price and any Distribution payable on or prior to the Redemption Date, but
without interest, and the Capital Securities will cease to be outstanding. In
the event that any Redemption Date of Capital Securities is not a Business
Day, then payment of the applicable 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). In the event that
payment of the applicable Redemption Price is improperly withheld or refused
and not paid either by the Trust or by the Company pursuant to the Guarantee
as described under "Description of Guarantee," Distributions on Capital
Securities will continue to accumulate at the then applicable rate, from the
Redemption Date originally established by the Trust to but excluding the date
such applicable Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of calculating
the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement.
Payment of the applicable Redemption Price on, and any distribution of
Junior Subordinated Debentures to holders of, the Trust Securities shall be
made to the applicable recordholders thereof as they appear on the register
therefor on the relevant record date, which shall be a date not more than 45
days nor less than 15 days prior to the Redemption Date or liquidation date,
as applicable.
Notice of any redemption will be mailed at least 15 days but not more than
60 days before the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated
Debentures, on and after the Redemption Date Distributions will cease to
accumulate on the Trust Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based
on the Liquidation Amounts of the Capital Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment
of any Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the applicable Redemption Price
the full amount of such Redemption Price on all outstanding Capital
Securities, 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 on, or Redemption Price of, the Capital
Securities then due and payable.
In the case of any Event of Default under the Trust Agreement resulting from
a Debenture Event of Default, the Company as holder of the Common Securities
will be deemed to have waived any right to act with respect to any such Event
of Default until the effect of all such Events of Default has been cured,
waived or otherwise eliminated. Until any such Events of Default have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Company as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act
on their behalf.
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EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an Event of Default under the
Trust Agreement (an "Event of Default") (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):
(i) the occurrence of a Debenture Event of Default (see "Description of
Junior Subordinated Debentures--Debenture Events of Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is addressed in clause (ii) or (iii) above) and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate Liquidation
Amount of the outstanding Capital Securities, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure to appoint a successor
Property Trustee within 60 days thereof.
Within 90 days after the occurrence of any Event of Default actually known
to the Property Trustee, the Property Trustee shall transmit notice of such
Event of Default to the holders of the Capital Securities, the Administrative
Trustees and the Company, as Depositor, unless such Event of Default shall
have been cured or waived. The Company, 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 the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities with respect to
payments of Distributions or upon termination of the Trust as described above.
See "--Liquidation of the Trust and Distribution of Junior Subordinated
Debentures" and "--Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
The holders of a majority in Liquidation Amount of Capital Securities may
remove the Property Trustee or the Delaware Trustee if a Debenture Event of
Default has occurred and is continuing. If the Property Trustee or the
Delaware Trustee is removed at a time when a Debenture Event of Default has
occurred and is continuing, the holders of a majority in Liquidation Amount of
Capital Securities may appoint a successor Property Trustee or Delaware
Trustee. If no Debenture Event of Default has occurred and is continuing at
such time, the Company, as holder of the Common Securities, may appoint a
successor Property Trustee or Delaware Trustee. If an Administrative Trustee
is removed, the Company, as holder of the Common Securities, shall promptly
appoint a successor. In no event will the holders of Capital Securities have
the right to vote to remove the Administrative Trustees, which voting rights
are vested exclusively in the Company, as holder of the Common Securities. If
a successor has not been so appointed, any holder of Capital Securities or
Common Securities (who has been a holder for at least six months), or a
resigning Trustee, in the case of the failure to appoint its successor, may
petition a court of competent jurisdiction to appoint a successor. Any
Delaware Trustee must meet the applicable requirements of Delaware law. Any
Property Trustee must be a national or state-chartered bank and at the time of
appointment have securities rated in one of the three highest rating
categories by a nationally recognized statistical rating organization and have
capital and surplus of at least $50,000,000. Each Administrative Trustee shall
be a current officer of the Company. No resignation or removal of an Issuer
Trustee and no appointment of
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a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust
Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee shall be a party, or any entity succeeding to all or substantially all
the corporate trust business of such Issuer Trustee, shall be the successor of
such Issuer Trustee under the Trust Agreement, provided such entity shall be
otherwise qualified and eligible.
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 substantially as an
entirety to any corporation or other entity, except as described below or
pursuant to a liquidation as described above in "--Liquidation of the Trust
and Distribution of Junior Subordinated Debentures." The Trust may, at the
request of the Company, as Depositor, and with the consent of the
Administrative Trustees, but without the consent of the holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as
such under the laws of any State; provided, however, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Capital Securities or (b) substitutes for the Capital
Securities other securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor Securities
rank the same as the Capital Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
the Company expressly appoints a trustee of such successor entity possessing
the same powers and duties as the Property Trustee as the holder of the Junior
Subordinated Debentures, (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 Capital
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded 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 Capital Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose substantially identical to
that of the Trust, (vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an
opinion from independent counsel to the 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 Capital Securities (including
any Successor Securities) in any material respect, and (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 Investment Company Act of 1940, as
amended (the "Investment Company Act"), and (viii) the Company 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, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets 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.
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT
Except as provided below and under "Description of Guarantee--Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities have no voting rights.
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The Trust Agreement may be amended from time to time by the Company, the
Property Trustee, the Delaware Trustee and the Administrative Trustees,
without the consent of the holders of the Trust Securities, (i) to cure any
ambiguity to correct or supplement any provisions in the Trust Agreement that
may be inconsistent with any other provision or to make any other provision
with respect to matters or questions arising under the Trust Agreement, which
shall not be inconsistent with the other provisions of the Trust Agreement,
(ii) to modify, eliminate or add to any provisions of the 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 Investment
Company Act or (iii) to provide the Property Trustee with the authority to
execute on behalf of the Administrative Trustees Capital Securities
certificates in certificated, fully registered form; provided, however, that
in the case of clauses (i) and (ii), such action shall not adversely affect in
any material respect the interests of any holder of Trust Securities or the
Property Trustee or the Delaware Trustee, and any amendments of the Trust
Agreement shall become effective when notice thereof is given to the holders
of the Trust Securities. The Trust Agreement may be amended by the Issuer
Trustees and the Company with (i) the consent of holders representing not less
than a majority (based upon Liquidation Amounts) of the outstanding Trust
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 Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an "investment company" under the Investment
Company Act. The Trust Agreement may not be amended without the consent of
each holder of Trust Securities 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 or (ii) restrict the right of a holder of Trust Securities
to institute suit for the enforcement of any such payment on or after such
date.
So long as any Junior Subordinated Debentures 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 Debenture Trustee
or executing any trust or power conferred on the Debenture Trustee with
respect to the Junior Subordinated Debentures, (ii) waive any past default
that is waivable under the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Junior Subordinated
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated
Debentures, where the consent of the holders of the Junior Subordinated
Debentures shall be required, without, in each case, obtaining the prior
approval of the holders of at least a majority in Liquidation Amount of all
outstanding Capital Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each holder of the Capital
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Capital Securities,
except by a subsequent vote of such holders. The Property Trustee shall notify
each holder of Capital Securities of any notice of default with respect to the
Junior Subordinated Debentures unless such default shall have been cured or
waived. In addition to obtaining the foregoing approvals of such holders of
the Capital 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 such action will not cause the Trust to be classified as an
association taxable as a corporation for United States federal income tax
purposes.
Any required approval of holders of Trust Securities may be given at a
meeting of such holders convened for such purpose. Any action that may be
taken by holders of Trust Securities at a meeting may be taken without a
meeting if holders of Trust Securities holding more than a majority of
outstanding Trust Securities (based upon their Liquidation Amount) shall
consent to the action in writing. The Property Trustee will cause a notice of
any meeting at which holders of Trust 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 Trust Securities in the manner
set forth in the Trust Agreement.
No vote or consent of the holders of Capital Securities is required for the
Trust to redeem and cancel the Capital Securities in accordance with the Trust
Agreement.
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Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustee, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
In the event that New Capital Securities are issued in certificated form,
such New Capital Securities will be in blocks having a Liquidation Amount of
not less than $100,000 (100 New Capital Securities) and may be transferred or
exchanged in such blocks in the manner and at the offices described below.
In the event that New Capital Securities are issued in registered, global
form (collectively, the "Global Capital Securities"), the Global Capital
Securities will be deposited upon issuance with the Property Trustee as
custodian for DTC, in New York, New York, and registered in the name of DTC or
its nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below.
Except as set forth below, Global Capital Securities may be transferred, in
whole and not in part, only to another nominee of DTC or to a successor of DTC
or its nominee. Beneficial interests in Global Capital Securities may not be
exchanged for New Capital Securities in certificated form except in the
limited circumstances described below. See "--Exchange of Book-Entry New
Capital Securities for Certificated New Capital Securities."
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The
Participants include securities brokers and dealers (including the Initial
Purchasers), banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to other entities such
as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a Participant, either directly or indirectly
(collectively, the "Indirect Participants"). Persons who are not Participants
may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures
established by it, (i) upon deposit of Global Capital Securities, DTC will
credit the accounts of Participants designated by the Exchange Agent with
portions of the Liquidation Amount of such Global Capital Securities and (ii)
ownership of such interests in such Global Capital Securities will be shown
on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Capital Securities).
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN GLOBAL CAPITAL SECURITIES
WILL NOT HAVE NEW CAPITAL SECURITIES REGISTERED IN THEIR NAME, WILL NOT
RECEIVE PHYSICAL DELIVERY OF NEW CAPITAL SECURITIES IN CERTIFICATED FORM AND
WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE
TRUST AGREEMENT FOR ANY PURPOSE.
Payments in respect of a Global Capital Security registered in the name of
DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms
of the Trust Agreement, the Property Trustee will treat the persons in whose
names the New Capital Securities, including Global Capital Securities, are
registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor
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any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to or payments made on account of beneficial ownership interests in
Global Capital Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's records relating
to the beneficial ownership interests in Global Capital Securities or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Company that its current practice, upon receipt of any payment in respect of
securities such as the New Capital Securities, is to credit the accounts of
the relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC
has reason to believe it will not receive payment on such payment date.
Payments by the Participants and the Indirect Participants to the beneficial
owners of New Capital Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee or the Trust. Neither the Trust nor the Property Trustee will be
liable for any delay by DTC or any of its participants in identifying the
beneficial owners of the New Capital Securities, and the Trust and the
Property Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Interests in Global Capital Securities will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and its participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of New Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in
Global Capital Securities are credited and only in respect of such portion of
the aggregate Liquidation Amount of the New Capital Securities as to which
such Participant or Participants has or have given such direction. However, if
there is an Event of Default under the Trust Agreement, DTC reserves the right
to exchange Global Capital Securities for legended New Capital Securities in
certificated form and to distribute such New Capital Securities to its
Participants.
The information in this section concerning DTC and their book-entry systems
has been obtained from sources that the Trust and the Company believe to be
reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
Exchange of Book-Entry New Capital Securities for Certificated New Capital
Securities
A Global Capital Security is exchangeable for New Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
or (y) has ceased to be a clearing agency registered under the Exchange Act
and the Company fails to appoint a successor Depositary within 90 days, (ii)
the Company in its sole discretion elects to cause the issuance of the New
Capital Securities in certificated form or (iii) there shall have occurred and
be continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default under the Trust Agreement. In all
cases, certificated New Capital Securities delivered in exchange for any
Global Capital Security or beneficial interests therein will be registered in
the names, and issued in any approved denominations, requested by or on behalf
of the Depositary (in accordance with its customary procedures).
PAYMENT AND PAYING AGENCY
Payments in respect of Global Capital Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution
Dates, or in respect of New Capital Securities that are not held by DTC, such
payments shall be made by check mailed to the address of the holder entitled
thereto as such
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address shall appear on the register. 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 the
Company. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee and the Company. 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 the Company) to
act as Paying Agent.
RESTRICTIONS ON TRANSFER
The New Capital Securities will be issued, and may be transferred only, in
blocks having a Liquidation Amount of not less than $100,000 (100 New Capital
Securities). Any attempted transfer, sale or other disposition of Capital
Securities in a block having a Liquidation Amount of less than $100,000 shall
be deemed to be void and of no legal effect whatsoever. Any such transferee
shall be deemed not to be the holder of such Capital Securities for any
purpose, including but not limited to the receipt of Distributions on such
Capital Securities, and such transferee shall be deemed to have no interest
whatsoever in such Capital Securities.
RATING
The Capital Securities have not been rated by S&P or Moody's. On February 4,
1997, S&P announced that the preferred stock of the Company was downgraded
from "AA-" to "A" and that the Company was removed from CreditWatch (where it
had been placed following the Company's announcement that it had entered into
the Merger Agreement with A&A). The preferred stock of the Company is
currently rated "a3" by Moody's (which is currently reviewing for downgrade
its ratings on the securities of the Company).
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the New
Capital Securities. The Property Trustee also acts as registrar and transfer
agent for the Old Capital Securities.
Registration of transfers of the Capital Securities may be effected without
charge by or on behalf of the Trust, but the 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. The Trust will not be required to
register or cause to be registered the transfer of the Capital Securities
after they have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, 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 Property Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Agreement at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous or
inconsistent provisions in the Trust Agreement or is unsure of the application
of any provision of the Trust Agreement, and the matter is not one on which
holders of the Capital Securities are entitled under the Trust Agreement to
vote, then the Property Trustee shall take such action as is directed by the
Company and if not so directed, shall take such action as it deems advisable
and in the best interests of the holders of the Trust 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 Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under
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the Investment Company Act or classified as other than a grantor trust for
United States federal income tax purposes and so that the Junior Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Company and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Trust
Agreement, that the Company 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
Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of its
assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate series under the
Indenture. The Indenture has been qualified under the Trust Indenture Act. In
the event the Exchange Offer is consummated, the Company will exchange the New
Junior Subordinated Debentures for the Old Junior Subordinated Debentures. The
form and terms of the New Junior Subordinated Debentures are identical in all
material respects to the form and terms of the Old Junior Subordinated
Debentures, except that the New Junior Subordinated Debentures have been
registered under the Securities Act and therefore are not subject to certain
restrictions on transfer applicable to the Old Junior Subordinated Debentures
and will not provide for any increase in the interest rate thereon.
Accordingly, as the context may require, unless expressly stated otherwise,
"Junior Subordinated Debentures" means the Old Junior Subordinated Debentures
and, in the event the Exchange Offer is consummated, the New Junior
Subordinated Debentures. This summary of certain terms and provisions of the
Junior Subordinated Debentures and the Indenture does not purport to be
complete, and where reference is made to particular provisions of the
Indenture, such provisions, including the definitions of certain terms, some of
which are not otherwise defined herein, are qualified in their entirety by
reference to all of the provisions of the Indenture and those terms made a part
of the Indenture by the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Old Capital Securities, the Trust
invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Old Junior Subordinated Debentures.
Pursuant to the Exchange Offer, the Company will exchange the Old Junior
Subordinated Debentures as soon as practicable after the consummation of the
Exchange Offer and the Old Junior Subordinated Debentures will be retired and
cancelled.
The Junior Subordinated Debentures bear interest at the annual rate of 8.205%
of the principal amount thereof, payable semi-annually in arrears on January 1
and July 1 of each year (each, an "Interest Payment Date"), commencing July 1,
1997, to the person in whose name each Junior Subordinated Debenture is
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. It is anticipated that
until the liquidation, if any, of the Trust, each Junior Subordinated Debenture
will be held in the name of the Property Trustee in trust for the benefit of
the holders of the Trust Securities. The amount of interest payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on the Junior
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
in each case with the same force and effect as if made on the date such payment
was originally payable. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest ("Additional Interest") on
the amount thereof (to the extent permitted by law) at the rate per annum of
8.205% thereof, compounded semi-annually. The term "interest" as used herein
shall include semi-annual interest payments, Additional Interest and Additional
Tax Sums (as defined below), as applicable.
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The Junior Subordinated Debentures mature on January 1, 2027. The Junior
Subordinated Debentures are unsecured and rank junior and subordinate in right
of payment to all Senior Indebtedness of the Company. Because the Company is a
holding company, the right of the Company to participate in any distribution
of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution), is subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Company may itself be recognized as a creditor of that subsidiary. Claims on
the Company's subsidiaries by creditors other than the Company include long-
term debt and certain other short-term borrowings. Accordingly, the Junior
Subordinated Debentures are subordinated to all Senior Indebtedness of the
Company and effectively subordinated to all existing and future liabilities of
the Company's subsidiaries, and holders of Junior Subordinated Debentures
should look only to the assets of the Company for payments on the Junior
Subordinated Debentures. The Indenture does not limit the incurrence or
issuance of other secured or unsecured debt of the Company, including Senior
Indebtedness.
DENOMINATIONS, REGISTRATION AND TRANSFER
The New Junior Subordinated Debentures will be represented by one
certificate registered in the name of The Bank of New York as Property Trustee
of the Trust. If distributed to holders of Capital Securities in connection
with a Tax Event or an Investment Company Event, the New Junior Subordinated
Debentures may be represented by one or more global certificates registered in
the name of Cede & Co. as the nominee of DTC and one or more New Junior
Subordinated Debentures in certificated form. Beneficial interests in New
Junior Subordinated Debentures in global form will be shown on, and transfers
thereof will be effected only through, records maintained by participants in
DTC. Except as described below, New Junior Subordinated Debentures in
certificated form will not be issued in exchange for the global certificates.
A global security shall be exchangeable for New Junior Subordinated
Debentures registered in the names of persons other than Cede & Co. only if
(i) DTC notifies the Company that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have
been appointed, or if at any time DTC ceases to be a "clearing agency"
registered under the Exchange Act, at a time when DTC is required to be so
registered to act as such depositary, (ii) the Company in its sole discretion
determines that such global security shall be so exchangeable or (iii) there
shall have occurred and be continuing a Debenture Event of Default. Any global
security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for certificates registered in such names as DTC shall direct. It
is expected that such instructions will be based upon directions received by
DTC from its Participants with respect to ownership of beneficial interests in
such global security. In the event that New Junior Subordinated Debentures are
issued in certificated form, such New Junior Subordinated Debentures will be
in minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof and may be transferred or exchanged only in such minimum
denominations and in the manner and at the offices described below.
Payments on New Junior Subordinated Debentures represented by a global
security will be made to DTC, as the depositary for the New Junior
Subordinated Debentures. In the event New Junior Subordinated Debentures are
issued in certificated form, principal and interest will be payable, the
transfer of the New Junior Subordinated Debentures will be registrable, and
New Junior Subordinated Debentures will be exchangeable for New Junior
Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate office of the Debenture Trustee in New York, New
York, or at the offices of any paying agent or transfer agent appointed by the
Company, provided that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto or by
wire transfer. In addition, if the New Junior Subordinated Debentures are
registered to a holder other than the Property Trustee or a nominee of DTC,
the record dates will be the immediately preceding December 15 and June 15,
respectively.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Capital Securities--Form, Denomination,
Book-Entry Procedures and Transfer." If the New Junior Subordinated Debentures
are distributed to the holders of the Trust Securities upon the termination of
the Trust, the form, denomination, book-entry and
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transfer procedures with respect to the Capital Securities as described under
"Description of Capital Securities--Form, Denomination, Book-Entry Procedures
and Transfer," shall apply to the New Junior Subordinated Debentures mutatis
mutandis.
PAYMENT AND PAYING AGENTS
Payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debentures will be made at the office of the Debenture Trustee in
The City of New York or at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option of the
Company payment of any interest may be made, except in the case of Junior
Subordinated Debentures in global form, (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the register for
Junior Subordinated Debentures or (ii) by transfer to an account maintained by
the Person entitled thereto as specified in such register, provided that
proper transfer instructions have been received by the relevant record date.
Payment of any interest on any Junior Subordinated Debenture will be made to
the Person in whose name such Junior Subordinated Debenture is registered at
the close of business on the record date for such interest, except in the case
of a call for redemption after a record date and prior to such Interest
Payment Date and defaulted interest. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent;
however, the Company will at all times be required to maintain a Paying Agent
in each place of payment for the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the request of the Company,
be repaid to the Company and the holder of such Junior Subordinated Debenture
shall thereafter look, as a general unsecured creditor, only to the Company
for payment thereof.
OPTION TO DEFER INTEREST PAYMENTS
So long as no Debenture Event of Default has occurred and is continuing, the
Company has the right under the Indenture to defer the payment of interest at
any time or from time to time for a period not exceeding 10 consecutive semi-
annual periods, during which Extension Period the Company has the right to
make partial payments of interest on any Interest Payment Date. No Extension
Period may extend beyond the Stated Maturity or any earlier prepayment date.
At the end of such Extension Period, the Company must pay all interest then
accrued and unpaid (together with interest thereon at the annual rate of
8.205%, compounded semi-annually, to the extent permitted by applicable law).
During an Extension Period, interest will continue to accrue and holders of
Junior Subordinated Debentures (and holders of the Capital Securities while
Capital Securities are outstanding) will be required to accrue interest income
for United States federal income tax purposes. See "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount."
During any such Extension Period, the Company may not, and may not permit
any subsidiary of the Company to (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's 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 securities of the
Company (including Other Debentures) that rank on a parity with or junior to
the Junior Subordinated Debentures or make any guarantee payments with respect
to any guarantee by the Company of the debt securities of any subsidiary of
the Company (including Other Guarantees) if such guarantee ranks on a parity
with or junior to the Junior Subordinated Debentures (other than (a) dividends
or distributions in common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
the issuance of capital stock under any such plan in the future, or the
redemption or repurchase of any such rights distributed pursuant thereto, (c)
payments under the Guarantee and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans
for its directors, officers, employees, consultants or advisers). Prior to the
termination of any such Extension Period,
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the Company may further extend such Extension Period, provided that such
extension does not cause such Extension Period to exceed 10 consecutive semi-
annual periods or to extend beyond the Stated Maturity or any earlier
prepayment date. At any time following the termination of any Extension Period
and the payment of all amounts then due, the Company may elect to begin a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof. The
Company must give the Property Trustee and Debenture Trustee notice of its
election to begin or extend any Extension Period at least five Business Days
prior to the earlier of (i) the next succeeding date the Distributions on the
Capital Securities would have been payable but for the election to begin or
extend such Extension Period 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 Capital Securities of the record date
or the date such Distributions are payable, but in any event not fewer than
five Business Days prior to such record date. An Administrative Trustee shall
give notice of the Company's election to begin or extend an Extension Period
to the holders of the Capital Securities. There is no limitation on the number
of times that the Company may elect to begin an Extension Period.
TAX EVENT OR INVESTMENT COMPANY EVENT PREPAYMENT
If a Tax Event or an Investment Company Event (each as defined below) shall
occur and be continuing, the Company may, at its option, prepay the Junior
Subordinated Debentures 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
prepayment price (the "Event Prepayment Price") equal to the greater of (i)
100% of the principal amount of such Junior Subordinated Debentures or (ii) as
determined by the Quotation Agent (as defined below), the sum of the present
value of 100% of the principal amount that would be payable on January 1,
2027, together with the present values of scheduled payments of interest from
the prepayment date to January 1, 2027 (the "Remaining Life"), in each case
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus,
in each case, accrued interest thereon to but excluding the date of
prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will also pay any
Additional Tax Sums on the Junior Subordinated Debentures.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Company
defaults in payment of the prepayment price, on and after the prepayment date
interest will cease to accrue on such Junior Subordinated Debentures called
for prepayment.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
Treasury Rate plus (i) 1.00% if such prepayment date occurs on or before
January 1, 1998 or (ii) 0.50% if such prepayment date occurs after January 1,
1998.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life (if no
maturity is within three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the Remaining Life
shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such prepayment date. The Treasury
Rate shall be calculated on the third Business Day preceding the prepayment
date.
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"Comparable Treasury Issue" means with respect to any prepayment date the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be used, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after January 1, 2027, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using
such securities.
"Quotation Agent" means Morgan Stanley & Co. Incorporated.
"Reference Treasury Dealer" means (i) Morgan Stanley & Co. Incorporated and
Goldman, Sachs & Co. and their respective successors; provided, however, that
if any of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Debenture Trustee after consultation
with the Company.
"Comparable Treasury Price" means, with respect to any prepayment date, (A)
the average of five Reference Treasury Dealer Quotations for such prepayment
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Debenture Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Liquidation Amount" means the stated amount of $1,000 per Capital Security.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any prepayment date, the average, as determined by the
Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00
p.m. on the third Business Day preceding such prepayment date.
"Additional Tax Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on
the outstanding Capital Securities and Common Securities shall not be reduced
as a result of any additional taxes, duties and other governmental charges to
which the Trust has become subject as a result of a Tax Event.
"Tax Event" means the receipt by the 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 or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after January 13, 1997, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days after the date of such opinion, subject to United States federal income
tax with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Company on the Junior Subordinated
Debentures is not, or within 90 days after the date of such opinion, will not
be, deductible by the Company, in whole or in part, for United States federal
income tax purposes or (iii) the Trust is, or will be within 90 days after the
date of such opinion, subject to more than a de minimis amount of other taxes,
duties, assessments or other governmental charges.
"Investment Company Event" means the receipt by the 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 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"), the Trust is or
will be considered an investment company that is required to be registered
under the Investment Company Act of 1940, as amended, which Change in 1940 Act
Law becomes effective on or after January 13, 1997.
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RESTRICTIONS ON CERTAIN PAYMENTS
The Company also covenanted that it will not, and will not permit any
subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium,
if any, on or repay or repurchase or redeem any debt securities of the Company
(including other Debentures) that rank on a parity with or junior to the
Junior Subordinated Debentures or make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company (including other Guarantees) if such guarantee ranks on a parity with
or junior to the Junior Subordinated Debentures (other than (a) dividends or
distributions in common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholder's rights
plan, or the issuance of any capital stock under any such plan in the future,
or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans
for its directors, officers, employees consultants or advisers) if at such
time (i) there shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute a "Debenture Event of Default" and (b) in respect of which
the Company shall not have taken reasonable steps to cure, (ii) the Company
shall be in default with respect to its payment of any obligations under the
Guarantee or (iii) the Company shall have given notice of its election of an
Extension Period as provided in the Indenture and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall
be continuing.
MODIFICATION OF INDENTURE
From time to time, the Company and the Debenture Trustee may, without the
consent of the holders of the Junior Subordinated Debentures, amend, waive or
supplement the 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 the
Junior Subordinated Debentures or the holders of Capital Securities so long as
they remain outstanding) and qualifying, or maintaining the qualification of,
the Indenture under the Trust Indenture Act.
The Indenture contains a provision permitting the Company and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures, to modify the rights
of the holders of Junior Subordinated Debentures, provided that no such
modification may (i) change the fixed maturity of any Junior Subordinated
Debentures, or reduce the rate or extend the time of payment of any interest
thereon or on any overdue principal amount, or reduce the principal amount
thereof, or reduce any amount payable upon any redemption thereof, or change
the currency of payment of principal of or any interest thereon or on any
overdue principal amount, without the consent of the holder of each Junior
Subordinated Debenture so affected, (ii) reduce the aforesaid percentage of
Junior Subordinated Debentures, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Junior Subordinated Debentures then outstanding, (iii) modify certain
provisions of the Indenture relating to waiver of compliance with covenants,
waiver of defaults or modification of the Indenture, except to increase the
percentage of holders required for such waiver or modification, without the
consent of the holders of all Junior Subordinated Debentures then outstanding,
or (iv) modify the provisions of the Indenture with respect to the
subordination of outstanding Junior Subordinated Debentures in a manner
adverse to the holders thereof without the consent of the holder of each
Junior Subordinated Debentures so affected; provided further that, so long as
any of the Capital Securities remain outstanding, no such modification may be
made that adversely affects the holders of such Capital Securities in any
material respect, and no termination of the Indenture may occur, and no waiver
of any Event of Default or compliance with any covenant under the Indenture
may be effective, without the prior consent of the holders of at least a
majority of the aggregate Liquidation Amount of such Capital Securities unless
and until the principal of the underlying Junior Subordinated Debentures and
all accrued and unpaid interest thereon have been paid in full and certain
other conditions are satisfied.
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DEBENTURE EVENTS OF DEFAULT
A Debenture Event of Default with respect to the Junior Subordinated
Debentures is defined in the Indenture as being: (a) default for 30 days in
payment of any installment of interest on the Junior Subordinated Debentures
(subject to the deferral of any due date in the case of an Extension Period);
(b) default in payment of any principal or premium, if any, on Junior
Subordinated Debentures; (c) failure by the Company in performance in any
material respect of any of the covenants or agreements (other than covenants
to pay interest, principal and premium, which are subject to the foregoing
clauses (a) and (b)) in the Indenture specifically contained therein for the
benefit of the Junior Subordinated Debentures which shall not have been
remedied for a period of 60 days after written notice to the Company by the
Debenture Trustee or to the Company and the Debenture Trustee by the holders
of not less than 25% in principal amount of the Junior Subordinated Debentures
outstanding; or (d) certain events of bankruptcy, insolvency or reorganization
of the Company.
The Indenture provides that if a Debenture Event of Default under clause
(a), (b) or (c) above shall have occurred and be continuing (but, in the case
of clause (c), only if the Debenture Event of Default is with respect to less
than all Junior Subordinated Debentures outstanding under the Indenture),
either the Debenture Trustee or the holders of not less than 25% in principal
amount of the then outstanding Junior Subordinated Debentures (each series of
Junior Subordinated Debentures voting as a separate class in the case of
clauses (a) and (b) above, and all series voting as one class in the case of
clause (c) above) may declare the principal of all the Junior Subordinated
Debentures, together with any accrued interest, to be immediately due and
payable. Should the Debenture Trustee or holders of such Junior Subordinated
Debentures fail to make such declaration, the holders of at least 25% in
aggregate liquidation amount of the Capital Securities shall have such right.
The Indenture also provides that if a Debenture Event of Default under clause
(c) or (d) above shall have occurred and be continuing (but, in the case of
clause (c), only if the Debenture Event of Default is with respect to all
Junior Subordinated Debentures outstanding under the Indenture), either the
Debenture Trustee or the holders of not less than 25% in principal amount of
the then outstanding Junior Subordinated Debentures (all series voting as one
class) may declare the principal of all the Junior Subordinated Debentures,
together with any accrued interest, to be immediately due and payable. Should
the Debenture Trustee or holders of such Junior Subordinated Debentures fail
to make such declaration, the holders of at least 25% in aggregate liquidation
amount of the Capital Securities shall have such right. Upon certain
conditions, such declaration (including a declaration caused by a default in
the payment of principal or interest, the payment for which has subsequently
been provided) may be annulled by the holders of at least a majority in
principal amount of the Junior Subordinated Debentures. Should the holders of
the Junior Subordinated Debentures fail to annul such declaration, the holders
of at least a majority in aggregate liquidation amount of the Capital
Securities shall have such right. In addition, past defaults may be waived by
the holders of a majority in principal amount of the Junior Subordinated
Debentures, except a default in the payment of principal of or interest on the
Junior Subordinated Debentures or in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the consent of the
holder of each Junior Subordinated Debenture so affected. Should the holders
of the Junior Subordinated Debentures fail to waive such default, the holders
of a majority in aggregate liquidation amount of the Capital Securities shall
have such right.
The Indenture contains a provision entitling the Debenture Trustee, subject
to the duty of the Debenture Trustee during default to act with the required
standard of care, to be indemnified by the holders of Junior Subordinated
Debentures issued under the Indenture before proceeding to exercise any right
or power under the Indenture at the request of such holders. The Indenture
also provides that the holders of a majority in principal amount of the
outstanding Junior Subordinated Debentures issued thereunder may direct the
time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee.
The Indenture contains a covenant that the Company will file annually with
the Debenture Trustee a certificate as to the absence of any default or
specifying any default that exists.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or
principal on the Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, a holder of Capital Securities may institute a
legal proceeding directly against the Company for enforcement of payment to
such holder of the principal of or interest on such related Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the related Capital Securities of such holder (a "Direct
Action"). The Company may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the
holders of all of the Capital Securities. If the right to bring a Direct
Action is removed, the Trust may become subject to reporting obligations under
the Securities Exchange Act of 1934, as amended. Notwithstanding any payments
made to a holder of Capital Securities by the Company in connection with a
Direct Action, the Company shall remain obligated to pay the principal of or
interest on the Junior Subordinated Debentures, and the Company shall be
subrogated to the rights of the holder of such Capital Securities with respect
to payments on the Capital Securities to the extent of any payments made by
the Company to such holder in any Direct Action.
The holders of the Capital Securities would not be able to exercise directly
any remedies, other than those set forth in the preceding paragraph, available
to the holders of the Junior Subordinated Debentures unless there shall have
been an Event of Default under the Trust Agreement. See "Description of
Capital Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company may not merge or consolidate or sell
or convey all or substantially all of its assets unless (i) the successor
entity (if other than the Company) is a U.S. entity that assumes the Company's
obligations under such Indenture and on the Junior Subordinated Debentures
issued under such Indenture, and, after giving effect to such transaction, the
Company or the successor would not be in default under such Indenture; and
(ii) certain other conditions as prescribed in the Indenture are met.
The provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and
payable at their Stated Maturity within one year, and the Company deposits or
causes to be deposited with the Debenture Trustee funds, in trust, for the
purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if
any) and interest to the date of the deposit or to the Stated Maturity, as the
case may be, then the Indenture will cease to be of further effect (except as
to remaining rights of registration of transfer, conversion, substitution and
exchange, the rights and obligations of the Debenture Trustee, the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that the obligations
of the Company to make any payment on account of the principal of and interest
on the Junior Subordinated Debentures will be subordinate and junior in right
of payment to the Company's obligations to the holders of Senior Indebtedness
of the Company to the extent described in the next two paragraphs. Senior
Indebtedness of the Company with respect to the Junior Subordinated Debentures
will include the existing and future senior notes, senior subordinated notes
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and subordinated notes of the Company and means (i) any indebtedness of the
Company for borrowed or purchased money, whether or not evidenced by bonds,
debentures, notes or other written instruments, (ii) obligations under letters
of credit, (iii) any indebtedness or other obligations of the Company with
respect to commodity contracts, interest rate and currency swap agreements,
cap, floor and collar agreements, currency spot and forward contracts, and
other similar agreements or arrangements designed to protect against
fluctuations in currency exchange or interest rates, and (iv) any guarantees,
endorsements (other than by endorsement of negotiable instruments for
collection in the ordinary course of business) or other similar contingent
obligations in respect of obligations of others of a type described in (i),
(ii) or (iii) above, whether or not such obligation is classified as a
liability on a balance sheet prepared in accordance with generally accepted
accounting principles, in each case listed in (i), (ii), (iii) and (iv) above,
whether outstanding on the date of execution of the Indenture or thereafter
incurred, other than obligations "ranking on a parity" with the Junior
Subordinated Debentures or "ranking junior" to the Junior Subordinated
Debentures (as those terms are defined in the Indenture); provided, however,
that the Junior Subordinated Debentures will not be subordinate and junior in
right of payment to trade creditors. As of September 30, 1996, there was
approximately $583 million of Senior Indebtedness of the Company outstanding.
The Indenture does not limit the amount of future increase in Senior
Indebtedness of the Company. The Company expects from time to time to issue
additional indebtedness constituting Senior Indebtedness.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.
In the case of any insolvency, receivership, conservatorship,
reorganization, readjustment of debt, marshaling of assets and liabilities or
similar proceedings or any liquidation or winding-up of or relating to the
Company as a whole, whether voluntary or involuntary, all obligations of the
Company to holders of Senior Indebtedness of the Company shall be entitled to
be paid in full before any payment shall be made on account of the principal
of or interest on the Junior Subordinated Debentures. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness of the Company, the holders of the Junior Subordinated
Debentures, together with the holders of any obligations of the Company
ranking on a parity with the Junior Subordinated Debentures, shall be entitled
to be paid from the remaining assets of the Company the amount at the time due
and owing on account of unpaid principal of and interest on the Junior
Subordinated Debentures before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
any obligations of the Company ranking junior to the Junior Subordinated
Debentures. By reason of such subordination, in the event of the insolvency of
the Company, holders of Senior Indebtedness of the Company may receive more,
ratably, and holders of the Junior Subordinated Debentures having a claim
pursuant to the Junior Subordinated Debentures may receive less, ratably, than
the other creditors of the Company. Such subordination will not prevent the
occurrence of any Event of Default in respect of the Junior Subordinated
Debentures.
RESTRICTIONS ON TRANSFER
The New Junior Subordinated Debentures will be issued, and may be
transferred only, in minimum denominations of not less than $100,000 and
multiples of $1,000 in excess thereof. Any transfer, sale or other disposition
of Junior Subordinated Debentures in a denomination of less than $100,000
shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Junior Subordinated
Debentures for any purpose, including but not limited to the receipt of
payments on such Junior Subordinated Debentures, and such transferee shall be
deemed to have no interest whatsoever in such Junior Subordinated Debentures.
GOVERNING LAW
The Indenture is and the New Junior Subordinated Debentures will be governed
by and construed in accordance with the laws of the State of New York.
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INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
holder of Junior Subordinated Debentures, unless offered reasonable indemnity
by such holder against the costs, expenses and liabilities which might be
incurred thereby. The Debenture 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 Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Old Guarantee was executed and delivered by the Company concurrently
with the issuance by the Trust of the Old Capital Securities for the benefit
of the holders from time to time of the Old Capital Securities. In the event
the Exchange Offer is consummated, the Company will exchange the New Guarantee
for the Old Guarantee. The New Guarantee Agreement has been qualified under
the Trust Indenture Act. The form and terms of the New Guarantee are identical
in all material respects to the form and terms of the Old Guarantee, except
that the New Guarantee has been registered under the Securities Act.
Accordingly, as the context may require, unless expressly stated otherwise,
"Guarantee" means the Old Guarantee and, in the event the Exchange Offer is
consummated, the New Guarantee. This summary of certain terms and provisions
of the Old Guarantee Agreement and the New Guarantee Agreement does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Old Guarantee Agreement and the New
Guarantee Agreement, including the definitions therein of certain terms, and
the Trust Indenture Act. The Bank of New York will act as Guarantee Trustee
and will hold the New Guarantee for the benefit of the holders of all Capital
Securities.
GENERAL
Under the New Guarantee the Company will irrevocably agree (and under the
Old Guarantee has agreed) to pay in full on a subordinated basis, to the
extent set forth herein, the Guarantee Payments (as defined below) to the
holders of all Capital Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert other than
the defense of payment. The following payments with respect to the Capital
Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated
and unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand available therefor at such time, (ii)
the applicable Redemption Price with respect to Capital Securities called for
redemption, to the extent that the Trust has funds on hand available therefor
at such time and (iii) upon a voluntary or involuntary termination,
dissolution, winding-up or liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the aggregate of the Liquidation Amount plus accumulated and
unpaid Distributions on the Capital Securities to the date of payment, to the
extent that the Trust has funds on hand available therefor at such time, and
(b) the amount of assets of the Trust remaining available for distribution to
holders of Capital Securities in liquidation of the Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Company to the holders of the Capital Securities
or by causing the Trust to pay such amounts to such holders.
The Guarantee is an irrevocable guarantee on a subordinated basis of the
Trust's related obligations under all Capital Securities, but will apply only
to the extent that the Trust has funds sufficient to make such payments, and
is not a guarantee of collection. If the Company does not make interest
payments on the Junior Subordinated Debentures held by the Trust, the Trust
will not be able to pay Distributions on the Capital Securities and will not
have funds legally available therefor. In such event, holders of the Capital
Securities would not be able to rely on the Guarantee for such payments.
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The Guarantee ranks subordinate and junior in right of payment to all
liabilities of the Company, other than any liabilities which expressly by
their terms are made pari passu with or subordinate to the obligations of the
Company under the Guarantee (including Other Guarantees). See "--Status of the
Guarantee." Since the Company is a holding company, the right of the Company
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability
of holders of Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary,
except to the extent that the Company may itself be recognized as a creditor
of that subsidiary. Claims on the Company's subsidiaries by creditors other
than the Company include long-term debt and certain other short-term
borrowings. Accordingly, the Company's obligations under the Guarantee will be
effectively subordinated to all existing and future liabilities of the
Company's subsidiaries, and claimants should look only to the assets of the
Company for payments thereunder. The Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Company, including
Senior Indebtedness, whether under the Indenture or any other indenture that
the Company may enter into in the future or otherwise.
The Company has, through the Guarantee, the Guarantee Agreement, the Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreement, taken together, fully, irrevocably and unconditionally guaranteed
on a subordinated basis all of the Trust's obligations under the Capital
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 Trust's obligations under
the Capital Securities. See "Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all liabilities of the Company
(including obligations under the Junior Subordinated Debentures), other than
any liabilities which expressly by their terms are made pari passu with or
subordinate to the obligations of the Company under the Guarantee.
The Guarantee ranks pari passu with all Other Guarantees issued by the
Company. The Guarantee constitutes a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against any other person or entity). The
Guarantee is held for the benefit of the holders of all Capital Securities.
The Guarantee will not be discharged except by payment of the Guarantee
Payments in full to the extent not paid by the Trust or upon distribution of
the Junior Subordinated Debentures to the holders of the Capital Securities.
The Guarantee does not place a limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company. The Company expects from
time to time to incur additional indebtedness constituting Senior
Indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of the Capital Securities in any material respect (in which case no
vote will be required), the Guarantee Agreement may not be amended without the
prior approval of the holders of not less than a majority of the aggregate
Liquidation Amount of outstanding Capital Securities. The manner of obtaining
any such approval will be as set forth under "Description of Capital
Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees
and agreements contained in the Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall
inure to the benefit of the holders of the Capital Securities then
outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee Agreement will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder. The holders of not less than a majority in aggregate
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Liquidation Amount of the Capital Securities will 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 the Guarantee or to direct the
exercising of any trust or power conferred upon the Guarantee Trustee under
the Guarantee Agreement.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee
or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee
Agreement.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Guarantee Agreement provides that the Company shall not consolidate with
or merge into any other entity or convey, transfer or lease all or
substantially all of its properties and assets to any other entity, and no
entity shall consolidate with or merge into the Company or convey, transfer or
lease all or substantially all of its properties and assets to the Company,
unless (i) either the Company shall be the continuing corporation or the
successor entity is organized under the laws of the United States or any state
or the District of Columbia and such successor entity expressly assumes the
Company's obligations on the Guarantee; (ii) immediately after giving effect
thereto, no event of default under the Guarantee Agreement and no event which,
after notice or lapse of time or both, would become an event of default under
the Guarantee Agreement, shall have happened and be continuing; and (iii)
certain other conditions as prescribed in the Guarantee Agreement are met.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee Agreement and,
after default with respect to the 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 the Guarantee
Agreement at the request of any holder of the Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Junior Subordinated Debentures to the holders of the Capital
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Capital Securities must
restore payment of any sums paid under the Capital Securities or the
Guarantee.
GOVERNING LAW
The Old Guarantee is and the New Guarantee will be governed by and construed
in accordance with the laws of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement, the Company has irrevocably and
unconditionally guaranteed to each person or entity to whom the Trust becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
the Trust, other than obligations of the Trust to pay to the holders of any
Trust Securities or other similar interests in the Trust of the amounts due
such holders pursuant to the terms of the Trust Securities or such other
similar interests, as the case may be.
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DESCRIPTION OF OLD SECURITIES
The forms and terms of the Old Securities are identical in all material
respects to the forms and terms of the New Securities, except that (i) the Old
Securities have not been registered under the Securities Act, are subject to
certain restrictions on transfer and are entitled to certain rights under the
Registration Rights Agreement (which rights will terminate upon consummation
of the Exchange Offer, except under limited circumstances); (ii) the New
Capital Securities will not provide for any increase in the Distribution rate
thereon; and (iii) the New Junior Subordinated Debentures will not provide for
any increase in the interest rate thereon. The Old Securities provide that, in
the event that the Exchange Offer is not consummated on or prior to August 11,
1997, or, in certain limited circumstances, in the event a shelf registration
statement (the "Shelf Registration Statement") with respect to the resale of
the Old Capital Securities is not declared effective on or prior to August 11,
1997, then interest will accrue (in addition to the stated interest rate on
the Junior Subordinated Debentures) at the rate of 0.25% per annum on the
principal amount of the Junior Subordinated Debentures and Distributions will
accumulate (in addition to the stated Distribution rate on the Capital
Securities) at the rate of 0.25% per annum on the Liquidation Amount of the
Capital Securities, for the period from the occurrence of such event until
such time as the Exchange Offer is consummated or any required Shelf
Registration Statement is effective. The New Securities are not, and upon
consummation of the Exchange Offer the Old Securities will not be, entitled to
any such additional interest or Distributions. Accordingly, holders of Old
Capital Securities should review the information set forth under "Risk
Factors--Certain Consequences of a Failure to Exchange Old Capital Securities"
and "Description of Securities."
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Trust has funds available for the payment of such
Distributions) are and will continue to be irrevocably guaranteed by the
Company as and to the extent set forth under "Description of Securities--
Description of Guarantee." Taken together, the Company's obligations under the
Junior Subordinated Debentures, the Indenture, the Trust Agreement, the
Expense Agreement, the Guarantee Agreement and the Guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Capital 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 Trust's obligations under the Capital
Securities. If and to the extent that the Company does not make payments on
the Junior Subordinated Debentures, the Trust will not pay Distributions or
other amounts due on the Capital Securities. The Guarantee does not cover
payment of Distributions when the Trust does not have sufficient funds to pay
such Distributions. In such event, the remedy of a holder of Capital
Securities is to institute a Direct Action. The obligations of the Company
under the Guarantee are subordinate and junior in right of payment to all
liabilities of the Company to the extent and in the manner set forth in the
Guarantee Agreement.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount of the Junior Subordinated
Debentures will be equal to the sum of the aggregate Liquidation Amount or
Redemption Price, as applicable, of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Junior Subordinated Debentures will match the Distribution rate and
Distribution and other payment dates for the Trust Securities; (iii) under the
Expense Agreement, the Company shall pay for all and any costs, expenses and
liabilities of the Trust except the Trust's obligations to holders of Trust
Securities under such Trust Securities; and (iv) the Trust Agreement further
provides that the Trust will not engage in any activity that is not consistent
with the limited purposes thereof.
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ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Trust Agreement. However,
in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Junior Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on
Junior Subordinated Debentures would constitute an Event of Default under the
Trust Agreement.
LIMITED PURPOSES OF THE TRUST
The Capital Securities evidence an undivided beneficial interest in the
assets of the Trust, and the Trust exists for the exclusive purposes of
issuing and selling the Trust Securities, using the proceeds from the sale of
the Common Securities and Old Capital Securities to acquire the Old Junior
Subordinated Debentures and exchanging the Old Junior Subordinated Debentures
for New Junior Subordinated Debentures in the Exchange Offer pursuant to the
Indenture, and engaging in only those other activities necessary, convenient
or incidental thereto (such as registering the transfer of Capital
Securities). A principal difference between the rights of a holder of a
Capital Security and a holder of a Junior Subordinated Debenture is that a
holder of a Junior Subordinated Debenture is entitled to receive from the
Company the principal amount of and interest accrued on Junior Subordinated
Debentures held, while a holder of Capital Securities is entitled to receive
Distributions from the Trust (or from the Company under the Guarantee) if and
to the extent the Trust has funds available for the payment of such
Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the Junior Subordinated Debentures,
after satisfaction of liabilities to creditors as required by applicable law,
the holders of the Trust Securities will be entitled to receive, out of assets
held by the Trust, the Liquidation Distribution in cash. See "Description of
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as
holder of the Junior Subordinated Debentures, would be a subordinated creditor
of the Company, subordinated in right of payment to all Senior Indebtedness as
set forth in the Indenture, but entitled to receive payment in full of
principal and interest, before any stockholders of the Company receive
payments or distributions. Since the Company is the guarantor under the
Guarantee and has agreed under the Expense Agreement to pay for all costs,
expenses and liabilities of the Trust (other than the Trust's obligations to
the holders of its Trust Securities), the positions of a holder of Capital
Securities and a holder of Junior Subordinated Debentures relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Capital Securities
to beneficial owners thereof ("Securityholders"). This summary does not
address all tax consequences that may be applicable to Securityholders, nor
does it address the tax consequences to (i) persons that may be subject to
special treatment under United States federal income tax law, such as banks,
insurance companies, thrift institutions, regulated investment companies, real
estate investment trusts, tax-exempt organizations and dealers in securities
or currencies, (ii) persons that will hold Capital Securities as part of a
position in a "straddle" or as part of a "hedging," "conversion" or other
integrated investment transaction for federal income tax purposes, (iii)
persons whose functional currency is not the United States dollar or (iv)
persons that do not hold Capital Securities as capital assets.
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The statements of law or legal conclusion set forth in this summary
constitute the opinion of Sidley & Austin, counsel to the Company and the
Trust. Such opinion has not been confirmed by the Internal Revenue Service, by
private ruling or otherwise, and is not binding on the Internal Revenue
Service or the courts. This summary is based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations promulgated thereunder,
Internal Revenue Service rulings and pronouncements and judicial decisions now
in effect, all of which are subject to change at any time. Such changes may be
applied retroactively in a manner that could cause the tax consequences to
vary substantially from the consequences described below, possibly affecting a
beneficial owner of Capital Securities adversely. In particular, legislation
has been proposed that could affect adversely the Company's ability to deduct
interest on the Junior Subordinated Debentures, which may in turn permit the
Company to cause a redemption of the Capital Securities. See "--Possible Tax
Law Changes." The authorities on which this summary is based are subject to
various interpretations, and it is therefore possible that the federal income
tax treatment of the purchase, ownership and disposition of Capital Securities
may differ from the treatment described below.
HOLDERS OF CAPITAL SECURITIES ARE ADVISED TO CONSULT WITH THEIR OWN TAX
ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
EXCHANGE OF OLD CAPITAL SECURITIES FOR NEW CAPITAL SECURITIES
Under current United States federal income tax law, the exchange of Old
Capital Securities for New Capital Securities pursuant to the Exchange Offer
will not be a taxable event to Securityholders. The New Capital Securities
will be treated as a continuation of the Old Capital Securities. Accordingly,
a Securityholder will have the same adjusted tax basis and holding period in
the New Capital Securities that such Securityholder had in the Old Capital
Securities exchanged therefor.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Old Capital Securities, Sidley &
Austin has rendered its opinion to the effect that, under then-current law and
assuming compliance with the Indenture, and based on certain facts and
assumptions contained in such opinion, the Junior Subordinated Debentures held
by the Trust will be classified for United States federal income tax purposes
as indebtedness of the Company.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Old Capital Securities, Sidley &
Austin has rendered its opinion to the effect that, under then-current law and
assuming compliance with the terms of the Trust Agreement, and based on
certain facts and assumptions contained in such opinion, the Trust will be
classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes. As a result, each
Securityholder will be treated as owning an undivided beneficial interest in
the Junior Subordinated Debentures. By its acceptance of a Capital Security,
each Securityholder agrees to treat such Capital Security consistently with
the foregoing opinions. Accordingly, each Securityholder will be required to
include in its gross income its pro rata share of income on the Junior
Subordinated Debentures. See "--Interest Income and Original Issue Discount."
No amount included in income with respect to the Capital Securities will be
eligible for the dividends-received deduction.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
The Company has the option, under the terms of the Junior Subordinated
Debentures, to defer payments of interest by extending interest payment
periods for up to ten consecutive semi-annual periods. See "Description of
Securities--Description of Junior Subordinated Debentures--Option to Defer
Interest Payments." Under Treasury Regulations, this option should cause
stated interest payments on the Junior Subordinated Debentures to be treated
as original issue discount ("OID") and the Company intends to so treat the
Junior Subordinated
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Debentures. Holders of debt instruments issued with OID must include that
discount in income on an economic accrual basis before the receipt of cash
attributable to the discount, regardless of their method of tax accounting.
Generally, all of a Securityholder's taxable interest income with respect to
the Junior Subordinated Debentures will be accounted for as OID, and actual
distributions of stated interest will not be reported separately as taxable
income. The amount of OID that accrues in any semi-annual period will
approximately equal the amount of the interest that accrues on the Junior
Subordinated Debentures in that period at the stated interest rate. In the
event that the interest payment period is extended, Securityholders will
continue to accrue OID approximately equal to the amount of the interest
payment due at the end of the extended interest payment period on an economic
accrual basis over the length of the extended interest period. Under recently
issued Treasury Regulations, it is possible that the Junior Subordinated
Debentures could be considered to have terms and conditions that make the
likelihood of the Company's deferring the payment of interest a "remote
contingency" for purposes of the OID rules. In that event, (a) the Junior
Subordinated Debentures would not be subject to the OID rules at the time of
their original issuance, (b) a Securityholder would include its share of
interest on the Junior Subordinated Debentures in income in accordance with
such holder's regular method of tax accounting and (c) if the Company were to
defer the payment of interest, the Junior Subordinated Debentures would
generally become subject to the OID rules described above.
MARKET DISCOUNT AND PREMIUM
Securityholders that did not acquire their interest in the Capital
Securities pursuant to an acquisition of Old Capital Securities on their
original issue at their original offering price or pursuant to an exchange of
such Old Capital Securities for New Capital Securities pursuant to the
Exchange Offer may be considered to have acquired their undivided interest in
the Junior Subordinated Debentures with market discount, amortizable bond
premium or acquisition premium as such terms are defined for United States
federal income tax purposes. Such Securityholders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Capital Securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL
SECURITIES
A distribution by the Trust of the Junior Subordinated Debentures as
described under the caption "Description of Securities--Description of Capital
Securities--Liquidation of the Trust and Distribution of Junior Subordinated
Debentures" is conditioned on receipt by the Company of an opinion of counsel
to the effect that such distribution will not be a taxable event to
Securityholders for United States federal income tax purposes. Under current
United States federal income tax law, such a distribution would not be a
taxable event to Securityholders and such a distribution would result in a
Securityholder's receiving directly its pro rata share of the Junior
Subordinated Debentures previously held indirectly through the Trust, with a
holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in its Capital Securities before
such distribution. A Securityholder would recognize interest income in respect
of Junior Subordinated Debentures received from the Trust in the manner
described above under "--Interest Income and Original Issue Discount."
SALES OR REDEMPTIONS OF CAPITAL SECURITIES
Gain or loss will be recognized by a Securityholder on a sale of Capital
Securities (including a redemption for cash) in an amount equal to the
difference between the amount realized (which for this purpose, will exclude
amounts attributable to accrued interest or OID not previously included in
income) and the Securityholder's adjusted tax basis in the Capital Securities
sold (or so redeemed). Gain or loss recognized by a Securityholder on Capital
Securities held for more than one year will generally be taxable as long-term
capital gain or loss. Amounts attributable to accrued interest with respect to
a Securityholder's pro rata share of the Junior Subordinated Debentures not
previously included in income will be taxable as ordinary income.
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BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The Trust will report the interest and original issue discount that accrued
during the year with respect to the Junior Subordinated Debentures, and any
gross proceeds received by the Trust from the retirement or redemption of the
Junior Subordinated Debentures, annually to the holders of record of the
Capital Securities and the Internal Revenue Service. The Trust currently
intends to deliver such reports to holders of record prior to January 31
following each calendar year. It is anticipated that persons who hold Capital
Securities as nominees for beneficial owners will report the required tax
information to beneficial owners on Form 1099.
Payments made on, and proceeds from the sale of, Capital Securities may be
subject to a "backup" withholding tax of 31% unless the Securityholder
complies with certain identification requirements. Any withheld amounts will
generally be allowed as a credit against the Securityholder's federal income
tax, provided the required information is timely filed with the Internal
Revenue Service.
UNITED STATES ALIEN SECURITYHOLDERS
For purposes of this discussion, a United States Alien Securityholder is any
Securityholder that is a corporation, individual, partnership, estate or trust
that, for United States federal income tax purposes, is a foreign corporation,
a non-resident alien individual, a foreign partnership or a foreign estate or
trust. This discussion assumes that income with respect to the Capital
Securities is not effectively connected with a trade or business in the United
States in which the United States Alien Securityholder is engaged.
Under current United States federal income tax law:
(i) payments by the Trust or any of its paying agents to any United
States Alien Securityholder generally will not be subject to withholding or
other United States federal income tax, provided that, in the case of
payments with respect to interest (including OID), (a) the United States
Alien Securityholder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote, (b) the United States Alien Securityholder is not a
controlled foreign corporation that is related to the Company through stock
ownership, and (c) either (A) the United States Alien Securityholder
certifies to the Trust or its agent, under penalties of perjury, that it is
a United States Alien Securityholder and provides its name and address or
(B) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business (a "Financial Institution") and holds the Capital Securities in
such capacity certifies to the Trust or its agent under penalties of
perjury that such statement has been received from the United States Alien
Securityholder by it or by a Financial Institution between it and the
United States Alien Securityholder and furnishes the Trust or its agent
with a copy thereof; and
(ii) a United States Alien Securityholder generally will not be subject
to withholding or other United States federal income tax on any gain
realized upon the sale or other disposition of Capital Securities.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill")
proposed by the Clinton administration was released. The Bill would, among
other things, generally deny interest deductions for United States federal
income tax purposes for interest on an instrument issued by a corporation that
has a maximum term of more than 20 years and that is not shown as indebtedness
on the separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. The above-described provision of the
Bill was proposed to be effective generally for instruments issued on or after
December 7, 1995. If such provision were to apply to the Junior Subordinated
Debentures, the Company would be unable to deduct interest on the Junior
Subordinated Debentures for United States federal income tax purposes.
However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, will be no earlier than the date of appropriate Congressional action.
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The proposals were not enacted in the recently concluded session of Congress.
There can be no assurance, however, that final legislation similar to the Bill
or future legislative proposals, future regulations or official administrative
pronouncements or future judicial decisions will not affect the ability of the
Company to deduct interest on the Junior Subordinated Debentures. Such a
change could give rise to a Tax Event, which may permit the Company to cause a
redemption of the Capital Securities. See "Description of Securities--
Description of Capital Securities--Redemption" and "Description of
Securities--Description of Junior Subordinated Debentures--Tax Event or
Investment Company Event Prepayment." Such a tax law change would not alter
the United States federal income tax consequences of the purchase, ownership
and disposition of Capital Securities to Securityholders.
ERISA CONSIDERATIONS
GENERAL
A fiduciary of an employee benefit plan subject to Title I of ERISA should
consider fiduciary standards under ERISA in the context of the particular
circumstances of such plan before authorizing an investment in the Capital
Securities. Such fiduciary should consider whether the investment satisfies
ERISA's diversification and prudence requirements, whether the investment
constitutes unauthorized delegation of fiduciary authority and whether the
investment is in accordance with the documents and instruments governing the
plan. In addition, ERISA and the Code prohibit a wide range of transactions
("Prohibited Transactions") involving the assets of a plan subject to ERISA or
the assets of an individual retirement account or plan subject to Section 4975
of the Code (hereinafter an "ERISA Plan") and persons who have certain
specified relationships to the ERISA Plan ("parties in interest," within the
meaning of ERISA, and "disqualified persons," within the meaning of the Code).
Such transactions may require "correction" and may cause the ERISA Plan
fiduciary to incur certain liabilities and the parties in interest or
disqualified persons to be subject to excise taxes.
The acquisition of any Capital Security by any person who is using for such
acquisition the assets of an ERISA Plan shall constitute a representation by
such person to the Company that (i) if the Company is a "party in interest" or
a "disqualified person" with respect to such ERISA Plan, then such security is
being acquired pursuant to an exemption from the Prohibited Transaction rules
under ERISA and the Code, and (ii) the Company is not a "fiduciary," within
the meaning of Section 3(21) of ERISA and the regulations thereunder, with
respect to such person's interest in the Capital Securities or the Junior
Subordinated Debentures.
Governmental plans and certain church plans (each as defined under ERISA)
are not subject to the Prohibited Transaction rules. Such plans may, however,
be subject to federal, state or local laws or regulations which may affect
their investment in the Capital Securities. Any fiduciary of such a
governmental or church plan considering an investment in the Capital
Securities should determine the need for, and the availability, if necessary,
of any exemptive relief under such laws or regulations.
THE DISCUSSION HEREIN OF ERISA IS GENERAL IN NATURE AND IS NOT INTENDED TO
BE ALL INCLUSIVE. ANY FIDUCIARY OF AN ERISA PLAN, GOVERNMENTAL PLAN OR CHURCH
PLAN CONSIDERING AN INVESTMENT IN THE CAPITAL SECURITIES SHOULD CONSULT WITH
ITS LEGAL ADVISORS REGARDING THE CONSEQUENCES OF SUCH INVESTMENT.
PROHIBITED TRANSACTIONS
The Company may be a party in interest or a disqualified person with respect
to an ERISA Plan investing in the Capital Securities, and, therefore, such
investments by an ERISA Plan may give rise to a Prohibited Transaction.
Consequently, before investing in the Capital Securities, any person who is,
or who in acquiring such securities is using the assets of, an ERISA Plan
should determine that either a statutory or an administrative exemption from
the Prohibited Transaction rules discussed below or otherwise available is
applicable to such person's investment in the Capital Securities, or that its
investment in such securities will not result in a Prohibited Transaction.
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Certain statutory or administrative exemptions from the Prohibited
Transaction rules under ERISA and the Code may be available to an ERISA Plan
which is investing in the Capital Securities. Included among these exemptions
are: Prohibited Transaction Class Exemption ("PTCE") 90-1, regarding
investments by insurance company pooled separate accounts; PTCE 91-38,
regarding investments by bank collective investment funds; PTCE 84-14,
regarding transactions effected by qualified professional asset managers; PTCE
96-23, regarding transactions effected by in-house asset managers; or PTCE 95-
60, regarding investments by insurance company general accounts.
TRUST ASSETS AS "PLAN ASSETS"
The Department of Labor has issued final regulations (the "Labor
Regulations") as to what constitutes assets of an employee benefit plan ("plan
asset") under ERISA. The Labor Regulations provide that, as a general rule,
when an ERISA Plan acquires an equity interest in an entity and such interest
does not represent a "publicly offered security" nor a security issued by an
investment company registered under the Investment Company Act of 1940, the
ERISA Plan's assets include both the equity interest and an undivided interest
in each of the underlying assets of the entity, unless it is established either
that the entity is an operating company or that equity participation in the
entity by "benefit plan investors" is not "significant." For purposes of the
Labor Regulations, the Trust will not be an investment company nor an operating
company and the Old Capital Securities will not constitute a "publicly offered
security." As discussed below, at the time of the Exchange Offer, the New
Capital Securities may qualify as "publicly offered securities" for purposes of
the Labor Regulations, but such result cannot be assured.
Under the Labor Regulations, equity participation by benefit plan investors
will not be considered "significant" on any date only if, immediately after the
most recent acquisition of Capital Securities, the aggregate interest in the
Capital Securities held by benefit plan investors will be less than 25% of the
value of the Capital Securities. Although it is possible that the equity
participation by benefit plan investors on any date will not be "significant"
for purposes of the Labor Regulations, such result cannot be assured.
Consequently, if ERISA Plans or investors using plan assets of ERISA plans
purchase the Capital Securities, the Trust's assets could be deemed to be "plan
assets" of such ERISA Plans for purposes of the fiduciary responsibility
provisions of ERISA and the Code. Under ERISA, any person who exercises any
authority or control respecting the management or disposition of the assets of
an ERISA Plan is considered to be a fiduciary of such ERISA Plan. For example,
the Property Trustee could therefore become a fiduciary of the ERISA Plans that
invest in the Capital Securities and be subject to the general fiduciary
requirements of ERISA in exercising its authority with respect to the
management of the assets of the Trust. However, the Property Trustee will have
only limited discretionary authority with respect to the Trust's assets and the
remaining functions and responsibilities performed by the Property Trustee will
be for the most part custodial and ministerial in nature. Inasmuch as the
Property Trustee or another person with authority or control respecting the
management or disposition of the Trust assets may become a fiduciary with
respect to the ERISA Plans that will purchase the Capital Securities, there may
be an improper delegation by such ERISA Plans of the responsibility to manage
plan assets.
The New Capital Securities may qualify as "publicly offered securities" under
the Labor Regulations if, in addition to such distribution and registration, at
the time of the Exchange Offer they are also "widely held" and "freely
transferable." Under the Labor Regulations, a class of securities is "widely
held" only if it is a class of securities that is owned by 100 or more
investors independent of the issuer and of one another. Although it is possible
that at the time of the Exchange Offer the New Capital Securities will be
"widely held," such result cannot be assured. Whether a security is "freely
transferable" for purposes of the Labor Regulations is a factual question to be
determined on the basis of all relevant facts and circumstances. If, at the
time of the Exchange Offer, the New Capital Securities qualify as "publicly
offered securities," the assets of the Trust should not be "plan assets" as of
such time. If, at the time of the Exchange Offer, the New Capital Securities do
not qualify as "publicly offered securities," the "plan asset" considerations
discussed in the immediately preceding paragraph in connection with the Capital
Securities could also be applicable in connection with the investment by ERISA
Plans or investors' using plan assets of ERISA Plans in the New Capital
Securities.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
in connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by Participating Broker-Dealers during the 90-day period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-
making activities or other trading activities. The Company has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 90 days after the Expiration Date (subject to
extension under certain limited circumstances described herein) or, if earlier,
when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "The Exchange Offer--Resales of New Capital
Securities." The Company will not receive any cash or other proceeds from the
issuance of the New Capital Securities offered hereby. New Capital Securities
received by broker-dealers for their own accounts in connection with the
Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such broker-
dealer and/or the purchasers of any such New Capital Securities. Any broker-
dealer that resells New Capital Securities that were received by it for its own
account in connection with the Exchange Offer and any broker or dealer that
participates in a distribution of such New Capital Securities may be deemed to
be an "underwriter" within the meaning of the Securities Act, and any profit on
any such resale of New Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the New Capital
Securities and the creation of the Trust have been passed upon by Richards,
Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to the
Company and the Trust. The validity of the New Guarantee and the New Junior
Subordinated Debentures have been passed upon for the Company by Sidley &
Austin, Chicago, Illinois. Certain matters relating to United States federal
income tax considerations have been passed upon for the Company by Sidley &
Austin, Chicago, Illinois.
EXPERTS
The consolidated financial statements and schedules of the Company, included
in and incorporated by reference in the Company's Annual Report (Form 10-K) for
the year ended December 31, 1995, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon included and
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements and schedules are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
With respect to the unaudited condensed consolidated interim financial
information for the three-month periods ended March 31, June 30, and September
30, 1996 and 1995, the six-month periods ended June 30, 1996 and 1995, and the
nine-month periods ended September 30, 1996 and 1995, incorporated by reference
in this Prospectus, Ernst & Young LLP have reported that they have applied
limited procedures in accordance with
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professional standards for a review of such information. However, their
separate reports, included in the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, June 30 and September 30, 1996, and incorporated
herein by reference, state that they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted considering
the limited nature of the review procedures applied. The independent auditors
are not subject to the liability provisions of Section 11 of the Securities Act
for their report on the unaudited interim financial information because that
report is not a "report" or a "part" of the Registration Statement prepared or
certified by the auditors within the meaning of Sections 7 and 11 of the
Securities Act.
The financial statements and schedules of Alexander & Alexander as of
December 31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995 included in the Company's Current Report (Form 8-K) dated
January 15, 1997 and incorporated by reference in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports incorporated by reference in this Prospectus. Such financial statements
and schedules are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN-
DER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAK-
ING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information..................................................... 6
Incorporation of Certain Documents by Reference........................... 6
Summary................................................................... 8
Risk Factors.............................................................. 17
Use of Proceeds from Sale of Old Capital Securities....................... 22
Aon Capital A............................................................. 22
Aon Corporation........................................................... 23
Acquisition of Alexander & Alexander...................................... 23
Pro Forma Consolidated Financial Information.............................. 25
Ratios of Earnings to Fixed Charges....................................... 32
Accounting Treatment for the Trust........................................ 33
The Exchange Offer........................................................ 33
Description of Securities................................................ 42
Description of Capital Securities........................................ 42
Description of Junior Subordinated Debentures............................ 53
Description of Guarantee................................................. 62
Description of Old Securities............................................. 65
Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee............................................. 65
Certain Federal Income Tax Consequences................................... 66
ERISA Considerations...................................................... 71
Validity of Securities.................................................... 73
Experts................................................................... 73
</TABLE>
UNTIL , 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SE-
CURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UN-
SOLD ALLOTMENT OR SUBSCRIPTIONS.
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AON CAPITAL A
OFFER TO EXCHANGE ITS
8.205% CAPITAL SECURITIES WHICH
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 FOR ANY
AND ALL OF ITS OUTSTANDING 8.205%
CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000
PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN,
BY AON CORPORATION
-----------------
PROSPECTUS
-----------------
, 1997
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company was organized under and is subject to the Delaware General
Corporation Law. Delaware law provides that officers and directors may receive
indemnification from their corporations for certain actual or threatened
lawsuits. The Delaware law sets out the standard of conduct which the officers
and directors must meet in order to be indemnified, the parties who are to
determine whether the standard has been met, and the types of expenditures
which will be indemnified. Delaware law further provides that a corporation
may purchase indemnification insurance, such insurance providing
indemnification for the officers and directors whether or not the corporation
would have the power to indemnify them against such liability under the
provisions of Delaware law.
The Company has adopted an article within its Certificate of Incorporation
which provides that the Company will indemnify its officers and directors to
the full extent permitted by Delaware law.
Furthermore, the Company is covered by insurance which will reimburse it
within the policy limits for amounts it is obligated to pay in lawsuits
involving officers and directors serving in such capacities in which the
damages, judgments, settlements, costs, charges or expenses incurred in
connection with the defense of the action, suit or proceeding are reimbursable
pursuant to the law and the Certificate of Incorporation of the Company.
Under the Trust Agreement, the Company has agreed to indemnify, to the
fullest extent permitted by applicable law, each of the Issuer Trustees of the
Trust, or any predecessor Issuer Trustee of the Trust, and to hold the Issuer
Trustees harmless against, any loss, damage, liability, tax, penalty, expense
or claim incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the creation, operation or
termination of the Trust, including the costs and expenses of defending
themselves against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Trust Agreement.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
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<TABLE>
<C> <S>
4.1 Junior Subordinated Indenture dated as of January 13, 1997 between Aon
Corporation and The Bank of New York, as trustee
4.2 First Supplemental Indenture dated as of January 13, 1997 between Aon
Corporation and The Bank of New York, as trustee
4.3 Certificate of Trust of Aon Capital A
4.4 Trust Agreement of Aon Capital A dated as of December 27, 1996 among Aon
Corporation, as Depositor, and the trustees named therein
4.5 Amended and Restated Trust Agreement of Aon Capital A dated as of
January 13, 1997 among Aon Corporation, as Depositor, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, the Administrative Trustees named therein and the holders,
from time to time, of the Capital Securities
4.6 Forms of Capital Security Certificates for Aon Capital A (included as
Exhibits B, C and D to Exhibit 4.5)
4.7 Form of Junior Subordinated Debenture for Aon Corporation (included as
Exhibit A to Exhibit 4.2)
4.8 Capital Securities Guarantee Agreement dated as of January 13, 1997
between Aon Corporation and The Bank of New York, as guarantee trustee
4.9 Form of Capital Securities Guarantee Agreement to be executed by Aon
Corporation and The Bank of New York, as guarantee trustee
4.10 Capital Securities Exchange and Registration Rights Agreement dated as
of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan
Stanley & Co. Incorporated and Goldman, Sachs & Co.
4.11 Debenture Exchange and Registration Rights Agreement dated as of January
13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co.
4.12 Guarantee Exchange and Registration Rights Agreement dated as of January
13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co.
4.13 Agreement as to Expenses and Liabilities dated as of January 13, 1997
between Aon Corporation and Aon Capital A
5.1 Opinion of Sidley & Austin as to validity of the Junior Subordinated
Debentures and the Guarantee to be issued by Aon Corporation
5.2 Opinion of special Delaware counsel as to validity of the Capital
Securities to be issued by Aon Capital A
8 Opinion of special tax counsel as to certain federal income tax matters
12 Computation of ratios of earnings to fixed charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Sidley & Austin (included in Exhibits 5.1 and 8)
23.4 Consent of special Delaware counsel (included in Exhibit 5.2)
24 Powers of Attorney (included in the Signatures page of this Registration
Statement)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Junior Subordinated Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Trust Agreement of Aon Capital A
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the
Guarantee for the benefit of the holders of Capital Securities of Aon
Capital A
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter from Registered Holders to Clients
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.5 Form of Exchange Agent Agreement
</TABLE>
II-2
<PAGE>
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
this 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the foregoing provisions, or otherwise, each
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 each
Registrant of expenses incurred or paid by a director, officer or controlling
person of each 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 registered, each 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.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired or involved therein, that was not the subject of and included
in the Registration Statement when it became effective.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, STATE OF
ILLINOIS, ON FEBRUARY 5, 1997.
AON Corporation
Patrick G. Ryan
By: _________________________________
PATRICK G. RYAN CHAIRMAN,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Patrick G. Ryan, Harvey N. Medvin and Raymond I.
Skilling, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, in any and all
capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, including any filings under Rule
462 promulgated under the Securities Act of 1933, and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED BELOW ON FEBRUARY 5, 1997.
SIGNATURE TITLE
Patrick G. Ryan Chairman, President, Chief Executive
- ------------------------------------- Officer and Director (principal
PATRICK G. RYAN executive officer)
Harvey N. Medvin Executive Vice President, Chief
- ------------------------------------- Financial Officer and Treasurer
HARVEY N. MEDVIN (principal financial and accounting
officer)
Daniel T. Carroll Director
- -------------------------------------
DANIEL T. CARROLL
Franklin A. Cole Director
- -------------------------------------
FRANKLIN A. COLE
II-4
<PAGE>
SIGNATURE TITLE
Edgar D. Janotta Director
- -------------------------------------
EDGAR D. JANOTTA
Perry J. Lewis Director
- -------------------------------------
PERRY J. LEWIS
Joan D. Manley Director
- -------------------------------------
JOAN D. MANLEY
Andrew J. McKenna Director
- -------------------------------------
ANDREW J. MCKENNA
Newton N. Minow Director
- -------------------------------------
NEWTON N. MINOW
Peer Pedersen Director
- -------------------------------------
PEER PEDERSEN
Donald S. Perkins Director
- -------------------------------------
DONALD S. PERKINS
John W. Rogers, Jr. Director
- -------------------------------------
JOHN W. ROGERS, JR.
George A. Schaefer Director
- -------------------------------------
GEORGE A. SCHAEFER
Raymond I. Skilling Director
- -------------------------------------
RAYMOND I. SKILLING
Fred L. Turner Director
- -------------------------------------
FRED L. TURNER
Arnold R. Weber Director
- -------------------------------------
ARNOLD R. WEBER
II-5
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AON CAPITAL A
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, AND STATE OF
ILLINOIS, ON FEBRUARY 5, 1997.
AON CAPITAL A
By: Aon Corporation,
as Depositor
Michael A. Conway
By: _________________________________
Michael A. Conway
Senior Vice President
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
<TABLE>
<C> <S>
4.1 Junior Subordinated Indenture dated as of January 13, 1997 between Aon
Corporation and The Bank of New York, as trustee
4.2 First Supplemental Indenture dated as of January 13, 1997 between Aon
Corporation and The Bank of New York, as trustee
4.3 Certificate of Trust of Aon Capital A
4.4 Trust Agreement of Aon Capital A dated as of December 27, 1996 among Aon
Corporation, as Depositor, and the trustees named therein
4.5 Amended and Restated Trust Agreement of Aon Capital A dated as of
January 13, 1997 among Aon Corporation, as Depositor, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, the Administrative Trustees named therein and the holders,
from time to time, of the Capital Securities
4.6 Forms of Capital Security Certificates for Aon Capital A (included as
Exhibits B, C and D to Exhibit 4.5)
4.7 Form of Junior Subordinated Debenture for Aon Corporation (included as
Exhibit A to Exhibit 4.2)
4.8 Capital Securities Guarantee Agreement dated as of January 13, 1997
between Aon Corporation and The Bank of New York, as guarantee trustee
4.9 Form of Capital Securities Guarantee Agreement to be executed by Aon
Corporation and The Bank of New York, as guarantee trustee
4.10 Capital Securities Exchange and Registration Rights Agreement dated as
of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan
Stanley & Co. Incorporated and Goldman, Sachs & Co.
4.11 Debenture Exchange and Registration Rights Agreement dated as of January
13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co.
4.12 Guarantee Exchange and Registration Rights Agreement dated as of January
13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co.
4.13 Agreement as to Expenses and Liabilities dated as of January 13, 1997
between Aon Corporation and Aon Capital A
5.1 Opinion of Sidley & Austin as to validity of the Junior Subordinated
Debentures and the Guarantee to be issued by Aon Corporation
5.2 Opinion of special Delaware counsel as to validity of the Capital
Securities to be issued by Aon Capital A
8 Opinion of special tax counsel as to certain federal income tax matters
12 Computation of ratios of earnings to fixed charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Sidley & Austin (included in Exhibits 5.1 and 8)
23.4 Consent of special Delaware counsel (included in Exhibit 5.2)
24 Powers of Attorney (included in the Signatures page of this Registration
Statement)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Junior Subordinated Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Trust Agreement of Aon Capital A
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the
Guarantee for the benefit of the holders of Capital Securities of Aon
Capital A
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter from Registered Holders to Clients
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.5 Form of Exchange Agent Agreement
</TABLE>
<PAGE>
================================================================================
AON CORPORATION
AND
THE BANK OF NEW YORK
TRUSTEE
--------------------------------
INDENTURE
DATED AS OF JANUARY 13, 1997
JUNIOR SUBORDINATED DEBENTURES
================================================================================
<PAGE>
Reconciliation and Tie Sheet*
between
Provisions of the Trust Indenture Act of 1939, as amended
and
Indenture Dated as of January 13, 1997
between
Aon Corporation
and
The Bank of New York, Trustee
<TABLE>
<CAPTION>
Section of Act Section of Indenture
-------------- --------------------
<S> <C>
310(a)(1) 7.09
310(a)(2) 7.09
310(a)(3) Inapplicable
310(a)(4) Inapplicable
310(b) 7.08, 7.10
310(c) Inapplicable
311(a) 7.13(a), 7.13(c)
311(b) 7.13(b), 7.13(c)
311(c) Inapplicable
312(a) 5.01, 5.02(a)
312(b) 5.02(b)
312(c) 5.03(c)
313(a) 5.04(a)
313(b)(1) Inapplicable
313(b)(2) 5.04(b)
313(c) 5.04(c)
313(d) 5.04(d)
314(a)(1) 5.03(a)
314(a)(2) 5.03(b)
314(a)(3) 5.03(c)
314(a)(4) 4.06
314(b) Inapplicable
314(c)(1) 15.04
314(c)(2) 15.04
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 15.04
314(f) Omitted
315(a) 7.01
315(b) 6.07
315(c) 7.01
315(d) 7.01
315(e) 6.08
316(a)(1) 6.06, 8.04
316(a)(2) Omitted
316(b) 6.04
316(c) 10.05
317(a) 6.02
317(b) 4.04
318(a) 15.06
________________________
</TABLE>
* This Reconciliation and Tie Sheet is not part of the Indenture.
-i-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE
DEFINITIONS
<S> <C>
Section 1.01 Certain terms defined........................................................... 1
Act............................................................................. 2
Additional Interest............................................................. 2
Administrative Trustee.......................................................... 2
Aon Guarantee................................................................... 2
Aon Trust....................................................................... 3
Applicants...................................................................... 3
Authenticating Agent............................................................ 3
Authorized Newspaper............................................................ 3
Board of Directors.............................................................. 3
Business Day.................................................................... 3
Capital Securities.............................................................. 3
Capital Stock................................................................... 3
Commission...................................................................... 4
Common Securities............................................................... 4
Common Stock.................................................................... 4
Company......................................................................... 4
Depositary...................................................................... 4
Distributions................................................................... 4
Event of Default................................................................ 5
Exchange Act.................................................................... 5
Extension Period................................................................ 5
Indenture....................................................................... 5
Investment Company Event........................................................ 5
Maturity........................................................................ 5
1940 Act........................................................................ 5
Officers' Certificate........................................................... 5
Opinion of Counsel.............................................................. 6
Original Issue Date............................................................. 6
Original Issue Discount Security................................................ 6
Paying Agent.................................................................... 6
Person.......................................................................... 6
Preferred Securities............................................................ 6
principal....................................................................... 6
Property Trustee................................................................ 6
Ranking junior to the Securities................................................ 7
Ranking on a parity with the Securities......................................... 7
record date..................................................................... 7
Register........................................................................ 7
Resolution of the Company....................................................... 7
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Responsible Officer............................................................. 8
Rights Plan..................................................................... 8
Security or Securities; outstanding............................................. 8
Securityholder; registered holder............................................... 9
Senior Indebtedness of the Company.............................................. 9
Stated Maturity................................................................. 9
Subsidiary...................................................................... 9
Tax Event....................................................................... 10
Trust Agreement................................................................. 10
Trustee; Principal Office of the Trustee........................................ 10
Trust Indenture Act of 1939..................................................... 10
Trust Securities................................................................ 10
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION OF
TRANSFER AND EXCHANGE OF SECURITIES
Section 2.01. Amount, series and delivery of Securities....................................... 11
Section 2.02 Form of Securities and Trustee's Certificate.................................... 15
Section 2.03. Denominations of and payment of interest on Securities.......................... 17
Section 2.04. Execution of Securities......................................................... 18
Section 2.05. Registration, transfer and exchange of Securities............................... 18
Section 2.06. Temporary Securities............................................................ 20
Section 2.07. Mutilated, destroyed, lost or stolen Securities................................. 20
Section 2.08. Cancellation and destruction of surrendered Securities.......................... 21
Section 2.09. Authenticating Agents........................................................... 21
Section 2.10. Deferrals of Interest Payment Dates............................................. 23
Section 2.11. Right of Set-Off................................................................ 24
Section 2.12. Shortening or Extension of Stated Maturity...................................... 24
Section 2.13. Agreed tax treatment............................................................ 24
Section 2.14. CUSIP Numbers................................................................... 24
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Applicability of Article........................................................ 25
Section 3.02. Mailing of notice of redemption................................................. 25
Section 3.03. When Securities called for redemption become due and payable.................... 26
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
<S> <C>
Section 4.01. Payment of principal of and interest on Securities.............................. 27
Section 4.02. Maintenance of offices or agencies for registration of transfer,
exchange and payment of Securities........................................... 27
Section 4.03. Appointment to fill a vacancy in the office of Trustee.......................... 27
Section 4.04. Duties of Paying Agent.......................................................... 28
Section 4.05. Further assurances.............................................................. 28
Section 4.06. Officers' Certificate as to defaults; notices of certain defaults............... 29
Section 4.07. Waiver of covenants............................................................. 29
Section 4.08. Additional Tax Sums............................................................. 29
Section 4.09. Additional Covenants............................................................ 30
Section 4.10. Calculation of Original Issue Discount.......................................... 30
ARTICLE FIVE
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
Section 5.01. Company to furnish Trustee information as to the names and
addresses of Securityholders................................................. 31
Section 5.02. Trustee to preserve information as to the names and addresses of
Securityholders received by it............................................... 31
Section 5.03. Annual and other reports to be filed by Company with Trustee.................... 32
Section 5.04. Trustee to transmit annual report to Securityholders............................ 33
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01. Events of Default defined....................................................... 34
Section 6.02. Covenant of Company to pay to Trustee whole amount due
on Securities on default in payment of interest or principal................. 37
Section 6.03. Application of moneys collected by Trustee...................................... 38
Section 6.04. Limitation on suits by holders of Securities.................................... 39
Section 6.05. On default Trustee may take appropriate action.................................. 40
Section 6.06. Rights of holders of majority in principal amount of Securities
to direct Trustee and to waive default....................................... 40
Section 6.07. Trustee to give notice of defaults known to it, but may withhold
in certain circumstances..................................................... 41
Section 6.08. Requirement of an undertaking to pay costs in certain suits under
the Indenture or against the Trustee......................................... 41
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE SEVEN
CONCERNING THE TRUSTEE
<S> <C>
Section 7.01. Upon Event of Default occurring and continuing, Trustee shall
exercise powers vested in it, and use same degree of care and
skill in their exercise, as a prudent man would use.......................... 42
Section 7.02. Reliance on documents, opinions, etc............................................ 43
Section 7.03. Trustee not liable for recitals in Indenture or in Securities................... 44
Section 7.04. May hold Securities............................................................. 44
Section 7.05. Moneys received by Trustee to be held in trust without interest................. 44
Section 7.06. Trustee entitled to compensation, reimbursement and indemnity................... 44
Section 7.07. Right of Trustee to rely on Officers' Certificate where no other
evidence specifically prescribed............................................. 45
Section 7.08. Disqualification; conflicting interests......................................... 45
Section 7.09. Requirements for eligibility of Trustee......................................... 45
Section 7.10. Resignation and Removal of Trustee.............................................. 46
Section 7.11. Acceptance by successor Trustee................................................. 47
Section 7.12. Successor to Trustee by merger, consolidation or succession to business......... 48
Section 7.13. Limitations on rights of Trustee as a creditor to obtain payment of
certain claims within three months prior to default or during
default, or to realize on property as such creditor thereafter............... 48
ARTICLE EIGHT
CONCERNING THE SECURITYHOLDERS
Section 8.01. Evidence of action by Securityholders........................................... 52
Section 8.02. Proof of execution of instruments and of holding of Securities.................. 52
Section 8.03. Who may be deemed owners of Securities.......................................... 53
Section 8.04. Securities owned by Company or controlled or controlling persons
disregarded for certain purposes............................................. 53
Section 8.05. Instruments executed by Securityholders bind future holders..................... 54
ARTICLE NINE
SECURITYHOLDERS' MEETINGS
Section 9.01. Purposes for which meetings may be called....................................... 54
Section 9.02. Manner of calling meetings...................................................... 54
Section 9.03. Call of meeting by Company or Securityholders................................... 55
Section 9.04. Who may attend and vote at meetings............................................. 55
Section 9.05. Regulations may be made by Trustee.............................................. 55
Section 9.06. Manner of voting at meetings and record to be kept.............................. 56
Section 9.07. Exercise of rights of Trustee, Securityholders and holders of
Preferred Securities not to be hindered or delayed........................... 56
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE TEN
SUPPLEMENTAL INDENTURES
<S> <C>
Section 10.01. Purposes for which supplemental indentures may be entered
into without consent of Securityholders...................................... 56
Section 10.02. Modification of Indenture with consent of holders of a majority
in principal amount of Securities............................................ 58
Section 10.03. Effect of supplemental indentures............................................... 59
Section 10.04. Securities may bear notation of changes by supplemental indentures.............. 60
Section 10.05. Revocation and effect of consents............................................... 60
ARTICLE ELEVEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 11.01. Company may consolidate, etc. on certain terms.................................. 60
Section 11.02. Successor corporation substituted............................................... 61
Section 11.03. Opinion of Counsel to Trustee................................................... 61
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE,
UNCLAIMED MONEYS
Section 12.01. Satisfaction and discharge of Indenture........................................ 61
Section 12.02. Application by Trustee of funds deposited for payment of Securities............ 62
Section 12.03. Repayment of moneys held by Paying Agent....................................... 62
Section 12.04. Repayment of moneys held by Trustee............................................ 62
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS,
DIRECTORS AND EMPLOYEES
Section 13.01. Incorporators, stockholders, officers, directors and employees
of Company exempt from individual liability................................. 63
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
Section 14.01. Agreement to subordinate....................................................... 63
Section 14.02. Obligation of the Company unconditional........................................ 65
Section 14.03. Limitations on duties to holders of Senior Indebtedness of the Company......... 65
Section 14.04. Notice to Trustee of facts prohibiting payment................................. 65
Section 14.05. Application by Trustee of moneys deposited with it............................. 66
Section 14.06. Subrogation.................................................................... 66
</TABLE>
-vi-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 14.07. Subordination rights not impaired by acts or omissions of
Company or holders of Senior Indebtedness of the Company.................... 66
Section 14.08. Authorization of Trustee to effectuate subordination of Securities............. 67
Section 14.09. No Payment when Senior Indebtedness in default................................. 67
Section 14.10. Right of Trustee to hold Senior Indebtedness of the Company.................... 67
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
Section 15.01. Successors and assigns of Company bound by Indenture........................... 68
Section 15.02. Acts of board, committee or officer of successor corporation valid............. 68
Section 15.03. Required notices or demands may be served by mail.............................. 68
Section 15.04. Officers' Certificate and Opinion of Counsel to be furnished
upon applications or demands by the Company................................. 68
Section 15.05. Payments due on Saturdays, Sundays, and holidays............................... 69
Section 15.06. Provisions required by Trust Indenture Act of 1939 to control.................. 69
Section 15.07. Indenture and Securities to be construed in accordance with the laws
of the State of New York.................................................... 69
Section 15.08. Provisions of the Indenture and Securities for the sole benefit
of the parties and the Securityholders...................................... 69
Section 15.09. Indenture may be executed in counterparts...................................... 70
Section 15.10. Securities in foreign currencies............................................... 70
</TABLE>
-vii-
<PAGE>
THIS INDENTURE, dated as of the 13th day of January, 1997 between AON
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as the "Company"), party of
the first part, and THE BANK OF NEW YORK, a New York banking corporation
(hereinafter sometimes referred to as the "Trustee"), party of the second part.
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance from time to time of its unsecured junior subordinated
debentures or other evidences of indebtedness (hereinafter referred to as the
"Securities"), without limit as to principal amount, issuable in one or more
series, the amount and terms of each such series to be determined as hereinafter
provided, including, without limitation, Securities issued to evidence loans
made to the Company of the proceeds from the issuance from time to time by one
or more business trusts (each an "Aon Trust," and collectively, the "Aon
Trusts") of preferred interests in such Trusts (the "Preferred Securities" which
may also be referred to, without limitation, as the "Capital Securities") and
common interests in such Trusts (the "Common Securities," and collectively with
the Preferred Securities, the "Trust Securities"); to be authenticated by the
certificate of the Trustee; and, to provide the terms and conditions upon which
the Securities are to be authenticated, issued and delivered, the Company has
duly authorized the execution of this Indenture; and
WHEREAS, all acts and things necessary to make the Securities when
executed by the Company and authenticated and delivered by the Trustee as in
this Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute these presents a valid indenture and agreement
according to its terms, have been done and performed and the execution of this
Indenture and the issue hereunder of the Securities have in all respects been
duly authorized, and the Company, in the exercise of the legal rights and power
vested in it, executes this Indenture and proposes to make, execute, issue and
deliver the Securities;
NOW, THEREFORE, in order to declare the terms and conditions upon
which the Securities are authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Securities by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit of the respective holders from
time to time of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01 CERTAIN TERMS DEFINED. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(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;
<PAGE>
(b) All other terms used herein which are defined in the Trust
Indenture Act of 1939, whether directly or by reference therein, have the
meanings assigned to them therein;
(c) All accounting terms used herein and not expressly defined herein
shall have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States of America, and, except
as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States of America at the date 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 the
Company; and
(d) The terms "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Act:
The term "Act" has the meaning specified in Section 2.01.
Additional Interest:
The term "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 Tax Sums:
The term "Additional Tax Sums" has the meaning specified in Section
4.08.
Administrative Trustee:
The term "Administrative Trustee" means, in respect of any Aon Trust,
each Person identified as an "Administrative Trustee" in the related Trust
Agreement, solely in such Person's capacity as Administrative Trustee of such
Aon Trust under such Trust Agreement and not in such Person's individual
capacity, or any successor administrative trustee appointed as therein provided.
Aon Guarantee:
The term "Aon Guarantee" means the guarantee by the Company of
distributions on the Preferred Securities of an Aon Trust to the extent provided
in the Guarantee Agreement.
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Aon Trust:
The terms "Aon Trust" and "Aon Trusts" each have the meaning specified
in the recitals to this Indenture.
applicants:
The term "applicants" has the meaning specified in Section 5.02(b).
Authenticating Agent:
The term "Authenticating Agent" means any Authenticating Agent
appointed by the Trustee pursuant to Section 2.09.
Authorized Newspaper:
The term "Authorized Newspaper" means a newspaper in the City of
Chicago, State of Illinois, and the Borough of Manhattan, The City of New York,
State of New York, each of which is printed in the English language and
customarily published at least once a day for at least five days in each
calendar week and of general circulation in the respective cities. Whenever
successive publications are required to be made in an Authorized Newspaper, the
successive publications may be made in the same or in a different newspaper
meeting the foregoing requirements and in each case on any day of the week. If
it is impossible or, in the opinion of the Trustee, impracticable to publish any
notice in the manner herein provided, then such publication in lieu thereof as
shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
Board of Directors:
The term "Board of Directors," when used with reference to the
Company, means the Board of Directors of the Company or the Executive Committee
or any other committee of or created by the Board of Directors of the Company
duly authorized to act hereunder.
Business Day:
The term "Business Day" means any day which is not a Saturday or
Sunday and which is neither a legal holiday nor a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to close or a day on which the principal corporate trust office
of the Trustee is closed for business.
Capital Securities:
The term "Capital Securities" has the meaning specified in the
recitals to this Indenture.
Capital Stock:
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The term "Capital Stock" means shares of capital stock of any class of
any corporation whether now or hereafter authorized regardless of whether such
capital stock shall be limited to a fixed sum or percentage in respect of the
rights of the holders thereof to participate in dividends and in the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up.
Commission:
The term "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 of 1939, then the body performing such duties on such
date.
Common Securities:
The term "Common Securities" has the meaning specified in the recitals
to this Indenture.
Common Stock:
The term "Common Stock" means the common stock, par value $1.00 per
share, of the Company.
Company:
The term "Company" means Aon Corporation, a corporation duly organized
and existing under the laws of the State of Delaware and, subject to the
provisions of Article Eleven, shall also include its successors and assigns.
Depositary:
The term "Depositary" 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 Depositary by the Company pursuant to
Section 2.01 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter the term "Depositary"
shall mean or include each person who is then a Depositary hereunder and if at
any time there is more than one such person, the term "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of such series.
Distributions:
The term "Distributions," with respect to the Trust Securities issued
by an Aon Trust, means amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions."
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Event of Default:
The term "Event of Default" with respect to Securities of any series
shall mean any event specified as such in Section 6.01 and any other event as
may be established with respect to the Securities of such series as contemplated
by Section 2.01.
Exchange Act:
The term "Exchange Act" has the meaning specified in Section 2.02.
Extension Period:
The term "Extension Period" has the meaning specified in Section 2.10.
Indenture:
The term "Indenture" means this instrument as originally executed, or,
if amended or supplemented as herein provided, then as so amended or
supplemented, and shall include the form and terms of particular series of
Securities established as contemplated by Sections 2.01 and 2.02.
Investment Company Event:
The term "Investment Company Event" means in respect of an Aon Trust,
the receipt by an Aon Trust of an Opinion of Counsel (as defined in the relevant
Trust Agreement) 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 Aon 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 Aon Trust.
Maturity:
The term "Maturity" when used with respect to any Security means the
date on which the principal of such Security 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:
The term "1940 Act" means the Investment Company Act of 1940, as
amended.
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed by
the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive
Officer, the President, any Vice Chairman or any Vice President of the Company
(whether or not designated by a number or a word or words added
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before or after the title Vice President) and by the Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 15.04, if and to the extent required by the
provisions thereof and will comply with Section 314 of the Trust Indenture Act
of 1939.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who shall be satisfactory to the Trustee, and who may be an
employee of, or counsel to, the Company and delivered to the Trustee. Each such
opinion shall include the statements provided for in Section 15.04, if and to
the extent required by the provisions thereof and will comply with Section 314
of the Trust Indenture Act of 1939.
Original Issue Date:
The term "Original Issue Date" means the first date of issuance of
each Security.
Original Issue Discount Security:
The term "Original Issue Discount Security" shall mean any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon declaration pursuant to Section 6.01.
Paying Agent:
The term "Paying Agent" means the Trustee or any Person or Persons
authorized by the Company to pay the principal or interest on any Securities on
behalf of the Company.
Person:
The term "Person" or "person" means 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.
Preferred Securities:
The term "Preferred Securities" has the meaning specified in the
recitals to this Indenture.
principal:
The term "principal," whenever used with reference to the Securities
or any Security or any portion thereof, shall be deemed to include "and premium,
if any."
Property Trustee:
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The term "Property Trustee" means, in respect of any Aon 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 Aon
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.
Ranking junior to the Securities:
The term "ranking junior to the Securities" when used with respect to
any obligation of the Company means (i) any Aon Guarantee of Preferred
Securities of any Aon Trust, and (ii) any other obligation of the Company which
(a) ranks junior to and not equally with or prior to the Securities (or any
other obligations of the Company ranking on a parity with the Securities) in
right of payment upon the happening of any event of the kind specified in the
first sentence of the first paragraph of Section 14.01, or (b) is specifically
designated as ranking junior to the Securities by express provision in the
instrument creating or evidencing such obligation.
The securing of any obligations of the Company, otherwise ranking
junior to the Securities, shall be deemed to prevent such obligations from
constituting obligations ranking junior to the Securities.
Ranking on a parity with the Securities:
The term "ranking on a parity with the Securities" when used with
respect to any obligation of the Company means any obligation of the Company
which (a) ranks equally with and not prior to the Securities in right of payment
upon the happening of any event of the kind specified in the first sentence of
the first paragraph of Section 14.01, or (b) is specifically designated as
ranking on a parity with the Securities by express provision in the instrument
creating or evidencing such obligation.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities, shall not be deemed to prevent such obligations from
constituting obligations ranking on a parity with the Securities.
record date:
The term "record date" has the meaning specified in Section 2.03.
Register:
The term "Register" has the meaning specified in Section 2.05.
Resolution of the Company:
The term "Resolution of the Company" means a resolution of the
Company, in the form of a resolution of the Board of Directors, in the form of a
resolution of a duly constituted committee of the Board of Directors, or in the
form of a resolution of two or more senior officers of the Company, authorizing,
ratifying, setting forth or otherwise validating agreements, execution and
delivery of
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documents, the issuance, form and terms of Securities, or any other actions or
proceedings pursuant or with respect to this Indenture.
Responsible Officer:
The term "Responsible Officer," when used with respect to the Trustee,
means the chairman and vice chairman of the board of directors, the president,
the chairman and vice chairman of the executive committee of the board of
directors, every vice president or officer senior thereto, every assistant vice
president, the secretary, every assistant secretary, the treasurer, every
assistant treasurer, every corporate trust officer, every assistant corporate
trust officer, and every other officer and assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of, and familiarity with, a
particular subject.
Rights Plan:
The term "Rights Plan" means a plan of the Company providing for the
issuance by the Company to all holders of its Common Stock of rights entitling
the holders thereof to subscribe for or purchase shares of Common Stock or any
class or series of preferred stock, which rights (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and (iii)
are also issued in respect of future issuances of Common Stock, in each case
until the occurrence of a specified event or events.
Security or Securities; outstanding:
The term "Security" or "Securities" means any security or securities
of the Company, as the case may be, without regard to series, authenticated and
delivered under this Indenture.
The term "outstanding," when used with reference to Securities and
subject to the provisions of Section 8.04, means as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any Paying Agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent), provided that such Securities shall
have reached their Stated Maturity or, if such Securities are to be
redeemed prior to the Stated Maturity thereof, notice of such redemption
shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered or which have been
paid pursuant to the terms of
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Section 2.07 unless proof satisfactory to the Trustee is presented that any
such Securities are held by persons in whose hands any of such Securities
is a valid, binding and legal obligation of the Company.
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, the principal amount of an
Original Issue Discount Security that shall be deemed to be outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the Maturity thereof pursuant to Section 6.01.
Securityholder; registered holder:
The terms "Securityholder," "holder of Securities," "registered
holder" or other similar term, mean any person who shall at the time be the
registered holder of any Security or Securities on the Register kept for that
purpose in accordance with the provisions of this Indenture.
Senior Indebtedness of the Company:
The term "Senior Indebtedness of the Company" means (i) any
indebtedness of the Company for borrowed or purchased money, whether or not
evidenced by bonds, debentures, notes or other written instruments, (ii)
obligations under letters of credit, (iii) any indebtedness or other obligations
of the Company with respect to commodity contracts, interest rate and currency
swap agreements, cap, floor and collar agreements, currency spot and forward
contracts, and other similar agreements or arrangements designed to protect
against fluctuations in currency exchange or interest rates, and (iv) any
guarantees, endorsements (other than by endorsement of negotiable instruments
for collection in the ordinary course of business) or other similar contingent
obligations in respect of obligations of others of a type described in (i), (ii)
or (iii) above whether or not such obligation is classified as a liability on a
balance sheet prepared in accordance with generally accepted accounting
principles, in each case listed in (i), (ii), (iii) and (iv) above whether
outstanding on the date of execution of this Indenture or thereafter incurred,
other than obligations ranking on a parity with the Securities or ranking junior
to the Securities; provided, however, that "Senior Indebtedness of the Company"
does not include trade creditors.
Stated Maturity:
The term "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 shortened or extended or
provided pursuant to the terms of such Security and this Indenture.
Subsidiary:
The term "Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting
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stock" means stock which ordinarily has voting power for the election of
directors, 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:
The term "Tax Event" means the receipt by the Company and an Aon Trust
of an Opinion of Counsel (as defined in the relevant Trust Agreement)
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 or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities of such Aon Trust, there is more than an insubstantial risk
that (i) the Aon Trust is, or will be within 90 days after 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 issued by
the Company to such Aon Trust, (ii) interest payable by the Company on such
corresponding series of Securities is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes, or (iii) the Aon Trust is, or
will be within 90 days after 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:
The term "Trust Agreement" means any Trust Agreement governing any Aon
Trust, whether now existing or created in the future, relating to the Securities
of any series in each case.
Trustee; Principal Office of the Trustee:
The term "Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument, and, subject to the provisions of Article
Seven, shall also include its successors. The term "principal office" of the
Trustee shall mean the principal corporate trust office of the Trustee in The
City of New York, State of New York, at which the corporate trust business of
the Trustee shall, at any particular time, be administered. The present address
of the office at which the corporate trust business of the Trustee is
administered is 101 Barclay Street, Floor 21 West, New York, New York 10286.
Trust Indenture Act of 1939:
Except as herein otherwise expressly provided or unless the context
requires otherwise, the term "Trust Indenture Act of 1939" shall mean the Trust
Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as
in force at the date as of which this Indenture was originally executed.
Trust Securities:
The term "Trust Securities" has the meaning specified in the recitals
to this Indenture.
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ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION OF
TRANSFER AND EXCHANGE OF SECURITIES
Section 2.01. AMOUNT, SERIES AND DELIVERY OF SECURITIES. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. The terms of each
series (which terms shall not be inconsistent with the provisions of this
Indenture) including:
(1) The designation of the Securities of such series (which shall
distinguish the Securities of the series from all other Securities and
which shall include the word "subordinated" or a word of like meaning);
(2) Any limit upon the aggregate principal amount of the Securities
of such series which may be executed, authenticated and delivered under
this Indenture; provided, however, that nothing contained in this Section
or elsewhere in this Indenture or in such Securities or in a Resolution of
the Company or Officers' Certificate or supplemental indenture is intended
to or shall limit execution by the Company or authentication and delivery
by the Trustee of Securities under the circumstances contemplated by
Sections 2.05, 2.06, 2.07, 3.02, 3.03 and 10.04;
(3) The date or dates (if any) on which the principal of the
Securities of such series is payable;
(4) The rate or rates at which the Securities of such series shall
bear interest, if any, the rate or rates and extent to which Additional
Interest or other interest, if any, shall be payable, the date or dates
from which such interest shall accrue, the dates on which such interest
shall be payable, the record date for the interest payable on any interest
payment date and the right of the Company to defer or extend an interest
payment date;
(5) The place or places where Securities of such series may be
presented for payment and for the other purposes provided in Section 4.02;
(6) Any price or prices at which, any period or periods within which,
and any terms and conditions upon which Securities of such series may be
redeemed, in whole or in part, at the option of the Company;
(7) The type or types (if any) of Capital Stock of the Company into
which, any period or periods within which, and any terms and conditions
upon which Securities of such series may be made payable, converted,
exchanged in whole or in part, at the option of the holder or of the
Company;
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(8) If other than denominations of $1,000 and any whole multiple
thereof, the denominations in which Securities of such series shall be
issuable;
(9) If other than the principal amount thereof, the portion of the
principal amount of Securities of such series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
6.01;
(10) If other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency (which may be a composite currency) in
which payment of the principal of (and premium, if any) and interest, if
any, on the Securities of such series shall be payable;
(11) If the principal of (and premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a holder thereof, in a coin or currency (including composite
currency) other than that in which the Securities of such series are stated
to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(12) If the amounts of payments of principal of (and premium, if any)
or interest, if any, on the Securities of such series may be determined
with reference to an index based on a coin or currency (including composite
currency) other than that in which the Securities of such series are stated
to be payable, the manner in which such amounts shall be determined;
(13) If the Securities of such series are payable at Maturity or upon
earlier redemption in Capital Stock, the terms and conditions upon which
such payment shall be made;
(14) The person or persons who shall be registrar for the Securities
of such series, and the place or places where the Register of Securities of
the series shall be kept;
(15) Any Events of Default with respect to the Securities of such
series, if not set forth herein;
(16) Whether any Securities of such series are to be issuable in
global form with or without coupons, and, if so, the Depositary for such
global Securities and whether beneficial owners of interests in any such
global Security may exchange such interests for definitive Securities of
such series and of like tenor of any authorized form and denomination and
the circumstances under which, and the place or places where, any such
exchanges may occur, if other than in the manner provided in Section 2.05;
(17) The form of Trust Agreement and Guarantee Agreement, if
applicable;
(18) If applicable, the relative degree to which Securities of such
series shall be senior to or be subordinated to other series of such
Securities or other indebtedness
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of the Company in right of payment, whether such other series of Securities
or other indebtedness are outstanding or not; and
(19) Any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture);
or in any case, the method for determining such terms, the persons authorized to
determine such terms and the limits, if any, within which any such determination
of such terms is to be made shall either be established in or pursuant to a
Resolution of the Company and set forth in an Officers' Certificate, or set
forth in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series.
The Securities of all series shall be subordinate to Senior
Indebtedness of the Company as provided in Article Fourteen. The applicable
Resolution of the Company set forth in an Officers' Certificate or supplemental
indenture may provide that Securities of any particular series may be issued at
various times, with different dates on which the principal or any installment of
principal is payable, with different rates of interest, if any, or different
methods by which interest may be determined, with different dates from which
such interest shall accrue, with different dates on which such interest may be
payable or with any different terms other than Events of Default but all such
Securities of a particular series shall for all purposes under this Indenture
including, but not limited to, voting and Events of Default, be treated as
Securities of a single series.
If any of the terms of any series of Securities are established by
action taken pursuant to a Resolution of the Company, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate or supplemental indenture setting forth
the terms of the series.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication by it, and the Trustee shall thereupon
authenticate and deliver such Securities to or upon the written order of the
Company, signed by its Chairman of the Board, or its Chief Executive Officer, or
its President, or any Vice Chairman or any Vice President of the Company
(whether or not designated by a number or a word or words added before or after
the title Vice President), and by its Treasurer or an Assistant Treasurer or its
Controller or its Secretary or an Assistant Secretary, without any further
corporate action by the Company. If the form or terms of the Securities of the
series have been established in or pursuant to a Resolution of the Company and
set forth in an Officers' Certificate, or set forth in one or more supplemental
indentures hereto, as permitted by this Section and Section 2.02, in
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 7.01) shall be fully protected in
relying upon:
(a) an Opinion of Counsel stating:
(i) If the form and terms of such Securities have been
established by or pursuant to a Resolution of the Company and set
forth in an Officers' Certificate as permitted by Section 2.02, that
such form and terms have been established in conformity with the
provisions of this Indenture;
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(ii) If the form and terms of such Securities have been
established by or pursuant to a Resolution of the Company and set
forth in one or more indentures supplemental hereto as permitted by
Section 2.02, that such form and terms have been established in
conformity with the provisions of this Indenture;
(iii) That the issuance and sale of such Securities have been
duly registered under the Securities Act of 1933, as amended (the
"Act"), and a registration statement with respect thereto under the
Act has become effective under the Act, or that such issuance and sale
are exempt from the registration requirements of the Act; and that any
other action by or before any governmental body or authority (except
that the offer and sale of such Securities in certain jurisdictions
may be subject to the Blue Sky or securities laws of such
jurisdictions) required in connection with the issuance and sale of
such Securities has been duly taken, specifying the nature thereof, or
that no such action is required;
(iv) That the issuance and delivery of such Securities does not
violate the charter or By-laws of the Company or violate any order or
decree of any court or public authority having jurisdiction of which
such counsel has knowledge; or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any
mortgage, indenture, contract, agreement or undertaking known to
counsel to which the Company is a party or by which it is bound;
(v) That such Securities, when executed by the Company and
authenticated by the Trustee in accordance with the terms of this
Indenture and delivered to the purchasers thereof against payment of
the agreed consideration therefor in accordance with the terms of any
purchase or similar agreement, will be entitled to the benefits of
this Indenture and will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer and other
laws of general applicability relating to or affecting the enforcement
of creditors' rights and to general principles of equity (regardless
of whether considered in a proceeding at law or in equity);
(vi) If the terms of such Securities provide for the conversion
of such Securities into shares of Capital Stock of the Company, or the
payment thereof in Capital Stock upon Maturity or earlier redemption
of such Securities, that the Company has reserved a sufficient number
of shares of Capital Stock for issuance upon such conversion or
payment, and such shares of Capital Stock, upon such issuance, will be
duly and validly issued, fully paid and nonassessable;
(vii) That the Company has the corporate power to issue such
Securities, and has duly taken all necessary corporate action with
respect to such issuance;
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(viii) That all laws and requirements in respect of the execution
and delivery by the Company of such Securities and the related
supplemental indenture, if any, have been complied with and that
authentication and delivery of such Securities and the execution and
delivery of the related supplemental indenture, if any, by the Trustee
will not violate the terms of this Indenture; and
(ix) Such other matters as the Trustee may reasonably request;
and
(b) An Officers' Certificate setting forth the form and terms of the
Securities of such series pursuant to this Section and Section 2.02 hereof
(but only if the form and terms of the Securities of such series are not
set forth in one or more supplemental indentures hereto) and stating that
all conditions precedent provided for in this Indenture relating to the
issuance of such Securities have been complied with, that no Event of
Default with respect to any series of Securities has occurred and is
continuing and that the issuance of such Securities is not and will not
result in (i) an Event of Default or an event or condition which, upon the
giving of notice to, or the acquisition of knowledge by, each such officer,
or the lapse of time or both, would become an Event of Default or (ii) a
default under the provisions of any other instrument or agreement by which
the Company is bound.
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
If all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver either an Opinion of Counsel or an
Officers' Certificate at the time of issuance of each Security, provided that
such Opinion of Counsel and Officers' Certificate, with appropriate
modifications, are instead delivered at or prior to the time of issuance of the
first Security of such series.
Each Security shall be dated the date of its authentication.
Section 2.02 FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE. The
Securities of each series shall be substantially of the tenor and terms as shall
be authorized in or pursuant to a Resolution of the Company and set forth in an
Officers' Certificate, or set forth in an indenture or indentures supplemental
hereto in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification or designation and
such legends or endorsements thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Securities may be listed, or to conform to usage.
If the form of Securities of any series is authorized by action taken pursuant
to a Resolution of the Company, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate contemplated by Section 2.01 setting forth the terms of the series.
The Securities may be printed, lithographed or fully or partly
engraved.
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The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By: ______________________________
Authorized Signatory
(by manual signature only)"
If Securities of a series are issuable in global form, as specified
pursuant to Section 2.01, then, notwithstanding clause (8) of Section 2.01 and
the provisions of Section 2.03, such Security shall represent such of the
outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of outstanding Securities
of such series from time to time endorsed thereon and that the aggregate amount
of outstanding Securities of such series represented thereby may from time to
time be increased or reduced to reflect exchanges or transfers. Any endorsement
of a Security in global form to reflect the amount, or any increase or decrease
in the amount, of outstanding Securities represented thereby shall be made by
the Trustee in such manner and upon instructions given by such person or persons
as shall be specified in such Security or by the Company. Subject to the
provisions of Section 2.04 and, if applicable, Section 2.06, the Trustee shall
deliver and redeliver any Security in global form in the manner and upon written
instructions given by the person or persons specified in such Security or by the
Company. Any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form after the original issuance
of the Securities of such series shall be in writing but need not comply with
Section 15.04 and need not be accompanied by an Opinion of Counsel.
Unless otherwise specified pursuant to Section 2.01, payment of
principal of and any premium and any interest on any Security in global form
shall be made to the person or persons specified therein.
The owners of beneficial interests in any global Security shall have
no rights under this Indenture with respect to any global Security held on their
behalf by a Depositary, and such Depositary may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the sole holder and
owner of such global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by a Depositary, or impair, as between a
Depositary and its participants in any global Security, the operation of
customary practices governing the exercise of the rights of a holder of a
Security of any series, including, without limitation, the granting of proxies
or other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action that a holder
is entitled to give or take under this Indenture.
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Neither the Company, the Trustee nor any Authenticating Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Each Depositary designated pursuant to Section 2.01 for a global
Security must, at the time of its designation and at all times while it serves
as Depositary, be a clearing agency registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and any other applicable statute or
regulation.
Section 2.03. DENOMINATIONS OF AND PAYMENT OF INTEREST ON SECURITIES.
The Securities of each series shall be issuable as fully registered Securities
without coupons in such denominations as shall be specified as contemplated by
Section 2.01 (except as provided in Section 2.02 and Section 2.06). In the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series shall be issuable in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.
If the Securities of any series shall bear interest, each Security of
such series shall bear interest from the applicable date at the rate or rates
per annum, and such interest shall be payable on the dates, specified on, or
determined in the manner provided in, the Security. The person in whose name
any Security is registered at the close of business on any record date (as
defined below) for the Security with respect to any interest payment date for
such Security shall be entitled to receive the interest payable thereon on such
interest payment date notwithstanding the cancellation of such Security upon any
registration of transfer, exchange or conversion thereof subsequent to such
record date and prior to such interest payment date, unless such Security shall
have been called for redemption on a date fixed for redemption subsequent to
such record date and prior to such interest payment date or unless the Company
shall default in the payment of interest due on such interest payment date on
such Security, in which case such defaulted interest shall be paid to the person
in whose name such Security (or any Security or Securities issued upon
registration of or exchange thereof) is registered at the close of business on
the record date for the payment of such defaulted interest, or except as
otherwise specified as contemplated by Section 2.01. The term "record date" as
used in this Section with respect to any regular interest payment date for any
Security shall mean such day or days as shall be specified as contemplated by
Section 2.01; provided, however, that in the absence of any such provisions with
respect to any Security, such term shall mean: (1) if such interest payment date
is the first day of a calendar month, record date means the fifteenth day of the
calendar month next preceding such interest payment date; or (2) if such
interest payment date is the fifteenth day of a calendar month, record date
means the first day of such calendar month; provided, further, that (except as
otherwise specified as contemplated by Section 2.01) if the day which would be
the record date as provided herein is not a Business Day, then it shall mean the
Business Day next preceding such day. Such term, as used in this Section, with
respect to the payment of any defaulted interest on any Security shall mean
(except as otherwise specified as contemplated by Section 2.01) the fifth day
next preceding the date fixed by the Company for the payment of defaulted
interest, established by notice given by first class mail by or on behalf of the
Company to the holder of such Security not less than 10 days preceding such
record date, or, if such fifth day is not a Business Day, the Business Day next
preceding such fifth day.
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Section 2.04. EXECUTION OF SECURITIES. The Securities shall be
signed on behalf of the Company, manually or in facsimile, by its Chairman of
the Board, or its Chief Executive Officer, or its President, or any Vice
Chairman, or any Vice President of the Company (whether or not designated by a
number or a word or words added before or after the title Vice President), and
by its Treasurer or an Assistant Treasurer or its Controller or its Secretary or
an Assistant Secretary under its corporate seal, which may be affixed thereto or
printed, engraved or otherwise reproduced thereon, by facsimile or otherwise.
Only such Securities as shall bear thereon a certificate of authentication
substantially in the form recited herein, executed by or on behalf of the
Trustee manually by an authorized signatory, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate
of authentication by the Trustee upon any Security executed by the Company shall
be conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture. Typographical or other errors or defects in the
seal or facsimile signature on any Security or in the text thereof shall not
affect the validity or enforceability of such Security if it has been duly
authenticated and delivered by the Trustee.
In case any officer of the Company who shall have signed any of the
Securities, manually or in facsimile, shall cease to be such officer before the
Securities so signed shall have been authenticated and delivered by the Trustee,
or disposed of by the Company, such Securities nevertheless may be authenticated
and delivered or disposed of as though the person who signed such Securities had
not ceased to be such officer of the Company; and any Security may be signed on
behalf of the Company, manually or in facsimile, by such persons as, at the
actual date of the execution of such Security, shall be the proper officers of
the Company, although at the date of the execution of this Indenture any such
person was not such officer.
Section 2.05. REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES.
Securities of any series (other than a global Security, except as set forth
below) may be exchanged for a like aggregate principal amount of Securities of
the same series of the same tenor and terms of other authorized denominations.
Securities to be exchanged shall be surrendered at the offices or agencies to be
maintained by the Company in accordance with the provisions of Section 4.02 and
the Company shall execute and the Trustee shall authenticate and deliver, or
cause to be authenticated and delivered, in exchange therefor the Security or
Securities which the Securityholder making the exchange shall be entitled to
receive.
The Company shall keep, at one or more of the offices or agencies to
be maintained by the Company in accordance with the provisions of Section 4.02
with respect to the Securities of each series, a Register ( the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall register the Securities of such series and the transfer of Securities of
such series as in this Article provided. Such Register shall be in written form
or in any other form capable of being converted into written form within a
reasonable time. At all reasonable times the Register shall be open for
inspection by the Trustee and any registrar of the Securities of such series
other than the Trustee. Upon due presentment for registration or transfer of any
Security of any series at the offices or agencies of the Company to be
maintained by the Company in accordance with Section 4.02 with respect to the
Securities of such series, the Company shall execute and register and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same series of like tenor and
terms for a like aggregate principal amount of authorized denominations.
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Every Security issued upon registration of transfer or exchange of
Securities pursuant to this Section shall be the valid obligation of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Security or Securities surrendered upon registration of such
transfer or exchange.
All Securities of any series presented or surrendered for exchange,
registration of transfer, redemption, conversion or payment shall, if so
required by the Company or any registrar of the Securities of such series, be
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Company and such registrar, duly executed by the registered
holder or by his attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto.
The Company shall not be required to exchange or register the transfer
of (a) any Securities of any series during a period beginning at the opening of
business fifteen days before the day of the mailing of a notice of redemption of
outstanding Securities of such series and ending at the close of business on the
relevant redemption date, or (b) any Securities or portions thereof called or
selected for redemption, except, in the case of Securities called for redemption
in part, the portion thereof not so called for redemption.
Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for Securities in definitive form, a global
Security representing all or a portion of the Securities of a series may not be
transferred, except as a whole by the Depositary for such series to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor Depositary.
Notwithstanding the foregoing, except as otherwise specified pursuant
to Section 2.01, any global Security shall be exchangeable pursuant to this
Section only as provided in this paragraph. If at any time the Depositary for
the Securities of a series notifies the Company that it is unwilling or unable
to continue as Depositary for the Securities of such series, or if at any time
the Depositary for the Securities of such series shall no longer be eligible to
so act, the Company shall appoint a successor Depositary with respect to the
Securities of such series. If (a) a successor Depositary for the Securities of
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility (thereby
automatically making the Company's election pursuant to Section 2.01 no longer
effective with respect to the Securities of such series), (b) the beneficial
owners of interests in a global Security are entitled to exchange such interests
for definitive Securities of such series and of the same tenor and terms, as
specified pursuant to Section 2.01, or (c) the Company in its sole discretion
determines that the Securities of any series issued in the form of one or more
global Securities shall no longer be represented by such global Security or
Securities, then without unnecessary delay, but, if appropriate, in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall deliver to the Trustee definitive Securities in aggregate
principal amount equal to the principal amount of such global Security, executed
by the Company and authenticated by the Trustee. On or after the earliest date
on which such interests are or may be so exchanged, such global
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Security shall be surrendered by the Depositary to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in part,
for definitive Securities upon payment by the beneficial owners of such
interest, at the option of the Company, of a service charge for such exchange
and of a proportionate share of the cost of printing such definitive Securities,
and the Trustee shall authenticate and deliver, (a) to each person specified by
the Depositary in exchange for each portion of such global Security, an equal
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of the same tenor and terms as the portion of such
global Security to be exchanged, and (b) to such Depositary a global Security in
a denomination equal to the difference, if any, between the principal amount of
the surrendered global security and the aggregate principal amount of definitive
Securities delivered to holders thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities of that series to be redeemed and ending on
the relevant redemption date. If a Security is issued in exchange for any
portion of a global Security after the close of business at the office or agency
where such exchange occurs on (i) any record date and before the opening of
business at such office or agency on the relevant interest payment date, or (ii)
any record date for the payment of defaulted interest and before the opening of
business at such office or agency on the related proposed date for payment of
defaulted interest, then interest or default interest, as the case may be, will
not be payable on such interest payment date or proposed date for payment of
defaulted interest, as the case may be, in respect of such Security, but will be
payable on such interest payment date or proposed date for payment of defaulted
interest, as the case may be, only to the person to whom interest in respect of
such portion of such global Security is payable in accordance with the
provisions of this Indenture and such global Security.
Section 2.06. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any series, the Company may execute and the Trustee
shall, upon the written order of the Company, authenticate and deliver temporary
Securities of such series (printed or lithographed) of any denomination and
substantially in the form of the definitive Securities of such series, but with
or without a recital of specific redemption prices or conversion provisions and
with such omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company. Temporary
Securities may contain such reference to any provisions of this Indenture as may
be appropriate. Every such temporary Security shall be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
the same effect, as the definitive Securities. Without unreasonable delay the
Company will execute and deliver to the Trustee definitive Securities of such
series and thereupon any or all temporary Securities of such series may be
surrendered in exchange therefor, at the offices or agencies to be maintained by
the Company as provided in Section 4.02 with respect to the Securities of such
series, and the Trustee shall, upon the written order of the Company,
authenticate and deliver in exchange for such temporary Securities an equal
aggregate principal amount of definitive Securities of such series. Until so
exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series authenticated and delivered hereunder.
Section 2.07. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. In
case any temporary or definitive Security shall become mutilated or be
destroyed, lost or stolen, the Company, in the case of any mutilated Security
shall, and in the case of any destroyed, lost or stolen Security in its
discretion may, execute, and upon its request the Trustee shall authenticate and
deliver, or cause to be authenticated and delivered, a new Security of the same
series of like tenor and terms in exchange and substitution for the mutilated
Security, or in lieu of and in substitution for the Security so destroyed, lost
or stolen. In
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case any such Security shall have matured or shall be about to mature, instead
of issuing a substituted Security, the Company may pay or authorize payment of
the same (without surrender thereof, except in the case of a mutilated
Security). In every case the applicant for a substituted Security or for such
payment shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
to the Trustee evidence to their satisfaction of the destruction, loss or theft
of such Security and of the ownership thereof. The Trustee may authenticate any
such substituted Security and deliver the same, or the Trustee or any Paying
Agent of the Company may make any such payment, upon the written request or
authorization of any officer of the Company. Upon the issue of any substituted
Security, the Company 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 reasonable expenses connected therewith (including the fees and expenses
of the Trustee).
To the extent permitted by mandatory provisions of law, every
substituted Security issued pursuant to the provisions of this Section in
substitution for any destroyed, lost or stolen Security shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Securities of the same series duly issued hereunder.
To the full extent legally enforceable, all Securities shall be held
and owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute now existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments or
other securities without their surrender.
Section 2.08. CANCELLATION AND DESTRUCTION OF SURRENDERED SECURITIES.
All Securities surrendered for the purpose of payment, redemption, exchange,
substitution or registration of transfer, shall, if surrendered to the Company
or any agent of the Company or of the Trustee, be delivered to the Trustee, and
the same, together with Securities surrendered to the Trustee for cancellation,
shall be cancelled by it, and no Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall return cancelled Securities to the Company. If the Company shall
purchase or otherwise acquire any of the Securities, however, such purchase or
acquisition shall not operate as a payment, redemption or satisfaction of the
indebtedness represented by such Securities unless and until the Company, at its
option, shall deliver or surrender the same to the Trustee for cancellation.
Section 2.09. AUTHENTICATING AGENTS. The Trustee may from time to
time appoint one or more Authenticating Agents with respect to one or more
series of Securities, which shall be authorized to act on behalf of the Trustee
and subject to its direction in authenticating and delivering Securities of such
series pursuant hereto as fully to all intents and purposes as though any such
Authenticating Agent had been expressly authorized to authenticate and deliver
Securities of such series, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as though authenticated by the Trustee. Wherever reference is made in
this Indenture to the authentication or delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication or delivery on behalf of the Trustee by an Authenticating
Agent and a certificate of authentication executed on behalf of the Trustee by
an
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Authenticating Agent. Each Authenticating Agent shall at all times be a
corporation (including a banking association) organized and doing business under
the laws of the United States or any State or territory thereof or of the
District of Columbia, having a combined capital and surplus of at least five
million dollars ($5,000,000) authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal, state,
territorial, or District of Columbia authorities. 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, 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 an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect herein specified in this
Section.
The Trustee hereby initially appoints The Bank of New York, through
its trust offices at 101 Barclay Street, Floor 21 West, New York, New York 10286
as Authenticating Agent.
Any corporation succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent, if such
successor corporation is 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 or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent. 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 herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have agreed with the Trustee that: it will perform and carry out the
duties of an Authenticating Agent as herein set forth, including among other
things the duties to authenticate and deliver Securities of any series for which
it has been appointed an Authenticating Agent when presented to it in connection
with exchanges, registrations of transfer or any redemptions or conversions
thereof; it will furnish from time to time as requested by the Trustee
appropriate records of all transactions carried out by it as Authenticating
Agent and will furnish the Trustee such other information and reports as the
Trustee may reasonably require; it is eligible for appointment as Authenticating
Agent under this Section and will notify the Trustee promptly if it shall cease
to be so qualified; and it will indemnify the Trustee against any loss,
liability or expense incurred by the Trustee and will defend any claim asserted
against the Trustee by reason of any acts or failures to act of the
Authenticating Agent but it shall have no liability for any action taken by it
at the specific written direction of the Trustee.
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Section 2.10. DEFERRALS OF INTEREST PAYMENT DATES. If specified as
contemplated by Section 2.01 or Section 2.02 with respect to the Securities of a
particular series, so long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time during the term of
such series, 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 2.01 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
interest payment date. No Extension Period shall end on a date other than an
interest payment date or extend beyond the Stated Maturity or any earlier
prepayment date. At the end of any such Extension Period the Company shall pay
all interest then accrued and unpaid on the Securities (together with Additional
Interest or other interest thereon, if any, at the rate specified for the
Securities of such series to the extent permitted by applicable law). During
any such Extension Period, the Company shall not, and shall cause any Subsidiary
not to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's Capital Stock (which includes Common Stock 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 securities of the Company that rank on a
parity with or junior to the Securities of such series or make any guarantee
payments with respect to any Aon Guarantee or other guarantee by the Company of
the debt securities of any Subsidiary of the Company that by its terms ranks on
a parity with or junior to the Securities of such series (other than (a)
dividends or distributions in Common Stock; (b) any declaration of a dividend in
connection with the implementation of a Rights Plan, the issuance of any Capital
Stock of any class or series of preferred stock of the Company under any Rights
Plan or the redemption or repurchase of any rights distributed pursuant to a
Rights Plan; (c) payments under any Aon Guarantee relating to the Preferred
Securities issued by the Aon Trust holding the Securities of such series; and
(d) purchases of Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors, officers,
employees, consultants or advisors). Before the termination of any Extension
Period, the Company may further extend such Extension Period; provided, however,
that no Extension Period shall exceed the period or periods specified in such
Securities or extend beyond the Stated Maturity of the principal of such
Securities or any earlier prepayment date. At any time following the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest or other interest then due, the
Company 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. If the Property Trustee of an Aon Trust is the only
registered holder of the Securities of a series at the time the Company elects
to begin or extend an Extension Period, the Company shall give written notice to
such Property Trustee and the Trustee of its election to begin or extend any
Extension Period at least five Business Days prior to the earlier of (i) the
next succeeding date on which Distributions on the corresponding Capital
Securities issued by such Aon Trust would have been payable but for the election
to begin or extend such Extension Period or (ii) the date the Administrative
Trustees of such Aon Trust are required to give notice to any securities
exchange or other applicable self-regulatory organization or to holders of such
Capital 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.
If the Property Trustee of an Aon Trust is not the only holder of the
Securities of a series at the time the Company elects to begin or extend an
Extension Period, the Company shall give the holders of such Securities and the
Trustee written notice of its election to begin or extend such Extension Period
at least ten Business Days prior to the earlier of (i) the next succeeding
interest payment date or
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(ii) the date the Company is required to give notice of the record or payment
date of such interest payment to any applicable self-regulatory organization or
to holders of such Securities.
An Administrative Trustee shall give notice of the Company's election
to begin or extend an Extension Period to the holders of the outstanding
Preferred Securities of such Aon Trust.
Section 2.11. RIGHT OF SET-OFF. With respect to the Securities of a
series issued to an Aon Trust, notwithstanding anything to the contrary in the
Indenture, the Company shall have the right to set off any payment it is
otherwise required to make thereunder in respect of any such Security to the
extent the Company has theretofore made, or is concurrently on the date of such
payment making, a payment under the Aon Guarantee relating to such Security or
under Section 6.05 of this Indenture.
Section 2.12. SHORTENING OR EXTENSION OF STATED MATURITY. If
specified as contemplated by Section 2.01 or Section 2.02 with respect to the
Securities of a particular series, the Company shall have the right to (i)
shorten the Stated Maturity of the principal of the Securities of such series at
any time to any date not earlier than the first date on which the Company has
the right, if any, to redeem the Securities of such series, and (ii) extend the
Stated Maturity of the principal of the Securities of such series at any time at
its election for one or more periods, but in no event to a date later than the
49th anniversary of the first interest payment date following the Original Issue
Date of the Securities of such series; provided that, if the Company elects to
exercise its right to extend the Stated Maturity of the principal of the
Securities of such series pursuant to this clause (ii), at the time such
election is made and at the time of extension (A) the Company is not in
bankruptcy, otherwise insolvent or in liquidation, (B) the Company is not in
default in the payment of any interest or principal on such Securities, (C) in
the case of any series of Securities issued to an Aon Trust, such Aon Trust is
not in arrears on payments of Distributions on the Preferred Securities issued
by such Aon Trust and no deferred Distributions are accumulated, and (D) such
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. In the event the Company
elects to shorten or extend the Stated Maturity of the Securities of a
particular series, it shall give notice to the Trustee (not less than 45 days
prior to the effectiveness thereof), and the Trustee shall give notice of such
shortening or extension to the holders not less than 30 nor more than 60 days
prior to the effectiveness thereof.
Section 2.13. AGREED TAX TREATMENT. Each Security issued hereunder
shall provide that the Company 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 2.14 CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to holders
of Securities; 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 will promptly notify the Trustee of any change in the CUSIP numbers.
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ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. APPLICABILITY OF ARTICLE. Securities of any series
which are redeemable prior to Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
2.01 for Securities of any series) in accordance with this Article.
Section 3.02. MAILING OF NOTICE OF REDEMPTION. In case the Company
shall desire to exercise any right to redeem all or, as the case may be, any
part of the Securities of any series pursuant to this Indenture, it shall give
notice of such redemption to holders of the Securities to be redeemed as
hereinafter in this Section provided.
The Company covenants that it will pay to the Trustee or one or more
Paying Agents, on or before the Business Day next preceding the date fixed for
each redemption of Securities, a sum in cash sufficient to redeem on the
redemption date all the Securities so called for redemption at the applicable
redemption price, together with any accrued interest on the Securities to be
redeemed to but excluding the date fixed for redemption.
Notice of redemption shall be given to the holders of Securities to be
redeemed as a whole or in part by mailing by first class mail, postage prepaid,
a notice of such redemption not less than 30 nor more than 60 days prior to the
date fixed for redemption to their last addresses as they shall appear upon the
Register, but failure to give such notice by mailing in the manner herein
provided to the holder of any Security designated for redemption as a whole or
in part, or any defect therein, shall not affect the validity of the proceedings
for the redemption of any other Security.
Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives the notice.
Each such notice of redemption shall identify the Securities to be
redeemed (including CUSIP numbers) and specify the date fixed for redemption and
the redemption price at which Securities are to be redeemed (or if the
redemption price cannot be calculated prior to the time the notice is required
to be given, the manner of calculation thereof), and shall state that payment of
the redemption price of the Securities or portions thereof to be redeemed will
be made at any of the offices or agencies to be maintained by the Company in
accordance with the provisions of Section 4.02 with respect to the Securities to
be redeemed, upon presentation and surrender of such Securities or portions
thereof, and that, if applicable, interest accrued to the date fixed for
redemption will be paid as specified in said notice and on and after said date
interest thereon will cease to accrue and shall also specify, if applicable, the
conversion price and the date on which the right to convert the Securities will
expire and that holders must comply with Article Fifteen hereof in order to
convert their Securities. If less than all the Securities of any series are to
be redeemed, the notice of redemption to each holder shall specify such holder's
Securities of such series to be redeemed as a whole or in part. In case any
Security is to be redeemed in part only, the notice which relates to such
Security shall state the portion of the principal amount thereof to be redeemed
(which shall be equal to the minimum authorized denomination for Securities of
such series or any whole multiple thereof), and shall state that on and after
the redemption date, upon
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surrender of such Security, the holder will receive the redemption price in
respect to the principal amount thereof called for redemption and, without
charge, a new Security or Securities of the same series of authorized
denominations for the principal amount thereof remaining unredeemed.
If the Securities of any series are to be redeemed, the Company shall
give the Trustee, at least 60 days in advance of the date fixed for redemption,
notice of the aggregate principal amount of Securities of such series to be
redeemed, and, if less than all the Securities of such series are to be
redeemed, thereupon the Trustee shall select, by lot, or in any manner it shall
deem fair, the Securities of such series to be redeemed as a whole or in part
and shall thereafter promptly notify the Company in writing of the particular
Securities of such series or portions thereof to be redeemed. If the Securities
of any series to be redeemed consist of Securities having different dates on
which the principal or any installment of principal is payable or different
rates of interest, if any, or different methods by which interest may be
determined or have any other different tenor or terms, then the Company may, by
written notice to the Trustee, direct that Securities of such series to be
redeemed shall be selected from among groups of such Securities having specified
tenor or terms and the Trustee shall thereafter select the particular Securities
to be redeemed in the manner set forth in the preceding sentence from among the
group of such Securities so specified.
Section 3.03. WHEN SECURITIES CALLED FOR REDEMPTION BECOME DUE AND
PAYABLE. If the giving of notice of redemption shall have been completed as
above provided, the Securities or portions of Securities specified in such
notice shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price, together, if
applicable, with any interest accrued (including any Additional Interest or
other interest) to but excluding the date fixed for redemption, and on and after
such date fixed for redemption (unless the Company shall default in the payment
of such Securities at the applicable redemption price, together with any
interest accrued to the date fixed for redemption) any interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and, except as provided in Sections 7.05 and 12.04, such Securities
shall cease from and after the date fixed for redemption to be entitled to any
benefit or security under this Indenture, and the holders thereof shall have no
right in respect of such Securities except the right to receive the redemption
price thereof and any unpaid interest accrued to but excluding the date fixed
for redemption. On presentation and surrender of such Securities at said place
of payment in said notice specified, such Securities or portions thereof shall
be paid and redeemed by the Company at the applicable redemption price, together
with any interest accrued to but excluding the date fixed for redemption;
provided, however, that, except as otherwise specified as contemplated by
Section 2.01, any regular payment of interest becoming due on the date fixed for
redemption shall be payable to the holders of the Securities registered as such
on the relevant record date as provided in Article Two hereof. Upon surrender
of any Security which is redeemed in part only, the Company shall execute and
the Trustee shall authenticate and deliver at the expense of the Company a new
Security of the same series of like tenor and terms of authorized denomination
in principal amount equal to the unredeemed portion of the Security so
surrendered; except that if a global Security is so surrendered, the Company
shall execute, and the Trustee shall authenticate and deliver to the Depositary
for such global Security, without service charge, a global Security in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the global Security so surrendered.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the date fixed for redemption at the rate
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borne by or prescribed therefor in the Security, or, in the case of a Security
which does not bear interest, at the rate of interest set forth therefor in the
Security to the extent permitted by law.
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
The Company covenants as follows:
Section 4.01. PAYMENT OF PRINCIPAL OF AND INTEREST ON SECURITIES.
The Company will duly and punctually pay or cause to be paid the principal of
and interest, if any, on each of the Securities at the time and places and in
the manner provided herein and in the Securities. Except as otherwise specified
as contemplated by Section 2.01, if the Securities of any series bear interest,
each installment of interest on the Securities of such series may at the option
of the Company be paid (i) by mailing a check or checks for such interest
payable to the Person entitled thereto pursuant to Section 2.03 to the address
of such person as it appears on the Register of the Securities of such series or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in the Register of Securities, provided that proper transfer
instructions have been received by the record date.
Section 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR REGISTRATION OF
TRANSFER, EXCHANGE AND PAYMENT OF SECURITIES. So long as any of the Securities
shall remain outstanding, the Company will maintain an office or agency in the
City of Chicago, State of Illinois, or in The City of New York, State of New
York, where the Securities may be presented for registration, conversion,
exchange and registration of transfer as in this Indenture provided, and where
notices and demands to or upon the Company in respect of the Securities or of
this Indenture may be served, and where the Securities may be presented for
payment. In case the Company shall designate and maintain some office or agency
other than the previously designated office or agency, it shall give the Trustee
prompt written notice thereof. In case the Company shall fail to maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the location thereof to the Trustee, presentations and demands may
be made and notices may be served at the principal office of the Trustee.
In addition to such office or agency, the Company may from time to
time constitute and appoint one or more other offices or agencies for such
purposes with respect to Securities of any series, and one or more paying agents
for the payment of Securities of any series, in such cities or in one or more
other cities, and may from time to time rescind such appointments, as the
Company may deem desirable or expedient, and as to which the Company has
notified the Trustee; provided, however, that no such appointment or rescission
shall in any manner relieve the Company of its obligation to maintain such
office or agency in the said Cities of Chicago and New York, where Securities of
such series may be presented for payment.
Section 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee with respect to each series of
Securities hereunder.
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Section 4.04. DUTIES OF PAYING AGENT. (a) If the Company shall
appoint a Paying Agent other than the Trustee with respect to Securities of any
series, it will cause such Paying Agent 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 and Section 12.03,
(1) That it will hold all sums held by it as such agent for the
payment of the principal of or interest, if any, on the Securities of such
series (whether such sums have been paid to it by the Company or by any
other obligor on the Securities of such series) in trust for the benefit of
the holders of the Securities of such series entitled to such principal or
interest and will notify the Trustee of the receipt of sums to be so held,
(2) That it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities of such series) to make
any payment of the principal of or interest on the Securities of such
series when the same shall be due and payable, and
(3) That it will at any time during the continuance of any Event of
Default, upon the written request of the Trustee, deliver to the Trustee
all sums so held in trust by it.
(b) Whenever the Company shall have one or more Paying Agents with
respect to the Securities of any series, it will, prior to each due date of the
principal of or any interest on a Security of such series, deposit with a Paying
Agent of such series a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the holders of
Securities of such series entitled to such principal or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
(c) If the Company shall act as its own Paying Agent with respect to
the Securities of any series, it will, on or before each due date of the
principal of or any interest on a Security of such series, set aside, segregate
and hold in trust for the benefit of the holder of such Security, a sum
sufficient to pay such principal or interest so becoming due and will notify the
Trustee of such action, or any failure by it or any other obligor on the
Securities of such series to take such action and will at any time during the
continuance of any Event of Default, upon the written request of the Trustee,
deliver to the Trustee all sums so held in trust by it.
(d) Anything in this Section to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for such series by it, or any Paying Agent
hereunder, as required by this Section, such sums are to be held by the Trustee
upon the trust herein contained.
(e) Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 12.03 and 12.04.
Section 4.05. FURTHER ASSURANCES. From time to time whenever
reasonably demanded by the Trustee, the Company will make, execute and deliver
or cause to be made, executed and delivered
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any and all such further and other instruments and assurances and take all such
further action as may be reasonably necessary or proper to carry out the
intention of or to facilitate the performance of the terms of this Indenture or
to secure the rights and remedies hereunder of the holders of the Securities of
any series.
Section 4.06. OFFICERS' CERTIFICATE AS TO DEFAULTS; NOTICES OF
CERTAIN DEFAULTS. The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee no later than 120 days after the end of each
calendar year, beginning with the year 1998, a certificate signed by the
Company's principal executive officer, principal financial officer or principal
accounting officer stating that a review has been made under his or her
supervision of the activities of the Company during such year and of the
performance under this Indenture and, to the best of his or her knowledge, the
Company has complied with all conditions and covenants under this Indenture
throughout such calendar year, or if there has been a default in the fulfillment
of any such obligation, specifying each such default known and the nature and
status thereof. For purposes of this Section, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
Section 4.07. WAIVER OF COVENANTS. The Company may omit in any
particular instance to comply with any covenant or condition specifically
contained in this Indenture for the benefit of one or more series of Securities,
if before the time for such compliance the holders of a majority in principal
amount of the Securities of all series affected (all series voting as one class)
at the time outstanding (determined as provided in Section 8.04) shall waive
such compliance in such instance, 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 the Company and the
duties of the Trustee in respect of any such covenant or condition shall remain
in full force and effect.
Section 4.08. ADDITIONAL TAX SUMS. In the case of the Securities of
a series issued to an Aon Trust, so long as no Event of Default has occurred and
is continuing and except as otherwise specified as contemplated by Section 2.01
or Section 2.02, in the event that (i) an Aon Trust is the holder of all of the
Outstanding Securities of such series, (ii) a Tax Event in respect of such Aon
Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Securities of such series or (b) terminated such Aon Trust
pursuant to the termination provisions of the related Trust Agreement, the
Company shall pay to such Aon Trust (and any permitted successor or assign under
the related Trust Agreement) for so long as such Aon Trust (or its permitted
successor or assignee) is the registered holder of any Securities of such
series, such additional amounts as may be necessary in order that the amount of
Distributions then due and payable by such Aon 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, duties and other governmental charges to which such Aon Trust
has become subject as a result of such Tax Event (but not including withholding
taxes imposed on holders of such Preferred Securities and Common Securities)
(the "Additional Tax Sums"). Whenever in this Indenture or the Securities there
is a reference in any context to the payment of principal of or interest on the
Securities, such reference shall be deemed to include payment of the Additional
Tax Sums provided for in this paragraph to the extent that, in such context,
Additional Tax Sums are, were or would be payable in respect thereof pursuant to
the provisions of this Section and express reference to the payment of
Additional Tax Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Tax Sums in those provisions hereof where such
express reference is not made; provided, however, that the deferral of the
payment of interest pursuant to Section
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2.10 or the Securities shall not defer the payment of any Additional Tax Sums
that may be then due and payable.
Section 4.09. ADDITIONAL COVENANTS. The Company covenants and agrees
with each holder of Securities of a series issued to an Aon Trust that it shall
not, and it shall cause any Subsidiary not to, (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any shares of the Company's Capital Stock (which includes
Common Stock 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
securities of the Company that rank on a parity with or junior to the Securities
of such series or make any guarantee payments with respect to any Aon Guarantee
or other guarantee by the Company of debt securities of any Subsidiary that by
its terms ranks on a parity with or junior to the Securities of such series
(other than (a) dividends or distributions in Common Stock; (b) any declaration
of a dividend in connection with the implementation of a Rights Plan, the
issuance of any Capital Stock of any class or series of preferred stock of the
Company under any Rights Plan or the redemption or repurchase of any rights
distributed pursuant to a Rights Plan; (c) payments under any Aon Guarantee
relating to the Preferred Securities issued by the Aon Trust holding the
Securities of such series; and (d) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers, employees, consultants or advisors) if at such time (i)
there shall have occurred any event of which the Company 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 the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the related Aon
Guarantee or (iii) the Company shall have given notice of its election to begin
an Extension Period as provided in Section 2.10 and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be
continuing.
The Company also covenants with each holder of Securities of a series
issued to an Aon Trust (i) to maintain directly or indirectly 100% ownership of
the Common Securities of such Aon Trust; provided, however, that any permitted
successor or assignee of the Company hereunder may succeed to the Company's
ownership of such Common Securities, (ii) not to voluntarily terminate, wind up
or liquidate such Aon Trust, except (a) in connection with a prepayment in full
of the Securities or a distribution of the Securities of such series to the
holders of Preferred Securities in liquidation of such Aon Trust or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the relevant Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Trust Agreement, to cause such Aon Trust
to remain classified as a grantor trust and not an association taxable as a
corporation for United States federal income tax purposes.
Section 4.10. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on outstanding Securities as of the end of
such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time.
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ARTICLE FIVE
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
Section 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO THE NAMES
AND ADDRESSES OF SECURITYHOLDERS. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee, semiannually not more than 5
days after January 15 and July 15 of each year beginning with July 1997, and at
such other times as the Trustee may request in writing within 30 days after
receipt by the Company of any such request, a list in such form as the Trustee
may reasonably require containing all information in the possession or control
of the Company, or any Paying Agent or any registrar of the Securities of each
series, other than the Trustee, as to the names and addresses of the holders of
Securities of such series obtained (in the case of each list other than the
first list) since the date as of which the next previous list was furnished;
provided, however, that if the Trustee shall be the registrar of the Securities
of such series, no such list need be furnished. Any such list may be dated as of
a date not more than fifteen days prior to the time such information is
furnished or caused to be furnished, and need not include information received
after such date.
Section 5.02. TRUSTEE TO PRESERVE INFORMATION AS TO THE NAMES AND
ADDRESSES OF SECURITYHOLDERS RECEIVED BY IT. (a) The Trustee shall preserve, in
as current a form as is reasonably practicable, all information as to the names
and addresses of the holders of Securities of each series (1) contained in the
most recent list furnished to it as provided in Section 5.01 and (2) received by
it in the capacity of Paying Agent or registrar (if so acting). The Trustee may
destroy any list furnished to it as provided in Section 5.01 upon receipt of a
new list so furnished.
(b) In case three or more holders of Securities of any series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Securities of any series or with holders of
all Securities with respect to their rights under this Indenture or under such
Securities, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section, or
(2) inform such applicants as to the approximate number of holders of
Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this
Section, and as to the approximate cost of mailing to such Securityholders
the form of proxy or other communication, if any, specified in such
application.
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If the Trustee shall elect not to afford such access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each of the holders of Securities of such series, or all Securities, as
the case may be, whose name and address appear in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and after payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Securities of such series or
all Securities, as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all the holders of
Securities of such series or all Securities, as the case may be, with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Each and every holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Paying Agent nor any registrar shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the holders of Securities in accordance with the provisions of subsection (b)
of this Section, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).
(d) If there shall be different Trustees acting hereunder with
respect to separate series of Securities, applicants shall make separate
applications hereunder to each such Trustee, and such Trustees shall
collaborate, if necessary, in acting under this Section.
Section 5.03. ANNUAL AND OTHER REPORTS TO BE FILED BY COMPANY WITH
TRUSTEE. (a) The Company covenants and agrees to file with the Trustee within
fifteen days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such Sections, then it will file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and registered on
a national securities exchange as may be prescribed from time to time in such
rules and regulations.
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(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents, and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit to the holders of
Securities within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in subsection (c) of Section 5.04 with respect
to reports pursuant to subsection (a) of said Section 5.04, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section as may be required by rules
and regulations prescribed from time to time by the Commission.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 5.04. TRUSTEE TO TRANSMIT ANNUAL REPORT TO SECURITYHOLDERS.
(a) On or before July 15, 1997, and on or before July 15 in every year
thereafter, if and so long as any Securities are outstanding hereunder, the
Trustee shall transmit to the Securityholders as hereinafter in this Section
provided, a brief report dated as of the preceding May 15 with respect to any of
the following events which may have occurred within the previous twelve (12)
months (but if no such event has occurred within such period no report need be
transmitted):
(1) Any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) The creation of or any material change to a relationship which,
with the occurrence of an Event of Default, would create a conflicting
interest within the meaning of the Trust Indenture Act;
(3) The character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge
prior to that of the Securities of any series on any property or funds held
or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than one-half of one percent of the
principal amount of the Securities of all series outstanding as of the date
of such report;
(4) Any change to the amount, interest rate, and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except indebtedness based upon a
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creditor relationship arising in any manner described in paragraph (2),
(3), (4), or (6) of subsection (b) of Section 7.13;
(5) Any change to the property and funds, if any, physically in the
possession of the Trustee (as such) on the date of such report;
(6) Any additional issue of Securities which the Trustee has not
previously reported to Securityholders; and
(7) Any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported to
Securityholders and which in its opinion materially affects the Securities
of any series, except action in respect of a default, notice of which has
been or is to be withheld by it in accordance with the provisions of
Section 6.07.
(b) The Trustee shall transmit to the Securityholders, as hereinafter
provided, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if such report has not yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Securities of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances so remaining unpaid
aggregate not more than ten percent of the principal amount of Securities of all
series outstanding as of the date of such report, such report to be transmitted
within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail to
all holders of Securities of any series, as the names and addresses of such
holders shall appear upon the Register of the Securities of such series.
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities of any series are listed and also with the
Commission. The Company will promptly notify the Trustee when and as the
Securities of any series become listed on any stock exchange.
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01. EVENTS OF DEFAULT DEFINED. The term "Event of Default"
whenever used herein with respect to Securities of any series shall mean any one
of the following events:
(a) Default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become due and
payable, and
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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 all or any part of the principal of any
of the Securities of such series as and when the same shall become due and
payable whether upon Maturity, upon any redemption, by declaration or
otherwise; or
(c) Failure on the part of the Company duly to observe or perform in
any material respect any covenants or agreements (other than covenants to
pay interest, principal and premium, which are subject to subsections (a)
and (b) above of this Section) on the part of the Company in the Securities
or in this Indenture (including any supplemental indenture or pursuant to
any Officers' Certificate as contemplated by Section 2.01) specifically
contained for the benefit of the Securities of such series, for a period of
60 days after there has been given, by registered or certified mail, to the
Company by the Trustee, or to the Company and the Trustee by the holders of
not less than 25% in principal amount of the Securities of such series and
all other series so benefited (all series voting as one class) at the time
outstanding under this Indenture a written notice specifying such failure
and stating that such is a "Notice of Default" hereunder; or
(d) The commencement by the Company of a voluntary case under Chapter
7 or Chapter 11 of the federal Bankruptcy Code or any other similar state
or federal law now or hereafter in effect, or the consent by the Company to
the entry of a decree or order for relief in an involuntary case under any
such law, or the consent by the Company to the appointment of a liquidating
agent or committee, conservator or receiver; or
(e) The entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company in an involuntary
case under Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any
other similar state or federal law now or hereafter in effect, and the
continuance of any such decree or order unstayed and in effect for a period
of 90 days, or the appointment of a liquidating agent or committee,
conservator or receiver, and the continuance of any such appointment
unstayed and in effect for a period of 90 days.
If an Event of Default under clauses 6.01(a), 6.01(b) or 6.01(c) shall
have occurred and be continuing (but, in the case of clause 6.01(c), only if the
Event of Default is with respect to less than all series of Securities then
outstanding under this Indenture), unless the principal of all the Securities
shall have already become due and payable, either the Trustee or the holders of
not less than 25% in principal amount of all the then outstanding Securities of
the series as to which such Event of Default under clauses 6.01(a), 6.01(b) or
6.01(c) has occurred (each such series voting as a separate class in the case of
an Event of Default under clauses 6.01(a) or 6.01(b), and all such series voting
as one class in the case of an Event of Default under clause 6.01(c)), by notice
in writing to the Company (and to the Trustee if given by Securityholders) may
declare the principal amount (or if Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all the Securities of such series, or of all such
series in the case of an Event of Default
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under clause 6.01(c), in each case together with any accrued interest, to be due
and payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable; provided, however, that in the case of the
Securities of a series issued to an Aon Trust, if upon an Event of Default, the
Trustee or the holders of at least 25% in principal amount of the outstanding
Securities of such 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 Preferred Securities
then outstanding shall have such right by a notice in writing to the Company and
the Trustee. If an Event of Default under clauses 6.01(c), 6.01(d), or 6.01(e)
shall have occurred and be continuing (but, in the case of clause 6.01(c)), only
if the Event of Default is with respect to all Securities then outstanding under
the Indenture), then and in each and every such case, unless the principal of
all the Securities shall have already become due and payable, either the Trustee
or the holders of not less than 25% in principal amount of all the then
outstanding Securities of each series as to which such Event of Default under
clauses 6.01(c), 6.01(d), or 6.01(e) above has occurred (voting as one class),
by notice in writing to the Company (and to the Trustee if given by
Securityholders) may declare the principal amount (or if Securities of any
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities as
to which the Event of Default under clauses 6.01(c), 6.01(d), or 6.01(e) above
has occurred, together with any accrued interest, to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything contained in this Indenture or in the
Securities to the contrary notwithstanding; provided, however, that in the case
of the Securities of a series issued to an Aon 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
Preferred Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee. The foregoing provisions, however, are
subject to the condition that if, at any time after the principal amount (or
specified portion thereof) of the Securities of any one or more series (or of
all the Securities, as the case may be) shall have been so declared due and
payable, and before any judgment or decree for the payment of moneys due shall
have been obtained or entered as hereinafter provided, the Company shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured installments
of interest upon all the Securities of such series (or upon all the Securities,
as the case may be) and the principal of any and all Securities of such series
(or of any and all the Securities, as the case may be) which shall have become
due otherwise than by declaration (with interest on overdue installments of
interest to the extent permitted by law and on such principal at the rate or
rates of interest borne by, or prescribed therefor in, the Securities of each
such series to the date of such payment or deposit) and the amounts payable to
the Trustee under Section 7.06, and any and all defaults under the Indenture
with respect to Securities of such series (or all Securities, as the case may
be), other than the nonpayment of principal of and any accrued interest on
Securities of such series (or any Securities, as the case may be) which shall
have become due by declaration, shall have been cured, remedied or waived as
provided in Section 6.06, then and in every such case the holders of a majority
in principal amount of the Securities of such series (or of all the Securities,
as the case may be) then outstanding and as to which such Event of Default has
occurred (such series or all series voting as one class, if more than one series
are so entitled) by written notice to the Company and to the Trustee, may
rescind and annul such declaration and its consequences. In the case of
Securities issued to an Aon Trust, should the holders of such Securities fail to
annul such declaration and waive such default, the holders of a majority in
aggregate liquidation preference of related Preferred Securities shall have such
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right; but no such rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon.
In case the Trustee, any holder of Securities or any holder of
Preferred Securities shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, such holder of Securities or such holder of
Preferred Securities then and in every such case the Company, the Trustee, the
holders of the Securities of such series (or of all the Securities, as the case
may be) and the holders of Preferred Securities shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee, the holders of the Securities of such
series (or of all the Securities, as the case may be) and the holders of
Preferred Securities shall continue as though no such proceedings had been
taken.
Section 6.02. COVENANT OF COMPANY TO PAY TO TRUSTEE WHOLE AMOUNT DUE
ON SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL. The Company
covenants that (1) in case default shall be made in the payment of any
installment of interest on any of the Securities of any series as and when the
same shall become due and payable, and such default shall have continued for a
period of 30 days (subject to the deferral of any due date in the case of an
Extension Period), or (2) in case default shall be made in the payment of all or
any part of the principal of any of the Securities of any series as and when the
same shall become due and payable, whether upon Maturity, upon any redemption,
by declaration or otherwise, then, upon demand of the Trustee, the Company will
pay to the Trustee, for the benefit of the holders of the Securities of such
series, the whole amount that then shall have become due and payable on all such
Securities of such series for principal or interest, or both, as the case may
be, with interest upon the overdue principal and installments of interest (to
the extent permitted by law) at the rate or rates of interest borne by or
prescribed therefor in the Securities of such series; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents and
counsel, and any expenses or disbursements reasonably incurred, and all
reasonable advances made hereunder by the Trustee, its agents, attorneys and
counsel, except as a result of its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor upon such
Securities, and collect in the manner provided by law out of the property of the
Company or any other obligor upon such Securities wherever situated the moneys
adjudged or decreed to be payable.
The Trustee shall be entitled and empowered, either in its own name or
as trustee of an express trust, or as attorney-in-fact for the holders of the
Securities of any series, or in any one or more of such capacities (irrespective
of whether the principal of the Securities of such series shall then be due and
payable, whether upon Maturity, upon any redemption, by declaration or
otherwise, and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section) to file and prove a claim or claims
for the whole amount of principal (or, if the Securities of such series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of such
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series) and interest owing and unpaid in respect of the Securities of such
series and to file such other documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for reasonable
compensation of the Trustee, its agents and counsel, and for reimbursement of
all expenses and disbursements reasonably incurred, and all reasonable advances
made hereunder by the Trustee, its agents and counsel, except as a result of its
negligence or bad faith) and of the holders of the Securities of such series
allowed in any equity receivership, insolvency, bankruptcy, liquidation,
arrangement, readjustment, reorganization or any other judicial proceedings
relative to the Company or any other obligor on the Securities of such series or
their creditors, or their property. The Trustee is hereby irrevocably appointed
(and the successive respective holders of the Securities of each series by
taking and holding the same shall be conclusively deemed to have so appointed
the Trustee) the true and lawful attorney-in-fact of the respective holders of
the Securities of such series, with authority to make and file in the respective
names of the holders of the Securities of such series, or on behalf of the
holders of the Securities of such series as a class, any proof of debt,
amendment of proof of debt, claim, petition or other document in any such
proceeding and to receive payment of any sums becoming distributable on account
thereof, and to execute any such other papers and documents and to do and
perform any and all such acts and things for and on behalf of such holders of
the Securities of such series, as may be necessary or advisable in the opinion
of the Trustee in order to have the respective claims of the Trustee and of the
holders of the Securities of such series allowed in any such proceeding, and to
receive payment of or on account of such claims and to distribute the same, and
any receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each holder to
make such payments to the Trustee 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 under Section 7.06; provided, however, that nothing
herein shall be deemed to authorize the Trustee to authorize or consent to or
vote for or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
of such series or the rights of any holder thereof, or to authorize the Trustee
to vote in respect of the claim of any holder of Securities of such series in
any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series, may be enforced by the Trustee
without the possession of any of the Securities of such series, or the
production thereof on any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee, shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall be,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of such Trustee, its agents and counsel, for the
ratable benefit of the holders of the Securities of such series.
Section 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
collected by the Trustee pursuant to Section 6.02 shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of reasonable costs and expenses of
collection, and of all amounts payable to the Trustee under Section
7.06;
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Second: In case the principal of the outstanding Securities in
respect of which moneys have been collected shall not have become due
and be unpaid, to the payment of any unpaid interest on such
Securities, in the order of the maturity of the installments of such
interest, with interest upon the overdue installments of interest (so
far as permitted by law and to the extent that such interest has been
collected by the Trustee) at the rate or rates of interest borne by,
or prescribed therefor in, such Securities, such payments to be made
ratably to the persons entitled thereto, without discrimination or
preference;
Third: In case the principal of the outstanding Securities in
respect of which such moneys have been collected shall have become due
and be unpaid, whether upon Maturity, upon any redemption, by
declaration or otherwise, to the payment of the whole amount then
owing and unpaid upon such Securities for principal and interest, if
any, with interest on the overdue principal and any installments of
interest (so far as permitted by law and to the extent that such
interest has been collected by the Trustee) at the rate or rates of
interest borne by, or prescribed therefor in, such Securities; and in
case such moneys shall be insufficient to pay in full the whole amount
so due and unpaid upon such Securities, then to the payment of such
principal and interest, without preference or priority of principal
over interest, or of interest over principal, or of any installment of
interest over any other installment of interest, or of any Security
over any other Security, ratably to the aggregate of such unpaid
principal and interest; and
Fourth: To the payment of the remainder, if any, to the Company,
its successors or assigns, or to whomsoever may be lawfully entitled
to receive the same, or as a court of competent jurisdiction may
direct.
Section 6.04. LIMITATION ON SUITS BY HOLDERS OF SECURITIES. No
holder of any Security of any series shall have any right by virtue or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the holders of not less than 25% in principal amount of all the
Securities at the time outstanding (considered as one class) shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 6.06; it being understood and intended, and being
expressly covenanted by the taker and holder of every Security with every other
taker and holder and the Trustee, that no one or more holders of Securities
shall have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Securities, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities. For the protection and enforcement
of the provisions
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of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions in this Indenture, the right of
any holder of any Security to receive payment of the principal of and interest
on such Security, on or after the respective due dates expressed in such
Security (or, in the case of redemption on or after the date fixed for
redemption), or to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such holder.
Section 6.05. ON DEFAULT TRUSTEE MAY TAKE APPROPRIATE ACTION. In
case of a default hereunder the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law. All powers
and remedies given by this Article to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any thereof or of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee, of any holder of any of the
Securities or any holder of Preferred Securities to exercise any right or power
accruing upon any default occurring and continuing as aforesaid shall impair any
such right or power, or shall be construed to be a waiver of any such default or
an acquiescence therein; and, subject to the provisions of Section 8.04, every
power and remedy given by this Article or by law to the Trustee, to the
Securityholders or the holders of Preferred Securities may be exercised from
time to time, and as often as shall be deemed expedient, by the Trustee, by the
Securityholders or by the holders of Preferred Securities, as the case may be.
In the case of Securities of a series issued to an Aon Trust, any
holder of the corresponding series of Preferred Securities issued by such Aon
Trust shall have the right, upon the occurrence of an Event of Default described
in Section 6.01(a) or (b) above, to institute a suit directly against the
Company for enforcement of payment to such holder of principal of (including
premium, if any) and interest (including any Additional Interest) on the
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities of the corresponding series held by such holder.
Section 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF
SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The holders of at least a
majority in principal amount of the Securities of any one or more series or of
all the Securities, as the case may be (voting as one class), at the time
outstanding (determined as provided in Section 8.04) 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 under this Indenture with respect to such one or more series; provided,
however, that subject to Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by Opinion of
Counsel determines that the action so directed may not lawfully be taken, or if
the Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceedings so directed would be illegal or involve
it in personal liability
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or be unduly prejudicial to the rights of Securityholders of such one or more
series not parties to such direction, and provided further that nothing in this
Indenture shall impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction by such
Securityholders of such one or more series. The holders of at least a majority
in principal amount of the Securities of all series as to which an Event of
Default hereunder has occurred (all series voting as one class) at the time
outstanding (determined as provided in Section 8.04) and, in the case of any
Preferred Securities of a series issued to an Aon Trust, the holders of at least
a majority in aggregate liquidation amount of the Preferred Securities issued by
such Aon Trust, may waive any past default hereunder with respect to such series
and its consequences, except a default in the payment of the principal of or
interest on any of such Securities or Preferred Securities or in respect of a
covenant or provision hereof which under Article Ten cannot be modified or
amended without the consent of the holder of each Security so 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
Indenture, but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon. Any such waiver shall be deemed to be on
behalf of the holders of all the Securities of such series or, in the case of a
waiver by holders of Preferred Securities issued by such Aon Trust, by all
holders of Preferred Securities issued by such Aon Trust.
Section 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, give to the holders of the Securities of such series in the manner and
to the extent provided in subsection (c) of Section 5.04 with respect to reports
pursuant to subsection (a) of said Section 5.04, notice of such default actually
known to the Trustee unless such default shall have been cured, remedied or
waived before the giving of such notice (the term "default" for the purposes of
this Section being hereby defined to be the events specified in clauses (c),
(d), (e) and (f) of Section 6.01 and default in the payment of the principal of
or interest on Securities of any series, not including any periods of grace
provided for therein, and irrespective of the giving of written notice specified
in any such terms, and irrespective of the delivery of any Officers' Certificate
provided for in any such terms); provided, however, that, except in the case of
default in the payment of the principal of or interest on any of the Securities
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 interest of the holders of the
Securities of such series.
Section 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN
SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this 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 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 and expenses, 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 of Securities of any series, or group of such Securityholders, holding in
the aggregate more than ten percent in principal amount of all the Securities
(all series considered as one class) outstanding, or to any suit instituted by
any Securityholder for the enforcement of the payment of the principal of or
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interest on any Security, on or after the due date expressed in such Security
(or in the case of any redemption, on or after the date fixed for redemption).
ARTICLE SEVEN
CONCERNING THE TRUSTEE
Section 7.01. UPON EVENT OF DEFAULT OCCURRING AND CONTINUING, TRUSTEE
SHALL EXERCISE POWERS VESTED IN IT, AND USE SAME DEGREE OF CARE AND SKILL IN
THEIR EXERCISE, AS A PRUDENT MAN WOULD USE. The Trustee, prior to the
occurrence of an Event of Default and after the curing, remedying or waiving of
all Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case
an Event of Default has occurred (which has not been cured, remedied or waived)
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this 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; provided, however, that
(a) Prior to the occurrence of an Event of Default and after the curing,
remedying or waiving of all Events of Default which may have occurred:
(1) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) In the absence of bad faith on the part of the Trustee, the
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 Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions which
by any provision 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 Indenture;
(b) The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(c) 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
the holders of Securities pursuant to Section 6.06 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
Indenture;
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(d) Whether or not therein expressly so provided, every provision of
this 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 7.01; and
(e) None of the provisions contained in this 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 is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
Section 7.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as
otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting in good faith upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, appraisal, 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;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
Resolution of the Company may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of 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 of Counsel;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee such adequate security or
indemnity against the costs, expenses (including attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with such request or
direction;
(e) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(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, approval, bond,
debenture, note, other evidence of indebtedness or other paper or document,
unless requested in writing to do so by the holders of Securities pursuant to
Section 6.06, but the Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee,
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not reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require adequate indemnity against such
costs, expenses or liabilities as a condition to so proceeding; and provided
further, that nothing in this subsection (f) shall require the Trustee to give
the Securityholders any notice other than that required by Section 6.07. The
reasonable expense of every such examination shall be paid by the Company or, if
paid by the Trustee, shall be repaid by the Company upon demand;
(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 by it hereunder;
provided, however, that the Trustee shall be responsible for its own negligence
or recklessness with respect to the selection of any such agent or attorney;
(h) The Trustee shall be under no responsibility for the approval by
it in good faith of any expert for any of the purposes expressed in this
Indenture; and
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
Section 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN
SECURITIES. The recitals contained herein and in the Securities (other than the
certificate of authentication on the Securities) shall be taken as the
statements of the Company, and the Trustee does not assume any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of the proceeds of the
Securities of any series.
Section 7.04. MAY HOLD SECURITIES. The Trustee or any agent of the
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Section 7.08, with the same
rights it would have if it were not Trustee or such agent.
Section 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST WITHOUT
INTEREST. Subject to the provisions of Section 12.04, all moneys received by
the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but 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 moneys received by it hereunder.
Section 7.06. TRUSTEE ENTITLED TO COMPENSATION, REIMBURSEMENT AND
INDEMNITY. The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as shall be agreed
to in writing between the Company and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of any express
trust), and, the Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in connection with the acceptance or administration of its trust under
this Indenture (including the reasonable compensation and the reasonable
expenses and disbursements of its agents and counsel and of all persons not
regularly in its employ)
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except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants and agrees to indemnify each
of the Trustee, any predecessor Trustee and their agents for, and to hold them
harmless against, any loss, liability or expense incurred without negligence or
bad faith on their part and arising out of or in connection with the acceptance
or administration of this trust and performance of their duties hereunder,
including the reasonable costs and expenses (including reasonable fees and
disbursements of their counsel) of defending themselves against any claim or
liability in connection with the exercise or performance of any of the powers or
duties hereunder. The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture and the resignation or removal of the Trustee.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of or interest, if any,
on the Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(d) or Section 6.01(e), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
Section 7.07. RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE WHERE
NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided in
Section 7.01, whenever in the administration of this Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking, suffering or omitting to take any action hereunder, the Trustee (unless
other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Company.
Section 7.08. DISQUALIFICATION; CONFLICTING INTERESTS. If the
Trustee has or shall acquire any conflicting interest, within the meaning of the
Trust Indenture Act, the 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 Indenture.
Section 7.09. REQUIREMENTS FOR ELIGIBILITY OF TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States or any State or territory thereof or of the
District of Columbia authorized under such laws to exercise corporate trust
powers, 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 and having its principal office and place of business in the
City of Chicago or in the Borough of Manhattan, The City of New York, if there
be such a corporation having its principal office and place of business in said
places willing to act upon reasonable and customary terms and conditions. If
such corporation publishes reports of condition at least annually, pursuant to
law or the requirements of the aforesaid supervising or examining authority,
then, for the purposes of this Section and to 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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.
Neither the Company, any other obligor upon the
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Securities, nor any person directly or indirectly controlling, controlled by, or
under common control with the Company or any such obligor shall serve as Trustee
under this Indenture.
Section 7.10. RESIGNATION AND REMOVAL OF TRUSTEE. (a) The Trustee,
or any trustee or trustees hereafter appointed, may at any time resign with
respect to one or more or all series of Securities by giving written notice of
such resignation to the Company and by giving to the holders of Securities of
the applicable series notice thereof in the manner and to the extent provided in
subsection (c) of Section 5.04 with respect to reports pursuant to subsection
(a) of Section 5.04. Upon receiving such notice of resignation and if the
Company shall deem it appropriate evidence satisfactory to it of such mailing,
the Company shall promptly appoint a successor Trustee with respect to the
applicable series (it being understood that any successor Trustee may be
appointed with respect to the Securities of one or more or all of such series
and at any time there shall be only one Trustee with respect to the Securities
of any particular series) by written instrument, in duplicate, executed pursuant
to a Resolution of the Company, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Securityholder
who has been a bona fide holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section 6.08,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor Trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.
(b) In case at any time any of the following shall occur:
(1) The Trustee shall fail to comply with Section 7.08 after written
request therefor by the Company or by any Securityholder who has been a
bona fide holder of a Security or Securities of the applicable series for
at least six months, or
(2) The Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder, or
(3) 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,
then, in any such case, the Company may remove the Trustee with respect to the
applicable series and appoint a successor Trustee with respect to the applicable
series by written instrument, in duplicate, executed pursuant to a Resolution of
the Company, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee, or, subject to the provisions of
Section 6.08, any Securityholder who has been a bona fide holder of a Security
or Securities of the applicable series 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 with respect to the applicable series. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor Trustee.
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(c) The holders of a majority in principal amount of the Securities
of any one series voting as a separate class or all series voting as one class
at the time outstanding (determined as provided in Section 8.04) may at any time
remove the Trustee with respect to the applicable series or all series, as the
case may be, and appoint a successor Trustee with respect to the applicable
series or all series, as the case may be, by written instrument or instruments
signed by such holders or their attorneys-in-fact duly authorized, or by the
affidavits of the permanent chairman and permanent secretary of a meeting of the
Securityholders (as elected in accordance with Section 9.05) evidencing the vote
upon a resolution or resolutions submitted thereto with respect to such removal
and appointment (as provided in Article Nine), and by delivery thereof to the
Trustee so removed, to the successor Trustee and to the Company.
(d) Any resignation or removal of the Trustee and any appointment of
a successor Trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor Trustee as
provided in Section 7.11.
Section 7.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor Trustee
with respect to all series of Securities appointed as provided in Section 7.10
shall execute, acknowledge and deliver to the Company and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee with respect to all or any
applicable series 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 with respect to such series of its predecessor
hereunder, with like effect as if originally named as Trustee herein; but, on
the written request of the Company or of the successor Trustee, the Trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 7.06, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers with respect to such series of
the Trustee so ceasing to act. Upon the request of any such successor Trustee,
the Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor Trustee all such rights
and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such Trustee or any successor Trustee
to secure any amounts then due it pursuant to the provisions of Section 7.06.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
such 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 such 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 with respect to the Securities of such
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 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
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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 such series to which the appointment of such successor Trustee relates; but,
on written request of the Company 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 such series to which the appointment of such successor Trustee
relates.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the successor Trustee shall at the expense of the Company transmit
notice of the succession of such Trustee hereunder to the holders of Securities
of any applicable series in the manner and to the extent provided in subsection
(c) of Section 5.04 with respect to reports pursuant to subsection (a) of said
Section 5.04.
Section 7.12. SUCCESSOR TO TRUSTEE BY MERGER, 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 qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have; provided, however, that the
right to adopt the certificate of authentication of any predecessor Trustee or
to authenticate Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
Section 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS A CREDITOR TO
OBTAIN PAYMENT OF CERTAIN CLAIMS WITHIN THREE MONTHS PRIOR TO DEFAULT OR DURING
DEFAULT, OR TO REALIZE ON PROPERTY AS SUCH CREDITOR THEREAFTER. (a) Subject to
the provisions of subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company or of any other obligor on the Securities within three months prior to a
default, as defined in subsection (c) of this Section, or subsequent to such a
default, then, unless and until such default shall be cured, waived or remedied,
the Trustee shall set apart and hold in a special account for the benefit of the
Trustee individually, the holders of the Securities of the one or more other
indenture securities (as defined in subsection (c) of this Section):
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(1) An amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period, and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection, or from the exercise of any right of set-
off which the Trustee could have exercised if a petition in bankruptcy had
been filed by or against the Company upon the date of such default; and
(2) All property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property if disposed
of, subject, however, to the rights, if any, of the Company and its other
creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) To retain for its own account (i) payments made on account of any
such claim by any person (other than the Company) who is liable thereon,
(ii) the proceeds of the bona fide sale of any such claim by the Trustee to
a third person, and (iii) distributions made in cash, securities, or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to title 11 of
the United States Code or applicable state laws;
(B) To realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three- month period;
(C) To realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received, the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within three months; or
(D) To receive payment on any claim referred to in paragraph (B) or
(C) against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C), and (D), property substituted
after the beginning of such three-month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and to the
extent that any claim referred to in any such paragraphs is created in renewal
of or in substitution for or for the purpose of repaying or refunding any pre-
existing claim of the Trustee as such creditor, such claim shall have the same
status as such pre-existing claim.
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If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the holders of Securities of the one or more series for
which it is acting as Trustee, and the holders of other indenture securities in
such manner that the Trustee, such Securityholders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to title 11 of the
United States Code or applicable state law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee, such Securityholders, and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to title 11 of the United States Code
or applicable state law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim in
bankruptcy or receivership or in proceedings for reorganization pursuant to
title 11 of the United States Code or applicable state law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion among the
Trustee, such Securityholders, and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, such Securityholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claim, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) The receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three-month period; and
(ii) Such receipt of property or reduction of claim occurred within
three months after such resignation or removal;
(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
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(1) The ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) Advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Securityholders at the time and in the
manner provided in Section 5.04(c) with respect to reports pursuant to
subsections (a) and (b) thereof, respectively;
(3) Disbursements made in the ordinary course of business in the
capacity of Trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) An indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) The ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) The acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment in full
of the principal of or interest upon any of the Securities or upon the
other indenture securities when and as such principal or interest becomes
due and payable.
(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act of
1939) outstanding under any other indenture (A) under which the Trustee is
also trustee, (B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (C) under which a default
exists at the time of the apportionment of the funds and property held in
said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
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(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise, or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" shall mean any obligor upon the Securities.
ARTICLE EIGHT
CONCERNING THE SECURITYHOLDERS
Section 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in
this Indenture it is provided that the holders of a specified percentage in
principal amount of the Securities of any or all series may take any action
(including the making of any demand or request, the giving of any notice,
consent, or waiver or the taking of any other action), the fact at the time of
taking any such action the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by such Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Securities voting
in favor thereof at any meeting of such Securityholders duly called and held in
accordance with the provisions of Article Nine, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
Securityholders.
If there shall be more than one Trustee acting hereunder with respect
to separate series of Securities, such Trustees shall collaborate, if necessary,
in acting under Article Nine and in determining whether the holders of a
specified percentage in principal amount of the Securities of any or all series
have taken any such action.
Section 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to the provisions of Sections 7.01, 7.02 and 9.05, proof of
the execution of any instrument by a Securityholder or his agent or proxy and
proof of the holding by any person of any of the Securities shall be sufficient
if made in the following manner:
The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
The ownership of Securities of any series shall be proved by the
Register of such Securities of such series, or by certificates of the Security
registrar or registrars thereof.
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The Trustee shall not be bound to recognize any person as a
Securityholder unless and until title to the Securities held by him is proved in
the manner in this Article Eight provided.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 9.06.
The Trustee may accept such other proof or require such additional
proof of any matter referred to in this Section as it shall deem reasonable.
Section 8.03. WHO MAY BE DEEMED OWNERS OF SECURITIES. Prior to due
presentment for registration of transfer of any Security, the Company, the
Trustee and any agent of the Company or the Trustee may deem and treat the
person in whose name such Security shall be registered upon the Register of
Securities of the series of which such Security is a part as the absolute owner
of such Security (whether or not payments in respect of such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or an account of the principal of and
interest, subject to Section 2.03, on such Security and for all other purposes;
and neither the Company nor the Trustee nor any agent of the Company or the
Trustee shall be affected by any notice to the contrary. All such payments so
made to any such holder for the time being, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability of moneys payable upon any such Security.
Section 8.04. SECURITIES OWNED BY COMPANY OR CONTROLLED OR
CONTROLLING PERSONS DISREGARDED FOR CERTAIN PURPOSES. In determining whether
the holders of the requisite principal amount of Securities have concurred in
any demand, direction, request, notice, vote, consent, waiver or other action
under this Indenture, Securities which are owned by the Company or any other
obligor on the Securities or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such demand, direction, request, notice, vote, consent, waiver or other action,
only Securities which a Responsible Officer of the Trustee assigned to its
principal office actually knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right to vote such Securities and
that the pledgee is not a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
such other obligor. Upon request of the Trustee, the Company shall furnish to
the Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Company to be owned or held by or for the
account of the Company or any other obligor on the Securities or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Securities; and,
subject to the provisions of Section 7.01, 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.
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Section 8.05. INSTRUMENTS EXECUTED BY SECURITYHOLDERS BIND FUTURE
HOLDERS. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
percentage in principal amount of the Securities specified in this Indenture in
connection with such action, any holder of a Security which is shown by the
evidence to be included in the Securities the holders of which have consented to
such action may, by filing written notice with the Trustee at its principal
office and upon proof of holding as provided in Section 8.02, revoke such action
so far as concerns such Security. Except as aforesaid any such action taken by
the holder of any Security and any direction, demand, request, notice, waiver,
consent, vote or other action of the holder of any Security which by any
provisions of this Indenture is required or permitted to be given shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in lieu thereof or upon
registration of transfers thereof, irrespective of whether any notation in
regard thereto is made upon such Security. Any action taken by the holders of
the percentage in principal amount of the Securities of any or all series
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the holders of all of the Securities
of such series subject, however, to the provisions of Section 7.01.
ARTICLE NINE
SECURITYHOLDERS' MEETINGS
Section 9.01. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting
of holders of Securities of any or all series may be called at any time and from
time to time pursuant to the provisions of this Article for any of the following
purposes:
(1) To give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by holders of Securities of any or all series, as the case may be,
pursuant to any of the provisions of Article Six;
(2) To remove the Trustee and appoint a successor Trustee pursuant to
the provisions of Article Seven;
(3) To consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.02; or
(4) To take any other action authorized to be taken by or on behalf of
the holders of any specified principal amount of the Securities of any or
all series, as the case may be, under any other provision of this Indenture
or under applicable law.
Section 9.02. MANNER OF CALLING MEETINGS. The Trustee may at any
time call a meeting of Securityholders to take any action specified in Section
9.01, to be held at such time and at such place in the Borough of Manhattan,
State of New York, as the Trustee shall determine. Notice of every meeting of
Securityholders setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed not less
than 20 nor more than 60 days prior to the date fixed for the meeting.
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Section 9.03. CALL OF MEETING BY COMPANY OR SECURITYHOLDERS. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of not less than ten percent in principal amount of the Securities
of any or all series, as the case may be, then outstanding, shall have requested
the Trustee to call a meeting of holders of Securities of any or all series, as
the case may be, to take any action authorized in Section 9.01 by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed notice of such meeting within
20 days after receipt of such request, then the Company or such holders of
Securities in the amount above specified may determine the time and place in the
Borough of Manhattan, State of New York for such meeting and may call such
meeting to take any action authorized in Section 9.01, by mailing notice thereof
as provided in Section 9.02.
Section 9.04. WHO MAY ATTEND AND VOTE AT MEETINGS. To be entitled to
vote at any meeting of Securityholders a person shall (a) be a holder of one or
more Securities with respect to which the meeting is being held, or (b) be a
person appointed by an instrument in writing as proxy by such holder of one or
more Securities. The only persons who shall be entitled to be present or to
speak at any meeting of Securityholders shall be the persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 9.05. REGULATIONS MAY BE MADE BY TRUSTEE. Notwithstanding
any other provisions of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Securityholders, in
regard to proof of the holding of Securities and of the appointment of proxies,
and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall think fit. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 8.02 and the appointment of any proxy shall be proved in the manner
specified in said Section 8.02; provided, however, that such regulations may
provide that written instruments appointing proxies regular on their face, may
be presumed valid and genuine without the proof hereinabove or in said Section
8.02 specified.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 9.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 8.04, at any meeting each
Securityholder or proxy shall be entitled to one vote for each $1,000 principal
amount of Securities held or represented by him, provided, however, that no vote
shall be cast or counted at any meeting in respect of any Security challenged as
not outstanding and ruled by the permanent chairman of the meeting to be not
outstanding; provided, further, that each holder of Original Issue Discount
Securities shall be entitled to one vote for each $1,000 amount which would be
due upon acceleration of his Original Issue Discount Security on the date of the
meeting. Neither a temporary nor a permanent chairman of the meeting shall have
a right to vote other than by virtue of Securities held by him or instruments in
writing as aforesaid duly designating him as the person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 9.02 or 9.03 may be adjourned from time to time, and
the meeting may be held so adjourned without further notice.
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At any meeting of Securityholders, the presence of persons holding or
representing Securities in principal amount sufficient to take action on the
business for the transaction of which such meeting was called shall constitute a
quorum, but, if less than a quorum is present, the person or persons holding or
representing a majority in principal amount of the Securities represented at the
meeting may adjourn such meeting with the same effect for all intents and
purposes, as though a quorum had been present.
Section 9.06. MANNER OF VOTING AT MEETINGS AND RECORD TO BE KEPT.
The vote upon any resolution submitted to any meeting of Securityholders shall
be by written ballots on which shall be subscribed the signatures of the holders
of Securities or of their representatives by proxy and the principal amount or
principal amounts of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the permanent secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Securityholders shall be prepared by the
permanent secretary of the meeting and there shall be attached to said record
the original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said notice
was mailed as provided in Section 9.02. The record shall show the principal
amount or principal amounts of the Securities voting in favor of, against, or
abstaining from voting on, any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and permanent secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 9.07. EXERCISE OF RIGHTS OF TRUSTEE, SECURITYHOLDERS AND
HOLDERS OF PREFERRED SECURITIES NOT TO BE HINDERED OR DELAYED. Nothing in this
Article contained shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Securityholders or any rights expressly or impliedly
conferred hereunder to make such call any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee, to the
Securityholders or the holders of Preferred Securities under any of the
provisions of this Indenture or of the Securities.
ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 10.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURES MAY BE
ENTERED INTO WITHOUT CONSENT OF SECURITYHOLDERS. The Company, when authorized
by a Resolution of the Company, and the Trustee may from time to time, and at
any time enter into an indenture or indentures supplemental hereto, in form
satisfactory to such Trustee (which shall comply with the provisions of the
Trust Indenture Act of 1939 as then in effect), for one or more of the following
purposes:
(a) To evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the
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covenants, agreements and obligations of the Company pursuant to Article
Eleven hereof;
(b) To add to the covenants of the Company such further covenants,
restrictions or conditions as the Company and the Trustee shall consider to
be for the protection of the holders of all or any series of Securities
(and if such covenants, restrictions or conditions are to be for the
benefit of less than all series of Securities, stating that such covenants,
restrictions or conditions are expressly being included solely for the
benefit of such series), and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect to any such additional covenant,
restriction or condition such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(c) To add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons;
(d) To change or eliminate any of the provisions of this Indenture;
provided, however, that any such change or elimination shall become
effective only when there is no Security of any series outstanding created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision;
(e) To establish the form or terms of Securities of any series as
permitted by Section 2.01 and 2.02;
(f) To cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provisions contained herein or in any
supplemental indenture, or to make such other provision in regard to
matters or questions arising under this Indenture or any supplemental
indenture which shall not adversely affect the interests of the holders of
the Securities; provided, however, that such action shall not adversely
affect the interest of the holders of Securities of any series in any
material respect or, in the case of the Securities of a series issued to an
Aon Trust and for so long as any of the corresponding series of Preferred
Securities issued by such Aon Trust shall remain outstanding, the holders
of such Preferred Securities;
(g) To mortgage or pledge to the Trustee as security for the
Securities any property or assets which the Company may desire to mortgage
or pledge as security for the Securities; and
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(h) To qualify, or maintain the qualification of, the Indenture under
the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, mortgage, pledge or assignment of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Securities at the time outstanding, notwithstanding
any of the provisions of Section 10.02.
Section 10.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF A
MAJORITY IN PRINCIPAL AMOUNT OF SECURITIES. With the consent (evidenced as
provided in Section 8.01) of the holders of not less than a majority in
principal amount of the Securities of all series at the time outstanding
(determined as provided in Section 8.04) affected by such supplemental indenture
(voting as one class), the Company, when authorized by a Resolution of the
Company, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall be in conformity with
the provisions of the Trust Indenture Act of 1939 as then in effect) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Securities of each such
series; provided, however, that no such supplemental indenture shall (i) change
the fixed Maturity of any Securities, or reduce the rate or extend the time of
payment of any interest thereon or on any overdue principal amount or reduce the
principal amount thereof, or change the provisions pursuant to which the rate of
interest on any Security is determined if such change could reduce the rate of
interest thereon, or reduce the minimum rate of interest thereon, or reduce any
amount payable upon any redemption thereof, or adversely affect any right to
convert the Securities in accordance herewith, or reduce the amount to be paid
at Maturity or upon redemption in Capital Stock or make the principal thereof or
any interest thereon or on any overdue principal amount payable in any coin or
currency other than that provided in the Security without the consent of the
holder of each Security so affected, (ii) reduce the aforesaid percentage of
Securities, the holders of which are required to consent to any such
supplemental indenture without the consent of the holders of all Securities then
outstanding, (iii) modify any of the provisions of this Section, Section 4.07 or
Section 6.06, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the holders of all Securities then outstanding or (iv) modify the
provisions of Article Fourteen with respect to the subordination of outstanding
Securities of any series in a manner adverse to the holders thereof without the
consent of the holder of each Security so affected; provided, however, that, in
the case of the Securities of a series issued to an Aon Trust, so long as any of
the corresponding series of Preferred Securities issued by such Aon Trust
remains outstanding, (i) no such amendment shall be made that adversely affects
the holders of such Preferred Securities in any material respect, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
with respect to such series or compliance with any covenant with respect to such
series under this Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation amount of such
Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Securities of such series and all accrued and unpaid
interest (including any
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Additional Interest) thereon have been paid in full; and (ii) no amendment shall
be made to Section 6.05 of this Indenture that would impair the rights of the
holders of such Preferred Securities provided therein or to this Indenture that
requires the consent of each holder of the Securities of such series without the
prior consent of each holder of such Preferred Securities then outstanding
unless and until the principal (and premium, if any) of the Securities of such
series and all accrued and unpaid interest (including any Additional Interest)
thereon have been paid in full.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities or Preferred
Securities, or which modifies the rights of holders of Securities or holders of
Preferred Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
holders of Securities or holders of Preferred Securities of any other series.
Upon the request of the Company, accompanied by a copy of a Resolution
of the Company certified by the Secretary or an Assistant Secretary of the
Company authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall mail a notice to the holders of Securities of each series so affected,
setting forth in general terms the substance of such supplemental indenture.
Any failure of the Company to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.
Section 10.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
The Trustee shall be entitled to receive, and subject to the
provisions of Section 7.01 shall be entitled to rely upon, an Opinion of Counsel
as conclusive evidence that any such supplemental indenture complies with the
provisions of this Article and stating that the Securities affected by the
supplemental indenture, when such Securities are authenticated and delivered by
the Trustee and executed and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will be valid and binding
obligations of the Company, except as any rights thereunder may be
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limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and by general equity principles.
Section 10.04. SECURITIES MAY BEAR NOTATION OF CHANGES BY
SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article, or after any action taken at a Securityholders' meeting pursuant to
Article Nine, may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture or as to any action taken at
any such meeting. If the Company or the Trustee shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Securities then
outstanding.
Section 10.05. REVOCATION AND EFFECT OF CONSENTS. Subject to
Section 8.05, until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Securityholder of a Security is a continuing
consent conclusive and binding upon such Securityholder and every subsequent
Securityholder of the same Security or portion thereof, and of any Security
issued upon the registration of transfer thereof or in exchange therefor or in
place thereof, even if notation of the consent is not made on any such Security.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Securityholders
at such record date (or their duly designated proxies), and only such Persons,
shall be entitled to consent or revoke such consent to such amendment,
supplement or waiver, whether or not such Persons continue to be Securityholders
after such record date. No such consent shall be valid or effective for more
than 180 days after such record date.
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Securityholder.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 11.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
The Company 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 the Company shall be the continuing corporation, or the
successor corporation (if other than the Company) shall be a corporation
organized and existing under the laws of the United States of America or a State
thereof or the District of Columbia and such corporation shall expressly assume
the due and punctual payment of the principal of and interest on all the
Securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, (ii) the Company or
such successor corporation, as the case may be, shall not, immediately after
such merger
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or consolidation, or such sale or conveyance, be in default in the performance
of any such covenant or condition, and (iii) in the case of Securities of a
series issued to an Aon Trust, such consolidation, merger, sale or conveyance is
permitted under the relevant Trust Agreement and Aon Guarantee and does not give
rise to any breach or violation of such Trust Agreement or Aon Guarantee.
Section 11.02. SUCCESSOR CORPORATION SUBSTITUTED. In case of any such
consolidation, merger, sale or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Securities issuable hereunder which theretofore shall
not have been delivered to the Trustee; and upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this 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 or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 11.03. OPINION OF COUNSEL TO TRUSTEE. The Trustee shall be
entitled to receive, and subject to the provisions of Section 7.01 shall be
entitled to rely upon, an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale or conveyance and any such assumption, complies
with the provisions of this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE,
UNCLAIMED MONEYS
Section 12.01. SATISFACTION AND DISCHARGE OF INDENTURE. If (a)
the Company shall deliver to the Trustee for cancellation all Securities of any
series theretofore authenticated (other than any Securities of such series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.07) and not theretofore cancelled, or (b) all the
Securities of such series not theretofore cancelled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee as trust funds the
entire amount sufficient to pay at Maturity or upon redemption all of such
Securities not theretofore cancelled or delivered to the Trustee for
cancellation, including principal and any interest due or to become due to such
date of Maturity or redemption date, as the case may be, and if in either case
the Company shall also pay or
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cause to be paid all other sums payable hereunder by the Company with respect to
Securities of such series, then this Indenture shall cease to be of further
effect with respect to Securities of such series, (except as to (i) remaining
rights of registration of transfer, conversion, substitution and exchange and
the Company's right of optional redemption of Securities of such series, (ii)
rights hereunder of holders to receive payments of principal of, and any
interest on, the Securities of such series, and other rights, duties and
obligations of the holders of Securities of such series as beneficiaries hereof
with respect to the amounts, if any, so deposited with the Trustee, and (iii)
the rights, obligations and immunities of the Trustee hereunder), and the
Trustee, on demand of the Company, and at the cost and expense of the Company,
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture. The Company hereby agrees to compensate the Trustee for any
services thereafter reasonably and properly rendered and to reimburse the
Trustee for any costs or expenses theretofore and thereafter reasonably and
properly incurred by the Trustee in connection with this Indenture or the
Securities of such series.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to the Securities of any or all series, the obligations of the Company
to the Trustee under Section 7.06 shall survive.
Section 12.02. APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT
OF SECURITIES. Subject to Section 12.04, all moneys deposited with the Trustee
pursuant to Section 12.01 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the holders of the particular Securities of
such series, for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest.
Section 12.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any series, all moneys with respect to Securities of such series
then held by any Paying Agent under the provisions of this Indenture shall, upon
demand of the Company, be paid to the Trustee and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.
Section 12.04. REPAYMENT OF MONEYS HELD BY TRUSTEE. Any moneys
deposited with the Trustee or any Paying Agent for the payment of the principal
of or any interest on any Securities of any series and not applied but remaining
unclaimed by the holders of Securities of such series for two years after the
date upon which such payment shall have become due and payable, shall, at the
request of the Company, be repaid to the Company by the Trustee or by such
Paying Agent; and the holder of any of the Securities of such series entitled to
receive such payment shall thereafter look only to the Company for the payment
thereof; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once a week for two successive weeks (in each case on any day of
the week) in an Authorized Newspaper, or mailed to the registered holders
thereof, a notice that said moneys have not been so applied and that after a
date named therein any unclaimed balance of said money then remaining will be
returned to the Company.
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ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS,
DIRECTORS AND EMPLOYEES
Section 13.01. INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND
EMPLOYEES OF COMPANY EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon
any obligation, covenant or agreement of this Indenture, or of any Security, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer, director or employee, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
it being expressly understood that this Indenture and the obligations issued
hereunder are solely corporate obligations, and that no personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers, directors or employees, as such, of the Company or any
successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of,
and any and all such rights and claims against every such incorporator,
stockholder, officer, director or employee, as such, because of the creation of
the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom are hereby expressly waived and released as a condition of
and as a consideration for, the execution of this Indenture and the issue of
such Securities.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
Section 14.01. AGREEMENT TO SUBORDINATE. The Company, for itself, is
successors and assigns, covenants and agrees, and each holder of a Security of
any series likewise covenants and agrees by his acceptance thereof, that the
obligation of the Company to make any payment on account of the principal of and
interest on each and all of the Securities of any series shall be subordinate
and junior in right of payment to the Company's obligations to the holders of
Senior Indebtedness of the Company, and that in the case of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or winding-
up of or relating to the Company as a whole, whether voluntary or involuntary,
all obligations of the Company to holders of Senior Indebtedness of the Company
shall be entitled to be paid in full before any payment shall be made on account
of the principal of or interest on any of the Securities. In the event of any
such proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness of the Company, the holders of the Securities of each series,
together with the holders of any obligations of the Company ranking on a parity
with the Securities, shall be entitled to be paid from the remaining assets of
the Company the amounts at the time due and owing on account of unpaid principal
of and interest on the Securities of any series before any payment or other
distribution, whether in cash, property or otherwise, shall be made on account
of any capital stock or any obligations of the Company ranking junior to the
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Securities. In addition, in the event of any such proceeding, if any payment or
distribution of assets of the Company of any kind or character whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securities of any series shall
be received by the Trustee or the holders of the Securities of any series before
all Senior Indebtedness of the Company is paid in full, such payment or
distribution shall be held in trust for the benefit of and shall be paid over to
the holders of such Senior Indebtedness of the Company or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness of the Company may
have been issued, ratably, for application to the payment of all Senior
Indebtedness of the Company remaining unpaid until all such Senior Indebtedness
of the Company shall have been paid in full, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness of
the Company. The obligations of the Company in respect of the Securities of all
series shall rank on a parity with any obligations of the Company ranking on a
parity with the Securities. Nothing in this Section 14.01 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.06.
The subordination provisions of the foregoing paragraph shall not be
applicable to amounts at the time due and owing on the Securities of any series
on account of the unpaid principal of or interest on the Securities of such
series for the payment of which funds have been deposited in trust with the
Trustee or any Paying Agent or have been set aside by the Company in trust in
accordance with the provisions of this Indenture; nor shall such provisions
impair any rights, interests, or powers of any secured creditor of the Company
in respect of any security the creation of which is not prohibited by the
provisions of this Indenture.
The Company shall give prompt written notice to the Trustee of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Company as a whole, whether voluntary or
involuntary. The Trustee, subject to the provisions of Section 7.01, shall be
entitled to assume that, and may act as if, no such event has occurred unless a
Responsible Officer of the Trustee assigned to the Trustee's corporate trust
department has received at the principal corporate trust office of the Trustee
from the Company or any one or more holders of Senior Indebtedness of the
Company or any trustee therefor (who shall have been certified or otherwise
established to the satisfaction of the Trustee to be such a holder or trustee)
written notice thereof. Upon any distribution of assets of the Company referred
to in this Article, the Trustee and holders of the Securities of each series
shall be entitled to rely upon any order or decree of a court of competent
jurisdiction in which proceedings relating to any event specified in the first
sentence of this paragraph are pending for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon, and all other facts pertinent thereto or
to this Article, and the Trustee, subject to the provisions of Article Seven,
and the holders of the Securities of each series shall be entitled to rely upon
a certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the holders of the Securities of each series
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article. In the absence of any
such liquidating trustee, agent or other person, the Trustee shall be entitled
to rely upon a written notice by a Person representing himself to be a holder of
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Senior Indebtedness of the Company (or a trustee or representative on behalf of
such holder) as evidence that such Person is a holder of such Senior
Indebtedness (or is such a trustee or representative). In the event that the
Trustee determines, in good faith, that further evidence is required with
respect to the right of any Person, as a holder of Senior Indebtedness of the
Company, to participate in any payment or distribution pursuant to this Section,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, as to the extent to which such Person is entitled to participation
in such payment or distribution, and as to other facts pertinent to the rights
of such Person under this Section, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 14.02. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing
contained in this Article or elsewhere in this Indenture is intended to or shall
impair, as between the Company and the holders of the Securities of each series,
the obligation of the Company, which is absolute and unconditional, to pay to
such holders the principal of and interest on such Securities of each series
when, where and as the same shall become due and payable, all in accordance with
the terms of such Securities, or is intended to or shall affect the relative
rights of such holders and creditors of the Company other than the holders of
the Senior Indebtedness of the Company, nor shall anything herein or therein
prevent the Trustee or the holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Indebtedness
of the Company in respect of cash, property, or securities of the Company
received upon the exercise of any such remedy.
Section 14.03. LIMITATIONS ON DUTIES TO HOLDERS OF SENIOR
INDEBTEDNESS OF THE COMPANY. With respect to the holders of Senior Indebtedness
of the Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness of the Company shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company, except with respect to moneys
held in trust pursuant to the first paragraph of Section 14.01.
Section 14.04. NOTICE TO TRUSTEE OF FACTS PROHIBITING PAYMENT.
Notwithstanding any of the provisions of this Article or any other provisions of
this Indenture, the Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee unless and until a Responsible Officer of the
Trustee assigned to its corporate trust department shall have received at the
principal corporate trust office of the Trustee written notice thereof from the
Company or from one or more holders of Senior Indebtedness of the Company or
from any trustee therefor who shall have been certified by the Company or
otherwise established to the reasonable satisfaction of the Trustee to be such a
holder or trustee; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that, if prior
to the fifth Business Day preceding the date upon which by the terms hereof any
such moneys may become payable for any purpose, or in the event of the execution
of an instrument pursuant to Section 12.01 acknowledging satisfaction and
discharge of this Indenture, then if prior to the second Business Day preceding
the date of such execution, the Trustee shall not have received with respect to
such moneys the notice provided for in this Section, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full
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power and authority to receive such moneys and/or 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 on or after such date; provided, however,
no such application shall affect the obligations under this Article of the
Persons receiving such moneys from the Trustee.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee therefor) to establish that such notice has been
given by a holder of Senior Indebtedness (or a trustee therefor). In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such Person, to the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Section 14.05. APPLICATION BY TRUSTEE OF MONEYS DEPOSITED WITH IT.
Anything in this Indenture to the contrary notwithstanding, any deposit of
moneys by the Company with the Trustee or any agent (whether or not in trust)
for any payment of the principal of or interest on any Securities shall, except
as provided in Section 14.04, be subject to the provisions of Section 14.01.
Section 14.06. SUBROGATION. Subject to the payment in full of all
Senior Indebtedness of the Company, the holders of the Securities of each series
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of assets of the Company applicable to such
Senior Indebtedness until the Securities shall be paid in full, and none of the
payments or distributions to the holders of such Senior Indebtedness to which
the holders of the Securities of any series or the Trustee would be entitled
except for the provisions of this Article or of payments over pursuant to the
provisions of this Article to the holders of such Senior Indebtedness by the
holders of such Securities or the Trustee shall, as among the Company, its
creditors other than the holders of such Senior Indebtedness, and the holders of
such Securities, be deemed to be a payment by the Company to or on account of
such Senior Indebtedness; it being understood that the provisions of this
Article are and are intended solely for the purpose of defining the relative
rights of the holders of such Securities, on the one hand, and the holders of
the Senior Indebtedness of the Company, on the other hand.
Section 14.07. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY. No right of any
present or future holders of any Senior Indebtedness of the Company 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 the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof with which any such holder may have or be
otherwise charged. The holders of Senior Indebtedness of the Company may, at any
time or from time to time and in their absolute discretion, change the manner,
place or terms of payment, change or extend the time of payment of, or renew or
alter, any such Senior Indebtedness of the Company, or amend or supplement any
instrument pursuant to which any such Senior Indebtedness of the Company is
issued or by which it may be secured, or release any security therefor, or
exercise or refrain from exercising any other of their rights under the Senior
Indebtedness of the Company including,
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without limitation, the waiver of default thereunder, all without notice to or
assent from the holders of the Securities of each series or the Trustee and
without affecting the obligations of the Company, the Trustee or the holders of
such Securities under this Article.
Section 14.08. AUTHORIZATION OF TRUSTEE TO EFFECTUATE SUBORDINATION
OF SECURITIES. Each holder of a Security of any series, by his acceptance
thereof, authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate, as between the holders
of such Securities and the holders of Senior Indebtedness of the Company, the
subordination provided in this Article. If, in the event of any proceeding or
other action relating to the Company referred to in the first sentence of
Section 14.01, a proper claim or proof of debt in the form required in such
proceeding or action is not filed by or on behalf of the holders of the
Securities of any series prior to fifteen days before the expiration of the time
to file such claim or claims, then the holder or holders of Senior Indebtedness
of the Company shall have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the holders of such Securities.
Section 14.09. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. 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 Indebtedness, or in the event
that any event of default with respect to any Senior Indebtedness shall have
occurred and be continuing and shall have resulted in such Senior Indebtedness
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, waived or remedied or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or in the event any judicial
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,
whether in cash, properties or securities shall be made by the Company on
account of principal of (or premium, if any) or interest (including any
Additional Interest) if any, on the Securities or on account of the purchase or
other acquisition of Securities by the Company or any Subsidiary.
In the event that, notwithstanding the foregoing, the Company 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 payment shall be paid over and delivered
forthwith to the Company.
Section 14.10. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS OF THE
COMPANY. The Trustee shall be entitled to all of the rights set forth in this
Article in respect of any Senior Indebtedness of the Company at any time held by
it in its individual capacity to the same extent as any other holder of such
Senior Indebtedness, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder.
Section 14.11. ARTICLE FOURTEEN NOT TO PREVENT DEFAULTS. The
failure to make a payment pursuant to the terms of Securities of any series by
reason of any provision in this Article shall not be construed as preventing the
occurrence of a default under this Indenture.
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ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
Section 15.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company shall bind its successors and assigns,
whether so expressed or not.
Section 15.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR
CORPORATION VALID. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer or officers of the Company shall and may be done and performed with like
force and effect by the like board, committee or officer or officers of any
corporation that shall at the time be the lawful sole successor of the Company.
Section 15.03. REQUIRED NOTICES OR DEMANDS MAY BE SERVED BY MAIL.
Any notice or demand which by any provisions of this Indenture is required or
permitted to be given or served by the Trustee, by the holders of Securities or
by the holders of Preferred Securities to or on the Company may be given or
served by registered mail postage prepaid addressed (until another address is
filed by the Company with the Trustee for such purpose), as follows: Aon
Corporation, 123 North Wacker Drive, Chicago, Illinois 60606, Attention:
Treasurer. Any notice, direction, request, demand, consent or waiver by the
Company, by any Securityholder or by any holder of a Preferred Security to or
upon the Trustee shall be deemed to have been sufficiently given, made or filed,
for all purposes, if given, made or filed in writing at the principal corporate
trust office of the Trustee, 101 Barclay Street, Floor 21 West, New York, New
York 10286, Attention: Corporate Trust Trustee Administration.
Section 15.04. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE
FURNISHED UPON APPLICATIONS OR DEMANDS BY THE COMPANY. Upon any request or
application by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this 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 have been complied with, except that in the case of any
such application or demand as to which furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture, other than certificates provided pursuant to
Section 4.06, shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) 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; (3) a statement that, in the opinion of such person, 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 (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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Any certificate, statement or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
Section 15.05. PAYMENTS DUE ON SATURDAYS, SUNDAYS, AND HOLIDAYS. In
any case where the date of payment of interest on or principal of the Securities
of any series or the date fixed for any redemption of any Security of any series
shall not be a Business Day, then payment of interest or principal need not be
made on such date, but shall be made on the next succeeding Business Day with
the same force and effect as if made on the date fixed for the payment of
interest on or principal of the Security or the date fixed for any redemption of
any Security of such series, and no additional interest shall accrue for the
period after such date and before payment.
Section 15.06. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939 TO
CONTROL. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 317,
inclusive, of the Trust Indenture Act through operation of Section 318(c)
thereof, such required provision shall control.
Section 15.07. INDENTURE AND SECURITIES TO BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture and each Security shall
be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State
(without regard to conflicts of laws principles thereof).
Section 15.08. PROVISIONS OF THE INDENTURE AND SECURITIES FOR THE
SOLE BENEFIT OF THE PARTIES AND THE SECURITYHOLDERS. Nothing in this Indenture
or in the Securities, expressed or implied, shall give or be construed to give
any person, firm or corporation, other than the parties hereto and their
successors and assigns and the holders of the Securities, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition and provision herein contained; all its covenants,
conditions and provisions being for the sole benefit of the parties hereto and
their
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successors and assigns and of the holders of the Securities and, to the extent
expressly provided in Sections 6.01, 6.05, 6.06, 9.07, 10.01 and 10.02, the
holders of Preferred Securities.
Section 15.09. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
Section 15.10. SECURITIES IN FOREIGN CURRENCIES. Whenever this
Indenture provides for any action by, or any distribution to, holders of
Securities denominated in United States dollars and in any other currency, in
the absence of any provision to the contrary in the form of Security of any
particular series, the relative amount in respect of any Security denominated in
a currency other than United States dollars shall be treated for any such action
or distribution as that amount of United States dollars that could be obtained
for such amount on such reasonable basis of exchange and as of such date as the
Company may specify in a written notice to the Trustee.
The Bank of New York, the party of the second part, hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions,
hereinabove set forth.
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IN WITNESS WHEREOF, AON CORPORATION, the party of the first part, has
caused this Indenture to be signed and acknowledged by its ***************** and
-----------------
one of its Vice Presidents; and THE BANK OF NEW YORK, the party of the second
part, has caused this Indenture to be signed and acknowledged by its
_____________________________________________________, all as of the day and
year first written above.
*one of its Executive Vice Presidents
AON CORPORATION
By: /s/ Harvey N. Medvin
--------------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
By: /s/ James D. White
--------------------------------------
Name: James D. White
Title: Vice President and Controller
THE BANK OF NEW YORK, as Trustee
By: /s/ Mary La Gumina
--------------------------------------
Name: Mary La Gumina
Title: Assistant Vice President
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================================================================================
FIRST SUPPLEMENTAL INDENTURE
BETWEEN
AON CORPORATION
AND
THE BANK OF NEW YORK
DATED AS OF JANUARY 13, 1997
8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
DUE JANUARY 1, 2027
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
ARTICLE I
DEFINITIONS
Section 1.01. Definition of Terms................................................. 2
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE
JUNIOR SUBORDINATED DEBENTURES
Section 2.01. Designation and Principal Amount.................................... 5
Section 2.02. Stated Maturity..................................................... 5
Section 2.03. Form and Payment; Minimum Transfer Restriction...................... 5
Section 2.04. Exchange and Registration of Transfer of Junior Subordinated
Debentures; Restrictions on Transfers; Depositary.................. 6
Section 2.05. Interest............................................................ 9
ARTICLE 3
REDEMPTION AND PREPAYMENT OF THE
JUNIOR SUBORDINATED DEBENTURES
Section 3.01. Tax Event or Investment Company Event Prepayment.................... 10
Section 3.02. Notice of Prepayment................................................ 10
ARTICLE 4
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.01. Extension of Interest Payment Period................................ 10
Section 4.02. Notice of Extension................................................. 11
ARTICLE 5
EXPENSES
Section 5.01. Payment of Expenses................................................. 11
Section 5.02. Payment upon Resignation or Removal................................. 12
ARTICLE 6
FORM OF JUNIOR SUBORDINATED DEBENTURE
Section 6.01. Form of Junior Subordinated Debenture............................... 12
</TABLE>
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<TABLE>
<S> <C>
ARTICLE 7
ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES
Section 7.01. Original Issue of Junior Subordinated Debentures.................... 13
ARTICLE 8
EXCHANGE OF SECURITIES
Section 8.01. Mandatory Tender in Exchange Offer.................................. 13
ARTICLE 9
MISCELLANEOUS
Section 9.01. Ratification of Indenture; First Supplemental Indenture Controls.... 13
Section 9.02. Trustee Not Responsible for Recitals................................ 14
Section 9.03. Governing Law....................................................... 14
Section 9.04. Separability........................................................ 14
Section 9.05. Counterparts........................................................ 14
</TABLE>
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FIRST SUPPLEMENTAL INDENTURE, dated as of January 13, 1997 (the "First
-----
Supplemental Indenture"), between Aon Corporation, a Delaware corporation (the
- ----------------------
"Company"), and The Bank of New York, as trustee (the "Trustee") under the
- -------- -------
Indenture dated as of January 13, 1997 between the Company and the Trustee (the
"Base Indenture" and, together with this First Supplemental Indenture, the
--------------
"Indenture").
- ----------
WHEREAS, the Company executed and delivered the Base Indenture to the
Trustee to provide for the future issuance of the Company's unsecured junior
subordinated debentures (the "Debentures") to be issued from time to time in one
----------
or more series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of two separate series of its
Debentures, both to be known as its 8.205% Junior Subordinated Deferrable
Interest Debentures due January 1, 2027 (collectively, the "Junior Subordinated
-------------------
Debentures"), the form and substance of such Junior Subordinated Debentures and
- ----------
the terms, provisions and conditions thereof to be set forth as provided in the
Base Indenture and this First Supplemental Indenture;
WHEREAS, the Company desires that (x) the first series of Junior
Subordinated Debentures (the "Private Debentures") be originally issued on
------------------
January 13, 1997 pursuant to the Indenture, the Purchase Agreement (as defined
below) and the Trust Agreement (as defined in Section 1.01), and (y) the second
series of Junior Subordinated Debentures (the "Exchange Debentures") be issuable
-------------------
upon surrender of and in exchange for the Private Debentures pursuant to Section
8.01;
WHEREAS, Aon Capital A, a Delaware statutory business trust (the
"Trust"), has offered to the purchasers (the "Purchasers") named in Schedule I
----------
to the Purchase Agreement (the "Purchase Agreement") dated January 8, 1997 among
------------------
the Purchasers, the Trust and the Company in a private placement $800,000,000
aggregate liquidation amount of its 8.205% Capital Securities (the "Capital
-------
Securities"), representing undivided beneficial interests in the assets of the
- ----------
Trust and proposes to invest the proceeds from the sale of the Capital
Securities, together with the proceeds of the sale by the Trust to the Company
of $24,000,000 aggregate liquidation amount of its Common Securities, in
$824,000,000 aggregate principal amount of the Junior Subordinated Debentures;
and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Junior Subordinated Debentures, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations of
the Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects.
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Junior Subordinated Debentures by the Purchasers, and for the purpose of setting
forth, as provided in the Base Indenture, the form and substance of the Junior
Subordinated Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01. Definition of Terms. For all purposes of this First
Supplemental Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms which are defined in the Base Indenture have the same
meanings when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act of 1939, whether directly or by reference therein, have the
meanings assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United States
of America at the date 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 the Company;
(e) a reference to a Section or Article is to a Section or Article of
this First Supplemental Indenture unless otherwise stated;
(f) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this First Supplemental Indenture as a whole and
not to any particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not affect
interpretation;
(h) the term "prepayment" as used herein means "redemption" as such
term is used in the Base Indenture; and
(i) the following terms have the meanings given to them in the Trust
Agreement: (i) Additional Distributions, (ii) Administrative Trustee, (iii)
Affiliate, (iv) Capital Securities Certificate, (v) Capital Securities
Exchange and Registration Rights Agreement, (vi) Cedel, (vii) Debenture
Exchange and Registration Rights Agreement, (viii) Delaware Trustee, (ix)
Distributions, (x) Euroclear, (xi) Exchange Act, (xii) Institutional
Accredited Investor, (xiii) Minimum Transfer Legend, (xiv) 144A Global
Security, (xv) PORTAL Market, (xvi) Private Placement Legend, (xvii)
Property
-2-
<PAGE>
Trustee, (xviii) QIB, (xix) Registration Rights Agreements, (xx) Regulation
S, (xxi) Regulation S Global Security, (xxii) Restricted Period, (xxiii)
Rule 144, (xxiv) Rule 144A, (xxv) Rule 144(k), (xxvi) Securities Act,
(xxvii) Transfer Restriction Termination Date, and (xxviii) Trust Security.
"Additional Interest" has the meaning specified in Section 2.05.
-------------------
"Adjusted Treasury Rate" means, with respect to any prepayment date,
----------------------
the Treasury Rate plus (i) 1.00% if such prepayment date occurs on or before
January 1, 1998 or (ii) 0.50% if such prepayment date occurs after January 1,
1998.
"Capital Securities" has the meaning specified in the fourth recital
------------------
to this First Supplemental Indenture.
"Comparable Treasury Issue" means with respect to any prepayment date
-------------------------
the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after January 1, 2027, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means, with respect to any prepayment
-------------------------
date, (A) the average of five Reference Treasury Dealer Quotations for such
prepayment date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Coupon Rate" has the meaning specified in Section 2.05(a).
-----------
"Debentures" has the meaning specified in the first recital to this
----------
First Supplemental Indenture.
"Definitive Debenture Certificates" means Debentures issued in
---------------------------------
definitive, fully registered form.
"Event Prepayment Price" has the meaning specified in Section 3.01.
----------------------
"Exchange Debentures" has the meaning specified in the third recital
-------------------
to this First Supplemental Indenture.
"Extension Period" has the meaning specified in Section 4.01.
----------------
"Global Debenture" has the meaning specified in Section 2.04(a).
----------------
"Global Private Debenture" has the meaning specified in Section
------------------------
2.04(d).
-3-
<PAGE>
"Interest Payment Date" has the meaning specified in Section 2.05.
---------------------
"Junior Subordinated Debentures" has the meaning specified in the
------------------------------
second recital to this First Supplemental Indenture and, unless the context
otherwise requires, shall include any Exchange Debentures to be issued and
exchanged for any Private Debentures.
"Liquidation Amount" means the stated amount of $1,000 per Capital
------------------
Security.
"144A Global Debenture" has the meaning specified in Section 2.04(c).
---------------------
"Private Debentures" has the meaning specified in the third recital to
------------------
this First Supplemental Indenture.
"Purchase Agreement" has the meaning specified in the fourth recital
------------------
to this First Supplemental Indenture.
"Purchasers" has the meaning specified in the fourth recital to this
----------
First Supplemental Indenture.
"Quotation Agent" means Morgan Stanley & Co. Incorporated.
---------------
"Record Date" has the meaning specified in Section 2.05(a).
-----------
"Reference Treasury Dealer" means (i) Morgan Stanley & Co.
-------------------------
Incorporated and Goldman, Sachs & Co. and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
-----------------------
Company shall substitute therefor another Primary Treasury Dealer; and (ii) any
other Primary Treasury Dealer selected by the Trustee after consultation with
the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
------------------------------------
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such prepayment date.
"Regulation S Global Debenture" has the meaning specified in Section
-----------------------------
2.04(d).
"Remaining Life" has the meaning specified in Section 3.01.
--------------
"Restricted Period" means the period of 40 consecutive days beginning
-----------------
on and including the later of (x) the day on which the offering of the Capital
Securities commences or (y) the Closing Date.
"Special Interest" has the meaning specified in Section 2.05(c).
----------------
-4-
<PAGE>
"Treasury Rate" means (i) the yield, under the heading which
-------------
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.R.(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date. The Treasury Rate shall be calculated on the third
Business Day preceding the prepayment date.
"Trust" has the meaning specified in the fourth recital to this First
-----
Supplemental Indenture.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
---------------
as of January 13, 1997 among the Company, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust.
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED DEBENTURES
SECTION 2.01. Designation and Principal Amount. There is hereby
authorized two series of Debentures, both to be designated the "8.205% Junior
Subordinated Deferrable Interest Debentures due January 1, 2027," and each
limited in aggregate principal amount to $824,000,000, which amount shall be as
set forth in any written orders of the Company for the authentication and
delivery of Junior Subordinated Debentures pursuant to Section 2.01 of the Base
Indenture and Section 7.01(a).
SECTION 2.02. Stated Maturity. The Stated Maturity of the Junior
Subordinated Debentures is January 1, 2027, and shall not be subject to
extension.
SECTION 2.03. Form and Payment; Minimum Transfer Restriction. (a)
The Debentures shall be issued to the Trust in fully registered definitive form
without coupons in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof. Principal and interest on the Junior Subordinated
Debentures issued in definitive form will be payable, the transfer of such
Junior Subordinated Debentures will be registrable and such Junior Subordinated
Debentures will be exchangeable for Junior Subordinated Debentures bearing
identical terms and provisions at the principal corporate trust office of the
Trustee; provided, however, that payment of interest may be made at the option
-------- -------
of the Company by check mailed to the registered holder at such address as shall
appear in the Register. Notwithstanding the foregoing, so long as the registered
holder of any Junior Subordinated
-5-
<PAGE>
Debentures is the property Trustee, the payment of the principal of and interest
(including Additional interest, Special Interest and Additional Tax Sums, if
any) on such Junior Subordinated Debentures held by the Property Trustee will be
made at such place and to such account as may be designated by the Property
Trustee. The Register for the Junior Subordinated shall be kept at the principal
corporate trust office of the Trustee is hereby appointed registrar for the
Junior Subordinated Debentures.
(b) The Junior Subordinated Debentures may be transferred or exchanged
only in minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof, and any attempted transfer, sale or other disposition of Junior
Subordinated Debentures in a denomination of less than $100,000 shall be deemed
to be void and of no legal effect whatsoever.
SECTION 2.04. Exchange and Registration of Transfer of Junior
Subordinated Debentures; Restrictions on Transfers; Depositary. If distributed
to holders of Capital Securities pursuant to Section 9.4 of the Trust Agreement,
the Junior Subordinated Debentures will be issued to such holders in the same
form as the Capital Securities that such Junior Subordinated Debentures replace
in accordance with the following procedures:
(a) So long as Junior Subordinated Debentures are eligible for book-
entry settlement with the Depositary, or unless required by law, all Junior
Subordinated Debentures that are so eligible will be represented by one or more
Junior Subordinated Debentures in global form (a "Global Debenture") registered
----------------
in the name of the Depositary or the nominee of the Depositary. Except as
provided in Section 2.04(i) below, beneficial owners of a Global Debenture shall
not be entitled to have Definitive Debenture Certificates registered in their
names, will not receive or be entitled to receive physical delivery of
Definitive Debenture Certificates and will not be registered holders of such
Global Debentures; provided, however, that a Definitive Debenture Certificate
shall be issued upon any transfer of a beneficial interest in a Global Private
Debenture to the Company or an Affiliate of the Company and no Definitive
Debenture Certificate, or portion thereof, in respect of which the Company or an
Affiliate of the Company held any beneficial interest shall be resold,
retransferred or included in any Private Global Security until such Private
Debenture is freely tradeable in accordance with Rule 144(k) or exchanged for an
Exchange Debenture.
(b) The transfer and exchange of beneficial interests in Global
Debentures shall be effected through the Depositary in accordance with the
Indenture and the procedures and standing instructions of the Depositary and the
Trustee shall make appropriate endorsements to reflect increases or decreases in
principal amounts of such Global Debentures.
(c) Private Debentures that are distributed in replacement of Private
Capital Securities represented by a 144A Global Security will be represented by
a global Private Debenture (a "144A Global Debenture"). Transfers of beneficial
---------------------
interests in a 144A Global Debenture will be subject to the restrictions on
transfer contained in the Private Placement Legend and the Minimum Transfer
Legend.
(d) Private Debentures that are distributed in replacement of Private
Capital Securities represented by a Regulation S Global Security will be
represented by a global Private Debenture (a "Regulation S Global Debenture",
-----------------------------
and together with the 144A Global Debenture, the
-6-
<PAGE>
"Global Private Debenture"). Prior to the expiration of the Restricted Period,
- ------------------------
interests in a Regulation S Global Debenture may only be held by the
Depositary's participants in the name of a nominee of Euroclear and Cedel. After
the expiration of the Restricted Period, transfers of beneficial interests in a
Regulation S Global Debenture will not be subject to any restrictions other than
the restrictions contained in the Minimum Transfer Legend. After the expiration
of the Restricted Period, beneficial interests in the Regulation S Global
Debenture may be held by the Depositary's participants other than in the name of
a nominee of Euroclear and Cedel.
(e) Private Debentures that are distributed in replacement of
Definitive Capital Securities Certificates will be represented by Definitive
Debenture Certificates and transfers will be subject to the Private Placement
Legend, the Minimum Transfer Legend and the requirements of Section 2.04(g)(1)
or (g)(2).
(f) Exchange Debentures that are distributed in replacement of
Exchange Capital Securities will be represented by a Global Debenture or in such
other form as the Trustee may direct and will bear the Minimum Transfer Legend.
(g) Unless and until the earlier of (i) the date upon which Private
Debentures are exchanged for Exchange Debentures or (ii) the Transfer
Restriction Termination Date:
(1) Definitive to Definitive Transfers. Any transfer of a
Definitive Debenture Certificate shall be registered upon the Register only
upon receipt by the Trustee of such Definitive Debenture Certificate
accompanied by a duly completed and executed assignment in the form of
Exhibit A-1 and, in the case of a transfer to an Institutional Accredited
Investor, upon the receipt by the Trustee of a written certificate in the
form of Exhibit B (or other certificates, legal opinions or other
information as the Company may reasonably request to confirm that such
transfer is exempt from the registration requirements of the Securities
Act);
(2) Definitive into a 144A Global Debenture. So long as Private
Debentures are eligible for book-entry settlement with the Depositary or
unless otherwise required by law, upon any transfer of a Definitive
Debenture Certificate to a QIB in accordance with Rule 144A or to a non-
U.S. Person in accordance with Regulation S, and upon receipt of the
Definitive Debenture Certificate being so transferred, accompanied by a
duly completed and executed assignment in the form attached hereto as
Exhibit A-1, the Trustee, on behalf of the Trust, shall make an endorsement
on any 144A Global Debenture or any Regulation S Global Debenture, as the
case may be, to reflect an increase in such Global Debenture and the
Trustee, on behalf of the Trust, shall cancel such Definitive Debenture
Certificate;
(3) 144A Global Debenture into Regulation S Global Debenture.
Any transfer in accordance with Rule 904 of Regulation S of a beneficial
interest in a 144A Global Debenture to a transferee that takes delivery in
the form of a beneficial interest in a Regulation S Global Debenture shall
be reflected by an increase in a Regulation S Global Debenture and a
corresponding decrease in the 144A Global Debenture only upon receipt by
the Trustee of a written certificate in the form of Exhibit C (or such
other certifications, legal opinions or other information as the Company
may reasonably request to confirm that such transfer is being made pursuant
to Rule 904); and
-7-
<PAGE>
(4) Regulation S Global Debenture into 144A Global Debenture.
Any transfer of a beneficial interest in a Regulation S Global Debenture to
a transferee that takes delivery in the form of a beneficial interest in a
144A Global Debenture shall be reflected by an increase in the 144A Global
Debenture and a corresponding decrease in the Regulation S Global Debenture
and, prior to the expiration of the Restricted Period, only upon receipt by
the Trustee of a written certificate in the form of Exhibit D (or such
other certifications, legal opinions or other information as the Company
may reasonably require).
(h) Any Global Debenture may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of the Indenture as may be required by the Depositary, by any
national securities exchange or by the National Association of Securities
Dealers, Inc. in order for the Private Debentures to be tradeable on the PORTAL
Market or as may be required for the Private Debentures to be tradeable on any
other market developed for trading of securities pursuant to Rule 144A or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange upon which the Junior
Subordinated Debentures may be listed or traded or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Junior Subordinated Debentures are subject.
(i) Notwithstanding any other provisions of the Indenture (other than
the provisions set forth in this Section 2.04(i)), a Global Debenture may not be
exchanged in whole or in part for Junior Subordinated Debentures registered, and
no transfer of a Global Debenture may be registered, in the name of any person
other than the Depositary or a nominee thereof unless (i) such Depositary (A)
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Debenture or (B) has ceased to be a clearing agency
registered as such under the Exchange Act and no successor Depositary has been
appointed by the Company within 90 days after its receipt of such notice or its
becoming aware of such ineligibility, (ii) there shall have occurred and be
continuing an Event of Default, or any event which after notice or lapse of time
or both would be an Event of Default under the Indenture, with respect to such
Debenture, or (iii) the Company, in its sole discretion, instructs the Trustee
to exchange such Global Debenture for a Junior Subordinated Debenture that is
not a Global Debenture (in which case such exchange shall be effected by the
Trustee).
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Debentures. Initially, any Global
Debentures shall be registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Trustee as custodian for Cede & Co.
Definitive Junior Subordinated Debentures issued in exchange for all
or a part of a Global Debenture pursuant to this Section 2.04(i) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. Upon execution and authentication, the Trustee
shall deliver such definitive Junior Subordinated Debentures to the person in
whose names such definitive Junior Subordinated Debentures are so registered.
So long as Junior Subordinated Debentures are represented by one or
more Global Debentures, (i) the registrar for the Junior Subordinated Debentures
and the Trustee shall be entitled to
-8-
<PAGE>
deal with the clearing agency for all purposes of the Indenture relating to such
Global Debentures as the sole holder of the Junior Subordinated Debentures
evidenced by such Global Debentures and shall have no obligations to the holders
of beneficial interests in such Global Debentures; and (ii) the rights of the
holders of beneficial interests in such Global Debentures shall be exercised
only through the clearing agency and shall be limited to those established by
law and agreements between such holders and the clearing agency and/or the
participants in the clearing agency.
At such time as all interests in a Global Debenture have been
redeemed, exchanged, repurchased or canceled, such Global Debenture shall be,
upon receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions of the Depositary. At any time prior to such
cancellation, if any interest in a Global Debenture is exchanged for definitive
Junior Subordinated Debentures, redeemed by the Company pursuant to Article 3 or
canceled, or transferred for part of a Global Debenture, the principal amount of
such Global Debenture shall, in accordance with the standing procedures and
instructions of the Depositary be reduced or increased, as the case may be, and
an endorsement shall be made on such Global Debenture by, or at the direction
of, the Trustee to reflect such reduction or increase.
SECTION 2.05. Interest. (a) Each Junior Subordinated Debenture will
bear interest at the rate of 8.205% per annum (the "Coupon Rate") from January
-----------
1, 1997 until the principal thereof becomes due and payable, and will bear
interest on any overdue principal at the Coupon Rate and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate ("Additional Interest"), compounded
-------------------
semiannually, payable (subject to the provisions of Article 4) semiannually in
arrears on the 1st day of January and July of each year (each, an "Interest
--------
Payment Date"), commencing on July 1, 1997, to the Person in whose name such
- ------------
Junior Subordinated Debenture is registered, subject to certain exceptions, at
the close of business on the Record Date next preceding such Interest Payment
Date. The "Record Date" for payment of interest will be the Business Day next
-----------
preceding the Interest Payment Date, unless such Junior Subordinated Debenture
is registered to a holder other than the Property Trustee or a nominee of the
Depositary, in which case the Record Date for payment of interest will be the
fifteenth day of the calendar month next preceding the applicable Interest
Payment Date or, if such fifteenth day of the month is not a Business Day, then
the Business Day next preceding such day. Until liquidation, if any, of the
Trust, each Junior Subordinated Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Trust
Securities.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on the Junior Subordinated Debentures is not a
Business Day, then payment of 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), in each case with the same force and
effect as if made on the date such payment was originally payable.
(c) If the Company does not comply with certain of its obligations
under the Registration Rights Agreements, the Private Debentures shall, in
accordance with Section 2(c) of the Capital Securities Exchange and Registration
Rights Agreement and Section 2(c) of the Debenture Exchange and Registration
Rights Agreement, bear additional interest ("Special Interest") in addition to
----------------
the interest provided for in Section 2.05(a).
-9-
<PAGE>
ARTICLE 3
REDEMPTION AND PREPAYMENT OF THE JUNIOR SUBORDINATED DEBENTURES
SECTION 3.01. Tax Event or Investment Company Event Prepayment. If
a Tax Event or Investment Company Event shall occur and be continuing, the
Company may, at its option, prepay the Junior Subordinated Debentures 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 prepayment price (the "Event Prepayment Price")
----------------------
equal to the greater of (i) 100% of the principal amount of such Junior
Subordinated Debentures or (ii) as determined by the Quotation Agent, an amount
equal to the sum of the present value of 100% of the principal amount that would
be payable on January 1, 2027, together with the present values of scheduled
payments of interest from the prepayment date to January 1, 2027 (the "Remaining
---------
Life"), in each case, discounted to the prepayment date on a semi-annual basis
- ----
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, accrued interest thereon to but excluding the
prepayment date.
SECTION 3.02. Notice of Prepayment. Subject to Article Three of the
Base Indenture, notice of any prepayment pursuant to this Article 3 will be
mailed at least 30 days but not more than 60 days before the prepayment date to
each holder of Junior Subordinated Debentures to be prepaid at such holder's
registered address. Unless the Company defaults in payment of the Event
Prepayment Price, on and after the prepayment date interest shall cease to
accrue on such Junior Subordinated Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will also pay any
Additional Tax Sums on the Junior Subordinated Debentures.
ARTICLE 4
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.01. Extension of Interest Payment Period. So long no Event
of Default under Section 6.01 of the Base Indenture has occurred and is
continuing, the Company shall have the right, subject to the provisions of
Section 2.10 of the Base Indenture, at any time during the term of the Junior
Subordinated Debentures, from time to time to defer the payment of interest by
extending the interest payment period of such Junior Subordinated Debentures for
a period not exceeding 10 consecutive semi-annual periods (an "Extension
---------
Period"), during which Extension Period the Company shall have the right to
make partial payments of interest on any Interest Payment Date. No Extension
Period shall end on a date other than an Interest Payment Date or extend beyond
the Stated Maturity or any earlier prepayment date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of an
Extension Period imposed pursuant to this Section 4.01, will bear Additional
Interest compounded semi-annually. At the end of the Extension Period, the
Company shall pay all interest then accrued and unpaid on the Junior
Subordinated Debentures, including any Additional Interest, Special Interest and
Additional Tax Sums, if applicable, to the holders of the Junior
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<PAGE>
Subordinated Debentures in whose names the Junior Subordinated Debentures are
registered in the Register on the first Record Date preceding the end of the
Extension Period. Before the termination of any Extension Period, the Company
may further extend such Extension Period, provided that such period together
with all such further extensions thereof shall not exceed 10 consecutive semi-
annual periods, or extend beyond the Stated Maturity or any earlier prepayment
date. At any time following the termination of any Extension Period and upon the
payment of any accrued and unpaid Additional Interest and Special Interest then
due, the Company may elect to begin a new Extension Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof.
SECTION 4.02. Notice of Extension. (a) If the Property Trustee is
the only registered holder of the Junior Subordinated Debentures at the time the
Company elects to begin or extend an Extension Period, the Company shall give
written notice to the Property Trustee and the Trustee of its election to begin
or extend any Extension Period at least five Business Days prior to the earlier
of (i) the next succeeding date on which Distributions on the Capital Securities
issued by the Trust would have been payable but for the election to begin or
extend such Extension Period 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 Capital 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. An Administrative Trustee shall
give notice of the Company's election to begin or extend an Extension Period to
the holders of such Capital Securities.
(b) If the Property Trustee is not the only holder of the Junior
Subordinated Debentures at the time the Company elects to begin or extend an
Extension Period, the Company shall give the holders of the Junior Subordinated
Debentures and the Trustee written notice of its election to begin or extend
such Extension Period at least ten Business Days prior to the earlier of (i) the
next succeeding Interest Payment Date or (ii) the date the Company is required
to give notice of the record or payment date of such interest payment to any
applicable self-regulatory organization or to holders of the Junior Subordinated
Debentures.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.02 shall be counted as one of the 10
consecutive semi-annual periods permitted in the maximum Extension Period
permitted under Section 4.01.
ARTICLE 5
EXPENSES
SECTION 5.01. Payment of Expenses. In connection with the offering, sale
and issuance of the Junior Subordinated Debentures to the Property Trustee and
in connection with the offering, sale and issuance of the Trust Securities by
the Trust, the Company, in its capacity as borrower with respect to the Junior
Subordinated Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Junior Subordinated Debentures, including commissions to
the Purchasers payable
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<PAGE>
pursuant to the Purchase Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 7.06 of the Base
Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the fees and expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including
without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Property Trustee of the rights of the registered holders of the Capital
Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Trust Agreement; and
(e) pay any and all taxes and all liabilities, costs and expenses
with respect to such taxes of the Trust (but not including withholding
taxes imposed on holders of Capital Securities or Common Securities of the
Trust).
SECTION 5.02. Payment upon Resignation or Removal. Upon termination of
this First Supplemental Indenture or the Base Indenture or the removal or
resignation of the Trustee pursuant to Section 7.10 of the Base Indenture, the
Company shall pay to the Trustee all amounts owed to it under Section 7.06 of
the Base Indenture accrued to the date of such termination, removal or
resignation. Upon termination of the Trust Agreement or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may be,
pursuant to Section 8.10 of the Trust Agreement, the Company shall pay to the
Delaware Trustee or the Property Trustee, and their respective counsel, as the
case may be, all amounts owed to them under Section 8.7 of the Trust Agreement
accrued to the date of such termination, removal or resignation.
ARTICLE 6
FORM OF JUNIOR SUBORDINATED DEBENTURE
SECTION 6.01. Form of Junior Subordinated Debenture. The Junior
Subordinated Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the form attached hereto as Exhibit
A.
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<PAGE>
ARTICLE 7
ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES
SECTION 7.01. Original Issue of Junior Subordinated Debentures. (a)
Junior Subordinated Debentures in the aggregate principal amount of up to
$824,000,000 may be executed by the Company and delivered to the Trustee for
authentication by it, and the Trustee shall thereupon authenticate and deliver
said Junior Subordinated Debentures to or upon the written order of the Company,
signed by its Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer, the President, any Vice Chairman or any Vice President
(whether or not designated by a number or word or words added before or after
the title Vice President) and by its Treasurer, an Assistant Treasurer, the
Controller, its Secretary or an Assistant Secretary, without any further
corporate action by the Company as follows: (i) $824,000,000 aggregate principal
amount of Private Debentures to be originally issued on the Closing Date (as
defined in the Purchase Agreement) and (ii) $824,000,000 aggregate principal
amount of Exchange Debentures to be issued upon surrender of and in exchange for
the Private Debentures pursuant to Section 8.01.
(b) Each Exchange Debenture shall be issued only upon surrender of
and in exchange for a like aggregate principal amount of Private Debentures and
any Private Debentures surrendered in exchange for Exchange Debentures shall be
canceled. Accordingly, the aggregate principal amount of Private Debentures and
Exchange Debentures that may be outstanding at any time shall not exceed
$824,000,000.
ARTICLE 8
EXCHANGE OF SECURITIES
SECTION 8.01. Mandatory Tender in Exchange Offer. The Junior
Subordinated Debentures will not be convertible into any other securities or
property of the Company. The Junior Subordinated Debentures may not be
exchanged for Securities of any other series, except that if the Company effects
an exchange offer pursuant to Section 2(a) of the Debenture Exchange and
Registration Rights Agreement and, if pursuant to such exchange offer, the
Company offers to exchange any Private Debentures for Exchange Debentures, then,
to the extent permitted by law, each holder of the Private Debentures shall be
obligated to tender all the Private Debentures held by such holder in exchange
for a like principal amount of the Exchange Debentures in accordance with the
Company's instructions.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Ratification of Indenture; First Supplemental Indenture
Controls. The Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the
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extent herein and therein provided. The provisions of this First Supplemental
Indenture shall supersede the provisions of the Indenture to the extent the
Indenture is inconsistent herewith.
SECTION 9.02. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
SECTION 9.03. Governing Law. This First Supplemental Indenture and
each Junior Subordinated Debenture shall be deemed to be a contract made under
the internal laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State, without
regard to the conflicts of law principles thereof.
SECTION 9.04. Separability. In case any one or more of the
provisions contained in this First Supplemental Indenture or in the Junior
Subordinated Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this First Supplemental Indenture or of
the Junior Subordinated Debentures, but this First Supplemental Indenture and
the Junior Subordinated Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 9.05. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the date first above written.
AON CORPORATION
By: /s/ Harvey N. Medvin
-----------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
By: /s/ Raymond I. Skilling
-------------------------------------
Name: Raymond I. Skilling
Title: Executive Vice President and
Chief Counsel
THE BANK OF NEW YORK,
as Trustee
By: /s/ Mary La Gumina
------------------------------------
Name: Mary La Gumina
Title: Assistant Vice President
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<PAGE>
EXHIBIT A
(FORM OF DEFINITIVE JUNIOR SUBORDINATED DEBENTURE)
THE DEBENTURES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH HOLDER OF
THE DEBENTURES EVIDENCED HEREBY, AND EACH PERSON THAT ACQUIRES A BENEFICIAL
INTEREST IN SUCH DEBENTURES, (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501
(a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURES
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURES
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER THE DEBENTURES EVIDENCED HEREBY
EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS
PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE DEBENTURES EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE DEBENTURES EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE,
SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE DEBENTURES EVIDENCED HEREBY UNDER RULE 144(k)
UNDER THE SECURITIES ACT OR SUCH EARLIER TIME AS A TRANSFER OF THE DEBENTURES
EVIDENCED HEREBY IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT.
<PAGE>
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
THE DEBENTURES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF
SUCH DEBENTURES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH DEBENTURES FOR ANY
PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF INTEREST IN RESPECT OF SUCH
DEBENTURES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN SUCH DEBENTURES.
<PAGE>
Registered
----------
FOR INFORMATION ON THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE
ISSUE DATE AND THE YIELD TO MATURITY, PLEASE CONTACT AON CORPORATION, 123 NORTH
WACKER DRIVE, CHICAGO, ILLINOIS 60606, ATTENTION: TREASURER, TELEPHONE NO.:
312/701-3000.
NUMBER R-1 $824,000,000
AON CORPORATION
8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JANUARY 1, 2027
Dated: January 13, 1997 [CUSIP__________________]
Registered Holder: The Bank of New York, as Property Trustee of Aon
Capital A
AON CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (herein referred to as the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to the Registered Holder named above,
the principal sum of Eight Hundred Twenty-Four Million Dollars ($824,000,000) on
January 1, 2027, in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debt.
The Company further promises to pay to the registered Holder hereof as
hereinafter provided (a) interest on said principal sum (subject to deferral as
set forth herein) at the rate per annum specified in the title of this debenture
(the "Debenture"), in like coin or currency, semiannually in arrears on the 1st
day of January and July (each an "Interest Payment Date") commencing July 1,
1997, from the Interest Payment Date next preceding the date hereof to which
interest has been paid or duly provided for (unless (i) no interest has yet been
paid or duly provided for on this Debenture, in which case from January 1, 1997,
or (ii) the date hereof is before an Interest Payment Date but after the related
Record Date (as defined below), in which case from such following Interest
Payment Date; provided, however, that if the Company shall default in payment of
the interest due on such following Interest Payment Date, then from the next
preceding Interest Payment Date to which interest has been paid or duly provided
for), until the principal hereof is paid or duly provided for, plus (b)
Additional Interest, as defined in the Indenture, to the extent permitted by
applicable law, on any interest payment that is not made on the applicable
Interest Payment Date, which shall accrue at the rate per annum specified in the
title of this Debenture, compounded semiannually. The interest so payable will,
subject to certain exceptions provided in the Indenture hereinafter referred to,
be paid to the person in whose name this Debenture is registered at the close of
business on the Record Date next preceding such Interest Payment Date. The
Record Date shall be the Business Day next preceding the Interest Payment Date,
unless this Certificate is registered to a holder other than the Property
Trustee or a nominee of The Depository Trust Company, in which case the Record
Date will be the fifteenth day of the calendar month next preceding such
Interest Payment Date or, if such fifteenth day is not a Business Day, then the
Business Day next preceding such day. This Debenture may be presented for
payment of principal and interest at the principal corporate trust office of The
Bank of New York, as paying agent for the Company, maintained for that purpose
in the Borough of Manhattan, The
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City of New York, State of New York; provided, however, that payment of interest
may be made at the option of the Company (i) by check mailed to such address of
the person entitled thereto as the address shall appear on the Register of the
Debentures or (ii) by transfer to an account maintained by the Person entitled
thereto as specified in the Register, provided that proper transfer instructions
have been received by the Record Date. Interest on the Debenture will be
computed on the basis of a 360-day year of twelve 30-day months.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Debenture from
time to time to defer payment of interest on this Debenture, for up to ten
consecutive semiannual interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date; provided, however, that no Extension Period shall end on a date
other than an Interest Payment Date or extend beyond January 1, 2027 or any
earlier prepayment date. At the end of each Extension Period, the Company shall
pay all interest then accrued and unpaid (together with any Additional Interest
thereon to the extent permitted by applicable law, Special Interest, and
Additional Tax Sums, if applicable). During any such Extension Period, the
Company shall not, and shall cause any Subsidiary of the Company not to, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's Capital
Stock (which includes Common Stock 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 securities of the Company that rank on a parity with or junior
to this Debenture or make any guarantee payments with respect to any Aon
Guarantee or other guarantee by the Company of the debt securities of any
Subsidiary of the Company that by its terms ranks on a parity with or junior to
this Debenture (other than (a) dividends or distributions in Common Stock, (b)
any declaration of a dividend in connection with the implementation of a Rights
Plan, the issuance of any Capital Stock or any class or series of preferred
stock of the Company under any Rights Plan or the redemption or repurchase of
any rights distributed pursuant to a Rights Plan, (c) payments under any Aon
Guarantee relating to the Preferred Securities issued by the Aon Trust holding
this Debenture, and (d) purchases of Common Stock related to the issuance of
Common Stock or rights under any of the Company's benefit plans for its
directors, officers, employees, consultants or advisors). Prior to the
termination of any such Extension Period, the Company may further extend such
Extension Period; provided, however, that no Extension Period shall exceed ten
consecutive semiannual periods or extend beyond January 1, 2027 or any earlier
prepayment date. At any time following the termination of any Extension Period
and the payment of all accrued and unpaid interest (together with any Additional
Interest, Special Interest and Additional Tax Sums, if applicable) then due, the
Company 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. If the Property Trustee is the only registered
holder of the Debentures of this series, the Company shall give written notice
to the Property Trustee and the Trustee of its election to begin or extend any
Extension Period at least five Business Days prior to the earlier of (i) the
next succeeding date on which Distributions on the Capital Securities issued by
the relevant Aon Trust would have been payable but for the election to begin or
extend such Extension Period 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 Capital 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. An Administrative Trustee shall
give notice of the Company's election to begin or extend an Extension Period to
the holders of such Capital Securities. If the Property Trustee is not the only
holder of the Debentures of this series at the time the Company elects to begin
or extend an Extension Period, the Company shall give the
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holders of the Debentures of this series and the Trustee written notice of its
election to begin or extend such Extension Period at least ten Business Days
prior to the earlier of (i) the next succeeding Interest Payment Date or (ii)
the date the Company is required to give notice of the record or payment date of
such interest payment to any applicable self-regulatory organization or to
holders of the Debentures of this series.
This Debenture is issued pursuant to an Indenture, dated as of January
13, 1997, between the Company, as issuer, and The Bank of New York, a New York
banking corporation, as trustee, as supplemented by a First Supplemental
Indenture dated as of January 13, 1997 (as further supplemented or amended from
time to time, the "Indenture"). Reference is made to the Indenture for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders (the word
"Holder" or "Holders" meaning the registered holder or registered holders) of
the Debentures. Capitalized terms used herein but not defined herein shall have
the respective meanings assigned thereto in the Indenture. By acceptance of
this Debenture, the Holder hereof agrees to be bound by the provisions of the
Indenture.
The Debentures of this series are limited to the aggregate principal
amount of Eight Hundred Twenty-Four Million Dollars ($824,000,000).
The Debentures evidenced by this Certificate may be transferred or
exchanged only in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof, and any attempted transfer, sale or other disposition
of Debentures in a denomination of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever.
The indebtedness of the Company evidenced by this Debenture, including
the principal hereof and interest hereon, is, to the extent and in the manner
set forth in the Indenture, subordinate and junior in right of payment to the
Company's obligations to Holders of Senior Indebtedness of the Company and each
Holder of this Debenture, by acceptance hereof, agrees to and shall be bound by
such provisions of the Indenture and all other provisions of the Indenture.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by or on
behalf of the Trustee under the Indenture.
A-3
<PAGE>
IN WITNESS WHEREOF, AON CORPORATION has caused this instrument to be
signed, manually or in facsimile, by its Chairman of the Board, or its Chief
Executive Officer, or its President or any Vice Chairman, or any Vice President
and by its Treasurer or an Assistant Treasurer or its Controller or its
Secretary or an Assistant Secretary under the corporate seal of Aon Corporation.
AON CORPORATION
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
[Seal]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities, of the series designated herein,
described in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By: ____________________________
Authorized Signatory
(by manual signature only)
A-4
<PAGE>
REVERSE OF DEBENTURE
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the payment of principal or interest on the
Debentures of this series or with respect to compliance with certain covenants
occurs and is continuing, then either the Trustee or the Holders of not less
than 25% in principal amount of the then outstanding Debentures of each series
as to which such Event of Default has occurred may declare the principal amount
of all the Debentures of such series, together with any accrued interest
(including any Additional Interest, Special Interest and Additional Tax Sums),
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee, if such notice is given by Holders). If the Debentures have been
issued to an Aon Trust, upon such an Event of Default, if the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Debentures
of this series fails to declare the principal of all the Debentures to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the corresponding Capital Securities of such Aon Trust
then outstanding shall have such right by a notice in writing to the Company and
the Trustee, and upon any such declaration the principal amount of and the
accrued interest (including any Additional Interest, Special Interest and
Additional Tax Sums) on all the Debentures of such series shall become
immediately due and payable, provided that the payment of principal and interest
on the Debentures shall remain subordinated to the extent provided in the
Indenture.
If an Event of Default with respect to certain covenants applicable to
all series of securities issued under the Indenture (collectively, the
"Securities") occurs and is continuing, then either the Trustee or the Holders
of not less than 25% in principal amount of all then outstanding Securities
under the Indenture (voting as a single class) may declare the principal amount
of all such Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if such notice is given by Holders). If the
Securities of a series issued under the Indenture have been issued to an Aon
Trust, upon such an Event of Default, if the Trustee and the Holders of not less
than 25% in principal amount of all 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 Capital Securities of such Aon Trust then outstanding shall
have such right by a notice in writing to the Company and the Trustee; and upon
any such declaration the principal amount of and the accrued interest (including
any Additional Interest and Special Interest) on all the Securities of that
series shall become immediately due and payable, provided that the payment of
principal and interest shall remain subordinated to the extent provided in the
Indenture.
The Indenture provides that in certain events such declaration that
principal and accrued interest are due and payable, and the consequences of such
declaration, may be rescinded and annulled by the holders of at least a majority
in principal amount of the Securities then outstanding under the Indenture as to
which such acceleration of the payment of principal and interest has occurred,
voting as one class. In the case of Securities issued under the Indenture to
one or more Aon Trusts, should the Holders of such Securities fail to rescind
and annul such declaration and its consequences, the Holders of at least a
majority in aggregate liquidation amount of the corresponding Capital Securities
of such Aon Trusts shall have such right. The Indenture also provides that the
Holders of at least a majority in principal amount of all of the Securities of
all series then outstanding as to which an Event of Default has occurred may, on
behalf of all Holders of such Securities, waive any past default under the
Indenture other than (a) a default in the payment of the principal of or
interest on any of the Securities or (b) a default in respect of a covenant or
provision of the Indenture which under the terms of the Indenture cannot be
modified or amended without the consent of each Holder of Securities so
affected. In the case of Securities of one or more series issued to one or more
Aon Trusts, the Indenture provides that the
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Holders of at least a majority in aggregate liquidation amount of the
corresponding Capital Securities issued by such Aon Trusts shall also have the
right to waive such defaults.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
principal amount of the outstanding Securities of all affected series (voting as
one class), to execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying the rights of the holders of the Securities
of each such series; provided, however, that no such supplemental indenture
shall (i) change the fixed maturity of any Securities, or reduce the rate or
extend the time of payment of interest thereon or on any overdue principal
amount, or reduce the principal amount thereof, or reduce any amount payable
upon any redemption thereof, or make the principal thereof or any interest
thereon or on any overdue principal amount payable in any coin or currency other
than that herein prescribed, without the consent of the Holder of each security
so affected, (ii) reduce the percentage of Securities, the consent of the
Holders of which is required for any such supplemental indenture, without the
consent of all Holders of Securities then outstanding, (iii) modify certain
provisions of the Indenture relating to waiver of compliance with covenants,
waiver of defaults or modification of the Indenture without the consent of all
Holders of Securities then outstanding, except to increase the percentage of
Holders required for such waiver or modification, or (iv) modify the provisions
with respect to the subordination of outstanding Securities of any series in a
manner adverse to the Holders thereof, without the consent of the Holder of each
security so affected; provided, however, that, in the case of the Securities of
a series issued to an Aon Trust, so long as any of the corresponding series of
Capital Securities issued by such Aon Trust remains outstanding, (i) no such
amendment shall be made that adversely affects the holders of such Capital
Securities or Preferred Securities in any material respect, and no termination
of the Indenture shall occur, and no waiver of any Event of Default with respect
to such series or compliance with any covenant with respect to such series under
the Indenture shall be effective, without the prior consent of the holders of at
least a majority of the aggregate liquidation amount of such Capital Securities
then outstanding, unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and unpaid interest (including any
Additional Interest) thereon shall have been paid in full and (ii) no amendment
shall be made to Section 6.05 of the Indenture (regarding the right of Holders
of Capital Securities to institute a suit directly against the Company) that
would impair the rights of the Holders of Capital Securities provided therein
without the prior consent of all Holders of Capital Securities then outstanding,
unless and until the principal (and premium, if any) of the Securities of such
series and all accrued and unpaid interest (including any Additional Interest)
thereon have been paid in full.
Upon the occurrence and during the continuation of a Tax Event or
Investment Company Event, the Company may, at its option, at any time within 90
days of the occurrence of such Tax Event or Investment Company Event redeem this
Debenture in whole (but not in part) at a prepayment price (the "Event
Prepayment Price") equal to the greater of (i) 100% of the principal amount
hereof or (ii) as determined by a Quotation Agent, the sum of the present value
of 100% of the principal amount that would be payable on January 1, 2027,
together with the present values of scheduled payments of interest from the
prepayment date to January 1, 2027, in each case discounted to the prepayment
date on a semi-annual basis at the Adjusted Treasury Rate, plus, in each case,
accrued interest thereon to but excluding the date of prepayment.
Any consent or waiver by the Holder of this Debenture given as
provided in the Indenture (unless effectively revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders of this Debenture and of any Debenture issued in exchange,
A-6
<PAGE>
registration of transfer, or otherwise in lieu hereof irrespective of whether
any notation of such consent or waiver is made upon this Debenture or such other
Debentures. No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture, at the places, at the respective times, at the rate
and in the coin or currency herein prescribed.
If the Company does not comply with certain of its obligations under
the Registration Rights Agreements (as defined in the Indenture), this Debenture
shall bear additional interest ("Special Interest") in addition to the interest
provided for in Section 2.05(a) of the First Supplemental Indenture to the
Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debenture may be registered on the
Register of the Debentures of this series upon surrender of this Debenture for
registration of transfer at the offices maintained by the Company or its agent
for such purpose, duly endorsed by the Holder hereof or his attorney duly
authorized in writing, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Securities registrar duly executed by
the Holder hereof or his attorney duly authorized in writing, but without
payment of any charge other than a sum sufficient to reimburse the Company for
any tax or other governmental charge incident thereto. Upon any such
registration of transfer, a new Debenture or Debentures of authorized
denomination or denominations for the same aggregate principal amount will be
issued to the transferee in exchange herefor.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, and any agent of the Company or the Trustee
may deem and treat the person in whose name this Debenture shall be registered
upon the Register of the Debentures of this series as the absolute owner of this
Debenture (whether or not this Debenture shall be overdue and notwithstanding
any notation of ownership or other writing hereon) for the purpose of receiving
payment of or on account of the principal hereof and, subject to the provisions
on the face hereof, interest due hereon and for all other purposes; and neither
the Company nor the Trustee nor any such agent shall be affected by any notice
to the contrary.
No recourse shall be had for the payment of the principal of or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any stockholder, officer, director or employee, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as a part of
the consideration for the issue hereof, expressly waived and released.
The Company and, by acceptance of this Debenture or a beneficial
interest in this Debenture, each holder hereof and any person acquiring a
beneficial interest herein, agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York (without regard to conflicts of laws principles thereof)
and for all purposes shall be governed by, and construed in accordance with, the
laws of said State.
A-7
<PAGE>
EXHIBIT A-1
FORM OF CERTIFICATE OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or other
taxpayer identification number of transferee:
_______________________________________
________________________________________________________________________________
(Name and Address of Transferee, including Zip Code, must be printed or
typewritten)
________________________________________________________________________________
the within Junior Subordinated Deferrable Interest Debenture (the "Debenture")
and hereby irrevocably constitutes and appoints _________________________
attorney to transfer said Debenture on the Register of the Debentures, with full
power of substitution in the premises.
In connection with any transfer of the within Debenture occurring prior to such
date as restrictions on the transfer of such security imposed by the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations
thereunder shall be terminated in accordance with the Indenture, the undersigned
confirms that such Debenture is being transferred:
[___] To Aon Corporation or a subsidiary thereof; or
[___] Pursuant to an effective registration statement under the
Securities Act; or
[___] Pursuant to and in compliance with Rule 144A under the Securities
Act; or
[___] Pursuant to and in compliance with Regulation S under the
Securities Act; or
[___] To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act; or
[___] Pursuant to and in compliance with Rule 144 under the Securities
Act:
and unless the box below is checked, the undersigned confirms that such
Debenture is not being transferred to an "affiliate" of Aon Corporation, as
defined in Rule 144 under the Securities Act (an "Affiliate"):
[___] The transferee is an Affiliate of Aon Corporation
I-1
<PAGE>
Date: __________________________
___________________________________
___________________________________
Signature(s)
Signature(s) must be guaranteed.
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Junior Subordinated Deferrable
Interest Debenture in every particular, without alteration or enlargement or any
change whatever.
I-2
<PAGE>
EXHIBIT B
FORM OF LETTER TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Dear Sirs and Mesdames:
We understand that the 8.205% Junior Subordinated Deferrable Interest
Debentures (the "Debentures") of Aon Corporation ("Aon") are being offered in
a transaction not involving any public offering within the United States within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"),
and that the Debentures have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we acquire
any Debentures, that if, prior to the expiration of the holding period
applicable to sales of any Debenture under Rule 144(k) under the Securities
Act, we decide to offer, resell or otherwise transfer such Debenture, such
Debenture may be offered, resold or otherwise transferred only (i) to Aon or a
subsidiary thereof, (ii) pursuant to an effective registration statement under
the Securities Act, (iii) inside the United States to a person who is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in compliance with Rule 144A, (iv) inside the United States to an
Institutional Accredited Investor (as defined below) that, prior to such
transfer, furnishes to The Bank of New York, as trustee, a signed letter in the
form hereof and such other opinions and certifications that the Property Trustee
may request, (v) outside the United States in compliance with Rule 904 under the
Securities Act or (vi) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available) and (vii) in each case, in
accordance with any applicable securities laws of the States of the United
States or any other applicable jurisdiction and in accordance with the legends
set forth on the Debentures. We further agree to provide any person purchasing
any of the Debentures from us a notice advising such purchaser that resales of
such securities are restricted as stated herein. We understand that any
Debentures will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph.
We confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act or an entity in which all of
the equity owners are accredited investors within the meaning of Rule
501(a)(1), (2) and (3) under the Securities Act (an "Institutional
Accredited Investor");
B-1
<PAGE>
(ii) (A) any acquisition of Debentures by us will be for our own
account or for the account of one or more other Institutional Accredited
Investors or as fiduciary for the account of one or more trusts, each of
which is an "accredited investor" within the meaning of Rule 501(a)(7)
under the Securities Act and for each of which we exercise sole investment
discretion or (B) we are a "bank," within the meaning of Section 3(a)(2) of
the Securities Act, or a "savings and loan association" or other
institution described in Section 3(a)(5)(A) of the Securities Act that is
acquiring Debentures as fiduciary for the account of one or more
institutions for which we exercise sole investment discretion;
(iii) in the event that we acquire any Debentures, we will acquire
Debentures having a minimum purchase price of not less than $100,000 for
our own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of an
investment in the Debentures;
(v) we are not acquiring Debentures with a view to resale or
distribution thereof or with any present intention of offering or selling
Debentures, except as permitted above; provided that the disposition of our
property and property of any accounts for which we are acting as fiduciary
shall remain at all times within our control; and
(vi) we have had access to such financial and other information and
have been afforded the opportunity to ask such questions of representatives
of Aon and receive answers thereto, as we deem necessary in connection with
our decision to acquire Debentures.
We acknowledge that Aon, you and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(Name of Transferee)
By: ____________________________________
Name:
Title:
Address:
B-2
<PAGE>
EXHIBIT C
FORM OF TRANSFER CERTIFICATE--
144A GLOBAL DEBENTURE TO REGULATION S GLOBAL DEBENTURE
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Aon Corporation (the "Company") 8.205% Junior Subordinated
Deferrable Interest Debentures due January 1, 2027 (the "Debentures")
Reference is hereby made to the Indenture (the "Base Indenture") dated
as of January 13, 1997 between the Company and The Bank of New York, as Trustee
(as supplemented by the First Supplemental Indenture (the "Supplemental
Indenture") dated January 13, 1997, the "Indenture"). Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
This letter relates to _________________ Private Debentures which are
evidenced by a 144A Global Debenture (CUSIP No. 37388AC9) and held with the
Depositary in the name of [insert name of transferor] (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Private
Debentures to a Person that will take delivery thereof in a transaction effected
pursuant to and in accordance with Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
does hereby further certify that:
The offer of the Private Debentures was not made to a person in the
United States;
(A) either:
(i) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on
its behalf reasonably believed that the transferee was outside the
United States, or
(ii) the transaction was executed in, or through the facilities of a
designated offshore securities market and neither the Transferor nor
any person acting on its behalf knows that the transaction was pre-
arranged with a buyer in the United States;
(B) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S, as applicable;
C-1
<PAGE>
(C) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(D) we have advised the transferee of the transfer restrictions
applicable to the Private Debentures.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby. Terms used in this certificate and not otherwise
defined herein or in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
Dated:
[Insert Name of Transferor]
By: ________________________________
Name:
Title:
(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)
C-2
<PAGE>
EXHIBIT D
FORM OF TRANSFER CERTIFICATE
REGULATION S GLOBAL DEBENTURE TO 144A GLOBAL DEBENTURE
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Aon Corporation (the "Company") 8.205% Junior Subordinated
Deferrable Interest Debentures due January 1, 2027 (the
"Debentures")
Reference is hereby made to the Indenture (the "Base Indenture") dated
as of January 13, 1997 between the Company and The Bank of New York, as Trustee
(as supplemented by the First Supplemental Indenture (the "Supplemental
Indenture") dated as of January 13, 1997, the "Indenture"). Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to _________________ Private Debentures which are
evidenced by a Regulation S Global Debenture (CUSIP No. U00199AB2) and held with
the Depositary indirectly in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Private Debentures to a Person that will take delivery thereof
in a transaction effected pursuant to and in accordance with Rule 144A under the
United States Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor does hereby certify that the (i) the Transferor's
interest in the Private Debentures is being transferred in accordance with the
transfer restrictions set forth in the Indenture and in the Private Debenture;
and (ii) the transferee is a person who the Transferor reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act, purchasing for its own account or the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule 144A, in
accordance with all applicable securities laws of the states of the United
States and other jurisdictions.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Dated:
[Insert Name of Transferor]
By: ______________________________
Name:
Title:
(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)
D-1
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
AON CAPITAL A
THIS Certificate of Trust of Aon Capital A (the "Trust"), dated as of
December 27, 1996, 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. (S)3801, et seq.).
- ------- --------
1. Name. The name of the business trust formed hereby is Aon
----
Capital A.
2. Delaware Trustee. The name and business address of the trustee
----------------
of the Trust in the State of Delaware are The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
--------------
upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first-above written.
THE BANK OF NEW YORK
(DELAWARE),
not in its individual capacity but solely
as trustee of the Trust
/s/ Joseph G. Ernst
------------------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
/s/ James White
-------------------------------------------
James White, not in his individual capacity
but solely as trustee of the Trust
<PAGE>
EXHIBIT 4.4
TRUST AGREEMENT
OF
AON CAPITAL A
THIS TRUST AGREEMENT is made as of December 27, 1996 (this "Trust
Agreement"), by and among Aon Corporation, a Delaware corporation, as Depositor
(the "Depositor"), and The Bank of New York (Delaware), a Delaware corporation,
as trustee, and James White, as trustee (collectively, the "Trustees"). The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "Aon Capital A" (the
"Trust"), in which name the Trustees or the Depositor, to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. Such amount shall constitute the initial trust estate.
It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. (S) 3801, et seq. (the "Business Trust Act"), and that this document
constitute the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust with the
Delaware Secretary of State in such form as the Trustees may approve.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement or Declaration satisfactory to each such party to provide for
the contemplated operation of the Trust created hereby and the issuance of the
Capital Securities referred to therein. Prior to the execution and delivery of
such amended and restated Trust Agreement or Declaration, the Trustees shall not
have any duty or obligation hereunder or with respect of the trust estate,
except as otherwise required by applicable law or as may be necessary to obtain
prior to such execution and delivery any licenses, consents or approvals
required by applicable law or otherwise. Notwithstanding the foregoing, the
Trustees may take all actions deemed proper as are necessary to effect the
transactions contemplated herein.
4. The Depositor, as sponsor of the Trust, is hereby authorized, in its
discretion, (i) to prepare one or more offering memoranda in preliminary and
final form relating to the offering and sale of Capital Securities of the Trust
in a transaction exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and such other forms or filings as may be
required by the 1933 Act, the Securities Exchange Act of 1934, as amended, or
the Trust Indenture Act of 1939, as amended, in each case relating to the
Capital Securities of the Trust; (ii) to file and execute on behalf of the
Trust, such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and documents
that shall be necessary or desirable to register or establish the exemption from
registration of the Capital Securities of the Trust under the securities or
"Blue Sky" laws of such jurisdictions as the Depositor, on behalf of the Trust,
may deem necessary or desirable; (iii) to execute and file an application, and
all other applications, statements, certificates, agreements and other
instruments that shall be necessary or desirable, to the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market; (iv) to
execute and deliver letters or documents to, or instruments for filing with, a
<PAGE>
depository relating to the Capital Securities of the Trust; and (v) to execute,
deliver and perform on behalf of the Trust one or more purchase agreements,
dealer manager agreements, escrow agreements and other related agreements
providing for or relating to the sale of the Capital Securities of the Trust.
In the event that any filing referred to in this Section 4 is required by
the rules and regulations of the Commission, PORTAL or state securities or Blue
Sky laws to be executed on behalf of the Trust by the Trustees, the Trustees, in
their capacities as trustees of the Trust, are hereby authorized and directed to
join in any such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that the Trustees, in their capacities as
trustees of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, PORTAL or state securities or Blue Sky laws.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of trustees of the Trust initially shall be two and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause any trustee of the Trust at any time. Any
trustee of the Trust may resign upon thirty days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (with regard to conflict of laws
principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
AON CORPORATION,
as Depositor
By: /s/ Jerome I. Baer
------------------------------
Name: Jerome I. Baer
Title: Vice President--Taxation
THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely as
trustee of the Trust
By: /s/ Joseph G. Ernst
--------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
/s/ James White
---------------------------------
James White, not in his individual
capacity but solely as trustee of the
Trust
<PAGE>
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
AON CORPORATION, as Depositor,
THE BANK OF NEW YORK,
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
and
THE SEVERAL HOLDERS, AS HEREIN DEFINED
Dated as of January 13, 1997
AON CAPITAL A
- --------------------------------------------------------------------------------
<PAGE>
AON CAPITAL A
Certain Sections of the Trust Agreement relating to
Sections 310 through 318 of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
<S> <C>
(S) 310(a)(1)........................................................ 8.1
(a)(2)........................................................ 8.1
(a)(3)........................................................ 8.9
(a)(4)................................................. 2.7(a)(ii)
(b) ........................................................ 8.8
(S) 311(a) ....................................................... 8.13
(b) ....................................................... 8.13
(S) 312(a) ........................................................ 5.7
(b) ........................................................ 5.7
(c) ........................................................ 5.7
(S) 313(a) .................................................... 8.14(a)
(a)(4).................................................... 8.14(a)
(b) .................................................... 8.14(b)
(c) ....................................................... 10.8
(d) .................................................... 8.14(c)
(S) 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
(S) 315(a) ............................................. 8.2(a), 8.4(a)
(b) .................................................. 8.3, 10.8
(c) ..................................................... 8.2(a)
(d) ................................................... 8.2, 8.4
(e) ............................................. Not Applicable
(S) 316(a) ....................................................... 5.14
(a)(1)(A)................................................. 5.14(c)
(a)(1)(B)................................................. 5.14(b)
(a)(2)............................................. Not Applicable
(b) ....................................................... 5.14
(c) ....................................................... 6.7
(S) 317(a)(1)............................................. Not Applicable
(a)(2)............................................. Not Applicable
(b) ........................................................ 5.9
(S) 318(a) ...................................................... 10.10
</TABLE>
____________
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINED TERMS.................................................... 2
SECTION 1.1. Definitions................................................... 2
ARTICLE II. CONTINUATION OF THE TRUST....................................... 15
SECTION 2.1. Name.......................................................... 15
SECTION 2.2. Office of the Delaware Trustee; Principal Place
of Business................................................... 15
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses....................................... 16
SECTION 2.4. Issuance of the Capital Securities............................ 16
SECTION 2.5. Issuance of the Common Securities; Subscription
and Purchase of Debentures.................................... 16
SECTION 2.6. Declaration of Trust.......................................... 17
SECTION 2.7. Authorization to Enter into Certain Transactions.............. 17
SECTION 2.8. Assets of Trust............................................... 22
SECTION 2.9. Title to Trust Property....................................... 22
ARTICLE III. PAYMENT ACCOUNT................................................ 22
SECTION 3.1. Payment Account............................................... 22
ARTICLE IV. DISTRIBUTIONS; REDEMPTION....................................... 22
SECTION 4.1. Distributions................................................ 22
SECTION 4.2. Redemption................................................... 23
SECTION 4.3. Subordination of Common Securities........................... 26
SECTION 4.4. Payment Procedures........................................... 27
SECTION 4.5. Tax Returns and Reports...................................... 27
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.................. 28
SECTION 4.7. Reduction for Payments under Indenture or
Pursuant to Direct Actions................................... 28
ARTICLE V. TRUST SECURITIES CERTIFICATES.................................... 28
SECTION 5.1. Initial Ownership............................................ 28
SECTION 5.2. The Trust Securities Certificates; Execution
and Delivery Thereof......................................... 28
SECTION 5.3. Form of Trust Secutities Certificates........................ 29
SECTION 5.4. Registration of Transfer and Exchange of
Capital Securities Certificates.............................. 30
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates...................................... 32
SECTION 5.6. Persons Deemed Securityholders............................... 32
SECTION 5.7. Access to List of Securityholders'
Names and Addresses.......................................... 33
SECTION 5.8. Maintenance of Office or Agency for Transfers................ 33
SECTION 5.9. Appointment of Paying Agent.................................. 33
SECTION 5.10. Ownership of Common Securities by Depositor.................. 34
SECTION 5.11. Book-Entry Interests......................................... 34
SECTION 5.12. Notices to Clearing Agency................................... 38
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 5.13. Procedures for Issuance of Definitive
Capital Securities Certificates.............................. 38
SECTION 5.14. Rights of Securityholders.................................... 39
ARTICLE VI. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING....................... 42
SECTION 6.1. Limitations on Voting Rights................................. 42
SECTION 6.2. Notice of Meetings........................................... 43
SECTION 6.3. Meetings of Capital Securityholders.......................... 43
SECTION 6.4. Voting Rights................................................ 44
SECTION 6.5. Proxies, etc................................................. 44
SECTION 6.6. Securityholder Action by Written Consent..................... 44
SECTION 6.7. Record Date for Voting and Other Purposes.................... 45
SECTION 6.8. Acts of Securityholders...................................... 45
SECTION 6.9. Inspection of Records........................................ 46
ARTICLE VII. REPRESENTATIONS AND WARRANTIES................................. 46
SECTION 7.1. Representations and Warranties of the Bank,
the Property Trustee and the Delaware Trustee................ 46
SECTION 7.2. Representations and Warranties of Depositor.................. 48
ARTICLE VIII. THE TRUSTEES.................................................. 49
SECTION 8.1. Corporate Property Trustee Required; Eligibility
of Trustees.................................................. 49
SECTION 8.2. Certain Duties and Responsibilities.......................... 49
SECTION 8.3. Certain Notices.............................................. 51
SECTION 8.4 Certain Rights of Property Trustee........................... 52
SECTION 8.5. Not Responsible for Recitals or Issuance
of Securities................................................ 54
SECTION 8.6. May Hold Securities.......................................... 55
SECTION 8.7. Compensation; Indemnity; Fees................................ 55
SECTION 8.8. Conflicting Interests........................................ 56
SECTION 8.9. Co-Trustees and Separate Trustee............................. 57
SECTION 8.10. Resignation and Removal; Appointment of
Successor.................................................... 59
SECTION 8.11. Acceptance of Appointment by Successor....................... 61
SECTION 8.12. Merger, Conversion, Consolidation or Succession
to Business.................................................. 61
SECTION 8.13. Preferential Collection of Claims Against
Depositor or Trust........................................... 62
SECTION 8.14. Reports by Property Trustee.................................. 63
SECTION 8.15. Reports to the Property Trustee.............................. 63
SECTION 8.16. Evidence of Compliance with Conditions
Precedent.................................................... 63
SECTION 8.17. Number of Trustees........................................... 64
SECTION 8.18. Delegation of Power.......................................... 64
ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER............................. 65
SECTION 9.1. Termination Upon Expiration Date............................. 65
SECTION 9.2. Early Termination............................................ 65
SECTION 9.3. Termination.................................................. 65
</TABLE>
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<TABLE>
<S> <C>
SECTION 9.4. Liquidation.................................................. 66
SECTION 9.5. Mergers, Consolidations, Amalgamations
or Replacements of the Trust................................. 68
ARTICLE X. MISCELLANEOUS PROVISIONS......................................... 69
SECTION 10.1. Limitation of Rights of Securityholders to
Terminate Trust.............................................. 69
SECTION 10.2. Amendment.................................................... 69
SECTION 10.3. Separability................................................. 71
SECTION 10.4. Governing Law................................................ 71
SECTION 10.5. Payments Due on Non-Business Day............................. 71
SECTION 10.6. Successors................................................... 72
SECTION 10.7. Headings..................................................... 72
SECTION 10.8. Reports, Notices and Demands................................. 72
SECTION 10.9. Agreement Not to Petition.................................... 73
SECTION 10.10.Trust Indenture Act; Conflict with Trust
Indenture Act................................................ 73
SECTION 10.11.Acceptance of Terms of Trust Agreement,
Guarantee an Indenture....................................... 74
SECTION 10.12.Counterparts................................................. 74
EXHIBIT A Certificate of Trust............................................. A-1
EXHIBIT B Form of 144A Global Security..................................... B-1
EXHIBIT C Form of Regulation S Global Security............................. C-1
EXHIBIT D Form of Definitive Capital Security Certificate.................. D-1
EXHIBIT E Form of Common Security Certificate.............................. E-1
EXHIBIT F Form of Letter to be Delivered by Institutional
Accredited Investors................................................ F-1
EXHIBIT G Form of Transfer Certificate - 144A Global Security
to Regulation S Global Security..................................... G-1
EXHIBIT H Form of Transfer Certificate - Regulation S Global
Security to 144A Global Security.................................... H-1
EXHIBIT I Form of Private Placement Legend................................. I-1
EXHIBIT J Form of Minium Transfer Legend................................... J-1
</TABLE>
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of January 13, 1997, among
(i) Aon Corporation, a Delaware corporation (including any successors or
assigns, the "Depositor"), (ii) The Bank of New York, a New York banking
corporation, 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) The Bank of New York (Delaware), a banking corporation that
maintains its principal place of business in Delaware, as Delaware trustee (the
"Delaware Trustee"), (iv) Harvey Medvin, an individual, Michael Conway, an
individual, and James White, an individual, each of whose address is c/o Aon
Corporation, 123 North Wacker Drive, Chicago, Illinois 60606 (each an
"Administrative Trustee" and collectively the "Administrative Trustees") and (v)
the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Delaware Trustee and an Administrative Trustee
have heretofore duly declared and created a business trust pursuant to the
Delaware Business Trust Act by entering into that certain Trust Agreement, dated
as of December 27, 1996 (the "Original Trust Agreement"), and by the execution
and filing with the Secretary of State of the State of Delaware of a Certificate
of Trust, filed on December 27, 1996, substantially in the form attached as
Exhibit A;
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 by the Trust to
the Depositor, (ii) the issuance and sale of the Capital Securities by the Trust
pursuant to the Purchase Agreement, (iii) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures, (iv) the
mandatory exchange by the Property Trustee with the Depositor of the Private
Debentures for the Exchange Debentures, and the exchange by the Trust with the
Securityholders of the Private Capital Securities for the Exchange Capital
Securities, each such exchange registered under the Securities Act;
WHEREAS, upon the effectiveness of the exchange registration agreement
referred to in the Capital Securities Exchange and Registration Rights
Agreement, this Trust Agreement shall be subject to, and shall be governed by,
the provisions of the Trust Indenture Act that are required to be part of and to
govern indentures qualified under the Trust Indenture Act;
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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:
(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 Distributions" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Tax Sums" has the meaning specified in Section 4.08 of the
Indenture.
"Administrative Trustee" means a Person satisfying the eligibility
requirements set forth in Section 8.1(b) and initially means each of Harvey
Medvin, Michael Conway and James White, solely
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<PAGE>
in such Person's capacity as Administrative Trustee of the Trust heretofore
created 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 judging 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 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 other 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 the taking of corporate action
by such Person in furtherance of any such action.
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<PAGE>
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Business Day" means any day which is not a Saturday or Sunday and which is
neither a legal holiday nor a day on which banking institutions in The City of
New York are authorized or required by law or executive order to close or a day
on which the Corporate Trust Office of the Property Trustee or the Debenture
Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing ownership
of Capital Securities, which certificate shall initially be substantially in the
form attached as Exhibit B, Exhibit C or Exhibit D, or Exchange Capital
Securities.
"Capital Securities Exchange and Registration Rights Agreement" means an
agreement dated as of January 13, 1997 among the Depositor, the Trust and the
Initial Purchasers named in Schedule I to the Purchase Agreement.
"Capital Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein. Unless the context otherwise
requires, the term "Capital Securities" shall include any Exchange Capital
Securities to be issued and exchanged for any Private Capital Securities.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate Depository Agreement" means the agreement among the Trust, the
Property Trustee and DTC, as the initial Clearing Agency, dated as of the
Closing Date, relating to the Capital Securities Certificates, 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 Exchange Act. DTC 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.
"Closing Date" means January 13, 1997, which is the date of execution and
delivery of this Trust Agreement, or such other date
4
<PAGE>
as may be designated the Closing Date pursuant to the Purchase 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 Exchange Act.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $1,000 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 E.
"Corporate Trust Office" means (i) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located in
New York, New York, and (ii) when used with respect to the Debenture Trustee,
the principal corporate trust office of the Debenture Trustee located in New
York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Exchange and Registration Rights Agreement" means an agreement
dated as of January 13, 1997 among the Depositor, the Trust and the Initial
Purchasers named in Schedule I to the Purchase Agreement.
"Debenture Prepayment Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
"Debenture Trustee" means The Bank of New York, and any successor thereto
under the Indenture.
"Debentures" means the Depositor's 8.205% Junior Subordinated Deferrable
Interest Debentures due January 1, 2027, issued pursuant to the Indenture.
5
<PAGE>
"Definitive Capital Securities Certificates" means Capital Securities
Certificates issued in definitive, fully registered form.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ((S)) 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 heretofore created and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any Delaware Trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this
Trust Agreement.
"Direct Action" has the meaning specified in Section 5.14(c).
"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 and shall include, if applicable, Additional
Distributions, Special Distributions and Additional Tax Sums.
"DTC" means The Depository Trust Company.
"Early Termination Event" has the meaning specified in Section 9.2.
"Euroclear" means Morgan Guaranty Trust Company of New York in its capacity
as operator of the Euroclear System.
"Event of Default" 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):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Property Trustee in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period of 30
days; or
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<PAGE>
(c) default by the Property Trustee in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is
addressed in clause (b) or (c) above) and continuation of such default or breach
for a period of 60 days after there has been given, by registered or certified
mail, to the defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Capital Securities a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure to appoint a successor Property Trustee within 60 days
thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Capital Securities" means Capital Securities representing
undivided beneficial interests in the assets of the Trust, issued by the Trust
in an exchange offer for the Private Capital Securities, such exchange offer
being registered under the Securities Act, all pursuant to the Capital
Securities Exchange and Registration Rights Agreement; provided, however, that
the aggregate Liquidation Amount of the Private Capital Securities and the
Exchange Capital Securities at any one time outstanding shall not exceed
$800,000,000.
"Exchange Debentures" means a new series of junior subordinated debentures
issued by the Depositor in a mandatory exchange offer for the Private
Debentures, such exchange offer being registered under the Securities Act, all
pursuant to the Debenture Exchange and Registration Rights Agreement.
"Exchange Guarantee" means the Exchange Guarantee extended by the Depositor
for the benefit of the Holders of Capital Securities pursuant to the Exchange
Guarantee Agreement, and registered under the Securities Act pursuant to the
Guarantee Exchange and Registration Rights Agreement.
"Exchange Guarantee Agreement" means the Guarantee Agreement to be entered
into by the Depositor, as Guarantor, and The Bank of
7
<PAGE>
New York, as Guarantee Trustee, pursuant to the Guarantee Exchange and
Registration Rights Agreement.
"Exchange Offer" means an exchange offer of the Exchange Capital Securities
for the Private Capital Securities, which is registered under the Securities Act
pursuant to the Capital Securities Exchange and Registration Rights Agreement.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities Certificate" means any Capital Securities
Certificate in the form of a 144A Global Security, a Regulation S Global
Security and, if applicable, any Exchange Capital Security represented in global
form and deposited with the Clearing Agency or the Property Trustee as custodian
for the Clearing Agency.
"Guarantee" means the Private Guarantee with respect to the Private Capital
Securities and the Exchange Guarantee with respect to the Exchange Capital
Securities.
"Guarantee Agreement" means the Capital Securities Guarantee Agreement
dated as of January 13, 1997 between the Depositor, as Guarantor, and The Bank
of New York, as Guarantee Trustee.
"Guarantee Exchange and Registration Rights Agreement" means an agreement
dated as of January 13, 1997 among the Depositor, the Trust and the Initial
Purchasers named in Schedule I to the Purchase Agreement.
"Holder" means a Person in whose name a Trust Security or Trust Securities
is registered in the Securities Register; any such Person shall be a beneficial
owner within the meaning of the Delaware Business Trust Act.
"Indemnified Person" has the meaning specified in Section 8.7(c).
"Indenture" means the Indenture, dated as of January 13, 1997, between the
Depositor and the Debenture Trustee, as trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, as amended or supplemented
from time to time.
8
<PAGE>
"Initial Purchasers" means the Purchasers named in Schedule I to the
Purchase Agreement.
"Institutional Accredited Investor" means an institutional investor that is
an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Investment Company Event" means the receipt by the Trust of an Opinion of
Counsel 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"), the 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
Capital Securities under this Trust Agreement.
"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 the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution, termination or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a dissolution,
termination and liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"Minimum Transfer Legend" means the legend substantially in the form
attached as Exhibit J.
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<PAGE>
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President, any Vice Chairman or any Vice President of the Depositor (whether or
not designated by a number or a word or words added before or after the title
Vice President) and by the Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of the Depositor and delivered to the
appropriate Trustee. 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.
"144A Global Security" has the meaning specified in Section 5.3(b).
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor (including counsel who is
an employee of the Depositor), who is experienced in matters related to the
substance of the opinion.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
10
<PAGE>
(a) Trust Securities theretofore cancelled by the Securities Registrar or
delivered to the Securities Registrar 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, however, that, if such
Trust Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of
which other Trust Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or any 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 Capital Securities that such Trustee actually knows to be so owned shall be
so disregarded and (b) the foregoing shall not apply at any time when all of the
outstanding Capital Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Capital 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 Trustee the pledgee's right so to act
with respect to such Capital 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 Global Capital
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.
"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 Security-holders in which all amounts paid in respect of
the Debentures will
11
<PAGE>
be held and from which the Property Trustee, through the Paying Agent, shall
make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means 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.
"PORTAL Market" means the Private Offerings, Resales and Trading through
Automated Linkages Market operated by the National Association of Securities
Dealers, Inc. (or any successor thereto).
"Private Capital Securities" means the $800,000,000 aggregate Liquidation
Amount of the Trust's 8.205% Capital Securities issued pursuant to this
Agreement on the Closing Date.
"Private Debentures" means the $824,000,000 aggregate principal amount of
the Depositor's 8.205% Junior Subordinated Deferrable Interest Debentures due
January 1, 2027, issued pursuant to the Indenture on the Closing Date.
"Private Guarantee" means the Guarantee extended by the Depositor for the
benefit of the Holders of Private Capital Securities pursuant to the Guarantee
Agreement.
"Private Placement Legend" means the legend substantially in the form
attached as Exhibit I.
"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 created 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.
"Purchase Agreement" means the Purchase Agreement, dated as of January 8,
1997, among the Trust, the Depositor and the Purchasers named in Schedule I
thereto.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"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 Debenture Prepayment Date
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<PAGE>
and the stated maturity of the Debentures 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 but excluding 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 Debentures, allocated on a pro rata basis (based on Liquidation
Amounts) among the Trust Securities.
"Registration Rights Agreements" means the Capital Securities Exchange and
Registration Rights Agreement, the Debenture Exchange and Registration Rights
Agreement and the Guarantee Exchange and Registration Rights Agreement,
collectively.
"Regulation S" means Regulation S under the Securities Act or any successor
provision.
"Regulation S Global Security" has the meaning specified in Section 5.3(c).
"Relevant Trustee" has the meaning specified in Section 8.10.
"Restricted Period" means the period of 40 consecutive days beginning on
and including the later of (x) the day on which the offering of the Capital
Securities commences or (y) the Closing Date.
"Rule 144" means Rule 144 as promulgated under the Securities Act, or any
successor rule.
"Rule 144A" means Rule 144A as promulgated under the Securities Act, or any
successor rule.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities Act, or
any successor rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" means a Person in whose name a Trust Security or Trust
Securities is registered in the Securities Register; any such Person shall be a
beneficial owner within the meaning of the Delaware Business Trust Act.
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<PAGE>
"Special Distributions" has the meaning specified in the Capital Securities
Exchange and Registration Rights Agreement.
"Special Interest" has the meaning specified in the Capital Securities
Exchange and Registration Rights Agreement.
"Successor Securities" has the meaning specified in Section 9.5.
"Tax Event" means the receipt by the Depositor and the Trust of an Opinion
of Counsel 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 or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Capital Securities
under this Trust Agreement, there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days after the date of such Opinion of
Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges.
"Transfer Restriction Termination Date" means the first day in which the
Capital Securities (other than Capital Securities acquired by the Trust or any
Affiliate thereof) may be sold pursuant to Rule 144(k).
"Trust" means the Delaware business trust created under the Original Trust
Agreement and 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 (i) all exhibits hereto, and (ii) 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.
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"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; 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 Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) 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 the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Capital
Securities. The Trust Securities represent undivided beneficial interests in
the Trust Property.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
ARTICLE II.
CONTINUATION OF THE TRUST
SECTION 2.1. Name.
The Trust continued hereby shall be known as "Aon Capital A," as such name
may be modified from time to time by the Administrative Trustees following
written notice to the Securityholders and the other Trustees, in which name the
Trustees 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 name and address of the Delaware Trustee in the State of Delaware is
The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711, Attention: Corporate Trust Department, or such other address in the
State of Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is c/o Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606.
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SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
SECTION 2.4. Issuance of the Capital Securities.
(a) The Depositor, on behalf of the Trust and pursuant to the Original
Trust Agreement, executed and delivered the Purchase 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 Initial Purchasers Capital Securities
Certificates in an aggregate amount of 800,000 Capital Securities having an
aggregate Liquidation Amount of $800,000,000, against payment by the Initial
Purchasers of $802,188,000 (such amount including accumulated distributions from
January 1, 1997), which amount the Administrative Trustee shall promptly deliver
to the Trust.
(b) Contemporaneously with the exchange of Exchange Capital Securities
pursuant to the Capital Securities Exchange and Registration Rights Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2, and deliver in accordance with any then applicable delivery
instructions, Capital Securities Certificates in an aggregate amount having an
aggregate Liquidation Amount equal to the aggregate Liquidation Amount of the
Private Capital Securities then being exchanged.
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.
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 Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of 24,000 Common
Securities having an aggregate Liquidation Amount of $24,000,000 against payment
by the Depositor of $24,065,640 (such amount including accumulated distributions
from January 1, 1997), which amount such Administrative Trustee shall promptly
deliver to the Trust.
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Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe for and purchase from the Depositor Debentures, registered in
the name of the Trust and having an aggregate principal amount equal to
$824,000,000, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $826,253,640 (such sum being the sum of the amounts delivered to the
Property Trustee pursuant to (i) the second sentence of 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 (including the Exchange Capital Securities pursuant to the
Exchange Offer), (b) to use the proceeds from the sale of Trust Securities to
acquire the Private Debentures, (c) to exchange the Private Debentures for the
Exchange Debentures pursuant to the Indenture and (d) to engage in those
activities necessary, convenient or incidental thereto. The Depositor hereby
appoints the Property Trustee, the Delaware Trustee and the Administrative
Trustees as trustees of the Trust, to have all the rights, powers and duties to
the extent set forth herein, and the Property Trustee, the Delaware Trustee and
the Administrative Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the Trust and 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 the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act and accepting service of process
on the Trust in the State of Delaware.
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, 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
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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 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 any
agreements necessary with respect to such issuance and sale;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Registration Rights Agreements, 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;
(C) assisting in the registration of the Exchange Offer and the
Exchange Capital Securities under the Securities Act, and under the state
securities or blue sky laws, and the qualification of this Trust Agreement as a
trust indenture under the Trust Indenture Act, all in accordance with the
Capital Securities Exchange and Registration Rights Agreement;
(D) assisting in any listing of the Exchange Capital Securities upon
such securities exchange or exchanges as shall be determined by the Depositor
and the registration of the Exchange Capital Securities under the Exchange Act
and the preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(E) 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;
(F) the appointment of a Paying Agent and Securities Registrar in
accordance with this Trust Agreement;
(G) executing the Trust Securities in accordance with this Trust
Agreement;
(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;
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(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 the
Trustees 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 of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments made
in respect of the Debentures in the Payment Account;
(D) the distribution through the Paying Agent of amounts owed 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 Debentures in accordance with the terms of this Trust Agreement;
(F) the sending of notices of default and other information regarding
the Trust Securities and the Debentures to the Securityholders in accordance
with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the execution of the certificate
of cancellation with the Secretary of State of the State of Delaware;
(I) to exchange the Private Guarantee for the Exchange Guarantee
pursuant to the Guarantee Exchange and Registration Rights Agreement in the
exchange in connection with the Exchange Offer;
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(J) to exchange the Private Debentures for the Exchange Debentures in
an exchange in connection with the Exchange Offer pursuant to the Debenture
Exchange and Registration Rights Agreement;
(K) after an Event of Default (other than under paragraph (b), (c),
(d) or (e) of the definition of such term if such Event of Default is by or with
respect to the Property Trustee), 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)
and, within 90 days after the occurrence of any Event of Default actually known
to an officer of the Property Trustee assigned to its Corporate Trust Office, to
give notice thereof to the Securityholders; and
(L) except as otherwise provided in this Section 2.7(a)(ii), or in the
Trust Indenture Act (regardless of whether applicable or not), 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 on behalf of the Trust shall not (i)
acquire any investments 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) incur any indebtedness for
borrowed money or issue any other debt or (v) 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.
(c) In connection with the issuance and sale of the Capital 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
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furtherance of the following prior to the date of this Trust Agreement are
hereby ratified and confirmed in all respects):
(i) negotiation of the terms of, and the execution and delivery of, the
Purchase Agreement providing for the sale of the Capital Securities;
(ii) preparation of an application for designation of the Private Capital
Securities for trading in the PORTAL Market at the time of issuance thereof;
(iii) the preparation of an offering memorandum and 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 Exchange
Offer, including any amendments thereto and/or a "shelf" registration statement
to register the Private Capital Securities, the Private Guarantee and the
Private Debentures, in each case in accordance with the provisions of the
Registration Rights Agreements;
(iv) the determination of the states, if any, in which to take appropriate
action to qualify or register for sale all or part of the Capital Securities and
the Guarantee and the determination of any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and the advice to 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 state; and
(v) 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 the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act or fail or cease to be
classified as a grantor trust for United States federal income tax purposes and
so that the Debentures 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 or this Trust
Agreement, that each of the Depositor and any Administrative Trustee determines
in its discretion to be necessary or desirable for such purposes, as long as
such action does not adversely affect in any material respect the interests of
the Holders of the Capital Securities.
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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. 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 Debentures. 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) Distributions will be made on the Trust Securities at the rate and on
the dates that payments of interest are made on the Debentures. Distributions
on the Trust Securities shall be cumulative, and will accumulate whether or not
there are funds of
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the Trust available for the payment of Distributions. Distributions shall
accumulate from January 1, 1997 and, except in the event (and to the extent)
that the Depositor exercises its right to defer the payment of interest on the
Debentures pursuant to the Indenture, shall be payable semiannually in arrears
on January 1 and July 1 of each year, commencing on July 1, 1997. 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), 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").
(b) Assuming payments of interest on the Debentures are made when due and
assuming compliance by the Depositor and the Trust with their obligations under
the Capital Securities Exchange and Registration Rights Agreement (and before
giving effect to any Additional Distributions, Special Distributions and
Additional Tax Sums, if applicable), Distributions on the Trust Securities shall
be payable at a rate of 8.205% 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. 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 Distributions,
Special Distributions and Additional Tax Sums, if any.
(c) 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 and available in the
Payment Account for the payment of such Distributions.
(d) 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
the 15th day of the month immediately prior to the month in which the relevant
Distribution Date occurs.
SECTION 4.2. Redemption.
(a) On each Debenture Prepayment Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
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(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 15 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, or if the Redemption Price cannot be calculated
prior to the time the notice of redemption is required to be sent, the manner of
calculation thereof;
(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) 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 of Debentures. 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 and 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
Capital Securities, then, by 10:00 a.m., New York City time, on the Redemption
Date, the Depositor shall deposit sufficient funds with the Property Trustee to
pay the Redemption Price. If such deposit has been made, then, by 12:00 noon,
New York City time, on the Redemption Date, subject to Section 4.2(c), the
Property Trustee will, with respect to Capital Securities evidenced by one or
more Global Capital Securities Certificates, irrevocably deposit with the
Clearing Agency for such Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
With respect to Capital Securities evidenced by one or more Definitive Capital
Securities Certificates, 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
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the Redemption Price with respect to such Capital Securities to the Holders
thereof upon surrender of their Definitive Capital 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 and any
Distribution payable on or prior to the Redemption Date, but without interest,
and such Trust 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), 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 the Redemption Price on the Trust Securities shall be made
to the Holders thereof as they appear on the Securities Register for the Trust
Securities on a date to be established as the record date for the distribution
by the Property Trustee, which date shall be not more than 45 days nor less than
15 days prior to the relevant Redemption Date.
(f) Subject to Section 4.3(a), 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 Capital Securities. The particular Capital Securities to be redeemed shall
be selected not less than 15 nor more than 60 days prior to the Redemption Date
by the Property Trustee from the Outstanding Capital Securities not previously
called for redemption, by such method (including, without limitation, on a pro
rata basis or by lot) as the Property Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions
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(equal to $1,000 or an integral multiple of $1,000 in excess thereof) of the
Liquidation Amount of Capital Securities of a denomination larger than $1,000;
provided, however, that redemption must be pro rata on the basis of the
Outstanding Capital Securities held by each Holder unless the Property Trustee
advised by Opinion of Counsel determines that non-pro rata redemption will not
cause the Trust to fail or cease to be classified as a grantor trust for United
States federal income tax purposes or, if the Trust might fail or cease to be
classified as a grantor trust, will not cause the Trust to be classified as an
association taxable as a corporation for United States federal income tax
purposes. In any such proration the Property Trustee may make such adjustments
so that any Capital Security to be redeemed shall, after such redemption, be in
an authorized denomination, subject to Section 5.4(b). The Property Trustee
shall promptly notify the Securities Registrar in writing of the Capital
Securities selected for redemption and, in the case of any Capital 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 Capital Securities shall relate, in
the case of any Capital Securities redeemed or to be redeemed only in part, to
the portion of the Liquidation Amount of Capital Securities that has been or is
to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made, subject to Section 4.2(f), pro rata
among the Common Securities and the Capital Securities based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date any Event of Default resulting from a Debenture Event of
Default shall have occurred and be continuing, no payment of any Distribution
on, or the Redemption Price 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 in full in cash of all accumulated and
unpaid Distributions on all Outstanding Capital Securities for all Distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all Outstanding
Capital Securities, 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 on, or the Redemption Price of,
Capital Securities then due and payable.
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(b) In the case of the occurrence of any Event of Default resulting from
any Debenture 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 all such Events of Default with respect
to the Capital Securities have been cured, waived or otherwise eliminated. Until
any such Event of Default under this Trust Agreement with respect to the Capital
Securities has been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Capital Securities and
not the Holder of the Common Securities, and only the Holders of the Capital
Securities will have the right to direct the Property Trustee to act on their
behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions in respect of the Capital Securities shall be
made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Capital Securities
are held by a Clearing Agency, such Distributions shall be made in immediately
available funds to the Clearing Agency, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable Distribution Dates. Payments
in respect of the 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 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.
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SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums and the written
direction of any of the Administrative Trustees, 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 Indenture or Pursuant to Direct
Actions.
Any amount payable hereunder to any Holder of Capital Securities shall be
reduced by the amount of any corresponding payment such Holder (or an Owner with
respect to the Holder's Capital Securities) has directly received pursuant to
Section 6.05 of the Indenture or Section 5.14 of this Trust Agreement.
Notwithstanding any such payments, the Depositor shall remain obligated to pay
the principal of or interest on the Debentures and the Depositor shall be
subrogated to the rights of the Holder (and Owner) of such Capital Securities
with respect to payments on the Capital Securities to the extent of any payments
made by the Depositor to such Holder (and Owner) pursuant to either of such
Sections.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the creation of the Trust and the contribution by the Depositor
referred 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; Execution and Delivery
Thereof.
The Capital Securities Certificates shall be issued in denominations of
$1,000 Liquidation Amount and integral multiples of $1,000 in excess thereof
(subject to Section 5.4(b)), and the Common Securities Certificates shall be
issued in denominations of $1,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof. The Trust Securities Certificates shall be
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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.
At the Closing Date, the Administrative Trustees, or any of them, shall
cause Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 2.4 and 2.5, to be executed on behalf of the Trust and
delivered to or upon the written order of the Depositor, signed by its Chairman
of the Board, any Vice Chairman of the Board, its President, any Vice President,
its Treasurer or any Assistant Treasurer or its Controller, without further
corporate action by the Depositor, in authorized denominations.
SECTION 5.3. Form of Trust Securities Certificates.
(a) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
(b) Capital Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Capital Securities,
substantially in the form of Exhibit B (a "144A Global Security") deposited with
the Clearing Agency or the Property Trustee as custodian for the Clearing
Agency. Transfers of beneficial interests in the 144A Global Security will be
subject to the restrictions on transfer contained in the Private Placement
Legend and the Minimum Transfer Legend. Transfers of beneficial interests in
the 144A Global Security will be made in accordance with the standing
instructions and procedures of the Clearing Agency.
(c) Capital Securities offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent global Capital Securities, substantially in the form of Exhibit C (a
"Regulation S Global Security") deposited with the Clearing Agency or the
Property
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Trustee as custodian for the Clearing Agency. Prior to the expiration of the
Restricted Period, interests in the Regulation S Global Security may only be
held by Clearing Agency Participants in the name of a nominee of Euroclear and
Cedel. After the expiration of the Restricted Period, transfers of beneficial
interests in the Regulation S Global Security will not be subject to any
restrictions other than the restrictions contained in the Minimum Transfer
Legend. After the expiration of the Restricted Period, beneficial interests in
the Regulation S Global Security may be held by Clearing Agency Participants
other than in the name of a nominee of Euroclear and Cedel. Transfers of
beneficial interests in the Regulation S Global Security will be made in
accordance with the standing instructions and procedures of the Clearing Agency.
(d) Capital Securities offered and sold to Institutional Accredited
Investors in reliance on Regulation D under the Securities Act shall be issued
initially in the form of one or more Definitive Capital Securities Certificate,
substantially in the form of Exhibit D. Transfers of Definitive Capital
Securities Certificates will be subject to the Private Placement Legend, the
Minimum Transfer Legend and the requirements contained in Section 5.11(d)(1) or
5.11(d)(2).
(e) All Trust Securities shall be dated the date of their execution.
(f) Exchange Capital Securities shall be issued in global form deposited
with the Property Trustee as custodian for the Clearing Agency or in such other
form as the Administrative Trustees may direct and will bear the Minimum
Transfer Legend.
SECTION 5.4. Registration of Transfer and Exchange of Capital Securities
Certificates.
(a) (i) The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.8, a register for the purpose of
registering Trust Securities Certificates and transfers and exchanges of Capital
Securities Certificates (the "Securities 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 Capital Securities Certificates and Common Securities Certificates and
registration of transfers and exchanges of Capital Securities Certificates,
subject to Section 5.4(b), Section 5.10, Section 5.11 and as may otherwise be
provided herein. The Bank shall be the initial Securities Registrar. The
Securities Registrar shall not be required to register the transfer or exchange
of any Capital Securities (x) during a period beginning at
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the opening of business 15 days before the day of the mailing of a notice of
redemption of Capital Securities and ending at the close of business on the day
of such mailing or (y) that have been selected for redemption in whole or in
part, except the unredeemed portion of any Capital Security redeemed in part.
(ii) Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.8 and
subject to compliance with Section 5.4(b) and Section 5.11, 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 Capital Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
dated the date of execution by such Administrative Trustee or Trustees. Subject
to Section 5.11, at the option of a Holder, Capital Securities Certificates may
be exchanged for other Capital Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation Amount upon
surrender of the Capital Securities Certificates to be exchanged at the office
or agency maintained pursuant to Section 5.8.
(iii) Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Capital Securities Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by an
Administrative Trustee or the Securities Registrar in accordance with such
Person's customary practice; provided that no exchanges of Private Capital
Securities for Exchange Capital Securities shall occur until a registration
statement shall have been declared effective by the Commission and that any
Capital Securities that are exchanged for Exchange Capital Securities shall be
canceled by the Property Trustee.
(iv) No service charge shall be made for any registration of transfer or
exchange of Capital 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 Capital Securities
Certificates.
(b) The Capital Securities (which includes both the Private Capital
Securities and the Exchange Capital Securities) will be issued, and may be
transferred, only in blocks having a Liquidation
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Amount of not less than $100,000 (100 Capital Securities). Any transfer, sale or
other disposition of Capital Securities in a block having a Liquidation Amount
of less than $100,000 shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be the Owner or Holder of
such Capital Securities for any purpose, including but not limited to the
receipt of Distributions on such Capital Securities, and such transferee shall
be deemed to have no interest whatsoever in such Capital Securities. All Capital
Securities (including the Exchange Capital Securities) will bear the Minimum
Transfer Legend.
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 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 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
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 class, 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 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 of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever (subject to the
record date provisions hereof), and neither the Trustees nor the Securities
Registrar shall be bound by any notice to the contrary.
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SECTION 5.7. Access to List of Securityholders' Names and Addresses.
At any time when the Property Trustee is not also acting as the Securities
Registrar, the Depositor shall furnish or cause to be furnished to the Property
Trustee promptly after receipt by an Administrative Trustee of a request
therefor from the Property Trustee in writing, 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. 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 obligations and rights of the Property Trustee, shall be as
provided in the Trust Indenture Act. Each Holder, 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 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.
SECTION 5.8. Maintenance of Office or Agency for Transfers.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Capital Securities Certificates may be 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. The
Administrative Trustees initially designate The Bank of New York, 101 Barclay
Street, New York, New York 10286, Attn: Corporate Trust Trustee Administration,
as the principal corporate trust office for such purposes. The Administrative
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 referred to above. 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. The Paying
Agent shall initially be the Bank,
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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 and the Depositor to act as
Paying Agent (which shall be a bank or trust company). 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 8.2, 8.4 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.
SECTION 5.10. Ownership of Common Securities by Depositor.
At 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 a transfer in connection with a consolidation, conversion or
merger of the Depositor into another Person, or any conveyance, transfer or
lease by the Depositor of its properties and assets substantially as an entirety
to any Person, pursuant to Article Eleven of the Indenture, any attempted
transfer of the Common Securities shall be void. The Administrative Trustees
shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE."
SECTION 5.11. Book-Entry Interests.
(a) So long as the Private Capital Securities are eligible for book-entry
settlement in the Clearing Agency or unless otherwise required by law, all
Private Capital Securities that are so eligible will be represented by one or
more Global Capital
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Securities Certificates deposited with the Clearing Agency or the Property
Trustee as custodian for the Clearing Agency, by, or on behalf of, the Trust. No
Owner of a beneficial interest in a Global Capital Securities Certificate will
receive a Definitive Capital Securities Certificate representing such Owner's
beneficial interest in the Private Capital Securities, except as provided in
Section 5.11(f) below; provided, however, that the Trust shall issue a
Definitive Capital Securities Certificate upon any transfer of a beneficial
interest in a Global Capital Security to the Company or an Affiliate of the
Company and no Definitive Capital Securities Certificate, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be resold, retransferred or included in any Global Capital
Security until such Private Capital Security is freely tradeable in accordance
with Rule 144(k) or exchanged for an Exchange Capital Security.
(b) 144A Global Securities shall initially be registered in the name of a
nominee of the Clearing Agency and Regulation S Global Securities shall
initially be registered in the name of a nominee for the Clearing Agency for the
accounts of Euroclear and Cedel.
(c) Transfers of interests in Private Capital Securities between any 144A
Global Security and any Regulation S Global Security will be made in accordance
with this Trust Agreement (including Section 5.11(d)(3)and (4), as applicable)
and in accordance with the standing instructions and procedures of the Clearing
Agency. The Property Trustee shall make appropriate endorsements to reflect
increases or decreases in the amount of such Global Capital Securities.
(d) Unless and until the earlier of (i) the date upon which Private Capital
Securities are exchanged for Exchange Capital Securities in connection with an
effective registration statement pursuant to the Capital Securities Exchange and
Registration Rights Agreement or (ii) the Transfer Restriction Termination Date:
(1) Definitive to Definitive Transfers. Any transfer of a Definitive
Capital Securities Certificate shall be registered on the Securities
Register only upon receipt by the Property Trustee of such Definitive
Capital Securities Certificate accompanied by a duly completed and executed
assignment in the form attached to Exhibit D and, in the case of a transfer
to an Institutional Accredited Investor, upon receipt by the Property
Trustee of a written certificate in the form of Exhibit F (or other
certificates, legal opinions or other information as the Depositor may
reasonably request
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to confirm that such transfer is exempt from the registration requirements
of the Securities Act);
(2) Definitive into a Global Capital Security. So long as Private
Capital Securities are eligible for book-entry settlement with the Clearing
Agency or unless otherwise required by law, upon any transfer of a
Definitive Capital Securities Certificate to a QIB in accordance with Rule
144A or to a non-U.S. Person in accordance with Regulation S, and upon
receipt of the Definitive Capital Securities Certificate being so
transferred accompanied by a duly completed and executed assignment in the
form attached to Exhibit D, the Property Trustee on behalf of the Trust
shall make an endorsement on any 144A Global Security or any Regulation S
Global Security, as the case may be, to reflect an increase in such Global
Capital Security and the Property Trustee, on behalf of the Trust, shall
cancel such Definitive Capital Securities Certificate.
(3) 144A Global Security into Regulation S Global Security. Any
transfer in accordance with Rule 904 of Regulation S of a beneficial
interest in a 144A Global Security shall be reflected by an increase in the
Regulation S Global Security and a corresponding decrease in the 144A
Global Security only upon receipt by the Trustee of a written certificate
in the form of Exhibit G (or such other certifications, legal opinions or
other information as the Depositor may reasonably require to confirm that
such transfer is being made pursuant to Rule 904); and
(4) Regulation S Global Security into 144A Global Security. Any
transfer of a beneficial interest in a Regulation S Global Security to a
transferee that takes delivery in the form of a beneficial interest in the
144A Global Security shall be reflected by an increase in the 144A Global
Security and a corresponding decrease in the Regulation S Global Security
and, prior to the expiration of the Restricted Period, only upon receipt by
the Property Trustee of a written certificate in the form of Exhibit H (or
such other certifications, legal opinions or other information as the
Depositor may reasonably require).
(e) Any Global Capital Security may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Trust Agreement as may be required by the Clearing
Agency, by any national securities exchange or by the National Association of
Securities Dealers, Inc. in order for the Private Capital
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Securities to be tradeable on the PORTAL Market or as may be required for the
Private Capital Securities to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange upon which the Capital Securities may be listed or
traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Capital Securities
are subject.
(f) Notwithstanding any other provisions of this Trust Agreement (other
than the provisions set forth in this Section 5.11(f)), a Global Capital
Security may not be exchanged in whole or in part for Definitive Capital
Securities Certificates, and no transfer of a Global Capital Security may be
registered, in the name of any Person other than the Clearing Agency or a
nominee thereof unless (i) such Clearing Agency (A) has notified the Property
Trustee and the Depositor that it is unwilling or unable to continue as Clearing
Agency for such Global Capital Security or (B) has ceased to be a clearing
agency registered as such under the Exchange Act and no successor Clearing
Agency has been appointed by the Depositor within 90 days after its receipt of
such notice or its becoming aware of such cessation of registration, (ii) there
shall have occurred and be continuing an Event of Default, or any event which
after notice or lapse of time or both would be an Event of Default under the
Trust Agreement, with respect to such Capital Security or (iii) the Depositor
instructs the Property Trustee to exchange such Global Capital Security for
Definitive Capital Securities Certificates.
(g) Unless and until Definitive Capital Securities Certificates have been
issued to Owners pursuant to Section 5.13, the following provisions of this
Section 5.11(g) shall be in full force and effect:
(i) 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 Global Capital Securities (including the payment of the Liquidation Amount
of and Distributions on the Capital Securities evidenced by Global Capital
Securities Certificates and the giving of instructions or directions to Owners
of Capital Securities evidenced by Global Capital Securities) as the sole Holder
of Capital Securities evidenced by Global Capital Securities and shall have no
obligations to the Owners thereof; and
(ii) the rights of the Owners of the Global Capital Securities shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such
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Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive Capital
Securities Certificates are issued pursuant to this Section 5.11 or Section
5.13, the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments on the Capital
Securities to such Clearing Agency Participants.
(h) The Administrative Trustees shall inform the Property Trustee in
writing of the effective date of any registration statement registering the
Exchange Capital Securities under the Securities Act. Upon the receipt of a
certificate from the Administrative Trustees, the Property Trustee will take
such actions as shall be necessary to effectuate the exchange any of the Private
Capital Securities for Exchange Capital Securities, including but not limited to
the issuance of Exchange Capital Securities in the form requested by the
Administrative Trustees, the entry of decreases in the Regulation S Global
Security and the 144A Global Security or, if applicable, the cancellation of
Definitive Capital Securities Certificates.
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 Capital
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. Procedures for Issuance of Definitive Capital Securities
Certificates.
Upon surrender to the Securities Registrar of the typewritten Capital
Securities Certificate or Certificates representing the Global Capital
Securities Certificates by the Clearing Agency upon occurrence of any of the
events described in Section 5.11(f), accompanied by registration instructions,
the Administrative Trustees, or any one of them, shall execute and the
Securities Registrar shall register the Definitive Capital Securities
Certificates in accordance with the instructions of the Clearing Agency.
Neither the Securities Registrar nor the Trustees shall be liable for any 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
Capital Securities Certificates, the Trustees shall recognize the Holders of the
Definitive Capital Securities Certificates as Securityholders. The
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Definitive Capital 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. When issued and
delivered to Securityholders against payment of the purchase price therefor, the
Capital Securities will be fully paid and nonassessable undivided beneficial
interests in the Trust Property. The Holders of the Capital 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 Capital Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the Holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have such right by a notice in writing to the Depositor and
the Debenture Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures shall become immediately due
and payable, provided that the payment of principal and interest on such
Debentures shall remain subordinated to the extent provided in the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, the Holders of a majority in Liquidation Amount of the Capital
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
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(i) the Depositor has paid or deposited with the Debenture Trustee a sum
sufficient to pay
(A) all overdue installments of interest (including any Additional
Interest, as defined in the Indenture) on all of the Debentures,
(B) the principal of (and premium, if any, on) any Debentures which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Debenture Trustee under the Indenture
and the reasonable compensation, expenses, disbursements and advances of the
Debenture Trustee and the Property Trustee, their agents and counsel and all
amounts payable to the Debenture Trustee under Section 7.06 of the Indenture;
and
(ii) all Debenture Events of Default, other than the non-payment of the
principal of the Debentures which has become due solely by such acceleration,
have been cured or waived as provided in Article Six of the Indenture.
The holders of a majority in aggregate Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, except a default in the payment of
principal 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 Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which are represented by Book-Entry Capital Securities
Certificates, a record date shall be established for determining Holders of
Outstanding Capital 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
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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 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).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section
6.01(a) or 6.01(b) of the Indenture, any Holder of Capital Securities shall have
the right to institute a proceeding directly against the Depositor, pursuant to
Article Six of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Capital Securities of such Holder (a "Direct
Action"). Except as set forth in Section 5.14(b) and this Section 5.14(c), the
Holders of Capital Securities shall have no right to exercise directly any right
or remedy available to the holders of, or in respect of, the Debentures.
The Holders of a majority in Liquidation Amount of the Capital Securities
at the time Outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred on the Property Trustee with
respect to such Capital Securities; provided, however, that the Property Trustee
shall have the right to decline to follow any such direction if the Property
Trustee being advised by Opinion of Counsel determines that the action so
directed may not lawfully be taken, or if the Property Trustee in good faith
shall determine that the proceedings so directed would be illegal or involve it
in personal liability or be unduly prejudicial to the rights of Holders of
Capital Securities not parties to such direction, and provided further that
nothing in the Trust Agreement shall impair the right of the Property Trustee to
take any action deemed proper by the Property Trustee and which is not
inconsistent with such direction by such Securityholders.
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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 Indenture and as otherwise required by law, no Holder of Capital
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 Debentures 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 Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where the
consent of the holders of Debentures shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Capital
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Capital Securities, except by a subsequent
vote of the Holders of Capital Securities. Subject to Section 8.3, the Property
Trustee shall notify all Holders of the Capital Securities of any notice of
default received from the Debenture Trustee with respect to the Debentures. In
addition to obtaining the foregoing approvals of the Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Trustees shall, at
the expense of the Depositor, obtain an Opinion of Counsel to the effect that
such action shall not cause the Trust to fail or cease to be classified as a
grantor trust for United States federal income tax purposes.
(c) If any proposed amendment to this Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any
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action that would adversely affect in any material respect the powers,
preferences or special rights of the Capital Securities, whether by way of
amendment to this 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 Capital Securities as a class
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 at
least a majority in Liquidation Amount of the Outstanding Capital Securities,
except as otherwise provided in Section 10.2(c). Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Trust to fail or
cease to be classified as a grantor trust for United States Federal income tax
purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Capital Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Capital Securityholder of record, at his
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 Capital Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Capital
Securityholders to vote on any matter upon the written request of the Capital
Securityholders of record of 25% of the Capital 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 Capital Securityholders to
vote on any matters as to which Capital Securityholders are entitled to vote.
Capital Securityholders of record of 50% of the Outstanding Capital
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Capital Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Capital
Securityholders of record present, in person or by proxy, holding more than a
majority of the Capital Securities (based upon their Liquidation Amount) held by
the Capital
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Securityholders of record present, either in person or by proxy, at
such meeting shall constitute the action of the Capital 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 $1,000 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 of record 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 more
than 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 that may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding 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.
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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 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 may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders 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
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 8.2) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
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 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 signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
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 Capital Securities shall be proved by the Securities Register.
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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 VI, 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, the Property
Trustee and the Delaware Trustee.
The initial Property Trustee and the initial Delaware Trustee, each
severally on behalf of and as to itself, hereby represents and warrants for the
benefit of the Depositor and the Securityholders that:
(a) the Property Trustee is a New York banking corporation;
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(b) the Property Trustee 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) the Delaware Trustee is a Delaware banking corporation duly organized,
validly existing and in good standing with its principal place of business in
the State of Delaware;
(d) the Delaware Trustee 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;
(e) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and the Delaware Trustee and constitutes the valid and
legally binding agreement of each of the Property Trustee and the Delaware
Trustee enforceable against each of them 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;
(f) the execution, delivery and performance of this Trust Agreement have
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the Delaware Trustee and do not require any approval of
stockholders of the Property Trustee and the Delaware Trustee and such
execution, delivery and performance will not (i) violate the charter or By-laws
of the Property Trustee or the Delaware Trustee, (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 Property
Trustee or the Delaware Trustee 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 banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context)
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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
banking, trust or general powers of the Property Trustee or the Delaware
Trustee, as the case may be, under the laws of the United States, the State of
Delaware or the State of New York; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Any successor Property Trustee and Delaware Trustee shall make similar
representations and warranties as contained in this Section 7.1 for the benefit
of the Depositor and the Securityholders.
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 at the Closing Date on behalf
of the Trust have been duly authorized and will 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, as of each such date, 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 Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
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ARTICLE VIII.
THE TRUSTEES
SECTION 8.1. Corporate Property Trustee Required; Eligibility of
Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. 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 the requirements of
its supervising or examining authority, then, for the purposes of this Section
8.1(a), 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 with respect to the Trust Securities. 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. No natural person shall be eligible to act as an Administrative Trustee
hereunder unless such person is an employee or officer of, or affiliated with,
the Depositor.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. 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 8.2. 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, and no implied covenants or obligations shall be read into this
Trust Agreement against the Property Trustee. Notwithstanding the foregoing, no
provision of this Trust Agreement shall require the Trustees to
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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. Nothing in this Trust Agreement shall be construed
to release an Administrative Trustee or the Delaware Trustee from liability for
his or its own negligence or willful misconduct. To the extent that, at law or
in equity, an Administrative Trustee or the Delaware Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust, to
any other trustee or to the Securityholders, such Administrative Trustee or the
Delaware Trustee shall not be liable to the Trust, to any other trustee 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 agreed by the Depositor, the
Trustees and the Securityholders to replace such other duties and liabilities of
the Administrative Trustees and the Delaware Trustee.
(b) 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 8.2(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.
(c) 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
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Property Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was made;
(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 not less than 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 Debentures 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 in writing 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 8.3. Certain Notices.
Within 90 days after the occurrence of any Event of Default actually known
to an officer of the Property Trustee assigned to its Corporate Trust Office,
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 Debentures
pursuant to the Indenture, the Administrative
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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.
SECTION 8.4 Certain Rights of Property Trustee.
Subject to the provisions of Section 8.2:
(a) the Property Trustee may rely and shall be fully 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, direction, consent, order, appraisal, 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;
(b) if (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
Capital 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; 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;
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(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be proved or established before
taking, suffering or omitting to take 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;
(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 of its selection (which
counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice or opinion of such 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 reliance thereon and in accordance with such advice or
opinion; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of the Trust or interpretation 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 such adequate
security or indemnity against the costs, expenses (including attorney's 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 Property Trustee;
(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, direction, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, 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 and the Property Trustee shall not be responsible for any misconduct
or negligence on the
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part of any agent or attorney appointed by it hereunder; provided, however, that
the Property Trustee shall be responsible for its own negligence or recklessness
with respect to the selection of any such 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;
(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; and
(l) the Property Trustee shall not be charged with knowledge of an Event of
Default unless an officer of the Property Trustee assigned to its Corporate
Trust Office obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from the Depositor, any other Trustee or
Securityholders holding a majority or more of Capital Securities (based upon
Liquidation Amount).
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 to act in accordance with such power and authority.
SECTION 8.5. 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 Trust, and the Trustees do not assume
any responsibility for their correctness.
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The Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Debentures.
SECTION 8.6. May Hold Securities.
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 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.7. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time such compensation as shall be
agreed in writing between the Depositor and the Property Trustee 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 their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their negligence or bad faith;
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates (referred
to herein as an "Indemnified Person") from and against any loss, damage,
liability, tax, penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person by reason of the creation, operation or
termination of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Trust Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions; and
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(d) to the fullest extent permitted by applicable law, to advance expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding which expenses shall be
advanced, from time to time, prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Depositor of (i) a
written affirmation by or on behalf of the Indemnified Person of its or his good
faith belief that it or he has met the standard of conduct set forth in this
Section 8.7 and (ii) an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in the preceding subsection.
The provisions of this Section 8.7 shall survive the termination of this
Trust Agreement and the resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.7.
The Depositor and any Trustee (in the case of the Property Trustee, subject
to Section 8.8 hereof) 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 of Trust
Securities 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 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 or be interested 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 8.8 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
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the extent and in the manner provided by, and subject to the provisions of, the
Trustee Indenture Act and this Trust Agreement.
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 conforming to 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, except in such instances as set forth in the following sentence, 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 a Debenture 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; provided, however, that, if a Debenture Event of Default shall
have occurred and be continuing, the Property Trustee may execute any such
instrument on behalf of the Depositor as its agent and attorney-in-fact
therefor.
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:
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(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.
(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 a Debenture 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; provided, however, that, if a Debenture Event of Default shall have
occurred and be continuing, the Property Trustee may execute any such
instruments or agreements on behalf of the Depositor as its agent and attorney-
in-fact therefor. 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.
(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.
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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 by giving written notice thereof to the Securityholders and
the Depositor. Upon giving such notice, a successor Relevant Trustee shall be
appointed in accordance with the second succeeding paragraph. If a successor is
not so appointed within a reasonable time not to exceed thirty days from the
date of the Relevant Trustee's notice of resignation, or if for any reason the
instrument of acceptance by the successor Trustee required by Section 8.11 shall
not have been delivered to the Relevant Trustee within thirty days after giving
of such notice of resignation, the Relevant Trustee may petition, at the expense
of the Trust, a court of competent jurisdiction in the State of Delaware to
appoint a successor.
Unless a Debenture Event of Default has occurred and is continuing, any
Trustee may be removed for cause at any time by the Holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed with or without cause
at such time by Holders of a majority in Liquidation Amount of the Outstanding
Capital Securities. In no event will the Holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrative Trustees,
which voting rights are vested exclusively in the Depositor, as Holder of the
Common Securities.
After removal by the Holders of a majority in Liquidation Amount of the
Capital Securities, the successor to the Relevant Trustee may be appointed in
accordance with the next paragraph. If a successor is not so appointed within a
reasonable time not to exceed thirty days from the date of the Relevant
Trustee's removal, or if for any reason the instrument of acceptance by the
successor Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within thirty days of such removal, the Relevant Trustee may
petition, at the expense of the Trust, a court of competent jurisdiction in the
State of Delaware to appoint a successor.
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
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Trustee for any cause, at a time when no Debenture 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, 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 a
Debenture Event of Default shall have occurred and be continuing, the Capital
Securityholders, by Act of the Securityholders of a majority in Liquidation
Amount of the Capital Securities then Outstanding delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, 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, the Common
Securityholder by Act of the Common Securityholder delivered to the
Administrative Trustee shall promptly appoint a successor Administrative Trustee
or Administrative Trustees and such successor Administrative Trustee or
Administrative Trustees shall comply with the applicable requirements of Section
8.11. If no successor Relevant Trustee shall have been so appointed by the
Common Securityholder or the Capital 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.
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.
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 or Delaware Trustee, as the case may be, set forth
in Section 8.1).
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SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, the
successor Relevant Trustee shall execute and deliver an amendment hereto wherein
such successor Relevant Trustee shall accept such appointment and which 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.
Upon the execution and delivery of such amendment, the resignation or
removal of the Relevant Trustee shall become effective to the extent provided
therein and each such successor Relevant Trustee, without any further act, deed
or conveyance by any Person, shall become vested with the rights, powers, trusts
and duties of the former Relevant Trustee; but, on request of the Trust or any
successor Relevant Trustee such former 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.
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 Person into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person 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 Person 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.
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SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions or
other amounts due on the Trust Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment of any
past due Distributions or such other amounts) shall be entitled and empowered,
to the fullest extent permitted by law, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of any Distributions and
other amounts owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee under Section
8.7.
Nothing herein contained shall be deemed to authorize the Property 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 Trust
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 8.14. Reports by Property Trustee.
(a) Not later than July 15 of each year commencing July 15, 1997, the
Property Trustee shall transmit to all Securityholders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of the immediately
preceding December 31 concerning the Property Trustee and its actions under this
Trust Agreement if and as may be required pursuant to Section 313(a) of the
Trust Indenture Act.
(b) In addition the Property Trustee shall transmit to Securityholders such
other reports concerning the Property Trustee and its actions under this Trust
Agreement as would be required pursuant to the Trust Indenture Act were this
Trust Agreement to be qualified under the Trust Indenture Act at the times and
in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with any interdealer quotation system
or self-regulatory organization upon which the Trust Securities are designated
for trading, with the Commission and with the Depositor.
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)(4) of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, such compliance certificate to be delivered annually on or before
September 15 of each year beginning in 1997.
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
such 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.
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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. The Property Trustee and the Delaware
Trustee may be the same Person.
(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
the provisions of Section 8.10 relating to appointment of a successor Trustee
upon resignation of a Trustee.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or 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 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) 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 this Trust Agreement, as set forth herein.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
January 1, 2028 (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 commencement by the Depositor of a voluntary case under Chapter 7
or Chapter 8 of the federal Bankruptcy Code or any other similar state or
federal law now or hereafter in effect, or the consent by the Depositor to the
entry of a decree or order for relief in an involuntary case under any such law,
or the consent by Aon Corporation to the appointment of a liquidating agent or
committee, conservator or receiver;
(b) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Depositor in an involuntary case
under Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any other
similar state or federal law now or hereafter in effect, and the continuance of
any such decree or order unstayed and in effect for a period of 90 days, or the
appointment of a liquidating agent or committee, conservator or receiver for Aon
Corporation and the continuance of any such appointment unstayed and in effect
for a period of 90 days;
(c) the dissolution or liquidation of the Depositor;
(d) the written direction to the Property Trustee from the Depositor at any
time to dissolve the Trust and distribute Debentures to Securityholders in
exchange for the Like Amount of the Trust Securities (which direction is
optional and wholly within the discretion of the Depositor), subject to the
Depositor having received an Opinion of Counsel to the effect that such
distribution will not be a taxable event for United States federal income tax
purposes to Holders of Capital Securities;
(e) the redemption of all of the Capital Securities in connection with the
redemption of all the Debentures; and
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(f) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
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), (c), (d) or
(f) 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
Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later than
15 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
Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debentures, or if Section
9.4(d) applies receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Trust and distribution of the
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Debentures to Securityholders, the Property Trustee shall establish a record
date for such distribution (which shall be not more than 45 days nor less than
15 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
Debentures in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
Property Trustee or its agent for exchange, (iii) the Depositor shall use its
reasonable efforts to have the Debentures listed on the New York Stock Exchange
or on such other exchange, interdealer quotation system or self-regulatory
organization as the Capital Securities are then listed, including PORTAL, (iv)
any Trust Securities Certificates not so surrendered for exchange will be deemed
to represent a Like Amount of Debentures, accruing interest at the rate provided
for in the Debentures 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 Debentures) and (v) all rights of Securityholders holding
Trust Securities will cease, except the right of such Securityholders to receive
the Like Amount of Debentures 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 Debentures in the manner provided
herein is determined by the Property Trustee not to be practicable, the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound-up and
terminated, by the Property Trustee in such manner as the Property Trustee
determines. In such event, on the date of the dissolution 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
directly by
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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 Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Capital
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities.
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
substantially as an entirety to any Person, except pursuant to this Article IX.
At the request of the Depositor, with the consent of the Administrative Trustees
and without the consent of the Holders of the Capital 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 substantially as an entirety to a trust organized as such under the laws
of any State; provided, however, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital 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 Debentures, (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 Capital Securities are then listed or traded, if
any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including any Successor
Securities) to be downgraded 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 Capital Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
substantially 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 from independent counsel to the
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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
Capital Securities (including any Successor Securities) in any material respect,
and (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 (viii)
the Depositor 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, the Trust shall not, except
with the consent of Holders of 100% in Liquidation Amount of the Capital
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other Person or permit any other Person 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 to Terminate Trust.
Subject to Section 9.2, the death, incapacity, dissolution, liquidation,
termination or bankruptcy of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, dissolve, terminate or annul the Trust, nor entitle the legal
representatives, successors 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 Property
Trustee, the Delaware Trustee, the Administrative Trustees and the Depositor,
without the consent of any Securityholders, (i) to cure any ambiguity, correct
or supplement
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any provision herein that 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, (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 any such
action shall not adversely affect in any material respect the interests of any
Securityholder or the Property Trustee or the Delaware Trustee, and any
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders or (iii) to provide the Property Trustee with the
authority to execute on behalf of the Administrative Trustees Definitive Capital
Securities Certificates.
(b) Except as provided in Section 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 not less than 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
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 Section 6.3 or 6.6 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 or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; 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
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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, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(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.
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, 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.
71
<PAGE>
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, conversion or sale involving the Depositor that is permitted under
Article Eleven of the 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 Capital
Securityholder, to such Capital 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 Aon Corporation, 123 North Wacker Drive,
Chicago, Illinois 60606, Attention: Treasurer, facsimile no.: 312/701-3900.
Such notice, demand or other 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, the Delaware 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 Bank of New
York, 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust
Trustee Administration, (b) with respect to the Delaware Trustee, to The Bank of
New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711,
Attention: Corporate Trust Department and (c) with respect to the
Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of Aon Capital A." Such
notice, demand or other communication to or
72
<PAGE>
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. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is intended to be in conformity with the
provisions of the Trust Indenture Act that would be required to be part of this
Trust Agreement were this Trust Agreement to be qualified under the Trust
Indenture Act 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 the duties
imposed under Sections 310 through 318 of the Trust Indenture Act were this
Trust Agreement to be qualified under the Trust Indenture Act, such duties 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.
73
<PAGE>
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
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 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 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.
SECTION 10.12. Counterparts.
This Trust Agreement 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.
74
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Trust Agreement of Aon Capital A as of the date first above written.
AON CORPORATION
By: /s/ Harvey N. Medvin
------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President,
Chief Financial
Officer and Treasurer
By: /s/ Raymond I. Skilling
------------------------------
Name: Raymond I. Skilling
Title: Executive Vice President
and Chief Counsel
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Mary La Gumina
------------------------------
Name: Mary La Gumina
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Melissa J. Beneduce
------------------------------
Name: Melissa J. Beneduce
Title: Assistant Vice President
/s/ Harvey Medvin
--------------------------
Harvey Medvin,
as Administrative Trustee
/s/ Michael Conway
--------------------------
Michael Conway,
as Administrative Trustee
/s/ James White
--------------------------
James White,
as Administrative Trustee
75
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
AON CAPITAL A
THIS Certificate of Trust of Aon Capital A (the "Trust"), dated as of
December 27, 1996, 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. (S)3801, et seq.).
- ------- --------
1. Name. The name of the business trust formed hereby is Aon
----
Capital A.
2. Delaware Trustee. The name and business address of the trustee
----------------
of the Trust in the State of Delaware are The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
--------------
upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first-above written.
THE BANK OF NEW YORK
(DELAWARE),
not in its individual capacity
but solely as trustee of the
Trust
______________________________
Name: ___________________
Title: __________________
______________________________
James White,
not in his individual capacity
but solely as trustee of the
Trust
A-1
<PAGE>
EXHIBIT B
FORM OF 144A GLOBAL SECURITY
This Capital Security is a 144A Global Security within the meaning of the
Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Capital Security is exchangeable for Capital Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Capital
Security (other than a transfer of this Capital 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 Capital Security is presented by an authorized representative
of The Depository Trust Company ("DTC"), a New York Corporation (55 Water
Street, New York), to Aon Capital A or its agent for registration of transfer,
exchange or payment, and any Capital Security issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized representative
of DTC (and any payment hereon is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH
HOLDER OF THE CAPITAL SECURITIES EVIDENCED HEREBY, AND EACH PERSON THAT
ACQUIRES A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (a)(1),(2),(3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THE CAPITAL SECURITIES EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER SUCH CAPITAL
SECURITIES EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B)
PURSUANT TO AN
B-1
<PAGE>
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF SUCH CAPITAL SECURITIES (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE CAPITAL
SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS PROPERTY
TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL
SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT OR
SUCH EARLIER TIME AS A TRANSFER OF SUCH CAPITAL SECURITIES IS MADE PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION
OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS
THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND
B-2
<PAGE>
SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
CAPITAL SECURITIES.
BY ITS ACCEPTANCE OF THE CAPITAL SECURITIES EVIDENCED HEREBY OR A
BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, THE HOLDER OF, AND ANY
PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN, SUCH CAPITAL SECURITIES
AGREE TO BE BOUND BY THE PROVISIONS OF THE CAPITAL SECURITIES EXCHANGE AND
REGISTRATION RIGHTS AGREEMENT, THE GUARANTEE EXCHANGE AND REGISTRATION
RIGHTS AGREEMENT AND THE DEBENTURE EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT, EACH DATED AS OF JANUARY 13, 1997 AND RELATING, RESPECTIVELY, TO
THE REGISTRATION UNDER THE SECURITIES ACT OF (1) CAPITAL SECURITIES
EXCHANGEABLE FOR THE CAPITAL SECURITIES EVIDENCED HEREBY AND REGISTRATION
OF THE CAPITAL SECURITIES EVIDENCED HEREBY, (2) THE GUARANTEE BY AON
CORPORATION IN RESPECT OF SUCH CAPITAL SECURITIES AND (3) THE 8.205% JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JANUARY 1, 2027 ISSUED BY
AON CORPORATION.
B-3
<PAGE>
CERTIFICATE NUMBER R-1 NUMBER OF CAPITAL SECURITIES
Up To 200,000
CUSIP NO. 037388AA3
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
AON CAPITAL A
8.205% CAPITAL SECURITIES,
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Aon Capital A, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of the number of Capital Securities of the Trust
specified in Schedule I hereto representing an undivided beneficial interest in
the assets of the Trust and designated the Aon Capital A 8.205% Capital
Securities (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.4 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of January 13, 1997, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of Capital
Securities as set forth therein. The Holder is entitled to the benefits of the
Capital Securities Guarantee Agreement entered into by Aon Corporation, a
Delaware corporation, and The Bank of New York, as guarantee trustee, dated as
of January 13, 1997 (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
By its acceptance of this certificate representing Capital Securities or a
beneficial interest in such Capital Securities, the owner of, and any person
that acquires a beneficial interest in, such Capital Securities agree to treat
the Debentures described in the Trust Agreement as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in such indebtedness for
tax purposes.
B-4
<PAGE>
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate as of this 13th day of January, 1997.
AON CAPITAL A
By:_____________________________
Name: James White
Administrative Trustee
B-5
<PAGE>
SCHEDULE I
144A GLOBAL SECURITY
The initial number of Capital Securities evidenced by this 144A Global
Security is 200,000
CHANGES TO NUMBER OF CAPITAL SECURITIES EVIDENCED BY 144A GLOBAL SECURITY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
| | Number of Capital Securities | | |
| | by which this 144A Global | Remaining Capital | |
| | Security is to be Reduced | Securities Represented | |
| | or Increased, and Reason for | by this 144A Global | |
| Date | Reduction or Increase | Security | Notation Made by |
|----------|-------------------------------|----------------------------|------------------------|
|<S> | <C> | <C> | <C> |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
|----------|-------------------------------|----------------------------|------------------------|
| | | | |
| | | | |
| | | | |
- -------------------------------------------------------------------------------------------------
</TABLE>
B-6
<PAGE>
EXHIBIT C
FORM OF REGULATION S GLOBAL SECURITY
This Capital Security is a Regulation S Global Security within the meaning
of the Trust Agreement hereinafter referred to and is registered in the name of
The Depository Trust Company (the "Depository") or a nominee of the Depository.
This Capital Security is exchangeable for Capital Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Capital
Security (other than a transfer of this Capital 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 Capital Security is presented by an authorized representative
of The Depository Trust Company ("DTC"), a New York Corporation (55 Water
Street, New York), to Aon Capital A or its agent for registration of transfer,
exchange or payment, and any Capital Security issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized representative
of DTC (and any payment hereon is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION
OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS
THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
BY ITS ACCEPTANCE OF THE CAPITAL SECURITIES EVIDENCED HEREBY OR A
BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, THE HOLDER OF, AND ANY
PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN, SUCH CAPITAL SECURITIES
AGREE TO BE BOUND BY THE PROVISIONS OF THE CAPITAL SECURITIES EXCHANGE AND
REGISTRATION RIGHTS AGREEMENT, THE GUARANTEE EXCHANGE AND REGISTRATION
RIGHTS AGREEMENT AND THE DEBENTURE EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT, EACH DATED AS OF JANUARY 13, 1997 AND
C-1
<PAGE>
RELATING, RESPECTIVELY, TO THE REGISTRATION UNDER THE SECURITIES ACT OF (1)
CAPITAL SECURITIES EXCHANGEABLE FOR THE CAPITAL SECURITIES EVIDENCED HEREBY
AND REGISTRATION OF THE CAPITAL SECURITIES EVIDENCED HEREBY, (2) THE
GUARANTEE BY AON CORPORATION IN RESPECT OF SUCH CAPITAL SECURITIES AND (3)
THE 8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JANUARY
1, 2027 ISSUED BY AON CORPORATION.
C-2
<PAGE>
CERTIFICATE NUMBER S-1 NUMBER OF CAPITAL SECURITIES
Up To 200,000
CUSIP NO. U00199AA4
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
AON CAPITAL A
8.205% CAPITAL SECURITIES,
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Aon Capital A, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of the number of Capital Securities of the Trust
specified in Schedule I hereto representing an undivided beneficial interest in
the assets of the Trust and designated the Aon Capital A 8.205% Capital
Securities (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.4 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of January 13, 1997, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of Capital
Securities as set forth therein. The Holder is entitled to the benefits of the
Capital Securities Guarantee Agreement entered into by Aon Corporation, a
Delaware corporation, and The Bank of New York, as guarantee trustee, dated as
of January 13, 1997 (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
By its acceptance of this certificate representing Capital Securities or a
beneficial interest in such Capital Securities, the owner of, and any person
that acquires a beneficial interest in, such Capital Securities agree to treat
the Debentures described in the Trust Agreement as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in such indebtedness for
tax purposes.
C-3
<PAGE>
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate as of this 13th day of January, 1997.
AON CAPITAL A
By:____________________________
Name: James White
Administrative Trustee
C-4
<PAGE>
SCHEDULE I
REGULATION S GLOBAL SECURITY
The initial number of Capital Securities evidenced by this
Regulation S Global Security is zero (0).
CHANGES TO NUMBER OF CAPITAL SECURITIES EVIDENCED BY REGULATION S GLOBAL
SECURITY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
| | Number of Capital Securities | | |
| | by which this Regulation S | | |
| | Global Security is to be | Remaining Capital | |
| | Reduced or Increased, and |Securities Represented | |
| | Reason for Reduction or | by this Regulation S | |
| Date| Increase | Global Security |Notation Made by |
|-----|------------------------------|-----------------------|-----------------|
|<S> | <C> |<C> |<C> |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
| | | | |
|-----|------------------------------|-----------------------|-----------------|
</TABLE>
C-5
<PAGE>
EXHIBIT D
FORM OF DEFINITIVE CAPITAL SECURITY CERTIFICATE
THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH
HOLDER OF THE CAPITAL SECURITIES EVIDENCED HEREBY, AND EACH PERSON THAT
ACQUIRES A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (a)(1),(2),(3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THE CAPITAL SECURITIES EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER SUCH CAPITAL
SECURITIES EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF SUCH CAPITAL SECURITIES (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE CAPITAL SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S.
PERSON, THE
D-1
<PAGE>
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS
PROPERTY TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON
CORPORATION MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE
SECURITIES ACT OR SUCH EARLIER TIME AS A TRANSFER OF SUCH CAPITAL
SECURITIES IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION
OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS
THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
BY ITS ACCEPTANCE OF THE CAPITAL SECURITIES EVIDENCED HEREBY OR A
BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, THE HOLDER OF, AND ANY
PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN, SUCH CAPITAL SECURITIES
AGREE TO BE BOUND BY THE PROVISIONS OF THE CAPITAL SECURITIES EXCHANGE AND
REGISTRATION RIGHTS AGREEMENT, THE GUARANTEE EXCHANGE AND REGISTRATION
RIGHTS AGREEMENT AND THE DEBENTURE EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT, EACH DATED AS OF JANUARY 13, 1997 AND RELATING, RESPECTIVELY, TO
THE REGISTRATION UNDER THE SECURITIES ACT OF (1) CAPITAL SECURITIES
EXCHANGEABLE FOR THE CAPITAL SECURITIES EVIDENCED HEREBY AND REGISTRATION
OF THE CAPITAL SECURITIES EVIDENCED HEREBY, (2) THE GUARANTEE BY AON
CORPORATION IN RESPECT OF SUCH CAPITAL SECURITIES AND (3) THE 8.205% JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JANUARY 1, 2027 ISSUED BY
AON CORPORATION.
D-2
<PAGE>
CERTIFICATE NUMBER AI-1 NUMBER OF CAPITAL SECURITIES
5,000
CUSIP NO. 037388AB1
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
AON CAPITAL A
8.205% CAPITAL SECURITIES,
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Aon Capital A, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Morgan Stanley & Co.
Incorporated (the "Holder") is the registered owner of Five Thousand (5,000)
Capital Securities of the Trust representing an undivided beneficial interest in
the assets of the Trust and designated the Aon Capital A 8.205% Capital
Securities (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
5.4 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of January 13, 1997, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of Capital
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Aon Corporation, a Delaware corporation, and
The Bank of New York, as guarantee trustee, dated as of January 13, 1997 (the
"Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Trust Agreement and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
By its acceptance of this certificate representing Capital Securities or a
beneficial interest in such Capital Securities, the owner of, and any person
that acquires a beneficial interest in, such Capital Securities agree to treat
the Debentures described in the Trust Agreement as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in such indebtedness for
tax purposes.
D-3
<PAGE>
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate as of this 13th day of January, 1997.
AON CAPITAL A
By: _________________________
Name: James White
Administrative Trustee
D-4
<PAGE>
FORM OF ASSIGNMENT
For value received ________________ hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
______________________________________________________________________________
(Please insert social security or other
taxpayer identification number of assignee.)
the within security and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer the said security on the books of
the Trust, with full power of substitution in the premises.
In connection with any transfer of the within security occurring prior to such
date as restrictions on the transfer of such security imposed by the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations
thereunder shall be terminated in accordance with the Trust Agreement, the
undersigned confirms that such security is being transferred:
[_] To Aon Corporation or a subsidiary thereof; or
[_] Pursuant to an effective registration statement under the Securities
Act; or
[_] Pursuant to and in compliance with Rule 144A under the Securities Act;
or
[_] To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act; or
[_] Pursuant to and in compliance with Regulation S under the Securities;
or
[_] Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended;
D-5
<PAGE>
and unless the box below is checked, the undersigned confirms that such security
is not being transferred to an "affiliate" of the Trust as defined in Rule 144
under the Securities Act (an "Affiliate"):
[_] The transferee is an Affiliate of the Trust.
Dated: ___________________
___________________
___________________
Signature(s)
Signature(s) must be guaranteed by
a commercial bank or trust company
or a member firm of a major stock
exchange.
___________________________
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular, without
alteration or enlargement or any change whatever.
D-6
<PAGE>
EXHIBIT E
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NUMBER C-1 NUMBER OF COMMON SECURITIES 24,000
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
AON CAPITAL A
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)
Aon Capital A, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Aon Corporation, a
Delaware corporation, (the "Holder") is the registered owner of Twenty-Four
Thousand (24,000) Common Securities of the Trust representing an undivided
beneficial interest in the assets of the Trust and designated the Common
Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). In accordance with Section 5.10 of the Trust Agreement (as
defined below) the Common Securities are not transferable and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of January 13, 1997, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common Securities as
set forth therein. The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
By its acceptance of this certificate representing Common Securities or a
beneficial interest in such Common Securities, the owner of, and any person that
acquires a beneficial interest in, such Common Securities agree to treat the
Debentures described in the Trust Agreement as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in such indebtedness for
tax purposes.
E-1
<PAGE>
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate as of this 13th day of January, 1997.
AON CAPITAL A
By:________________________
Name: James White
Administrative Trustee
E-2
<PAGE>
EXHIBIT F
FORM OF LETTER TO BE DELIVERED
BY INSTITUTIONAL ACCREDITED INVESTORS
Aon Corporation
123 North Wacker Drive
Chicago, IL 60606
Aon Capital A
123 North Wacker Drive
Chicago, IL 60606
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
We understand that the 8.205% Capital Securities, liquidation preference
$1,000 per Capital Security (the "Capital Securities"), of Aon Capital A, a
Delaware business trust (including the guarantee (the "Guarantee") of Aon
Corporation ("Aon") executed in connection therewith), and the 8.205% Junior
Subordinated Deferrable Interest Debentures of Aon (the "Debentures," and,
together with the Capital Securities and the Guarantee, the "Securities") are
being offered in a transaction not involving any public offering within the
United States within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and that the Securities have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Capital Securities, that if, prior to the expiration of
the holding period applicable to sales of any Security under Rule 144(k) under
the Securities Act, we decide to offer, resell or otherwise transfer such
Security, such Security may be offered, resold or otherwise transferred only (i)
to Aon or a subsidiary thereof, (ii) pursuant to an effective registration
statement under the Securities Act, (iii) inside the United States to a person
who is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in compliance with Rule 144A, (iv) inside the United States to
an Institutional Accredited Investor (as defined below) that, prior to such
transfer, furnishes to the Property Trustee a signed letter in the form hereof,
and such other opinions and certifications that the Property Trustee may
request, (v) outside the United States in compliance with Rule 904 under the
Securities Act or (vi) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available) and (vii) in each case, in
accordance with any applicable securities laws of the States of the United
States or any other applicable jurisdiction and in accordance with the legends
set forth on the Capital Securities and the Debentures. We further agree to
provide any person purchasing
F-1
<PAGE>
any of the Capital Securities or Debentures from us a notice advising such
purchaser that resales of such securities are restricted as stated herein. We
understand that any Capital Securities will bear a legend reflecting the
substance of this paragraph.
We confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act or an entity in which all of
the equity owners are accredited investors within the meaning of Rule
501(a)(1), (2) and (3) under the Securities Act (an "Institutional
Accredited Investor");
(ii) (A) any purchase of Capital Securities by us will be for our
own account or for the account of one or more other Institutional
Accredited Investors or as fiduciary for the account of one or more trusts,
each of which is an "accredited investor" within the meaning of Rule
501(a)(7) under the Securities Act and for each of which we exercise sole
investment discretion or (B) we are a "bank," within the meaning of Section
3(a)(2) of the Securities Act, or a "savings and loan association" or other
institution described in Section 3(a)(5)(A) of the Securities Act that is
acquiring Capital Securities as fiduciary for the account of one or more
institutions for which we exercise sole investment discretion;
(iii) in the event that we purchase any Capital Securities, we will
acquire Capital Securities having a minimum purchase price of not less than
$100,000 for our own account or for any separate account for which we are
acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
an investment in the Capital Securities;
(v) we are not acquiring Capital Securities with a view to resale
or distribution thereof or with any present intention of offering or
selling Capital Securities, except as permitted above; provided that the
disposition of our property and property of any accounts for which we are
acting as fiduciary shall remain at all times within our control; and
(vi) we have had access to such financial and other information and
have been afforded the opportunity to ask such questions of representatives
of Aon and receive answers thereto, as we deem necessary in connection with
our decision to purchase Capital Securities.
F-2
<PAGE>
We acknowledge that you and others will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
(Name of Purchaser)
____________________________
Name:
Title:
Address:
F-3
<PAGE>
EXHIBIT G
FORM OF TRANSFER CERTIFICATE--
144A GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Aon Capital A
Private Capital Securities
Reference is hereby made to the Amended and Restated Trust Agreement, dated
as of January 13, 1997 (the "Trust Agreement"), among Aon Corporation, The Bank
of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, the Administrative Trustees named therein and the holders, from time to
time, of undivided beneficial interests in the assets of Aon Capital A.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Trust Agreement.
This letter relates to _________________ Private Capital Securities which
are evidenced by a 144A Global Security (CUSIP No. 037388AA3) and held with the
Clearing Agency in the name of [insert name of transferor] (the "Transferor").
The Transferor has requested a transfer of such beneficial interest in such
Private Capital Securities to a Person that will take delivery thereof in a
transaction effected pursuant to and in accordance with Rule 904 under the
United States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor does hereby further certify that:
The offer of such Private Capital Securities was not made to a person in
the United States;
(A) either:
(i) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its behalf
reasonably believed that the transferee was outside the United States, or
(ii) the transaction was executed in, or through the facilities of a
designated offshore securities market and neither the Transferor nor any person
acting on its behalf knows that the transaction was pre-arranged with a buyer in
the United States;
(B) no directed selling efforts have been made in contravention
of the requirements of 904(b) of Regulation S, as applicable;
G-1
<PAGE>
(C) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(D) we have advised the transferee of the transfer restrictions
applicable to such Private Capital Securities.
You, the Trust and the Initial Purchasers are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate and not otherwise defined herein or in the Trust Agreement have the
meanings set forth in Regulation S under the Securities Act.
Dated:__________________
[Insert Name of Transferor]
By:_____________________
Name:
Title:
(If the registered owner is a corporation,
partnership or fiduciary, the title of the
Person signing on behalf of such registered
owner must be stated.)
<PAGE>
EXHIBIT H
FORM OF TRANSFER CERTIFICATE
REGULATION S GLOBAL SECURITY TO 144A GLOBAL SECURITY
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Aon Capital A
Private Capital Securities
Reference is hereby made to the Amended and Restated Trust Agreement, dated
as of January 13, 1997 (the "Trust Agreement"), among Aon Corporation, The Bank
of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, the Administrative Trustees named therein and the holders, from time to
time, of undivided beneficial interests in the assets of Aon Capital A.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Trust Agreement.
This letter relates to _________________ Private Capital Securities which
are evidenced by a Regulation S Global Security (CUSIP No. U00199AA4) and held
with the Clearing Agency indirectly in the name of [insert name of transferor]
(the "Transferor"). The Transferor has requested a transfer of such beneficial
interest in such Private Capital Securities to a Person that will take delivery
thereof in a transaction effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor does hereby certify that (i) the
Transferor's interest in such Private Capital Securities is being transferred in
accordance with the transfer restrictions set forth in the Trust Agreement; and
(ii) the transferee is a person who the Transferor reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act, purchasing for its own account or the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule 144A, in
accordance with all applicable securities laws of the states of the United
States and other jurisdictions.
H-1
<PAGE>
You, the Trust and the Initial Purchasers are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Dated :__________________________
[Insert Name of Transferor]
By:__________________________
Name:
Title:
(If the registered owner is a corporation,
partnership or fiduciary, the title of the
Person signing on behalf of such registered
owner must be stated.)
H-2
<PAGE>
EXHIBIT I
FORM OF PRIVATE PLACEMENT LEGEND
THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH HOLDER OF THE CAPITAL
SECURITIES EVIDENCED HEREBY, AND EACH PERSON THAT ACQUIRES A BENEFICIAL INTEREST
IN SUCH CAPITAL SECURITIES, (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501
(a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE CAPITAL
SECURITIES EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER SUCH CAPITAL
SECURITIES EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW
YORK, AS PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF SUCH CAPITAL
SECURITIES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE CAPITAL SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS
PROPERTY TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES
EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT OR SUCH EARLIER TIME
AS A TRANSFER OF SUCH CAPITAL SECURITIES IS MADE
I-1
<PAGE>
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
I-2
<PAGE>
EXHIBIT J
FORM OF MINIMUM TRANSFER LEGEND
THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED,
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100
CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH CAPITAL
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL
BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE,
INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN SUCH CAPITAL SECURITIES.
J-1
<PAGE>
[IF CAPITAL SECURITY IS AN EXCHANGE CAPITAL SECURITY, INSERT -
FORM OF ASSIGNMENT
For Value Received, the undersigned assigns and transfers this Capital Security
to:__________________________________________________________ (Insert assignee's
social security or tax identification number)
___________________________
(Insert address and zip code of assignee)
and irrevocably appoints _____________________________ agent to transfer this
Capital Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
Signature(s):
________________________________________________
________________________________________________
(Sign exactly as your name appears on the other
side of this Capital Security Certificate)
NOTICE: THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17AD-15.
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS CAPITAL SECURITIES GUARANTEE AGREEMENT, dated as of January 13,
1997 (the "Guarantee Agreement"), is executed and delivered by Aon Corporation,
a Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Aon Capital A, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January 13, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee, the Administrative Trustees named
therein and the holders, from time to time, of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $800,000,000 in aggregate
Liquidation Amount (as defined in the Trust Agreement) of its 8.205% Capital
Securities (the "Capital Securities") representing preferred undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement;
WHEREAS, the Capital 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 herein), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The Bank of New York, as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase Capital Securities
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Capital 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
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Capital 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 deemed to be an Affiliate of the Issuer.
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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.
"Board of Directors" means either the board of directors of the
Guarantor or any committee of that board duly authorized to act hereunder.
"Capital Securities" means the 8.205% Capital Securities (Liquidation
Amount $1,000 per Capital Security) of the Issuer, the certificates of which
bear legends indicating that they have not been registered under the Securities
Act and restricting transfers thereof.
"Common Securities" means the 8.205% Common Securities (Liquidation
Amount $1,000 per Common Security) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a 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 Capital 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
Capital Securities, to the extent the Issuer shall have funds on hand available
therefor at such time, (ii) the redemption price, including all accrued and
unpaid Distributions to but excluding the date of redemption (the "Redemption
Price") with respect to any Capital Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, dissolution,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $1,000
per Capital Security plus accumulated and unpaid Distributions on the Capital
Securities to but excluding the date of payment, to the extent the Issuer shall
have funds on hand available therefor at such time, and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of January 13, 1997, between
the Guarantor and The Bank of New York, as trustee, as supplemented by the First
Supplemental Indenture dated January 13, 1997, and as may be further
supplemented or amended from time to time.
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"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the 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 Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, any Vice Chairman of the Board,
the Chief Executive Officer, the President, any Vice Chairman or any Vice
President (whether or not designated by a number or a word or words added before
or after the title Vice President), and by the 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 such officer,
such condition or covenant has been complied with.
"Person" means 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 Guarantee Trustee 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 an familiarity with the
particular subject.
"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.
This Guarantee Agreement is not subject to the provisions of the Trust
Indenture Act, but the Guarantee Agreement is intended to comply with the
requirements of Sections 310 to 317, inclusive, of the Trust Indenture Act. If
and to the extent that any provision of this Guarantee Agreement limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, not more than five days after January 15 and
July 15 of each year, beginning with July 15, 1997, 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 (ii) 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 the obligations imposed
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act as if it were subject to the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing July 15, 1997, 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, as required by Section 314(a)
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) of the Trust Indenture Act 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 Capital
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 defaults have been cured or waived 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 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 Agreement 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 Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting in the Successor Guarantee Trustee and cessation of right, title
and interest with respect to the Guarantee Trustee shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee. If and when required by the
Guarantee Exchange and Registration Rights Agreement, the Guarantee Trustee
shall enter into the Exchange Guarantee Agreement and shall effect the exchange
contemplated therein.
(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 or waiving 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
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and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee Trustee and
conforming to the 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 (were it applicable hereto) 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 not less than a Majority in Liquidation
Amount of the Capital 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
financial liability in the performance of any of its duties hereunder, 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 adequate indemnity against such risk or liability is not
reasonably assured to it under the terms of this Guarantee Agreement.
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 in good faith upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, appraisal, 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 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
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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 of its
selection, and the 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 reliance thereon and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. 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 offered
to the Guarantee Trustee such adequate security or indemnity 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, appraisal, 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 Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed by
it hereunder; provided, however, that the Guarantee Trustee shall be
responsible for its own negligence with respect to the selection of any
such agent or attorney appointed by it hereunder.
(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 (A) may request instructions from the
Holders, (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
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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. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee 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 or bad faith.
SECTION 3.4. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any and all loss, liability, damage, claim 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.
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 the requirements of its
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.
(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 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 Issuer may have or assert other than
the defense of payment. 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.
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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, 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 Capital 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 extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Capital Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
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 Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(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.
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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 Capital 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) to the fullest extent permitted by law, any Holder may institute a
legal proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a proceeding against the
Guarantee Trustee, the Issuer or any other Person. The Guarantor waives any
right to require that any action be brought first against the Issuer or any
other Person or entity before proceeding directly against the Guarantor.
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 upon distribution of Debentures to Holders as provided in
the Trust Agreement.
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.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
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.
SECTION 5.8. Merger or Consolidation of Guarantor.
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The Guarantor covenants that it will not consolidate with or merge
into any other Person, or transfer, convey or lease all or substantially all of
its assets or properties to any other Person, and no other Person shall
consolidate with or merge into the Guarantor, or transfer, convey or lease all
or substantially all of its assets to the Guarantor, unless (i) either the
Guarantor shall be the continuing corporation, or the successor shall be a
Person organized and existing under the laws of the United States of America or
a State thereof or the District of Columbia and such successor shall expressly
assume the Guarantor's obligations under this Guarantee Agreement by written
instrument satisfactory to the Trustee, executed and delivered to the Trustee by
such successor, (ii) immediately after such merger or consolidation, or such
transfer, conveyance or lease, no Event of Default hereunder, and no event
which, after notice or lapse of time or both would become an Event of Default,
shall have happened and be continuing, and (iii) such consolidation, merger,
transfer, conveyance or lease is permitted under the Trust Agreement and
Indenture and does not give rise to any breach or violation of the Trust
Agreement or Indenture.
ARTICLE VI.
SUBORDINATION
SECTION 6.1. Subordination
The obligations of the Guarantor under this Guarantee Agreement
constitute unsecured obligations of the Guarantor and rank subordinate and
junior in right of payment to all other liabilities of the Guarantor (including
obligations under the Debentures) except (a) those liabilities which expressly
by their terms are made pari passu or subordinate to the obligations of the
Guarantor under this Guarantee Agreement and (b) liabilities arising under
similar guarantee agreements as described in Section 6.2 hereof.
SECTION 6.2. Pari Passu to Similar Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred securities or capital securities issued by any Aon Trust (as defined
in the Indenture).
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon the earliest of (i) the date on which all of the Capital
Securities cease to be outstanding following the consummation of the Exchange
Offer, (ii) full payment of the Redemption Price of all Capital Securities,
(iii) the distribution of Debentures to the Holders in exchange for all of the
Capital Securities or (iv) full
-13-
<PAGE>
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated if it has been
terminated pursuant to one of such clauses (ii) through (iv), as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Capital Securities or this Guarantee Agreement. Sections 3.3 and 3.4 shall
survive the termination of the Guarantee Agreement.
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 Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Section 5.8 of this
Guarantee Agreement, 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 not less than a Majority in Liquidation Amount
of all the outstanding Capital 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 personally 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, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders:
Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Facsimile No.: (312) 701-3100
Attention: Treasurer
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<PAGE>
(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:
Aon Capital A
c/o Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Facsimile No.: (312) 701-3100
Attention: Treasurer
with a copy to:
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(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 three days after being mailed
by first class mail, postage prepaid.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital 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;
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<PAGE>
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise specified;
(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.
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<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
AON CORPORATION
By: /s/ Harvey N. Medvin
-------------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
By: /s/ Raymond I. Skilling
--------------------------------------
Name: Raymond I. Skilling
Title: Executive Vice President and
Chief Counsel
THE BANK OF NEW YORK
as Guarantee Trustee
By: /s/ Mary La Gumina
-------------------------------------
Name: Mary La Gumina
Title: Assistant Vice President
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<PAGE>
EXHIBIT 4.9
- --------------------------------------------------------------------------------
CAPITAL SECURITIES GUARANTEE AGREEMENT
Between
AON CORPORATION
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
______________, 1997
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Trust Section of Capital Securities
Indenture Act 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
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1(c)
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.4
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
</TABLE>
___________
* This Cross-Reference Table does not constitute part of the Capital Securities
Guarantee Agreement and shall not affect the interpretation of any of its
terms or provisions.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS..................................................... 2
SECTION 1.1. Definitions...................................... 2
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 the 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......................... 5
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.............. 7
SECTION 3.3. Compensation..................................... 9
SECTION 3.4. Indemnity........................................ 9
ARTICLE IV. GUARANTEE TRUSTEE............................................... 9
SECTION 4.1. Guarantee Trustee: Eligibility.................. 9
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......................................12
SECTION 5.7. Independent Obligations..........................13
SECTION 5.8. Merger or Consolidation of Guarantor.............13
ARTICLE VI. SUBORDINATION...................................................13
SECTION 6.1. Subordination....................................13
SECTION 6.2. Pari Passu to Similar Guarantees.................14
ARTICLE VII. TERMINATION.....................................................14
SECTION 7.1. Termination......................................14
SECTION 7.2. Termination of Old Guarantee.....................14
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII. MISCELLANEOUS...................................................14
SECTION 8.1. Successors and Assigns...........................14
SECTION 8.2. Amendments.......................................14
SECTION 8.3. Notices..........................................15
SECTION 8.4. Benefit..........................................16
SECTION 8.5. Interpretation...................................16
SECTION 8.6. Governing Law....................................16
</TABLE>
-ii-
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS CAPITAL SECURITIES GUARANTEE AGREEMENT, dated as of __________,
1997 (the "Guarantee Agreement"), is executed and delivered by Aon Corporation,
a Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Aon Capital A, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January 13, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, the Administrative Trustees named therein and the holders,
from time to time, of undivided beneficial interests in the assets of the
Issuer, the Issuer issued $800,000,000 aggregate Liquidation Amount (as defined
in the Trust Agreement) of its 8.205% Capital Securities, Liquidation Amount
$1,000 per Capital Security (the "Old Capital Securities") representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the proceeds from the issuance of the Old Capital Securities,
together with the proceeds from the issuance of the Issuer's Common Securities
(as defined in Section 1.1), were used to purchase the Debentures (as defined in
the Trust Agreement) of the Guarantor which were deposited with The Bank of New
York, as Property Trustee, under the Trust Agreement, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Old Capital
Securities, the Guarantor irrevocably and unconditionally agreed, to the extent
set forth in that certain Capital Securities Guarantee Agreement dated as of
January 13, 1997 (the "Old Guarantee Agreement") between the Guarantor and the
Guarantee Trustee, for the benefit of the Holders of the Old Capital Securities,
to pay to the Holders of the Old Capital Securities the Guarantee Payments (as
defined therein) (the "Old Guarantee") and to make certain other payments on the
terms and conditions set forth therein;
WHEREAS, pursuant to that certain Guarantee Exchange and Registration
Rights Agreement, dated as of January 13, 1997 (the "Guarantee Exchange and
Registration Rights Agreement"), among the Guarantor, the Issuer and certain
Purchasers named therein, the Guarantor and the Issuer agreed that if the
Guarantor and the Issuer file a registration statement (the "Registration
Statement") to exchange the Old Capital Securities for a like amount of new
capital securities (the "New Capital Securities" and, together with the Old
Capital Securities, the "Capital Securities"), then the Guarantor and the Issuer
will simultaneously include in the Registration Statement an offer to exchange
the Old Guarantee for the Guarantee (as defined herein) for the benefit of the
Holders of the Capital Securities;
WHEREAS, on _______________________, 1997, the Guarantor and the
Issuer filed the Registration Statement;
WHEREAS, pursuant to the Guarantee Exchange and Registration Rights
Agreement, the Guarantor and the Issuer wish to exchange the Old Guarantee for
the Guarantee;
WHEREAS, the Guarantee will be substantially identical to the Old
Guarantee except that the Guarantee will be registered pursuant to an effective
registration statement under the Securities
<PAGE>
Act of 1933, as amended (the "Securities Act"), and the Guarantee will not
contain provisions restricting transfer in the absence of registration under the
Securities Act; and
WHEREAS, as required by the Guarantee Exchange Registration Rights
Agreement, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee Payments (as defined in Section 1.1) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, as required by the Guarantee Exchange Registration
Rights Agreement, the Guarantor executes and delivers this Capital Securities
Guarantee Agreement and pursuant to Section 5.1 hereof extends the Guarantee for
the benefit of the Holders from time to time of the Capital 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 deemed to be an Affiliate of the Issuer. 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.
"Board of Directors" means either the board of directors of the
Guarantor or any committee of that board duly authorized to act hereunder.
"Capital Securities" has the meaning set forth in the preamble to this
Guarantee Agreement.
"Common Securities" means the 8.205% Common Securities (Liquidation
Amount $1,000 per Common Security) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a 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.
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<PAGE>
"Guarantee" has the meaning set forth in Section 5.1.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital 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
Capital Securities, to the extent the Issuer shall have funds on hand available
therefor at such time, (ii) the redemption price, including all accrued and
unpaid Distributions to but excluding the date of redemption (the "Redemption
Price") with respect to any Capital Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, dissolution,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $1,000
per Capital Security plus accumulated and unpaid Distributions on the Capital
Securities to but excluding the date of payment, to the extent the Issuer shall
have funds on hand available therefor at such time, and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of January 13, 1997 between
the Guarantor and The Bank of New York, as trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, and as may be further
supplemented or amended from time to time.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the 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 Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, any Vice Chairman of the Board,
the Chief Executive Officer, the President, any Vice Chairman or any Vice
President (whether or not designated by a number or a word or words added before
or after the title Vice President), and by the 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;
-3-
<PAGE>
(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 such officer,
such condition or covenant has been complied with.
"Person" means 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, any Assistant Treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Guarantee Trustee 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.
"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.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, not more than five days after January 15 and
July 15 of each year, beginning with July 15, 1997, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and
-4-
<PAGE>
addresses of the Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (ii) 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 the obligations imposed
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act as if it were subject to the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing July 15, 1997, 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, as required by Section 314(a)
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.
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) of the Trust Indenture Act 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 Capital
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
-5-
<PAGE>
known to the Guarantee Trustee, unless such defaults have been cured or waived
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 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 Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF 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 to a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting in the Successor Guarantee Trustee and cessation of right, title
and interest with respect to the Guarantee Trustee 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 or waiving 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.
-6-
<PAGE>
(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 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 (were it
applicable hereto) 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 not less than a Majority in Liquidation
Amount of the Capital 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
financial liability in the performance of any of its duties hereunder, 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 adequate indemnity against such risk or liability is not
reasonably assured to it under the terms of this Guarantee Agreement.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
-7-
<PAGE>
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting in good faith upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, appraisal, 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 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 of its
selection, and the 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 reliance thereon and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. 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 offered
to the Guarantee Trustee such adequate security or indemnity 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, appraisal, 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
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attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it hereunder;
provided, however, that the Guarantee Trustee shall be responsible for its
own negligence with respect to the selection of any such agent or attorney
appointed by it hereunder.
(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 (A) may request instructions from the
Holders, (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. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee 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 or bad faith.
SECTION 3.4. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any and all loss, liability, damage, claim 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.
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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 the requirements of its
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.
(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.
(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 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
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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 Issuer may have or assert other than
the defense of payment (the "Guarantee"). 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 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,
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 Capital 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 extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Capital Securities;
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(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
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 Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(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 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 Capital 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) to the
fullest extent permitted by law, any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a proceeding against the Guarantee Trustee,
the Issuer or any other Person. The Guarantor waives any right to require that
any action be brought first against the Issuer or any other Person or entity
before proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection.
This Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Issuer)
or upon distribution of Debentures to Holders as provided in the Trust
Agreement.
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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.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
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.
SECTION 5.8. Merger or Consolidation of Guarantor.
The Guarantor covenants that it will not consolidate with or merge
into any other Person, or transfer, convey or lease all or substantially all of
its assets or properties to any other Person, and no other Person shall
consolidate with or merge into the Guarantor, or transfer, convey or lease all
or substantially all of its assets to the Guarantor, unless (i) either the
Guarantor shall be the continuing corporation, or the successor shall be a
Person organized and existing under the laws of the United States of America or
a State thereof or the District of Columbia and such successor shall expressly
assume the Guarantor's obligations under this Guarantee Agreement by written
instrument satisfactory to the Trustee, executed and delivered to the Trustee by
such successor, (ii) immediately after such merger or consolidation, or such
transfer, conveyance or lease, no Event of Default hereunder, and no event
which, after notice or lapse of time or both would become an Event of Default,
shall have happened and be continuing, and (iii) such consolidation, merger,
transfer, conveyance or lease is permitted under the Trust Agreement and
Indenture and does not give rise to any breach or violation of the Trust
Agreement or Indenture.
ARTICLE VI.
SUBORDINATION
SECTION 6.1. Subordination
The obligations of the Guarantor under this Guarantee Agreement
constitute unsecured obligations of the Guarantor and rank subordinate and
junior in right of payment to all other liabilities of the Guarantor (including
obligations under the Debentures) except (a) those liabilities which expressly
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by their terms are made pari passu or subordinate to the obligations of the
Guarantor under this Guarantee Agreement and (b) liabilities arising under
similar guarantee agreements as described in Section 6.2 hereof.
SECTION 6.2. Pari Passu to Similar Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred securities or capital securities issued by any Aon Trust (as defined
in the Indenture).
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon the earliest of (i) full payment of the Redemption Price of all
Capital Securities, (ii) the distribution of Debentures to the Holders in
exchange for all of the Capital Securities or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the Issuer.
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 Capital Securities or this
Guarantee Agreement. Sections 3.3 and 3.4 shall survive the termination of the
Guarantee Agreement.
SECTION 7.2. Termination of Old Guarantee.
The Old Guarantee Agreement is hereby terminated and shall have no
further force and effect except insofar as required by Section 7.1 therein.
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 Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Section 5.8 of this
Guarantee Agreement, the Guarantor shall not assign its obligations hereunder.
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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 not less than a Majority in Liquidation Amount
of all the outstanding Capital 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 personally 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, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders:
Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Facsimile No.: (312) 701-3100
Attention: Treasurer
(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:
Aon Capital A
c/o Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Facsimile No.: (312) 701-3100
Attention: Treasurer
with a copy to:
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
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All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or three days after being mailed
by first class mail, postage prepaid.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital 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;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise specified;
(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.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
AON CORPORATION
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK
as Guarantee Trustee
By:
--------------------------
Name:
Title:
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CAPITAL SECURITIES EXCHANGE AND
REGISTRATION RIGHTS AGREEMENT
CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of
January 13, 1997, by and among Aon Capital A, a Delaware business trust (the
"Trust"), Aon Corporation, a Delaware corporation ("Aon"), and Morgan Stanley &
Co. Incorporated and Goldman, Sachs & Co. (collectively, the "Purchasers") of
the 8.205% Capital Securities of the Trust.
1. Certain Definitions. For purposes of this Capital Securities Exchange
and Registration Rights Agreement, the following terms shall have the following
respective meanings:
(a) "Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities Act,
whichever is the relevant statute for the particular purpose.
(b) "Debenture Exchange and Registration Rights Agreement" means the
Debenture Exchange and Registration Rights Agreement in respect of the
Debentures dated as of January 13, 1997 among Aon, the Trust and the Purchasers.
(c) "Debentures" means the 8.205% Junior Subordinated Deferrable Interest
Debentures due January 1, 2027 of Aon, to be issued pursuant to the Indenture.
(d) "Effective Time", in the case of (i) an Exchange Offer, means the date
on which the Commission declares the Exchange Offer registration statement
effective or on which such registration statement otherwise becomes effective
and (ii) a Shelf Registration, means the date on which the Commission declares
the Shelf Registration effective or on which the Shelf Registration otherwise
becomes effective.
(e) "Exchange Act" means the Securities Exchange Act of 1934, or any
successor thereto, as amended from time to time.
(f) "Exchange Debentures" has the meaning set forth in Section 2(a) hereof.
(g) "Exchange Guarantee" has the meaning set forth in Section 2(a) hereof.
(h) "Exchange Offer" has the meaning set forth in Section 2(a) hereof.
(i) "Exchange Registration" has the meaning set forth in Section 3(c)
hereof.
(j) "Exchange Securities" has the meaning set forth in Section 2(a) hereof.
(k) "Guarantee" means the Guarantee of Aon with respect to the Securities,
to the extent set forth in the Guarantee Agreement.
(l) "Guarantee Agreement" means the Capital Securities Guarantee Agreement
dated as of January 13, 1997 between Aon and The Bank of New York, as Guarantee
Trustee (together with its successors and assigns, "Guarantee Trustee"), for the
benefit of the holders of the Securities.
<PAGE>
(m) "Guarantee Exchange and Registration Rights Agreement" means the
Guarantee Exchange and Registration Rights Agreement in respect of the Guarantee
dated as of January 13, 1997 among Aon, the Trust and the Purchasers.
(n) The term "holder" means each of the Purchasers for so long as it owns
any Registrable Securities, and its respective successors and assigns who
acquire Registrable Securities from time to time, directly or indirectly, from
such person or from any successor or assign of such person, in each case for so
long as such person owns any Registrable Securities.
(o) "Indemnified Person" has the meaning set forth in Section 6(a) hereof.
(p) "Indenture" means the Indenture dated as of January 13, 1997, between
Aon and The Bank of New York, as Debenture Trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, and as further amended or
supplemented from time to time.
(q) "Issue Date" means January 13, 1997.
(r) "Liquidation Amount" means the stated liquidation preference of the
Securities.
(s) "New Guarantee Agreement" has the meaning set forth in the Guarantee
Exchange and Registration Rights Agreement.
(t) The term "person" means 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.
(u) "Purchase Agreement" means the Purchase Agreement dated January 8,
1997, among Aon, the Trust and the Purchasers.
(v) "Registrable Securities" means the Securities; provided, however, that
such Securities shall cease to be Registrable Securities when
(i) the Exchange Offer is conducted as contemplated in Section 2(a);
provided that, prior to the consummation of the Exchange Offer, existing
Commission interpretations have not been changed such that the Exchange
Securities received by holders in the Exchange Offer for Registrable
Securities are not or would not be, upon receipt, transferable by each such
holder (other than a Restricted Holder) without restriction under the
Securities Act in the circumstances contemplated by Section 2(a); and
provided further, that any Exchange Security received by a broker-dealer in
an Exchange Offer exchange for a Registrable Security that was not acquired
by the broker-dealer directly from the Trust will also be a Registrable
Security through and including the earlier of the 90th day after the
Exchange Offer is completed or such time as such broker-dealer no longer
owns such Security; and provided further, however, that any such Securities
that, pursuant to the last two sentences of Section 2(a) hereof, are
included in a prospectus for use in connection with resales by broker-
dealers shall be deemed to
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<PAGE>
be Registrable Securities with respect to Sections 5, 6 and 9 until resale
of such Exchange Securities has been effected within the 90-day period
referred to in Section 2(a) hereof;
(ii) in the circumstances contemplated by Section 2(b), a
registration statement registering such Securities (and, in the
circumstances contemplated by Section 2(b), other than a registration
statement filed in addition to the Exchange Offer, also registering the
underlying Debentures and the related Guarantee) under the Securities Act
has been declared or becomes effective and such Securities have been sold
or otherwise transferred by the holder thereof pursuant to such effective
registration statement;
(iii) such Securities are sold pursuant to Rule 144 (or any successor
provision) promulgated under the Securities Act under circumstances in
which any legend borne by such Securities relating to restrictions on
transferability thereof, under the Securities Act, is removed by the Trust
or pursuant to the Trust Agreement or such Securities are eligible to be
sold pursuant to paragraph (k) of Rule 144; or
(iv) such Securities shall cease to be outstanding.
(w) "Registration Default" has the meaning set forth in Section 2(c)
hereof.
(x) "Registration Expenses" has the meaning set forth in Section 4 hereof.
(y) "Restricted Holder" means (i) a holder that is an affiliate of the
Trust or of Aon within the meaning of Rule 405 under the Securities Act, (ii) a
holder who acquires Exchange Securities outside the ordinary course of such
holder's business, (iii) a holder who has arrangements or understandings with
any person to participate in the Exchange Offer for the purpose of distributing
Exchange Securities or (iv) a broker-dealer who receives Securities for its own
account but did not acquire the Securities as a result of market-making
activities or other trading activities.
(z) "Resale Period" has the meaning set forth in Section 2(a) hereof.
(aa) "Securities" means, collectively, the $800,000,000 aggregate
Liquidation Amount of the 8.205% Capital Securities, Liquidation Amount $1,000
per Capital Security, of the Trust to be issued and sold to the Purchasers, and
any securities issued in exchange therefor or in lieu thereof pursuant to the
Trust Agreement.
(bb) "Securities Act" means the Securities Act of 1933, or any successor
thereto, as amended from time to time.
(cc) "Shelf Registration" has the meaning set forth in Section 2(b) hereof.
(dd) "Special Distributions" has the meaning set forth in Section 2(c)
hereof.
(ee) "Special Interest" has the meaning set forth in Section 2(c) hereof.
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(ff) "Trust Agreement" means the Amended and Restated Trust Agreement
dated as of January 13, 1997 among Aon, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust.
(gg) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as amended from time to time.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this Capital
Securities Exchange and Registration Rights Agreement, and the words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this Capital
Securities Exchange and Registration Rights Agreement as a whole and not to any
particular Section or other subdivision.
2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b) below, Aon and the Trust agree,
jointly and severally, to use their reasonable best efforts to file under the
Securities Act, as soon as practicable, but no later than 150 days after the
Issue Date, a registration statement relating to an offer to exchange (the
"Exchange Offer") any and all of the Securities for a like aggregate Liquidation
Amount of capital securities of the Trust which are substantially identical to
the Securities (and which are entitled to the benefits of the Trust Agreement
which will be qualified under the Trust Indenture Act) except that they have
been registered pursuant to an effective registration statement under the
Securities Act and such new capital securities will not contain provisions for
Special Distributions or provisions restricting transfer in the absence of
registration under the Securities Act (such new capital securities hereinafter
called "Exchange Securities") for any or all of the Registrable Securities. Such
registration statement shall also relate to, and the consummation of the
Exchange Offer shall be conditioned upon the consummation of, an offer to
exchange the Debentures for substantially identical debentures of Aon pursuant
to the Debenture Exchange and Registration Rights Agreement (the "Exchange
Debentures") and to an offer to exchange the Guarantee for a substantially
identical guarantee of Aon pursuant to the Guarantee Exchange and Registration
Rights Agreement (the "Exchange Guarantee"). Aon and the Trust agree, jointly
and severally, to use their reasonable best efforts to cause such registration
statement to become effective under the Securities Act within 180 days of the
Issue Date. The Exchange Offer will be registered under the Securities Act on
the appropriate form and will comply in all material respects with all
applicable tender offer rules and regulations under the Exchange Act. Aon and
the Trust further agree, jointly and severally, to commence the Exchange Offer
promptly after such registration statement has become effective and to hold the
Exchange Offer open for at least 30 calendar days, and the Trust agrees to issue
Exchange Securities for all Registrable Securities that have been validly
tendered and not withdrawn on or prior to the expiration of the Exchange Offer.
The Exchange Offer will be deemed to have been completed only if the Exchange
Securities received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are, upon receipt, transferable by each such
holder without restriction under the Securities Act and the Exchange Act, it
being understood that broker-dealers receiving Exchange Securities will be
subject to certain prospectus delivery requirements with respect to resale of
the Exchange
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Securities. The Exchange Offer shall be deemed to have been completed upon the
earlier to occur of (i) the Trust having exchanged the Exchange Securities for
all outstanding Registrable Securities pursuant to the Exchange Offer and (ii)
the Trust having exchanged, pursuant to the Exchange Offer, Exchange Securities
for all Registrable Securities that have been validly tendered and not withdrawn
before the expiration of the Exchange Offer, which shall be on a date that is at
least 30 days following the commencement of the Exchange Offer. Aon and the
Trust agree, jointly and severally, (x) to include in the registration statement
a prospectus for use in connection with any resales of Exchange Securities by a
broker-dealer, other than resales of Exchange Securities received by a broker-
dealer pursuant to the Exchange Offer in exchange for Registrable Securities
acquired by the broker-dealer directly from the Trust, and (y) to the extent any
broker-dealer participates in the Exchange Offer and notifies Aon or causes Aon
to be notified in writing that it is a participating broker-dealer, to use their
reasonable efforts to keep such registration statement effective for a period
(the "Resale Period") beginning when Exchange Securities are first issued in the
Exchange Offer and ending upon the earlier of the expiration of the 90th day
after the Exchange Offer has been completed or such shorter period if all
Exchange Securities received by such broker-dealer in exchange for Registrable
Securities acquired for its own account as a result of market-making or other
trading activities have been disposed of by such broker-dealer; and no broker-
dealers shall be authorized by Aon to, and shall not, deliver such Prospectus
after such period in connection with resales contemplated by this Section 2(a)
or otherwise; it being understood that, notwithstanding anything in this Capital
Securities Exchange and Registration Rights Agreement to the contrary, Aon shall
not be required to comply with any provision of this Section 2(a) or any other
provision of this Capital Securities Exchange and Registration Rights Agreement
relating to the distribution of Exchange Securities by broker-dealers, to the
extent that Aon reasonably concludes that compliance with such provision is no
longer required by applicable law or interpretation of the Staff of the
Commission. With respect to such registration statement, each broker-dealer that
holds Exchange Securities received in the Exchange Offer in exchange for
Registrable Securities not acquired by it directly from the Trust shall have the
benefit of the rights of indemnification and contribution set forth in Section 6
hereof.
(b) If (i) on or prior to the consummation of the Exchange Offer existing
Commission interpretations are changed such that the Exchange Securities
received by holders other than Restricted Holders in the Exchange Offer for
Registrable Securities are not or would not be, upon receipt, transferable by
each such holder without restriction under the Securities Act, (ii) the Exchange
Offer has not been consummated within 210 days following the Issue Date or (iii)
the Purchasers so request (but only with respect to the Securities) within 60
days after the consummation of the Exchange Offer with respect to any Securities
held by them which are not freely transferable following consummation of the
Exchange Offer, in lieu of (or, in the case of clause (iii), in addition to)
conducting the Exchange Offer contemplated by Section 2(a), Aon and the Trust
shall file under the Securities Act, as soon as practicable, a "shelf"
registration statement providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable Securities
(or, in the case of clause (iii), of the Securities held by the Purchasers for
resale by the Purchasers), pursuant to Rule 415 under the Securities Act and/or
any similar rule that may be adopted by the Commission (the "Shelf
Registration"). Unless the Shelf Registration has been filed in addition to
conducting the Exchange Offer contemplated by Section 2(a), the Shelf
Registration shall also provide for the registration of the Debentures pursuant
to the Debenture Exchange and Registration Rights Agreement and for
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<PAGE>
the registration of the Guarantee pursuant to the Guarantee Exchange and
Registration Rights Agreement. Aon and the Trust agree, jointly and severally,
to use their reasonable best efforts to cause the Shelf Registration to become
or be declared effective and to keep such Shelf Registration continuously
effective for a period ending on the earlier of (A) the third anniversary of the
Issue Date (or, in the case of clause (iii) above, the first anniversary) or (B)
the later of (i) such time as there are no longer any Registrable Securities
outstanding or (ii) as required under the Debenture Exchange and Registration
Rights Agreement. Aon and the Trust further agree, jointly and severally, to
supplement or make amendments to the Shelf Registration, as and when required by
the rules, regulations or instructions applicable to the registration form used
by Aon and the Trust for such Shelf Registration or by the Securities Act or
rules and regulations thereunder for shelf registration, and Aon and the Trust
agree, jointly and severally, to furnish to the holders of the Registrable
Securities copies of any such supplement or amendment prior to its being used
and/or filed with the Commission.
(c) In the event that (i) Aon and the Trust have not filed the registration
statement relating to the Exchange Offer (or, if applicable, the Shelf
Registration) on or before the 150th day after the Issue Date, or (ii) such
registration statement (or, if applicable, the Shelf Registration) has not
become effective or been declared effective by the Commission on or before the
180th day after the Issue Date, or (iii) any of the Exchange Offer, the exchange
offer contemplated by the Guarantee Exchange and Registration Rights Agreement
and the exchange offer contemplated by the Debenture Exchange and Registration
Rights Agreement has not been completed within 210 days after the Issue Date (if
the Exchange Offer is then required to be made) or (iv) any registration
statement required by Section 2(a) or 2(b) is filed and declared effective but
shall thereafter cease to be effective for five business days (except as
specifically permitted herein) without being succeeded by an additional
registration statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), then interest will
accrue (in addition to the stated interest rate on the Debentures) at the rate
of 0.25% per annum on the principal amount of the Debentures, and the
distributions will accumulate (in addition to the stated distribution rate on
the Securities) at the rate of 0.25% per annum on the Liquidation Amount of the
Securities, for the period from the occurrence of the Registration Default until
such time as no Registration Default is in effect. Such additional interest (the
"Special Interest") and such additional distributions (the "Special
Distributions") will be payable in cash semi-annually in arrears on each January
1 and July 1 in accordance with, and subject to the deferral provisions of, the
Indenture and the Trust Agreement, respectively. Special Interest, if any, and
Special Distributions, if any, will be computed on the basis of a 365 or 366 day
year, as the case may be, and the number of days actually elapsed.
(d) Any reference herein to a registration statement shall be deemed to
include any document incorporated therein by reference as of the applicable
Effective Time and any reference herein to any post-effective amendment to a
registration statement shall be deemed to include any document incorporated
therein by reference as of a time after such Effective Time.
3. Registration Procedures.
If Aon and the Trust file a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
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(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, Aon shall qualify the Indenture, the New
Guarantee Agreement and the Trust Agreement under the Trust Indenture Act.
(b) In the event that such qualification would require the appointment of a
new trustee under any of the Indenture, the New Guarantee Agreement or the Trust
Agreement, such new trustee shall be appointed thereunder pursuant to the
applicable provisions thereof.
(c) In connection with the joint and several obligations of Aon and the
Trust with respect to the registration of the Exchange Securities, the Exchange
Guarantee and the Exchange Debentures, as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, Aon and the Trust shall, as soon as
reasonably possible (or as otherwise specified):
(i) prepare and file with the Commission, as soon as practicable
but no later than 150 days after the Issue Date, a registration
statement with respect to the Exchange Registration on any form which
may be utilized by Aon and the Trust and which shall permit the
Exchange Offer and resales of Exchange Securities by broker-dealers
during the Resale Period to be effected as contemplated by Section
2(a) hereof, and use its reasonable best efforts to cause such
registration statement to become effective as soon as practicable
thereafter;
(ii) as soon as practicable prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus included therein as may be necessary to effect and maintain
the effectiveness of such registration statement for the periods and
purposes contemplated in Section 2(a) hereof and as may be required by
the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement,
and promptly provide each broker-dealer holding Exchange Securities
with such number of copies of the prospectus included therein (as then
amended or supplemented), in conformity in all material respects with
the requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission promulgated thereunder, as
such broker-dealer reasonably may request prior to the expiration of
the Resale Period, for use in connection with resales of Exchange
Securities;
(iii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such
registration statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has
been filed, and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of
the receipt of any comments by the Commission and by the Blue Sky or
securities commissioner or regulator of any state with respect thereto
or any request by the Commission for amendments or supplements to such
registration statement or prospectus or for additional information,
(C) of the issuance by the Commission of any
7
<PAGE>
stop order suspending the effectiveness of such registration statement
or the initiation or threatening by the Commission of any proceedings
for that purpose, (D) if at any time the joint and several
representations and warranties of Aon and the Trust contemplated by
Section 5 cease to be true and correct in all material respects, (E)
of the receipt by either Aon or the Trust of any notification with
respect to the suspension of the qualification of the Exchange
Securities and the Exchange Guarantee for sale in any United States
jurisdiction or the initiation or, to Aon's or the Trust's knowledge,
threatening of any proceeding for such purpose, or (F) at any time
during the Resale Period when a prospectus is required to be delivered
under the Securities Act, that such registration statement,
prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission promulgated thereunder or
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(iv) in the event that Aon and the Trust would be required,
pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers
holding Exchange Securities, without delay prepare and furnish to each
such holder a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to purchasers of such
Exchange Securities during the Resale Period, such prospectus shall
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission promulgated thereunder and shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(v) use their reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto at the earliest
practicable date;
(vi) use their reasonable best efforts to (A) register or
qualify the Exchange Securities and the Exchange Guarantee under the
securities laws or blue sky laws of such jurisdictions as are
contemplated by Section 2(a) no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in
effect and comply with such laws so as to permit the continuance of
offers, sales and dealings therein in such jurisdictions until the
expiration of the Resale Period and (C) take any and all other actions
as may be reasonably necessary or advisable to enable each broker-
dealer holding Exchange Securities to consummate the disposition
thereof in such jurisdictions; provided, however, that neither Aon nor
the Trust shall be required for any such purpose to (1) qualify to do
business in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(vi),
(2) consent to general service
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<PAGE>
of process in any such jurisdiction or (3) in the case of Aon, make
any changes to its charter or by-laws or any agreement between it and
its stockholders or in the case of the Trust, make any changes to the
Trust Agreement;
(vii) use their reasonable best efforts to obtain the consent or
approval of each United States governmental agency or authority,
whether federal, state or local, which may be required to effect the
Exchange Registration, the Exchange Offer and the offering and sale of
Exchange Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for all Exchange Securities, not
later than the applicable Effective Time; and
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to all holders of Securities
as soon as practicable but no later than eighteen months after the
Effective Time, an earnings statement of Aon and its subsidiaries
complying with Section 11 (a) of the Securities Act (including, at the
option of Aon, Rule 158 thereunder).
(d) In connection with the joint and several obligations of Aon and the
Trust with respect to the Shelf Registration, if applicable, Aon and the Trust
shall use their reasonable best efforts to cause the Shelf Registration to
become effective to permit the sale of the Registrable Securities by the holders
thereof in accordance with the intended method or methods of distribution
thereof described in the Shelf Registration. In connection therewith, Aon and
the Trust shall as soon as reasonably possible (or as otherwise specified):
(i) prepare and file with the Commission, as soon as
practicable, a registration statement with respect to the Shelf
Registration on any form which may be utilized by Aon and the Trust
and which shall permit the disposition of the Registrable Securities
in accordance with the intended method or methods thereof, as
specified in writing to Aon and the Trust by the holders of the
Registrable Securities and use their reasonable best efforts to cause
such registration statement to become effective as soon as practicable
thereafter;
(ii) as soon as practicable, prepare and file with the
Commission such amendments and supplements to such registration
statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such registration statement
for the period specified in Section 2(b) hereof and as may be required
by the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement and
furnish to the holders of the Registrable Securities copies of any
such supplement or amendment simultaneously with or prior to its being
used or filed with the Commission;
(iii) comply with the provisions of the Securities Act
applicable to Aon or the Trust in connection with the disposition of
all of the
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<PAGE>
Registrable Securities covered by such registration statement in
accordance with the intended methods of disposition by the holders
thereof, set forth in such registration statement;
(iv) provide (A) the holders of the Registrable Securities to be
included in such registration statement and not more than one counsel
for all the holders of such Registrable Securities, (B) the
underwriters (which term, for purposes of this Capital Securities
Exchange and Registration Rights Agreement, shall include a person
deemed to be an underwriter within the meaning of Section 2(11) of the
Securities Act), if any, thereof, (C) the sales or placement agent, if
any, therefor and (D) one counsel for such underwriters or agents, if
any, reasonable opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with
the Commission, and each amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such
registration statement, and throughout the period specified in Section
2(b), make available at reasonable times at Aon's principal place of
business or such other reasonable place for inspection by the persons
referred to in Section 3(d)(iv) who shall certify to Aon and the Trust
that they have a current intention to sell the Registrable Securities
pursuant to the Shelf Registration such financial and other
information and books and records of Aon and the Trust, and cause the
officers, employees, counsel and independent certified public
accountants of Aon and the Trust to respond to such inquiries, as
shall be reasonably necessary, in the judgment of the respective
counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to maintain
in confidence and not to disclose to any other person any information
or records reasonably designated by Aon as being confidential, until
such time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such registration statement or
otherwise, except by disclosure by such party in breach of this
Agreement), or (B) such person shall be required so to disclose such
information pursuant to the subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter
(subject to, and only to the extent required by, the requirements of
such order, and only after such person shall have given Aon prompt
prior written notice of such requirement);
(vi) promptly notify the selling holders of Registrable
Securities, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof and confirm such
advice in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement
or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with
respect thereto or any request
10
<PAGE>
by the Commission for amendments or supplements to such registration
statement or prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation or
threatening by the Commission of any proceedings for that purpose, (D)
if at any time the joint and several representations and warranties of
Aon and the Trust contemplated by Section 3(d)(xv)(A) or Section 5
cease to be true and correct in all material respects, (E) of the
receipt by either Aon or the Trust of any notification with respect to
the suspension of the qualification of the Registrable Securities and
the Guarantee for sale in any jurisdiction or, to Aon's or the Trust's
knowledge, the initiation or threatening of any proceeding for such
purpose, or (F) at any time when a prospectus is required to be
delivered under the Securities Act, that such registration statement,
prospectus, prospectus amendment or supplement or post-effective
amendment, or any document incorporated by reference in any of the
foregoing, does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission promulgated thereunder or
contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(vii) use their best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or
any post-effective amendment thereto at the earliest practicable date;
(viii) if requested by any managing underwriter or underwriters,
any placement or sales agent or any holder or counsel for the holders
of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is required
by the applicable rules and regulations of the Commission and as such
managing underwriter or underwriters, such agent or such holder
specifies should be included therein relating to the terms of the sale
of such Registrable Securities, including, without limitation,
information with respect to the Liquidation Amount or the principal
amount, as the case may be, of Registrable Securities being sold by
any holder or agent or to any underwriters, the name and description
of such holder, agent or underwriter, the offering price of such
Registrable Securities and any discount, commission or other
compensation payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other terms of
the offering of the Registrable Securities, to be sold by such holder
or agent or to such underwriters; and make all required filings of
such prospectus supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(ix) furnish to each holder of Registrable Securities, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(d)(iv) an
executed copy
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<PAGE>
of such registration statement, each such amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein) and such number of copies of such
registration statement (excluding exhibits thereto and documents
incorporated by reference therein unless specifically so requested by
such holder, agent or underwriter, as the case may be) and of the
prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with
the requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission promulgated thereunder,
and such other documents, as such holder, agent, if any, and
underwriter, if any, may reasonably request in order to facilitate the
offering and disposition of the Registrable Securities owned by such
holder, offered or sold by such agent or underwritten by such
underwriter and to permit such holder, agent and underwriter to
satisfy the prospectus delivery requirements of the Securities Act;
and each of Aon and the Trust hereby consents to the use of such
prospectus (including such preliminary and summary prospectus) and any
amendment or supplement thereto by each such holder and by any such
agent and underwriter, in each case in the form most recently provided
to such party by Aon and the Trust, in connection with the offering
and sale of the Registrable Securities covered by the prospectus
(including such preliminary and summary prospectus) or any supplement
or amendment thereto;
(x) use their reasonable best efforts to (A) register or qualify
the Registrable Securities to be included in such registration
statement and the Guarantee under such securities laws or blue sky
laws of such jurisdictions as any holder of such Registrable
Securities and each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers, sales and dealings therein in
such jurisdictions during the period the Shelf Registration is
required to remain effective under Section 2(b) above and for so long
as may be necessary to enable any such holder, agent or underwriter to
complete its distribution of Securities pursuant to such registration
statement and (C) take any and all other actions as may be reasonably
necessary or advisable to enable each such holder, agent, if any, and
underwriter, if any, to consummate the disposition in such
jurisdictions of Registrable Securities; provided, however, that
neither Aon nor the Trust shall be required for any such purpose to
(1) qualify to do business in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Section 3(d)(x), (2) consent to general service of process in any such
jurisdiction, (3) in the case of Aon, make any changes to its charter
or by-laws or any agreement between it and its shareholders or, in the
case of the Trust, make any changes to the Trust Agreement;
(xi) use their reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration
or the
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<PAGE>
offering or sale in connection therewith or to enable the selling
holder or holders to offer, or to consummate the disposition of, their
Registrable Securities;
(xii) cooperate with the holders of the Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall be printed,
lithographed or engraved, or produced by any combination of such
methods, and which shall not bear any restrictive legends; and, in the
case of an underwritten offering, enable such Registrable Securities
to be in such denominations and registered in such names as the
managing underwriters may request at least two business days prior to
any sale of the Registrable Securities;
(xiii) provide a CUSIP number for all Registrable Securities,
not later than the applicable Effective Time;
(xiv) enter into not more than one underwriting agreement,
engagement letter, agency agreement, "best efforts" underwriting
agreement or similar agreement, as appropriate, including (without
limitation) provisions relating to indemnification and contribution
substantially the same as those set forth in Section 6 hereof, and
take such other actions in connection therewith as any holders of
Registrable Securities aggregating at least 25% in aggregate
Liquidation Amount, or in aggregate principal amount, as the case may
be, of the Registrable Securities at the time outstanding shall
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities; provided, that Aon and the Trust shall
not be required to (i) enter into any such agreement more than once
with respect to all of the Registrable Securities and may delay
entering into such agreement until the consummation of any
underwritten public offering which Aon and the Trust shall have then
undertaken or (ii) enter into any engagement letter, agency agreement,
"best effort" underwriting agreement or similar agreement whatsoever
with respect to the Registrable Securities, and provided further, that
Aon and the Trust shall not be obligated to enter into any such
agreement with a broker-dealer which results in the need for a
"qualified independent underwriter" (within the meaning of the Rules
of Fair Practice and the By-Laws of the National Association of
Securities Dealers, Inc. ("NASD") or any successor thereto, as amended
from time to time (the "Rules and By-Laws of NASD"));
(xv) whether or not an agreement of the type referred to in
Section (3)(d)(xiv) hereof is entered into and whether or not any
portion of the offering contemplated by such registration statement is
an underwritten offering or is made through a placement or sales agent
or any other entity, (A) make such representations and warranties to
the holders of such Registrable Securities and the placement or sales
agent, if any, therefor and the underwriters, if any, thereof
substantially the same as those set forth in Section 1 of the Purchase
Agreement and such other representations and warranties as are
customarily made with respect to the offering of debt
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<PAGE>
securities pursuant to any appropriate agreement or to a registration
statement on the applicable form under the Securities Act; (B) obtain
an opinion or opinions of counsel to Aon and the Trust substantially
the same as the opinions provided for in Section 5 of the Purchase
Agreement with such additions, substitutions or deletions of such
matters as are customarily covered in opinions for an underwritten
offering, addressed to such holder or holders and the placement or
sales agent, if any, therefor and the underwriters, if any, thereof
and dated the effective date of such registration statement (and if
such registration statement contemplates an underwritten offering of a
part or all of the Registrable Securities, dated the date of the
closing under the underwriting agreement relating thereto) (it being
agreed that the matters to be covered by such opinion shall also
include, without limitation, the absence of governmental approvals
required to be obtained in connection with the Shelf Registration, the
offering and sale of the Registrable Securities, this Capital
Securities Exchange and Registration Rights Agreement or any agreement
of the type referred to in Section (3)(d)(xiv) hereof, except such
approvals as may be required under state securities or blue sky laws;
and the compliance in all material respects as to form of such
registration statement and any documents incorporated by reference
therein and of the Indenture, the Guarantee Agreement and the Trust
Agreement with the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
promulgated thereunder, respectively); and, such opinion shall also
state that such counsel has no reason to believe that, as of the date
of the opinion and of the registration statement or most recent post-
effective amendment thereto, as the case may be, such registration
statement and the prospectus included therein, as then amended or
supplemented, and the documents incorporated by reference therein (in
each case other than the financial statements and other financial
information contained therein) contains or contained an untrue
statement of a material fact or omits or omitted to state therein a
material fact necessary to make the statements therein not misleading
(in the case of such documents, in the light of the circumstances
existing at the time that such documents were filed with the
Commission under the Exchange Act)); (C) obtain a "cold comfort"
letter or letters from the independent certified public accountants of
Aon and the Trust addressed to the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor and the
underwriters, if any, thereof, dated (i) the effective date of such
registration statement and (ii) the effective date of any prospectus
supplement to the prospectus included in such registration statement;
(D) deliver such other documents and certificates, including officers'
certificates, as may be reasonably requested by any holders of at
least 25% in aggregate Liquidation Amount, or in aggregate principal
amount, as the case may be, of the Registrable Securities at the time
outstanding or the placement or sales agent, if any, therefor and the
managing underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or
those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the
underwriting agreement or other agreement entered into by Aon and the
Trust; and (E) undertake such
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obligations relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;
(xvi) notify in writing each holder of Registrable Securities of
any proposal by Aon and the Trust to amend or waive any provision of
this Capital Securities Exchange and Registration Rights Agreement
pursuant to Section 9(h) hereof and of any amendment or waiver
effected pursuant thereto, each of which notices shall contain the
text of the amendment or waiver proposed or effected, as the case may
be;
(xvii) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling group
or "assist in the distribution" (within the meaning of the Rules and
By-Laws of NASD) thereof, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, assist such broker-
dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by (A) if such Rules or By-Laws,
including Schedule E thereto (or any successor thereto), shall so
require, engaging a "qualified independent underwriter" (as defined in
such Schedule (or any successor thereto)) to participate in the
preparation of the registration statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect
thereto and, if any portion of the offering contemplated by such
registration statement is an underwritten offering or is made through
a placement or sales agent, to recommend the yield of such Registrable
Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 6 hereof (or to such other customary extent as may
be required by such underwriter), and (C) providing such information
to such broker-dealer as may be required in order for such broker-
dealer to comply with the requirements of the Rules and By-Laws of
NASD; and
(xviii) comply with all applicable rules and regulations of the
Commission, and make generally available to its holders of the
Securities as soon as practicable but in any event not later than
eighteen months after the effective date of such registration
statement, an earnings statement of Aon and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
Aon, Rule 158 thereunder).
(e) In the event that Aon and the Trust would be required, pursuant to
Section 3(d)(vi)(F) above, to notify the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, Aon and the Trust shall without delay prepare and
furnish to each such holder, to each placement or sales agent, if any, and to
each underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material respects
to the applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission promulgated thereunder and shall
not contain an untrue statement of a
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material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. Each broker-dealer holding Exchange Securities and
each holder of Registrable Securities agrees that upon receipt of any notice
from Aon and the Trust pursuant to Section 3(c)(iii)(F) or 3(d)(vi)(F) hereof,
as the case may be, such holder shall forthwith discontinue the disposition of
Exchange Securities or Registrable Securities, as the case may be, pursuant to
the registration statement applicable to such Exchange Securities or Registrable
Securities, as the case may be, until such holder shall have received copies of
such amended or supplemented prospectus, and if so directed by Aon and the
Trust, such holder shall deliver to Aon (at Aon's expense) all copies, other
than permanent file copies, then in such holder's possession of the prospectus
covering such Exchange Securities or Registrable Securities, as the case may be,
at the time of receipt of such notice.
(f) Aon and the Trust may require each holder of Registrable Securities as
to which any registration is being effected to furnish in writing to Aon and the
Trust such information regarding such holder and such holder's intended method
of distribution of such Registrable Securities as Aon and the Trust may from
time to time reasonably request in writing, but only to the extent that such
information is required in order to comply with the Securities Act. Each such
holder agrees to notify Aon and the Trust as promptly as practicable of any
inaccuracy or change in information previously furnished by such holder to Aon
and the Trust or of the occurrence of any event in either case as a result of
which any prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such holder or such holder's
intended method of distribution of such Registrable Securities or omits to state
any material fact regarding such holder or such holder's intended method of
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to Aon and the Trust any
additional information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with respect
to such holder or the distribution of such Registrable Securities, an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing. Each such holder shall comply with the
provisions of the Securities Act applicable to such holder with respect to the
disposition by such holder of Registrable Securities covered by such
registration statement in accordance with the intended methods of disposition by
such holder set forth in such registration statement.
(g) Until the expiration three years after the Issue Date, Aon will not,
and will not permit any of its "affiliates" (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them except
pursuant to an effective registration statement under the Securities Act or any
exemption therefrom; provided, however, that, for purposes of this paragraph,
"affiliates" shall not include the Purchasers or any of their affiliates other
than Aon and its subsidiaries, officers, managers and directors.
(h) If Aon and the Trust file with the Commission a registration statement
in respect of the Exchange Offer pursuant to Section 2(a), then Aon and the
Trust shall also file with the Commission a registration statement under Section
12 of the Exchange Act and the rules and regulations promulgated thereunder
related to the Exchange Securities (and the Securities and the Registrable
Securities, if any). Aon and the Trust shall use their
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reasonable best efforts to cause such registration statement to become effective
prior to the 120th day of the fiscal year of the Trust next succeeding the
fiscal year in which the Exchange Offer has been consummated.
(i) Aon and the Trust may require each holder of Registrable Securities as
to which a registration statement is being effected pursuant to Section 2(a), as
a condition to such holder's eligibility to exchange the Registrable Securities
for the Exchange Securities, that such holder furnish to Aon and the Trust (or
an agent thereof) in writing information as to the number of "beneficial owners"
(within the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such
holder holds the Registrable Securities that such holder desires to exchange for
the Exchange Securities.
4. Registration Expenses.
If Aon and the Trust file a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
Aon agrees to bear and to pay or cause to be paid promptly upon request
being made therefor all expenses incident to the performance by Aon and the
Trust or compliance with this Capital Securities Exchange and Registration
Rights Agreement, including, without limitation, (a) all Commission and any NASD
registration and filing fees and expenses, (b) all fees and expenses in
connection with the qualification of the Securities and the Guarantee for
offering and sale under the state securities and blue sky laws referred to in
Section 3(d)(x) hereof, including reasonable fees and disbursements of counsel
in connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, and the certificates representing the Securities and all documents
relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of
the Debenture Trustee under the Indenture, the Issuer Trustees under the Trust
Agreement and the Guarantee Trustee under the Guarantee Agreement and of any
escrow agent or custodian, (f) internal expenses (including, without limitation,
all salaries and expenses of Aon's officers and employees performing legal or
accounting duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of Aon and the Trust (including the
expenses of any opinions or "cold comfort" letters required by or incident to
such performance and compliance), (h) fees, disbursements and expenses of any
"qualified independent underwriter" engaged pursuant to Section 3(d)(xvii)
hereof, (i) fees, disbursements and expenses of one counsel for the holders of
Registrable Securities retained in connection with a Shelf Registration, as
selected by the holders of at least a majority in aggregate Liquidation Amount,
or the aggregate principal amount, as the case may be, of the Registrable
Securities being registered, and fees, expenses and disbursements of any other
persons, including special experts, retained by Aon or the Trust in connection
with such registration (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by any
holder of Registrable Securities or any placement or sales agent therefor or
underwriter thereof, Aon shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
written request therefor. Notwithstanding the foregoing, the holders of the
Registrable Securities being registered shall pay all agency or brokerage fees
and commissions and underwriting discounts and commissions attributable to the
sale of
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such Registrable Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such holders (severally or jointly), other
than the counsel and experts specifically referred to above, transfer taxes on
resale of any of the Securities by such holders and any advertising or
solicitation expenses other than expenses specifically referred to above
incurred by or on behalf of such holders in connection with any offers they may
make.
5. Representations and Warranties.
Aon and the Trust, jointly and severally, represent and warrant to, and
agree with, each Purchaser and each of the holders from time to time of
Registrable Securities that:
(a) Each registration statement covering Registrable Securities, the
Guarantee, if applicable, and the Debentures and each prospectus (including any
preliminary or summary prospectus) contained therein or furnished pursuant to
Section 3(d)(ix) hereof and any further amendments or supplements to any such
registration statement or prospectus, when it becomes effective or is filed with
the Commission, as the case may be, and, in the case of an underwritten offering
of Registrable Securities, at the time of the closing under the underwriting
agreement relating thereto, will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act, the
rules and regulations of the Commission promulgated thereunder and any such
registration statement and any amendment thereto will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
any such prospectus or any amendment or supplement thereto will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and at all times subsequent to the
Effective Time of any such registration statement when a prospectus would be
required to be delivered under the Securities Act, other than from (i) such time
as a notice has been given to holders of Registrable Securities pursuant to
Section 3(c)(iii)(F) or Section 3(d)(vi)(F) hereof until (ii) such time as Aon
and the Trust furnish an amended or supplemented prospectus pursuant to Section
3(c)(iv) or Section 3(e) hereof, as the case may be, each such registration
statement, and each prospectus (including any summary prospectus) contained
therein or furnished pursuant to Section 3(c) or Section 3(d)(ix) hereof, as
then amended or supplemented, will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission promulgated thereunder and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to Aon and the Trust by a holder of Registrable Securities or any
placement or sales agent therefor or underwriter thereof expressly for use
therein.
(b) Any documents incorporated by reference in any prospectus referred to
in Section 5(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or
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omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to Aon
and the Trust by a holder of Registrable Securities expressly for use therein.
(c) The representations and warranties of the Trust and Aon contained in
Section 1 of the Purchase Agreement are true and correct with the same force and
effect as though expressly made at and as of the date hereof.
6. Indemnification.
(a) Upon the registration of the Registrable Securities pursuant to Section
2 hereof, and in consideration of the agreements of the Purchasers contained
herein, and as an inducement to the Purchasers to purchase the Securities, the
Trust and Aon, jointly and severally, agree to indemnify and hold harmless each
of the holders of Registrable Securities to be included in such registration,
and each person who participates as a placement or sales agent or as an
underwriter in any offering or sale of such Registrable Securities and each
person, if any, who controls such holder, or such placement or sales agent, if
any, or such underwriter, if any, within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (each an "Indemnified Person") as follows:
(i) against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which
such Registrable Securities were registered under the Securities Act,
or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading or caused by any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus (or any amendment or
supplement thereto) contained in such registration statement or caused
by any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission that was made in reliance upon
and in conformity with written information relating to such
Indemnified Person furnished to the Trust and Aon by, or on behalf of,
such Indemnified Person expressly for use in such registration
statement or such preliminary, final or summary prospectus (or any
amendment or supplement thereto);
(ii) against any and all losses, claims, damages and liabilities
whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission (except as made in reliance upon and in
conformity with
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information relating to such Indemnified Person furnished by, or on
behalf of, such Indemnified Person as aforesaid), if such settlement
is effected with the written consent of the Trust and Aon; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by such Indemnified Person),
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission (except as made in reliance upon and in
conformity with information relating to such Indemnified Person
furnished by, or on behalf of, such Indemnified Person as aforesaid)
to the extent that any such expense is not paid under (i) or (ii)
above.
provided, however, that indemnification with respect to any prospectus shall not
inure to the benefit of any holder of Registrable Securities or Exchange
Securities from whom the Person asserting any loss, claim, damage, liability or
expense purchased such Securities, if a copy of the prospectus (as then amended
or supplemented and furnished by Aon to such holder) was not sent or given by or
on behalf of such holder to such person if such is required by law at or prior
to the sale of such Registrable Securities or Exchange Securities, as the case
may be, and if the prospectus (as so amended and supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense.
(b) Aon may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2 hereof and to entering
into any placement or underwriting agreement with respect thereto, that Aon
shall have received an undertaking reasonably satisfactory to them from the
holder of such Registrable Securities and from each placement agent or
underwriter named in any such placement agreement or underwriting agreement,
severally and not jointly, to indemnify and hold harmless the Trust and Aon and
each person, if any, who controls the Trust or Aon within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against any and all
loss, claim, damage, liability and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in any registration
statement under which such Registrable Securities were registered under the
Securities Act, or any preliminary, final or summary prospectus contained
therein as furnished by the Trust or Aon to any such holder, agent or
underwriter (or any amendment or supplement thereto), in reliance upon and in
conformity with written information relating to such holder, or such placement
or sales agent, if any, or such underwriter, if any, furnished to the Trust and
Aon by or on behalf of such holder, or such placement or sales agent, if any, or
such underwriter, if any, expressly for use in such registration statement or
such preliminary, final or summary prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action. In no event shall the
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indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances;
provided, however, that when more than one of such holders, such placement or
sales agents, if any, or such underwriters, if any, is an indemnified party,
each such holder, placement or sales agent or such underwriter, as the case may
be, shall be entitled to separate counsel (in addition to any local counsel) in
each such jurisdiction to the extent such holder, placement or sales agent or
such underwriter, as the case may be, may have interests conflicting with those
of the other holder, placement or sales agent or such underwriter, as the case
may be. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in this Section 6 is for any reason
held to be unavailable to such holders, such placement or sales agents, if any,
or such underwriters, if any, in accordance with its terms, the Trust, Aon and
such holders, such placement and sales agents, if any, and such underwriters, if
any, shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Trust, Aon and such holders, such placement and sales agents, if any, and such
underwriters, if any, in such proportions as is appropriate to reflect the
relative benefits received by the Trust and Aon on the one hand and such
holders, such placement and sales agents, if any, and such underwriters, if any,
on the other. The relative benefits received by the Trust and Aon on the one
hand and such holders, such placement and sales agents, if any, and such
underwriters, if any, on the other shall be deemed to be in such proportion
represented by the percentage that the total commissions and underwriting
discounts received by such holders, such placement and sales agents, if any, and
such underwriters, if any, to the date of such liability bears to the total
sales price (before deducting expenses) received by the Trust and such holders,
such placement and sales agents, if any, and such underwriters, if any, from the
sale of such Securities made to the date of such liability, and the Trust and
Aon are jointly and severally responsible for the balance. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if such holders, such placement and sales agents, if any, and
such underwriters, if any, failed to give the notice required under this
subsection (c), then the Trust, Aon and such holders, such placement and sales
agents, if any, and such underwriters, if any, shall contribute to such
aggregate losses, liabilities, claims, damages and expenses in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Trust and Aon on the one hand and such holders, such
placement and sales agents, if any, and such underwriters, if any, on the other
in connection with the statements or omissions which resulted in such
liabilities, claims, damages and expenses, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust and Aon on the one hand or is
supplied by, or on behalf of, such holders, such placement or sales agents, if
any, and such underwriters, if any, on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such
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statement or omission. The Trust, Aon and such holders, such placement or sales
agents, if any, and such underwriters, if any, agree that it would not be just
and equitable if contributions pursuant to this paragraph were determined pro
rata (even if such holders, such placement or sales agents, if any, and such
underwriters, if any, were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this paragraph. Notwithstanding the provisions of
this paragraph, such holders, such placement or sales agents, if any, and such
underwriters, if any, shall not be required to contribute any amount in excess
of the amount by which the total price at which the Securities referred to in
the second sentence of this paragraph that were offered and sold to the public
through such holders, such placement or sales agents, if any, and such
underwriters, if any, exceeds the amount of any damages that such holders, such
placement or sales agents, if any, and such underwriters, if any, have otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
under this paragraph to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls any such holders, such placement or sales agents, if any, and
such underwriters, if any, within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such holders, such placement or sales agents, if any, and such underwriters,
if any, and each person, if any, who controls the Trust or Aon within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Trust or Aon.
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten offering,
the managing underwriter or underwriters thereof shall be designated by the
holders of at least a majority in aggregate Liquidation Amount of the
Registrable Securities to be included in such offering, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Trust and Aon.
(b) Participation by Holders. Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
(c) Consolidated Earnings Statements. In the event of an underwritten
offering, Aon agrees to make generally available to holders of Securities as
soon as practicable, but in any event not later than eighteen months after the
effective date of the applicable registration statement (as defined in Rule
158(c) under the Securities Act), a consolidated earnings statement of Aon
(which need not be audited) complying with Section 11 (a) of the Securities Act
and the rules and regulations of the Commission thereunder (including, at the
option of Aon, Rule 158 under the Securities Act)
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8. Rule 144.
Aon covenants to the holders of Registrable Securities that to the extent
it shall be required to do so under the Exchange Act, Aon shall timely file the
reports required to be filed by it under the Exchange Act or the Securities Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to make Rule 144 available to such holder for the sale of
Registrable Securities without registration under the Securities Act within the
limitations of the exemption provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities in connection with that holder's sale pursuant to Rule
144, Aon shall deliver to such holder a written statement as to whether it has
complied with such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Trust and Aon represents,
warrants, covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this Capital
Securities Exchange and Registration Rights Agreement and that the Debenture
Exchange and Registration Rights Agreement and the Guarantee Exchange and
Registration Rights Agreement should be construed to be consistent with the
terms hereof.
(b) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Capital
Securities Exchange and Registration Rights Agreement in accordance with the
terms and conditions of this Capital Securities Exchange and Registration Rights
Agreement, in any court of the United States or any State thereof having
jurisdiction.
(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: if to the Trust or to
Aon, then to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois, 60606,
Attention: Treasurer, and if to a holder, to the address of such holder set
forth in the security register or other records of the Trust, or to such other
address as any party may have furnished to the others in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
(d) Parties in Interest. All the terms and provisions of this Capital
Securities Exchange and Registration Rights Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective
successors and assigns of the parties
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hereto. In the event that any transferee of any holder of Registrable Securities
shall become a holder of Registrable Securities, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, without
any further writing or action of any kind, be deemed a party hereto for all
purposes and such Registrable Securities shall be held subject to all of the
terms of this Capital Securities Exchange and Registration Rights Agreement, and
by taking and holding such Registrable Securities such transferee shall be
entitled to receive the benefits of and be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Capital
Securities Exchange and Registration Rights Agreement. If Aon shall so request,
any such successor, assign or transferee shall agree in writing to acquire and
hold the Registrable Securities subject to all of the terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Capital Securities
Exchange and Registration Rights Agreement or made pursuant hereto shall remain
in full force and effect regardless of any investigation (or statement as to the
results thereof) made by or on behalf of any holder of Registrable Securities,
any director, officer or partner of such holder, any agent or underwriter or any
director, officer or partner thereof, or any controlling person of any of the
foregoing, and shall survive delivery of and payment for the Registrable
Securities pursuant to the Purchase Agreement and the transfer and registration
of Registrable Securities by such holder and the consummation of an Exchange
Offer. In addition, the respective indemnities, representations and warranties
set forth herein shall survive the termination hereof.
(f) LAW GOVERNING. THIS CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Capital Securities Exchange and Registration Rights Agreement
are inserted for convenience only, do not constitute a part of this Capital
Securities Exchange and Registration Rights Agreement and shall not affect in
any way the meaning or interpretation of this Capital Securities Exchange and
Registration Rights Agreement.
(h) Entire Agreement; Amendments. This Capital Securities Exchange and
Registration Rights Agreement and the other agreements referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Capital
Securities Exchange and Registration Rights Agreement and such other agreements
referred to herein supersede all prior agreements and understandings between the
parties with respect to its subject matter. This Capital Securities Exchange and
Registration Rights Agreement may be amended and the observance of any term of
this Capital Securities Exchange and Registration Rights Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by Aon, the Trust and
the holders of at least 66-2/3 percent in aggregate principal amount of the
Registrable Securities at the time outstanding. Each holder of any Registrable
Securities at the time or thereafter outstanding shall be bound by any amendment
or waiver effected pursuant to this Section 9(h), whether or not any notice,
writing or marking indicating such amendment or waiver appears on such
Registrable Securities or is delivered to such holder.
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(i) Inspection. For so long as this Capital Securities Exchange and
Registration Rights Agreement shall be in effect, this Capital Securities
Exchange and Registration Rights Agreement and a complete list of the names and
addresses of all the registered holders of Registrable Securities shall be made
available for inspection and copying on any business day by any holder of
Registrable Securities at the offices of Aon at the address thereof set forth in
Section 9(c) above.
(j) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
(k) Termination. Except for the respective indemnities, representations and
warranties set forth herein, this Capital Securities Exchange and Registration
Rights Agreement shall terminate when all the Securities, Exchange Securities
and Registrable Securities cease to be outstanding.
25
<PAGE>
This Capital Securities Exchange and Registration Rights Agreement is hereby
executed as of the day and year first above written.
AON CORPORATION
By: /s/ Harvey N. Medvin
-------------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
AON CAPITAL A
By: /s/ Harvey N. Medvin
--------------------------------------
Name: Harvey N. Medvin
Administrative Trustee
MORGAN STANLEY & CO. INCORPORATED
As Representative of the Purchasers named in
Schedule I to the Purchase Agreement
By: /s/ Michael Fusco
--------------------------------------
(Morgan Stanley & Co. Incorporated)
Acting severally, and not jointly and
severally, on behalf of themselves and each
of the Purchasers named in Schedule I to the
Purchase Agreement
26
<PAGE>
DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of January 13,
1997, by and among Aon Capital A, a Delaware business trust (the "Trust"), Aon
Corporation, a Delaware corporation ("Aon"), and Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co. (collectively, the "Purchasers") of the
8.205% Capital Securities of the Trust.
1. Certain Definitions. For purposes of this Debenture Exchange and
Registration Rights Agreement, the following terms shall have the following
respective meanings:
(a) "Capital Securities Exchange and Registration Rights Agreement" means
the Capital Securities Exchange and Registration Rights Agreement in respect of
the Capital Securities dated as of January 13, 1997 among Aon, the Trust and the
Purchasers.
(b) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
(c) "Debentures" means the 8.205% Junior Subordinated Deferrable Interest
Debentures due January 1, 2027 of Aon, to be issued pursuant to the Indenture.
(d) "Effective Time", in the case of (i) an Exchange Offer, means the date
on which the Commission declares the Exchange Offer registration statement
effective or on which such registration statement otherwise becomes effective
and (ii) a Shelf Registration, means the date on which the Commission declares
the Shelf Registration effective or on which the Shelf Registration otherwise
becomes effective.
(e) "Exchange Act" means the Securities Exchange Act of 1934, or any
successor thereto, as amended from time to time.
(f) "Exchange Debentures" has the meaning set forth in Section 2(a)
hereof.
(g) "Exchange Guarantee" has the meaning set forth in Section 2(a) hereof.
(h) "Exchange Offer" has the meaning set forth in Section 2(a) hereof.
(i) "Exchange Registration" has the meaning set forth in Section 3(c)
hereof.
(j) "Exchange Securities" has the meaning set forth in Section 2(a)
hereof.
(k) "Guarantee" means the Guarantee of Aon with respect to the Securities,
to the extent set forth in the Guarantee Agreement.
(l) "Guarantee Agreement" means the Capital Securities Guarantee Agreement
dated as of January 13, 1997 between Aon and The Bank of New York, a New York
<PAGE>
banking corporation, as Guarantee Trustee (together with its successors and
assigns "Guarantee Trustee") for the benefit of the holders of the Securities.
(m) "Guarantee Exchange and Registration Rights Agreement" means the
Guarantee Exchange and Registration Rights Agreement in respect of the Guarantee
dated as of January 13 , 1997 among Aon, the Trust and the Purchasers.
(n) The term "holder" has the meaning set forth in the Capital Securities
Exchange and Registration Rights Agreement; provided, however, that if all the
Registrable Securities and all the Securities cease to be outstanding, then it
shall have the meaning set forth in the Indenture with respect to the
Debentures.
(o) "Indemnified Person" has the meaning set forth in Section 6(a) hereof.
(p) "Indenture" means the Indenture dated as of January 13, 1997 between
Aon and The Bank of New York, as Debenture Trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, and as further amended or
supplemented from time to time.
(q) "Issue Date" means January 13, 1997.
(r) "Liquidation Amount" means the stated liquidation preference of the
Securities.
(s) "New Guarantee Agreement" has the meaning set forth in the Guarantee
Exchange and Registration Rights Agreement.
(t) The term "person" means 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.
(u) "Purchase Agreement" means the Purchase Agreement dated January 8,
1997 among Aon, the Trust and the Purchasers.
(v) "Registrable Securities" has the meaning set forth in the Capital
Securities Exchange and Registration Rights Agreement; provided, however, that
if all the Registrable Securities and all the Securities cease to be
outstanding, then it shall mean the Debentures which have not been sold,
directly or indirectly, pursuant to an effective registration statement under
the Securities Act.
(w) "Registration Default" has the meaning set forth in Section 2(c)
hereof.
(x) "Registration Expenses" has the meaning set forth in Section 4 hereof.
(y) "Resale Period" has the meaning set forth in the Capital Securities
Exchange and Registration Rights Agreement.
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<PAGE>
(z) "Securities" means, collectively, the $800,000,000 aggregate
Liquidation Amount of the 8.205% Capital Securities, Liquidation Amount $1,000
per Capital Security, of the Trust to be issued and sold to the Purchasers, and
any securities issued in exchange therefor or in lieu thereof pursuant to the
Trust Agreement; provided, however, that if all the Registrable Securities and
all the Securities cease to be outstanding, then it shall mean the Debentures
which have been registered under the Securities Act.
(aa) "Securities Act" means the Securities Act of 1933, or any successor
thereto, as amended from time to time.
(bb) "Shelf Registration" has the meaning set forth in Section 2(b) hereof.
(cc) "Special Interest" has the meaning set forth in Section 2(c) hereof.
(dd) "Trust Agreement" means the Amended and Restated Trust Agreement dated
as of January 13, 1997 among Aon, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust.
(ee) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as amended from time to time.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this Debenture
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Debenture Exchange
and Registration Rights Agreement as a whole and not to any particular Section
or other subdivision.
2. Registration Under the Securities Act.
(a) If Aon and the Trust file a registration statement pursuant to Section
2(a) of the Capital Securities Exchange and Registration Rights Agreement, then
Aon and the Trust agree, jointly and severally, to include in such registration
statement an offer to exchange (the "Exchange Offer") all of the Debentures for
a like aggregate principal amount of a new series of junior subordinated
deferrable interest debentures of Aon which are substantially identical to the
Debentures (and which are entitled to the benefits of the Indenture which will
be qualified under the Trust Indenture Act) except that they have been
registered pursuant to an effective registration statement under the Securities
Act and such new debentures will not contain provisions for Special Interest or
provisions restricting transfer in the absence of registration under the
Securities Act (such new debentures hereinafter called "Exchange Debentures").
Such registration statement shall also relate to, and the consummation of the
Exchange Offer shall be conditioned upon the consummation of, an offer to
exchange the Securities for substantially identical capital securities of the
Trust pursuant to the Capital Securities Exchange and Registration Rights
Agreement (the "Exchange Securities") and to an offer to exchange the Guarantee
for a substantially identical guarantee of Aon pursuant to
3
<PAGE>
the Guarantee Exchange and Registration Rights Agreement (the "Exchange
Guarantee"). Aon and the Trust agree, jointly and severally, to use their
reasonable best efforts to cause such registration statement to become effective
under the Securities Act within 180 days of the Issue Date. The Exchange Offer
will be registered under the Securities Act on the appropriate form. The
Exchange Offer shall be deemed to have been completed upon the completion of the
exchange of the Exchange Debentures for all the Debentures pursuant to the
Exchange Offer.
(b) If (i) Aon and the Trust file a "shelf" registration statement
pursuant to Section 2(b) of the Capital Securities Exchange and Registration
Rights Agreement without also filing a registration statement pursuant to
Section 2(a) thereof or (ii) none of the Securities or the Registrable
Securities is outstanding and the Exchange Offer has not been effected, then in
the case of clause (i), such "shelf" registration statement shall provide for
the registration of the Debentures and, in the case of clause (ii) none of the
Securities or the Registrable Securities is outstanding and the Exchange Offer
has not been effected, Aon shall file under the Securities Act, as soon as
practicable, a "shelf" registration statement providing for the registration of,
and the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities, pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission (in each case, the "Shelf
Registration"). In the case of clause (i) only, the Shelf Registration shall
also provide for the registration of the Securities pursuant to the Capital
Securities Exchange and Registration Rights Agreement and for the registration
of the Guarantee pursuant to the Guarantee Exchange and Registration Rights
Agreement. Aon and, if applicable, the Trust agree, jointly and severally, to
use their reasonable best efforts to cause the Shelf Registration to become or
be declared effective and to keep such Shelf Registration continuously effective
for a period ending on the earlier of (A) the third anniversary of the Issue
Date or (B) such time as there are no longer any Registrable Securities
outstanding. Aon and, if applicable, the Trust further agree, jointly and
severally, to supplement or make amendments to the Shelf Registration, as and
when required by the rules, regulations or instructions applicable to the
registration form used by Aon and, if applicable, the Trust for such Shelf
Registration or by the Securities Act or rules and regulations thereunder for
shelf registration, and Aon and, if applicable, the Trust agree, jointly and
severally, to furnish to the holders of the Registrable Securities copies of any
such supplement or amendment prior to its being used and/or filed with the
Commission.
(c) In the event that (i) Aon and, if applicable, the Trust have not filed
the registration statement relating to the Exchange Offer (or, if applicable,
the Shelf Registration) on or before the 150th day after the Issue Date, or (ii)
such registration statement (or, if applicable, the Shelf Registration) has not
become effective or been declared effective by the Commission on or before the
180th day after the Issue Date, or (iii) any of the Exchange Offer, the exchange
offers contemplated by the Capital Securities Exchange and Registration Rights
Agreement and the exchange offer contemplated by the Guarantee Exchange and
Registration Rights Agreement has not been completed within 210 days after the
Issue Date (if the Exchange Offer is then required to be made) or (iv) any
registration statement required by Section 2(a) or 2(b) is filed and declared
effective but shall thereafter cease to be effective for five business days
(except as specifically permitted herein) without being succeeded by an
additional registration statement filed and declared
4
<PAGE>
effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), then interest will accumulate (in addition to the
stated interest rate on the Debentures) at the rate of 0.25% per annum on the
principal amount of the Debentures for the period from the occurrence of the
Registration Default until such time as no Registration Default is in effect.
Such additional interest (the "Special Interest") will be payable in cash semi-
annually in arrears on each July 1 and January 1 in accordance with, and subject
to the deferral provisions of, the Indenture. Special Interest, if any, will be
computed on the basis of a 365 or 366 day year, as the case may be, and the
number of days actually elapsed.
(d) Any reference herein to a registration statement shall be deemed to
include any document incorporated therein by reference as of the applicable
Effective Time and any reference herein to any post-effective amendment to a
registration statement shall be deemed to include any document incorporated
therein by reference as of a time after such Effective Time.
3. Registration Procedures.
If Aon and, if applicable, the Trust file a registration statement pursuant
to Section 2(a) or Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, Aon shall qualify the Indenture, the New
Guarantee Agreement, if applicable, and the Trust Agreement, if applicable,
under the Trust Indenture Act.
(b) In the event that such qualification would require the appointment of
a new trustee under any of the Indenture, the New Guarantee Agreement or the
Trust Agreement, such new trustee shall be appointed thereunder pursuant to the
applicable provisions thereof.
(c) In connection with the joint and several obligations of Aon and the
Trust with respect to the registration of the Exchange Securities, the Exchange
Guarantee and the Exchange Debentures, as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, Aon and the Trust shall, as soon as
reasonably possible (or as otherwise specified):
(i) prepare and file with the Commission, as soon as
practicable but no later than 150 days after the Issue Date, a
registration statement with respect to the Exchange Registration on
any form which may be utilized by Aon and the Trust and which shall
permit the Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as contemplated
by Section 2(a) hereof, and use its reasonable best efforts to cause
such registration statement to become effective as soon as practicable
thereafter;
(ii) as soon as practicable prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus included therein as may be necessary to effect and maintain
the effectiveness of such registration statement for the periods and
purposes
5
<PAGE>
contemplated in Section 2(a) hereof and as may be required by the
applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement,
and promptly provide each broker-dealer holding Exchange Securities
with such number of copies of the prospectus included therein (as then
amended or supplemented), in conformity in all material respects with
the requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission promulgated thereunder, as
such broker-dealer reasonably may request prior to the expiration of
the Resale Period, for use in connection with resales of Exchange
Securities;
(iii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such
registration statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has
been filed, and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of
the receipt of any comments by the Commission and by the Blue Sky or
securities commissioner or regulator of any state with respect thereto
or any request by the Commission for amendments or supplements to such
registration statement or prospectus or for additional information,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation or
threatening by the Commission of any proceedings for that purpose, (D)
if at any time the joint and several representations and warranties of
Aon and the Trust contemplated by Section 5 cease to be true and
correct in all material respects, (E) of the receipt by either Aon or
the Trust of any notification with respect to the suspension of the
qualification of the Exchange Securities and the Exchange Guarantee
for sale in any United States jurisdiction or the initiation or, to
Aon's or the Trust's knowledge, threatening of any proceeding for such
purpose, or (F) at any time during the Resale Period when a prospectus
is required to be delivered under the Securities Act, that such
registration statement, prospectus, prospectus amendment or supplement
or post-effective amendment does not conform in all material respects
to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
promulgated thereunder or contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances then existing;
(iv) in the event that Aon and the Trust would be required,
pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers
holding Exchange Securities, without delay prepare and furnish to each
such holder a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to purchasers of such
Exchange Securities during the Resale Period, such prospectus shall
conform in all material
6
<PAGE>
respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
promulgated thereunder and shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(v) use their reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of such
registration statement or any post-effective amendment thereto at the
earliest practicable date;
(vi) use their reasonable best efforts to (A) register or
qualify the Exchange Securities and the Exchange Guarantee under the
securities laws or blue sky laws of such jurisdictions as are
contemplated by Section 2(a) no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in
effect and comply with such laws so as to permit the continuance of
offers, sales and dealings therein in such jurisdictions until the
expiration of the Resale Period and (C) take any and all other actions
as may be reasonably necessary or advisable to enable each broker-
dealer holding Exchange Securities to consummate the disposition
thereof in such jurisdictions; provided, however, that neither Aon nor
the Trust shall be required for any such purpose to (1) qualify to do
business in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(vi),
(2) consent to general service of process in any such jurisdiction or
(3) in the case of Aon, make any changes to its charter or by-laws or
any agreement between it and its stockholders or in the case of the
Trust, make any changes to the Trust Agreement;
(vii) use their reasonable best efforts to obtain the consent
or approval of each United States governmental agency or authority,
whether federal, state or local, which may be required to effect the
Exchange Registration, the Exchange Offer and the offering and sale of
Exchange Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for all Exchange Securities, not
later than the applicable Effective Time; and
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to all holders of Securities
as soon as practicable but no later than eighteen months after the
Effective Time, an earnings statement of Aon and its subsidiaries
complying with Section 11 (a) of the Securities Act (including, at the
option of Aon, Rule 158 thereunder).
(d) In connection with the joint and several obligations of Aon and the
Trust with respect to the Shelf Registration, if applicable, Aon and, if
applicable, the Trust shall use
7
<PAGE>
their reasonable best efforts to cause the Shelf Registration to become
effective to permit the sale of the Registrable Securities by the holders
thereof in accordance with the intended method or methods of distribution
thereof described in the Shelf Registration. In connection therewith, Aon and,
if applicable, the Trust shall as soon as reasonably possible (or as otherwise
specified):
(i) prepare and file with the Commission, as soon as
practicable, a registration statement with respect to the Shelf
Registration on any form which may be utilized by Aon and, if
applicable, the Trust and which shall permit the disposition of the
Registrable Securities in accordance with the intended method or
methods thereof, as specified in writing to Aon and, if applicable,
the Trust by the holders of the Registrable Securities and use their
reasonable best efforts to cause such registration statement to become
effective as soon as practicable thereafter;
(ii) as soon as practicable, prepare and file with the
Commission such amendments and supplements to such registration
statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such registration statement
for the period specified in Section 2(b) hereof and as may be required
by the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement and
furnish to the holders of the Registrable Securities copies of any
such supplement or amendment simultaneously with or prior to its being
used or filed with the Commission;
(iii) comply with the provisions of the Securities Act
applicable to Aon or, if applicable, the Trust in connection with the
disposition of all of the Registrable Securities covered by such
registration statement in accordance with the intended methods of
disposition by the holders thereof, set forth in such registration
statement;
(iv) provide (A) the holders of the Registrable Securities to
be included in such registration statement and not more than one
counsel for all the holders of such Registrable Securities, (B) the
underwriters (which term, for purposes of this Debenture Exchange and
Registration Rights Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities
Act), if any, thereof, (C) the sales or placement agent, if any,
therefor and (D) one counsel for such underwriters or agents, if any,
reasonable opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with
the Commission, and each amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such
registration statement, and throughout the period specified in Section
2(b), make available at reasonable times at Aon's principal place of
business or such other reasonable place for inspection by the persons
referred to in Section 3(d)(iv) who shall certify to Aon and, if
applicable, the Trust that they have
8
<PAGE>
a current intention to sell the Registrable Securities pursuant to the
Shelf Registration such financial and other information and books and
records of Aon and, if applicable, the Trust, and cause the officers,
employees, counsel and independent certified public accountants of Aon
and, if applicable, the Trust to respond to such inquiries, as shall
be reasonably necessary, in the judgment of the respective counsel
referred to in such Section, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided,
however, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or
records reasonably designated by Aon as being confidential, until such
time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such registration statement or
otherwise, except by disclosure by such party in breach of this
Agreement), or (B) such person shall be required so to disclose such
information pursuant to the subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter
(subject to, and only to the extent required by, the requirements of
such order, and only after such person shall have given Aon prompt
prior written notice of such requirement);
(vi) promptly notify the selling holders of Registrable
Securities, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof and confirm such
advice in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement
or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for
additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration statement
or the initiation or threatening by the Commission of any proceedings
for that purpose, (D) if at any time the joint and several
representations and warranties of Aon and, if applicable, the Trust
contemplated by Section 3(d)(xv)(A) or Section 5 cease to be true and
correct in all material respects, (E) of the receipt by either Aon or
the Trust of any notification with respect to the suspension of the
qualification of the Registrable Securities and, if applicable, the
Guarantee, for sale in any jurisdiction or the initiation or, to Aon's
or the Trust's knowledge, threatening of any proceeding for such
purpose, or (F) at any time when a prospectus is required to be
delivered under the Securities Act, that such registration statement,
prospectus, prospectus amendment or supplement or post-effective
amendment, or any document incorporated by reference in any of the
foregoing, does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission promulgated thereunder or
contains an untrue statement of a material fact or omits to state any
material
9
<PAGE>
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(vii) use their best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or
any post-effective amendment thereto at the earliest practicable date;
(viii) if requested by any managing underwriter or underwriters,
any placement or sales agent or any holder or counsel for the holders
of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is required
by the applicable rules and regulations of the Commission and as such
managing underwriter or underwriters, such agent or such holder
specifies should be included therein relating to the terms of the sale
of such Registrable Securities, including, without limitation,
information with respect to the Liquidation Amount or the principal
amount, as the case may be, of Registrable Securities being sold by
any holder or agent or to any underwriters, the name and description
of such holder, agent or underwriter, the offering price of such
Registrable Securities and any discount, commission or other
compensation payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other terms of
the offering of the Registrable Securities, to be sold by such holder
or agent or to such underwriters; and make all required filings of
such prospectus supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(ix) furnish to each holder of Registrable Securities, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(d)(iv) an
executed copy of such registration statement, each such amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and such number of copies
of such registration statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by such holder, agent or underwriter, as the case may be)
and of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
promulgated thereunder, and such other documents, as such holder,
agent, if any, and underwriter, if any, may reasonably request in
order to facilitate the offering and disposition of the Registrable
Securities owned by such holder, offered or sold by such agent or
underwritten by such underwriter and to permit such holder, agent and
underwriter to satisfy the prospectus delivery requirements of the
Securities Act; and each of Aon and, if applicable, the Trust hereby
consents to the use of such prospectus (including such preliminary and
summary
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<PAGE>
prospectus) and any amendment or supplement thereto by each such
holder and by any such agent and underwriter, in each case in the form
most recently provided to such party by Aon and the Trust, in
connection with the offering and sale of the Registrable Securities
covered by the prospectus (including such preliminary and summary
prospectus) or any supplement or amendment thereto;
(x) use their reasonable best efforts to (A) register or
qualify the Registrable Securities to be included in such registration
statement and, if applicable, the Guarantee under such securities laws
or blue sky laws of such jurisdictions as any holder of such
Registrable Securities and each placement or sales agent, if any,
therefor and underwriter, if any, thereof shall reasonably request,
(B) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers, sales and
dealings therein in such jurisdictions during the period the Shelf
Registration is required to remain effective under Section 2(b) above
and for so long as may be necessary to enable any such holder, agent
or underwriter to complete its distribution of Securities pursuant to
such registration statement and (C) take any and all other actions as
may be reasonably necessary or advisable to enable each such holder,
agent, if any, and underwriter, if any, to consummate the disposition
in such jurisdictions of Registrable Securities; provided, however,
that neither Aon nor, if applicable, the Trust shall be required for
any such purpose to (1) qualify to do business in any jurisdiction
wherein it would not otherwise be required to qualify but for the
requirements of this Section 3(d)(x), (2) consent to general service
of process in any such jurisdiction, (3) in the case of Aon, make any
changes to its charter or by-laws or any agreement between it and its
shareholders or, if applicable, in the case of the Trust, make any
changes to the Trust Agreement;
(xi) use their reasonable best efforts to obtain the consent
or approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable the
selling holder or holders to offer, or to consummate the disposition
of, their Registrable Securities;
(xii) cooperate with the holders of the Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall be printed,
lithographed or engraved, or produced by any combination of such
methods, and which shall not bear any restrictive legends; and, in the
case of an underwritten offering, enable such Registrable Securities
to be in such denominations and registered in such names as the
managing underwriters may request at least two business days prior to
any sale of the Registrable Securities;
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(xiii) provide a CUSIP number for all Registrable Securities,
not later than the applicable Effective Time;
(xiv) enter into not more than one underwriting agreement,
engagement letter, agency agreement, "best efforts" underwriting
agreement or similar agreement, as appropriate, including (without
limitation) provisions relating to indemnification and contribution
substantially the same as those set forth in Section 6 hereof, and
take such other actions in connection therewith as any holders of
Registrable Securities aggregating at least 25% in aggregate
Liquidation Amount, or in aggregate principal amount, as the case may
be, of the Registrable Securities at the time outstanding shall
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities; provided, that Aon and, if applicable,
the Trust shall not be required to (i) enter into any such agreement
more than once with respect to all of the Registrable Securities and
may delay entering into such agreement until the consummation of any
underwritten public offering which Aon and, if applicable, the Trust
shall have then undertaken or (ii) enter into any engagement letter,
agency agreement, "best effort" underwriting agreement or similar
agreements whatsoever with respect to the Registrable Securities, and
provided further, that Aon and, if applicable, the Trust shall not be
obligated to enter into any such agreement with a broker-dealer which
results in the need for a "qualified independent underwriter" (within
the meaning of the Rules of Fair Practice and the By-Laws of the
National Association of Securities Dealers, Inc. ("NASD") or any
successor thereto, as amended from time to time (the "Rules and By-
Laws of NASD"));
(xv) whether or not an agreement of the type referred to in
Section (3)(d)(xiv) hereof is entered into and whether or not any
portion of the offering contemplated by such registration statement is
an underwritten offering or is made through a placement or sales agent
or any other entity, (A) make such representations and warranties to
the holders of such Registrable Securities and the placement or sales
agent, if any, therefor and the underwriters, if any, thereof
substantially the same as those set forth in Section 1 of the Purchase
Agreement and such other representations and warranties as are
customarily made with respect to the offering of debt securities
pursuant to any appropriate agreement or to a registration statement
on the applicable form under the Securities Act; (B) obtain an opinion
or opinions of counsel to Aon and, if applicable, the Trust
substantially the same as the opinions provided for in Section 5 of
the Purchase Agreement with such additions, substitutions or deletions
of such matters as are customarily covered in opinions for an
underwritten offering, addressed to such holder or holders and the
placement or sales agent, if any, therefor and the underwriters, if
any, thereof and dated the effective date of such registration
statement (and if such registration statement contemplates an
underwritten offering of a part or all of the Registrable Securities,
dated the date of the closing under the underwriting agreement
relating thereto) (it
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being agreed that the matters to be covered by such opinion shall also
include, without limitation, the absence of governmental approvals
required to be obtained in connection with the Shelf Registration, the
offering and sale of the Registrable Securities, this Debenture
Exchange and Registration Rights Agreement or any agreement of the
type referred to in Section (3)(d)(xiv) hereof, except such approvals
as may be required under state securities or blue sky laws; and the
compliance in all material respects as to form of such registration
statement and any documents incorporated by reference therein and of
the Indenture, the Guarantee Agreement, if applicable, and the Trust
Agreement, if applicable, with the requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of the
Commission promulgated thereunder, respectively); and, such opinion
shall also state that such counsel has no reason to believe that, as
of the date of the opinion and of the registration statement or most
recent post-effective amendment thereto, as the case may be, such
registration statement and the prospectus included therein, as then
amended or supplemented, and the documents incorporated by reference
therein (in each case other than the financial statements and other
financial information contained therein) contains or contained an
untrue statement of a material fact or omits or omitted to state
therein a material fact necessary to make the statements therein not
misleading (in the case of such documents, in the light of the
circumstances existing at the time that such documents were filed with
the Commission under the Exchange Act); (C) obtain a "cold comfort"
letter or letters from the independent certified public accountants of
Aon and, if applicable, the Trust addressed to the selling holders of
Registrable Securities, the placement or sales agent, if any, therefor
and the underwriters, if any, thereof, dated (i) the effective date of
such registration statement and (ii) the effective date of any
prospectus supplement to the prospectus included in such registration
statement or post-effective amendment to such registration statement;
(D) deliver such other documents and certificates, including officers'
certificates, as may be reasonably requested by any holders of at
least 25% in aggregate Liquidation Amount, or in aggregate principal
amount, as the case may be, of the Registrable Securities at the time
outstanding or the placement or sales agent, if any, therefor and the
managing underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or
those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the
underwriting agreement or other agreement entered into by Aon and, if
applicable, the Trust; and (E) undertake such obligations relating to
expense reimbursement, indemnification and contribution as are
provided in Section 6 hereof;
(xvi) notify in writing each holder of Registrable Securities
of any proposal by Aon and the Trust to amend or waive any provision
of this Debenture Exchange and Registration Rights Agreement pursuant
to Section 9(h) hereof and of any amendment or waiver effected
pursuant
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thereto, each of which notices shall contain the text of the amendment
or waiver proposed or effected, as the case may be;
(xvii) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling group
or "assist in the distribution" (within the meaning of the Rules and
By-Laws of NASD) thereof, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, assist such broker-
dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by (A) if such Rules or By-Laws,
including Schedule E thereto (or any successor thereto), shall so
require, engaging a "qualified independent underwriter" (as defined in
such Schedule (or any successor thereto)) to participate in the
preparation of the registration statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect
thereto and, if any portion of the offering contemplated by such
registration statement is an underwritten offering or is made through
a placement or sales agent, to recommend the yield of such Registrable
Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 6 hereof (or to such other customary extent as may
be required by such underwriter), and (C) providing such information
to such broker-dealer as may be required in order for such broker-
dealer to comply with the requirements of the Rules and By-Laws of
NASD; and
(xviii) comply with all applicable rules and regulations of the
Commission, and make generally available to its holders of the
Securities as soon as practicable but in any event not later than
eighteen months after the effective date of such registration
statement, an earnings statement of Aon and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
Aon, Rule 158 thereunder).
(e) In the event that Aon and, if applicable, the Trust would be required,
pursuant to Section 3(d)(vi)(F) above, to notify the selling holders of
Registrable Securities, the placement or sales agent, if any, therefor and the
managing underwriters, if any, thereof, Aon and, if applicable, the Trust shall
without delay prepare and furnish to each such holder, to each placement or
sales agent, if any, and to each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to purchasers of Registrable Securities, such prospectus shall conform in all
material respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission promulgated
thereunder and shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
Each broker-dealer holding Exchange Securities and each holder of Registrable
Securities agrees that upon receipt of any notice from Aon and, if applicable,
the Trust pursuant to Section 3(c)(iii)(F) or 3(d)(vi)(F) hereof, as the case
may be, such holder shall
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<PAGE>
forthwith discontinue the disposition of Exchange Securities or Registrable
Securities, as the case may be, pursuant to the registration statement
applicable to such Exchange Securities or Registrable Securities, as the case
may be, until such holder shall have received copies of such amended or
supplemented prospectus, and if so directed by Aon and, if applicable, the
Trust, such holder shall deliver to Aon (at Aon's expense) all copies, other
than permanent file copies, then in such holder's possession of the prospectus
covering such Exchange Securities or Registrable Securities, as the case may be,
at the time of receipt of such notice.
(f) Aon and, if applicable, the Trust may require each holder of
Registrable Securities as to which any registration is being effected to furnish
in writing to Aon and, if applicable, the Trust such information regarding such
holder and such holder's intended method of distribution of such Registrable
Securities as Aon and the Trust may from time to time reasonably request in
writing, but only to the extent that such information is required in order to
comply with the Securities Act. Each such holder agrees to notify Aon and, if
applicable, the Trust as promptly as practicable of any inaccuracy or change in
information previously furnished by such holder to Aon and, if applicable, the
Trust or of the occurrence of any event in either case as a result of which any
prospectus relating to such registration contains or would contain an untrue
statement of a material fact regarding such holder or such holder's intended
method of distribution of such Registrable Securities or omits to state any
material fact regarding such holder or such holder's intended method of
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to Aon and, if applicable,
the Trust any additional information required to correct and update any
previously furnished information or required so that such prospectus shall not
contain, with respect to such holder or the distribution of such Registrable
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Each such holder
shall comply with the provisions of the Securities Act applicable to such holder
with respect to the disposition by such holder of Registrable Securities covered
by such registration statement in accordance with the intended methods of
disposition by such holder set forth in such registration statement.
(g) Until the expiration three years after the Issue Date, Aon will not,
and will not permit any of its "affiliates" (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them except
pursuant to an effective registration statement under the Securities Act or any
exemption therefrom; provided, however, that, for purposes of this paragraph,
"affiliates" shall not include the Purchasers or any of their affiliates other
than Aon and its subsidiaries, officers, managers and directors.
4. Registration Expenses.
If Aon and, if applicable, the Trust file a registration statement pursuant
to Section 2(a) or Section 2(b), the following provisions shall apply:
Aon agrees to bear and to pay or cause to be paid promptly upon request
being made therefor all expenses incident to the performance by Aon and, if
applicable, the Trust
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<PAGE>
or compliance with this Debenture Exchange and Registration Rights Agreement,
including, without limitation, (a) all Commission and any NASD registration and
filing fees and expenses, (b) all fees and expenses in connection with the
qualification of the Securities and, if applicable, the Guarantee for offering
and sale under the state securities and blue sky laws referred to in Section
3(d)(x) hereof, including reasonable fees and disbursements of counsel in
connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, and the certificates representing the Securities and all documents
relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of
the Debenture Trustee under the Indenture, the Issuer Trustees under the Trust
Agreement and, if applicable, the Guarantee Trustee under the Guarantee
Agreement, if applicable, and of any escrow agent or custodian, (f) internal
expenses (including, without limitation, all salaries and expenses of Aon's
officers and employees performing legal or accounting duties), (g) fees,
disbursements and expenses of counsel and independent certified public
accountants of Aon and, if applicable, the Trust (including the expenses of any
opinions or "cold comfort" letters required by or incident to such performance
and compliance), (h) fees, disbursements and expenses of any "qualified
independent underwriter" engaged pursuant to Section 3(d)(xvii) hereof, (i)
fees, disbursements and expenses of one counsel for the holders of Registrable
Securities retained in connection with a Shelf Registration, as selected by the
holders of at least a majority in aggregate Liquidation Amount, or the aggregate
principal amount, as the case may be, of the Registrable Securities being
registered, and fees, expenses and disbursements of any other persons, including
special experts, retained by Aon or, if applicable, the Trust in connection with
such registration (collectively, the "Registration Expenses"). To the extent
that any Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, Aon shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a written
request therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency or brokerage fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such holders (severally or jointly), other
than the counsel and experts specifically referred to above, transfer taxes on
resale of any of the Securities by such holders and any advertising or
solicitation expenses other than expenses specifically referred to above
incurred by or on behalf of such holders in connection with any offers they may
make.
5. Representations and Warranties.
Aon and, if applicable, the Trust, jointly and severally, represent and
warrant to, and agree with, each Purchaser and each of the holders from time to
time of Registrable Securities that:
(a) Each registration statement covering Registrable Securities, the
Guarantee, if applicable, and the Debentures and each prospectus (including any
preliminary or summary prospectus) contained therein or furnished pursuant to
Section 3(d)(ix) hereof and any
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<PAGE>
further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as the
case may be, and, in the case of an underwritten offering of Registrable
Securities, at the time of the closing under the underwriting agreement relating
thereto, will conform in all material respects to the applicable requirements of
the Securities Act and the Trust Indenture Act, the rules and regulations of the
Commission promulgated thereunder and any such registration statement and any
amendment thereto will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and any such prospectus or any amendment
or supplement thereto will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing; and at all times subsequent to the Effective Time of any such
registration statement when a prospectus would be required to be delivered under
the Securities Act, other than from (i) such time as a notice has been given to
holders of Registrable Securities pursuant to Section 3(c)(iii)(F) or Section
3(d)(vi)(F) hereof until (ii) such time as Aon and, if applicable, the Trust
furnish an amended or supplemented prospectus pursuant to Section 3(c)(iv) or
Section 3(e) hereof, as the case may be, each such registration statement, and
each prospectus (including any summary prospectus) contained therein or
furnished pursuant to Section 3(c) or Section 3(d)(ix) hereof, as then amended
or supplemented, will conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission promulgated thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to Aon
and, if applicable, the Trust by a holder of Registrable Securities or any
placement or sales agent therefor or underwriter thereof expressly for use
therein.
(b) Any documents incorporated by reference in any prospectus referred to
in Section 5(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to Aon and the Trust, if applicable, by a
holder of Registrable Securities expressly for use therein.
(c) The representations and warranties of the Trust, if applicable, and Aon
contained in Section 1 of the Purchase Agreement are true and correct with the
same force and effect as though expressly made at and as of the date hereof.
6. Indemnification.
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(a) Upon the registration of the Registrable Securities pursuant to Section
2 hereof, and in consideration of the agreements of the Purchasers contained
herein, and as an inducement to the Purchasers to purchase the Securities, the
Trust and Aon, jointly and severally, agree to indemnify and hold harmless each
of the holders of Registrable Securities to be included in such registration,
and each person who participates as a placement or sales agent or as an
underwriter in any offering or sale of such Registrable Securities and each
person, if any, who controls such holder, or such placement or sales agent, if
any, or such underwriter, if any, within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (each an "Indemnified Person") as follows:
(i) against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which
such Registrable Securities were registered under the Securities Act,
or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading or caused by any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus (or any amendment or
supplement thereto) contained in such registration statement or caused
by any omission or alleged omission to state therein of a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission that was made in
reliance upon and in conformity with written information relating to
such Indemnified Person furnished to the Trust and Aon by, or on
behalf of, such Indemnified Person expressly for use in such
registration statement or such preliminary, final or summary
prospectus (or any amendment or supplement thereto);
(ii) against any and all losses, claims, damages and liabilities
whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission (except as made in reliance upon and in
conformity with information relating to such Indemnified Person
furnished by, or on behalf of, such Indemnified Person as aforesaid),
if such settlement is effected with the written consent of the Trust
and Aon; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by such Indemnified Person),
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or
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<PAGE>
omission (except as made in reliance upon and in conformity with
information relating to such Indemnified Person furnished by, or on
behalf of, such Indemnified Person as aforesaid) to the extent that
any such expense is not paid under (i) or (ii) above.
provided, however, that indemnification with respect to any prospectus shall not
inure to the benefit of any holder of Registrable Securities or Exchange
Securities from whom the Person asserting any loss, claim, damage, liability or
expense purchased such Securities, if a copy of the prospectus (as then amended
or supplemented and furnished by Aon to such holder) was not sent or given by or
on behalf of such person or to such person if such is required by law at or
prior to the sale of such Registrable Securities or Exchange Securities, as the
case may be, and if the prospectus (as so amended and supplemented) would have
cured the defect giving rise to such loss, claim, damage, liability or expense.
(b) Aon may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2 hereof and to entering
into any placement or underwriting agreement with respect thereto, that Aon
shall have received an undertaking reasonably satisfactory to them from the
holder of such Registrable Securities and from each placement agent or
underwriter named in any such placement agreement or underwriting agreement,
severally and not jointly, to indemnify and hold harmless the Trust and Aon and
each person, if any, who controls the Trust or Aon within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against any and all
loss, claim, damage, liability and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in any registration
statement under which such Registrable Securities were registered under the
Securities Act, or any preliminary, final or summary prospectus contained
therein as furnished by the Trust or Aon to any such holder, agent or
underwriter (or any amendment or supplement thereto), in reliance upon and in
conformity with written information relating to such holder, or such placement
or sales agent, if any, or such underwriter, if any, furnished to the Trust and
Aon by or on behalf of such holder, or such placement or sales agent, if any, or
such underwriter, if any, expressly for use in such registration statement or
such preliminary, final or summary prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances;
provided, however, that when more than one of such holders, such placement or
sales agents, if any, or such underwriters, if any, is an indemnified party each
such holder, placement or sales agent or such underwriter, as the case may be,
shall be entitled to separate counsel (in addition to any local counsel) in each
such jurisdiction to the extent such holder, placement or sales agent or such
underwriter, as the case may be, may
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have interests conflicting with those of the other holder, placement or sales
agent or such underwriter, as the case may be. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in this Section 6 is for any reason
held to be unavailable to such holders, such placement or sales agents, if any,
or such underwriters, if any, in accordance with its terms, the Trust, Aon and
such holders, such placement and sales agents, if any, and such underwriters, if
any, shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Trust, Aon and such holders, such placement and sales agents, if any, and such
underwriters, if any, in such proportions as is appropriate to reflect the
relative benefits received by the Trust and Aon on the one hand and such
holders, such placement and sales agents, if any, and such underwriters, if any,
on the other. The relative benefits received by the Trust and Aon on the one
hand and such holders, such placement and sales agents, if any, and such
underwriters, if any, on the other shall be deemed to be in such proportion
represented by the percentage that the total commissions and underwriting
discounts received by such holders, such placement and sales agents, if any, and
such underwriters, if any, to the date of such liability bears to the total
sales price (before deducting expenses) received by the Trust and such holders,
such placement and sales agents, if any, and such underwriters, if any, from the
sale of such Securities made to the date of such liability, and the Trust and
Aon are jointly and severally responsible for the balance. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if such holders, such placement and sales agents, if any, and
such underwriters, if any, failed to give the notice required under this
subsection (c), then the Trust, Aon and such holders, such placement and sales
agents, if any, and such underwriters, if any, shall contribute to such
aggregate losses, liabilities, claims, damages and expenses in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Trust and Aon on the one hand and such holders, such
placement and sales agents, if any, and such underwriters, if any, on the other
in connection with the statements or omissions which resulted in such
liabilities, claims, damages and expenses, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust and Aon on the one hand or is
supplied by, or on behalf of, such holders, such placement or sales agents, if
any, and such underwriters, if any, on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Trust, Aon and such holders, such placement or
sales agents, if any, and such underwriters, if any, agree that it would not be
just and equitable if contributions pursuant to this paragraph were determined
pro rata (even if such holders, such placement or sales agents, if any, and such
underwriters, if any, were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this paragraph. Notwithstanding the provisions of
20
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this paragraph, such holders, such placement or sales agents, if any, and such
underwriters, if any, shall not be required to contribute any amount in excess
of the amount by which the total price at which the Securities referred to in
the second sentence of this paragraph that were offered and sold to the public
through such holders, such placement or sales agents, if any, and such
underwriters, if any, exceeds the amount of any damages that such holders, such
placement or sales agents, if any, and such underwriters, if any, have otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
under this paragraph to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if any,
who controls any such holders, such placement or sales agents, if any, and such
underwriters, if any, within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such holders, such placement or sales agents, if any, and such underwriters, if
any, and each person, if any, who controls the Trust or Aon within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Trust or Aon.
7.Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten offering,
the managing underwriter or underwriters thereof shall be designated by the
holders of at least a majority in aggregate Liquidation Amount, or aggregate
principal amount, as the case may be, of the Registrable Securities to be
included in such offering, provided that such designated managing underwriter or
underwriters is or are reasonably acceptable to the Trust, if applicable, and
Aon.
(b) Participation by Holders. Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
(c) Consolidated Earnings Statements. In the event of an underwritten
offering, Aon agrees to make generally available to holders of Securities as
soon as practicable, but in any event not later than eighteen months after the
effective date of the applicable registration statement (as defined in Rule
158(c) under the Securities Act), a consolidated earnings statement of Aon
(which need not be audited) complying with Section 11 (a) of the Securities Act
and the rules and regulations of the Commission thereunder (including, at the
option of Aon, Rule 158 under the Securities Act)
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8. Rule 144.
Aon covenants to the holders of Registrable Securities that to the extent
it shall be required to do so under the Exchange Act, Aon shall timely file the
reports required to be filed by it under the Exchange Act or the Securities Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to make Rule 144 available to such holder for the sale of
Registrable Securities without registration under the Securities Act within the
limitations of the exemption provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities in connection with that holder's sale pursuant to Rule
144, Aon shall deliver to such holder a written statement as to whether it has
complied with such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Trust and Aon represents,
warrants, covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this
Debenture Exchange and Registration Rights Agreement and that the Capital
Securities Exchange and Registration Rights Agreement and the Guarantee Exchange
and Registration Rights Agreement should be construed to be consistent with the
terms hereof.
(b) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Debenture
Exchange and Registration Rights Agreement in accordance with the terms and
conditions of this Debenture Exchange and Registration Rights Agreement, in any
court of the United States or any State thereof having jurisdiction.
(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: if to the Trust or to
Aon, then to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606,
Attention: Treasurer, and if to a holder, to the address of such holder set
forth in the security register or other records of the Trust or of the Debenture
Trustee under the Indenture, as the case may be, or to such other address as any
party may have furnished to the others in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
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(d) Parties in Interest. All the terms and provisions of this Debenture
Exchange and Registration Rights Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto. In the event that any transferee of any holder of
Registrable Securities shall become a holder of Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed a
party hereto for all purposes and such Registrable Securities shall be held
subject to all of the terms of this Debenture Exchange and Registration Rights
Agreement, and by taking and holding such Registrable Securities such transferee
shall be entitled to receive the benefits of and be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Debenture Exchange and Registration Rights Agreement. If Aon shall so request,
any such successor, assign or transferee shall agree in writing to acquire and
hold the Registrable Securities subject to all of the terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Debenture Exchange and
Registration Rights Agreement or made pursuant hereto shall remain in full force
and effect regardless of any investigation (or statement as to the results
thereof) made by or on behalf of any holder of Registrable Securities, any
director, officer or partner of such holder, any agent or underwriter or any
director, officer or partner thereof, or any controlling person of any of the
foregoing, and shall survive delivery of and payment for the Registrable
Securities and the transfer and registration of Registrable Securities by such
holder and/or the consummation of an Exchange Offer.
(f) LAW GOVERNING. THIS DEBENTURE EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Debenture Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Debenture
Exchange and Registration Rights Agreement and shall not affect in any way the
meaning or interpretation of this Debenture Exchange and Registration Rights
Agreement.
(h) Entire Agreement; Amendments. This Debenture Exchange and Registration
Rights Agreement and the other agreements referred to herein or delivered
pursuant hereto which form a part hereof contain the entire understanding of the
parties with respect to its subject matter. This Debenture Exchange and
Registration Rights Agreement and such other agreements referred to herein
supersede all prior agreements and understandings between the parties with
respect to its subject matter. This Debenture Exchange and Registration Rights
Agreement may be amended and the observance of any term of this Debenture
Exchange and Registration Rights Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively) only by a
written instrument duly executed by Aon, the Trust and the holders of at least
66-2/3 percent in aggregate Liquidation Amount or principal amount, as the case
may be, of the Registrable Securities at the time outstanding. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
23
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by any amendment or waiver effected pursuant to this Section 9(h), whether or
not any notice, writing or marking indicating such amendment or waiver appears
on such Registrable Securities or is delivered to such holder.
(i) Inspection. For so long as this Debenture Exchange and Registration
Rights Agreement shall be in effect, this Debenture Exchange and Registration
Rights Agreement and a complete list of the names and addresses of all the
registered holders of Registrable Securities shall be made available for
inspection and copying on any business day by any holder of Registrable
Securities at the offices of Aon at the address thereof set forth in Section
9(c) above.
(j) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
(k) Termination. Except for the respective indemnities, representations and
warranties set forth herein, this Debenture Exchange and Registration Rights
Agreement shall terminate when all Securities, Exchange Securities and
Registrable Securities cease to be outstanding.
24
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This Debenture Exchange and Registration Rights Agreement is executed as of
the day and year first above written.
AON CORPORATION
By: /s/ Harvey N. Medvin
----------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
AON CAPITAL A
By: /s/ Harvey N. Medvin
----------------------------------------
Name: Harvey N. Medvin
Administrative Trustee
MORGAN STANLEY & CO. INCORPORATED
As Representative of the Purchasers named in
Schedule I to the Purchase Agreement
By: /s/ Michael Fusco
----------------------------------------
(Morgan Stanley & Co. Incorporated)
Acting severally, and not jointly and severally,
on behalf of themselves and each of the
Purchasers named in Schedule I to the Purchase
Agreement
25
<PAGE>
GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of January 13,
1997, by and among Aon Capital A, a Delaware business trust (the "Trust"), Aon
Corporation, a Delaware corporation ("Aon"), and Morgan Stanley & Co.
Incorporated and Goldman, Sachs & Co. (collectively, the "Purchasers") of the
8.205% Capital Securities of the Trust.
1. Certain Definitions. For purposes of this Guarantee Exchange and
Registration Rights Agreement, the following terms shall have the following
respective meanings:
(a) "Capital Securities Exchange and Registration Rights Agreement" means
the Exchange and Registration Rights Agreement in respect of the Securities
dated as of January 13, 1997 among Aon, the Trust and the Purchasers.
(b) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
(c) "Debenture Exchange and Registration Rights Agreement" means the
Debenture Exchange and Registration Rights Agreement in respect of the
Debentures dated as of January 13, 1997 among Aon, the Trust and the Purchasers.
(d) "Debentures" means the 8.205% Junior Subordinated Deferrable Interest
Debentures due January 1, 2027 of Aon, to be issued pursuant to the Indenture.
(e) "Effective Time", in the case of (i) an Exchange Offer, means the date
on which the Commission declares the Exchange Offer registration statement
effective or on which such registration statement otherwise becomes effective
and (ii) a Shelf Registration, means the date on which the Commission declares
the Shelf Registration effective or on which the Shelf Registration otherwise
becomes effective.
(f) "Exchange Act" means the Securities Exchange Act of 1934, or any
successor thereto, as amended from time to time.
(g) "Exchange Debentures" has the meaning set forth in Section 2(a) hereof.
(h) "Exchange Guarantee" has the meaning set forth in Section 2(a) hereof.
(i) "Exchange Offer" has the meaning set forth in Section 2(a) hereof.
(j) "Exchange Securities" has the meaning set forth in Section 2(a) hereof.
(k) "Guarantee" means the Guarantee of Aon with respect to the Securities,
to the extent set forth in the Guarantee Agreement.
(l) "Guarantee Agreement" means the Capital Securities Guarantee Agreement
dated as of January 13, 1997 between Aon and The Bank of New York, as Guarantee
Trustee (together with its successors and assigns, the "Guarantee Trustee"), for
the benefit of the holders of the Securities.
<PAGE>
(m) The term "holder" has the meaning set forth in the Capital Securities
Exchange and Registration Rights Agreement.
(n) "Indemnified Person" has the meaning set forth in Section 6(a) hereof.
(0) "Indenture" means the Indenture dated as of January 13, 1997, between
Aon and The Bank of New York, as Debenture Trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, and as further amended or
supplemented from time to time.
(p) "Issue Date" means January 13, 1997.
(q) "Liquidation Amount" means the stated liquidation preference of the
Securities.
(r) "New Guarantee Agreement" has the meaning set forth in Section 2(a)
hereof.
(s) The term "person" means 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.
(t) "Purchase Agreement" means the Purchase Agreement dated January 8,
1997, among Aon, the Trust and the Purchasers.
(u) "Registrable Securities" has the meaning set forth in the Capital
Securities Exchange and Registration Rights Agreement.
(v) "Registration Expenses" has the meaning set forth in Section 4 hereof.
(w) "Resale Period" has the meaning set forth in the Capital Securities
Exchange and Registration Rights Agreement.
(x) "Securities" means, collectively, the $800,000,000 aggregate
Liquidation Amount of the 8.205% Capital Securities, Liquidation Amount $1,000
per Capital Security, of the Trust to be issued and sold to the Purchasers, and
any securities issued in exchange therefor or in lieu thereof pursuant to the
Trust Agreement.
(y) "Securities Act" means the Securities Act of 1933, or any successor
thereto, as amended from time to time.
(z) "Shelf Registration" has the meaning set forth in Section 2(b) hereof.
(aa) "Trust Agreement" means the Amended and Restated Trust Agreement dated
as of January 13, 1997 among Aon, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust.
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<PAGE>
(bb) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as amended from time to time.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this Guarantee
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Guarantee Exchange
and Registration Rights Agreement as a whole and not to any particular Section
or other subdivision.
2. Registration Under the Securities Act.
(a) If Aon and the Trust file a registration statement pursuant to Section
2(a) of the Capital Securities Exchange and Registration Rights Agreement, then
Aon and the Trust agree, jointly and severally, to include in such registration
statement an offer to exchange (the "Exchange Offer") the Guarantee for a new
guarantee of Aon to be extended pursuant to a new guarantee agreement to be
entered into by Aon and the Guarantee Trustee for the benefit of holders of the
Exchange Securities (as defined below), the Registrable Securities, if any, and
the Securities, if any (the "New Guarantee Agreement"), which will be qualified
under the Trust Indenture Act, such new guarantee to be substantially identical
to the Guarantee except that it will relate to the Exchange Securities, the
Registrable Securities, if any, and the Securities, if any, and it will be
registered pursuant to an effective registration statement under the Securities
Act and such new guarantee will not contain provisions restricting transfer in
the absence of registration under the Securities Act (such new guarantee
hereinafter called "Exchange Guarantee"). Such registration statement shall also
relate to, and the consummation of the Exchange Offer shall be conditioned upon
the consummation of, an offer to exchange the Debentures for substantially
identical debentures of Aon pursuant to the Debenture Exchange and Registration
Rights Agreement (the "Exchange Debentures") and to an offer to exchange the
Securities for substantially identical capital securities of the Trust pursuant
to the Capital Securities Exchange and Registration Rights Agreement (the
"Exchange Securities"). Aon and the Trust agree, jointly and severally, to use
their reasonable best efforts to cause such registration statement to become
effective under the Securities Act within 180 days of the Issue Date. The
Exchange Offer will be registered under the Securities Act on the appropriate
form. The Exchange Offer shall be deemed to have been completed upon the
completion of the exchange of the Exchange Guarantee for the Guarantee pursuant
to the Exchange Offer.
(b) If Aon and the Trust file a "shelf" registration statement pursuant to
Section 2(b) of the Capital Securities Exchange and Registration Rights
Agreement without also filing a registration statement pursuant to Section 2(a)
thereof, then such "shelf" registration statement shall provide for the
registration of the Guarantee (the "Shelf Registration"). The Shelf Registration
shall also provide for the registration of the Debentures pursuant to the
Debenture Exchange and Registration Rights Agreement and for the registration of
and the sale on a continuous or delayed basis by the holders of, all of the
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission pursuant to the Capital Securities
Exchange and Registration Rights Agreement. Aon and the Trust agree, jointly and
severally, to use their reasonable best efforts to cause the Shelf Registration
to become or be declared effective and to keep such Shelf Registration
continuously effective for a period ending on the earlier of (A) the third
anniversary of the
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<PAGE>
Issue Date or (B) the later of (i) such time as there are no
longer any Securities outstanding or (ii) as required under the Debenture
Exchange and Registration Rights Agreement. Aon and the Trust further agree,
jointly and severally, to supplement or make amendments to the Shelf
Registration, as and when required by the rules, regulations or instructions
applicable to the registration form used by Aon and the Trust for such Shelf
Registration or by the Securities Act or rules and regulations thereunder for
shelf registration.
(c) Any reference herein to a registration statement shall be deemed to
include any document incorporated therein by reference as of the applicable
Effective Time and any reference herein to any post-effective amendment to a
registration statement shall be deemed to include any document incorporated
therein by reference as of a time after such Effective Time.
3. Registration Procedures.
If Aon and the Trust file a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, Aon shall qualify the Indenture, the New
Guarantee Agreement and the Trust Agreement under the Trust Indenture Act.
(b) In the event that such qualification would require the appointment of a
new trustee under any of the Indenture, the New Guarantee Agreement or the Trust
Agreement, such new trustee shall be appointed thereunder pursuant to the
applicable provisions thereof.
(c) In connection with the joint and several obligations of Aon and the
Trust with respect to the registration of the Exchange Securities, the Exchange
Guarantee and the Exchange Debentures, as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, Aon and the Trust shall, as soon as
reasonably possible (or as otherwise specified):
(i) prepare and file with the Commission, as soon as practicable
but no later than 150 days after the Issue Date, a registration
statement with respect to the Exchange Registration on any form which
may be utilized by Aon and the Trust and which shall permit the
Exchange Offer and resales of Exchange Securities by broker-dealers
during the Resale Period to be effected as contemplated by Section
2(a) hereof, and use its reasonable best efforts to cause such
registration statement to become effective as soon as practicable
thereafter;
(ii) as soon as practicable prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus included therein as may be necessary to effect and maintain
the effectiveness of such registration statement for the periods and
purposes contemplated in Section 2(a) hereof and as may be required by
the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement,
and promptly provide each broker-dealer holding Exchange Securities
with such number of copies
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<PAGE>
of the prospectus included therein (as then amended or supplemented),
in conformity in all material respects with the requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission promulgated thereunder, as such broker-
dealer reasonably may request prior to the expiration of the Resale
Period, for use in connection with resales of Exchange Securities;
(iii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such
registration statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has
been filed, and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of
the receipt of any comments by the Commission and by the Blue Sky or
securities commissioner or regulator of any state with respect thereto
or any request by the Commission for amendments or supplements to such
registration statement or prospectus or for additional information,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation or
threatening by the Commission of any proceedings for that purpose, (D)
if at any time the joint and several representations and warranties of
Aon and the Trust contemplated by Section 5 cease to be true and
correct in all material respects, (E) of the receipt by either Aon or
the Trust of any notification with respect to the suspension of the
qualification of the Exchange Securities and the Exchange Guarantee
for sale in any United States jurisdiction or the initiation or, to
Aon's or the Trust's knowledge, threatening of any proceeding for such
purpose, or (F) at any time during the Resale Period when a prospectus
is required to be delivered under the Securities Act, that such
registration statement, prospectus, prospectus amendment or supplement
or post-effective amendment does not conform in all material respects
to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
promulgated thereunder or contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances then existing;
(iv) in the event that Aon and the Trust would be required,
pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers
holding Exchange Securities, without delay prepare and furnish to each
such holder a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to purchasers of such
Exchange Securities during the Resale Period, such prospectus shall
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission promulgated thereunder and shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
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<PAGE>
(v) use their reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto at the earliest
practicable date;
(vi) use their reasonable best efforts to (A) register or
qualify the Exchange Securities and the Exchange Guarantee under the
securities laws or blue sky laws of such jurisdictions as are
contemplated by Section 2(a) no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in
effect and comply with such laws so as to permit the continuance of
offers, sales and dealings therein in such jurisdictions until the
expiration of the Resale Period and (C) take any and all other actions
as may be reasonably necessary or advisable to enable each broker-
dealer holding Exchange Securities to consummate the disposition
thereof in such jurisdictions; provided, however, that neither Aon nor
the Trust shall be required for any such purpose to (1) qualify to do
business in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(vi),
(2) consent to general service of process in any such jurisdiction or
(3) in the case of Aon, make any changes to its charter or by-laws or
any agreement between it and its stockholders or in the case of the
Trust, make any changes to the Trust Agreement;
(vii) use their reasonable best efforts to obtain the consent or
approval of each United States governmental agency or authority,
whether federal, state or local, which may be required to effect the
Exchange Registration, the Exchange Offer and the offering and sale of
Exchange Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for all Exchange Securities, not
later than the applicable Effective Time; and
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to all holders of Securities
as soon as practicable but no later than eighteen months after the
Effective Time, an earnings statement of Aon and its subsidiaries
complying with Section 11 (a) of the Securities Act (including, at the
option of Aon, Rule 158 thereunder).
(d) In connection with the joint and several obligations of Aon and the
Trust with respect to the Shelf Registration, if applicable, Aon and the Trust
shall use their reasonable best efforts to cause the Shelf Registration to
become effective to permit the sale of the Registrable Securities by the holders
thereof in accordance with the intended method or methods of distribution
thereof described in the Shelf Registration. In connection therewith, Aon and
the Trust shall as soon as reasonably possible (or as otherwise specified):
(i) prepare and file with the Commission, as soon as
practicable, a registration statement with respect to the Shelf
Registration on any form which may be utilized by Aon and the Trust
and which shall
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<PAGE>
permit the disposition of the Registrable Securities in accordance
with the intended method or methods thereof, as specified in writing
to Aon and the Trust by the holders of the Registrable Securities and
use their reasonable best efforts to cause such registration statement
to become effective as soon as practicable thereafter;
(ii) as soon as practicable, prepare and file with the
Commission such amendments and supplements to such registration
statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such registration statement
for the period specified in Section 2(b) hereof and as may be required
by the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement and
furnish to the holders of the Registrable Securities copies of any
such supplement or amendment simultaneously with or prior to its being
used or filed with the Commission;
(iii) comply with the provisions of the Securities Act
applicable to Aon or the Trust in connection with the disposition of
all of the Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by
the holders thereof, set forth in such registration statement;
(iv) provide (A) the holders of the Registrable Securities to be
included in such registration statement and not more than one counsel
for all the holders of such Registrable Securities, (B) the
underwriters (which term, for purposes of this Guarantee Exchange and
Registration Rights Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities
Act), if any, thereof, (C) the sales or placement agent, if any,
therefor and (D) one counsel for such underwriters or agents, if any,
reasonable opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with
the Commission, and each amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such
registration statement, and throughout the period specified in Section
2(b), make available at reasonable times at Aon's principal place of
business or such other reasonable place for inspection by the persons
referred to in Section 3(d)(iv) who shall certify to Aon and the Trust
that they have a current intention to sell the Registrable Securities
pursuant to the Shelf Registration such financial and other
information and books and records of Aon and the Trust, and cause the
officers, employees, counsel and independent certified public
accountants of Aon and the Trust to respond to such inquiries, as
shall be reasonably necessary, in the judgment of the respective
counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to maintain
in confidence and not to disclose to any other person any information
or records reasonably designated by Aon as being confidential, until
such time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such
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<PAGE>
registration statement or otherwise, except by disclosure by such
party in breach of this Agreement), or (B) such person shall be
required so to disclose such information pursuant to the subpoena or
order of any court or other governmental agency or body having
jurisdiction over the matter (subject to, and only to the extent
required by, the requirements of such order, and only after such
person shall have given Aon prompt prior written notice of such
requirement);
(vi) promptly notify the selling holders of Registrable
Securities, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof and confirm such
advice in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement
or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same
has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for
additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such registration statement
or the initiation or threatening by the Commission of any proceedings
for that purpose, (D) if at any time the joint and several
representations and warranties of Aon and the Trust contemplated by
Section 3(d)(xv)(A) or Section 5 cease to be true and correct in all
material respects, (E) of the receipt by either Aon or the Trust of
any notification with respect to the suspension of the qualification
of the Registrable Securities and the Guarantee for sale in any
jurisdiction or the initiation or, to Aon's or the Trust's knowledge,
threatening of any proceeding for such purpose, or (F) at any time
when a prospectus is required to be delivered under the Securities
Act, that such registration statement, prospectus, prospectus
amendment or supplement or post-effective amendment, or any document
incorporated by reference in any of the foregoing, does not conform in
all material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission promulgated thereunder or contains an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(vii) use their best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or
any post-effective amendment thereto at the earliest practicable date;
(viii) if requested by any managing underwriter or underwriters,
any placement or sales agent or any holder or counsel for the holders
of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is required
by the applicable rules and regulations of the Commission and as such
managing underwriter or underwriters, such agent or such holder
specifies should be included
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<PAGE>
therein relating to the terms of the sale of such Registrable
Securities, including, without limitation, information with respect to
the Liquidation Amount or the principal amount, as the case may be, of
Registrable Securities being sold by any holder or agent or to any
underwriters, the name and description of such holder, agent or
underwriter, the offering price of such Registrable Securities and any
discount, commission or other compensation payable in respect thereof,
the purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable
Securities, to be sold by such holder or agent or to such
underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after notification of
the matters to be incorporated in such prospectus supplement or post-
effective amendment;
(ix) furnish to each holder of Registrable Securities, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(d)(iv) an
executed copy of such registration statement, each such amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and such number of copies
of such registration statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by such holder, agent or underwriter, as the case may be)
and of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
promulgated thereunder, and such other documents, as such holder,
agent, if any, and underwriter, if any, may reasonably request in
order to facilitate the offering and disposition of the Registrable
Securities owned by such holder, offered or sold by such agent or
underwritten by such underwriter and to permit such holder, agent and
underwriter to satisfy the prospectus delivery requirements of the
Securities Act; and each of Aon and the Trust hereby consents to the
use of such prospectus (including such preliminary and summary
prospectus) and any amendment or supplement thereto by each such
holder and by any such agent and underwriter, in each case in the form
most recently provided to such party by Aon and the Trust, in
connection with the offering and sale of the Registrable Securities
covered by the prospectus (including such preliminary and summary
prospectus) or any supplement or amendment thereto;
(x) use their reasonable best efforts to (A) register or qualify
the Registrable Securities to be included in such registration
statement and the Guarantee under such securities laws or blue sky
laws of such jurisdictions as any holder of such Registrable
Securities and each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers, sales and dealings therein in
such jurisdictions during the period the Shelf Registration is
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<PAGE>
required to remain effective under Section 2(b) above and for so long
as may be necessary to enable any such holder, agent or underwriter to
complete its distribution of Securities pursuant to such registration
statement and (C) take any and all other actions as may be reasonably
necessary or advisable to enable each such holder, agent, if any, and
underwriter, if any, to consummate the disposition in such
jurisdictions of Registrable Securities; provided, however, that
neither Aon nor the Trust shall be required for any such purpose to
(1) qualify to do business in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Section 3(d)(x), (2) consent to general service of process in any such
jurisdiction, (3) in the case of Aon, make any changes to its charter
or by-laws or any agreement between it and its shareholders or, in the
case of the Trust, make any changes to the Trust Agreement;
(xi) use their reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable the
selling holder or holders to offer, or to consummate the disposition
of, their Registrable Securities;
(xii) cooperate with the holders of the Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall be printed,
lithographed or engraved, or produced by any combination of such
methods, and which shall not bear any restrictive legends; and, in the
case of an underwritten offering, enable such Registrable Securities
to be in such denominations and registered in such names as the
managing underwriters may request at least two business days prior to
any sale of the Registrable Securities;
(xiii) provide a CUSIP number for all Registrable Securities,
not later than the applicable Effective Time;
(xiv) enter into not more than one underwriting agreement,
engagement letter, agency agreement, "best efforts" underwriting
agreement or similar agreement, as appropriate, including (without
limitation) provisions relating to indemnification and contribution
substantially the same as those set forth in Section 6 hereof, and
take such other actions in connection therewith as any holders of
Registrable Securities aggregating at least 25% in aggregate
Liquidation Amount, or in the aggregate principal amount, as the case
may be, of the Registrable Securities at the time outstanding shall
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities; provided, that Aon and the Trust shall
not be required to (i) enter into any such agreement more than once
with respect to all of the Registrable Securities and may delay
entering into such agreement until the consummation of any
underwritten public offering which Aon and the Trust shall have then
undertaken or (ii) enter into any engagement letter, agency agreement,
"best effort" underwriting agreement
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<PAGE>
or similar agreements whatsoever with respect to the Registrable
Securities, and provided further, that Aon and the Trust shall not be
obligated to enter into any such agreement with a broker-dealer which
results in the need for a "qualified independent underwriter" (within
the meaning of the Rules of Fair Practice and the By-Laws of the
National Association of Securities Dealers, Inc. ("NASD") or any
successor thereto, as amended from time to time (the "Rules and By-
Laws of NASD"));
(xv) whether or not an agreement of the type referred to in
Section (3)(d)(xiv) hereof is entered into and whether or not any
portion of the offering contemplated by such registration statement is
an underwritten offering or is made through a placement or sales agent
or any other entity, (A) make such representations and warranties to
the holders of such Registrable Securities and the placement or sales
agent, if any, therefor and the underwriters, if any, thereof
substantially the same as those set forth in Section 1 of the Purchase
Agreement and such other representations and warranties as are
customarily made with respect to the offering of debt securities
pursuant to any appropriate agreement or to a registration statement
on the applicable form under the Securities Act; (B) obtain an opinion
or opinions of counsel to Aon and the Trust substantially the same as
the opinions provided for in Section 5 of the Purchase Agreement with
such additions, substitutions or deletions of such matters as are
customarily covered in opinions for an underwritten offering,
addressed to such holder or holders and the placement or sales agent,
if any, therefor and the underwriters, if any, thereof and dated the
effective date of such registration statement (and if such
registration statement contemplates an underwritten offering of a part
or all of the Registrable Securities, dated the date of the closing
under the underwriting agreement relating thereto) (it being agreed
that the matters to be covered by such opinion shall also include,
without limitation, the absence of governmental approvals required to
be obtained in connection with the Shelf Registration, the offering
and sale of the Registrable Securities, this Guarantee Exchange and
Registration Rights Agreement or any agreement of the type referred to
in Section (3)(d)(xiv) hereof, except such approvals as may be
required under state securities or blue sky laws; and the compliance
in all material respects as to form of such registration statement and
any documents incorporated by reference therein and of the Indenture,
the Guarantee Agreement and the Trust Agreement with the requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission promulgated thereunder, respectively);
and, such opinion shall also state that such counsel has no reason to
believe that, as of the date of the opinion and of the registration
statement or most recent post-effective amendment thereto, as the case
may be, such registration statement and the prospectus included
therein, as then amended or supplemented, and the documents
incorporated by reference therein (in each case other than the
financial statements and other financial information contained
therein) contains or contained an untrue statement of a material fact
or omits or omitted to state therein a material fact necessary to make
the statements therein not misleading (in the case of such documents,
in the light of the circumstances existing at the time that such
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<PAGE>
documents were filed with the Commission under the Exchange Act); (C)
obtain a "cold comfort" letter or letters from the independent
certified public accountants of Aon and the Trust addressed to the
selling holders of Registrable Securities, the placement or sales
agent, if any, therefor and the underwriters, if any, thereof, dated
(i) the effective date of such registration statement and (ii) the
effective date of any prospectus supplement to the prospectus included
in such registration statement or post-effective amendment to such
registration statement; (D) deliver such other documents and
certificates, including officers' certificates, as may be reasonably
requested by any holders of at least 25% in aggregate Liquidation
Amount, or in the aggregate principal amount, as the case may be, of
the Registrable Securities at the time outstanding or the placement or
sales agent, if any, therefor and the managing underwriters, if any,
thereof to evidence the accuracy of the representations and warranties
made pursuant to clause (A) above or those contained in Section 5(a)
hereof and the compliance with or satisfaction of any agreements or
conditions contained in the underwriting agreement or other agreement
entered into by Aon and the Trust; and (E) undertake such obligations
relating to expense reimbursement, indemnification and contribution as
are provided in Section 6 hereof;
(xvi) notify in writing each holder of Registrable Securities of
any proposal by Aon and the Trust to amend or waive any provision of
this Guarantee Exchange and Registration Rights Agreement pursuant to
Section 9(h) hereof and of any amendment or waiver effected pursuant
thereto, each of which notices shall contain the text of the amendment
or waiver proposed or effected, as the case may be;
(xvii) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling group
or "assist in the distribution" (within the meaning of the Rules and
By-Laws of NASD) thereof, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, assist such broker-
dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by (A) if such Rules or By-Laws,
including Schedule E thereto (or any successor thereto), shall so
require, engaging a "qualified independent underwriter" (as defined in
such Schedule (or any successor thereto)) to participate in the
preparation of the registration statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect
thereto and, if any portion of the offering contemplated by such
registration statement is an underwritten offering or is made through
a placement or sales agent, to recommend the yield of such Registrable
Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 6 hereof (or to such other customary extent as may
be required by such underwriter), and (C) providing such information
to such broker-dealer as
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<PAGE>
may be required in order for such broker-dealer to comply with the
requirements of the Rules and By-Laws of NASD; and
(xviii) comply with all applicable rules and regulations of the
Commission, and make generally available to its holders of the
Securities as soon as practicable but in any event not later than
eighteen months after the effective date of such registration
statement, an earnings statement of Aon and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
Aon, Rule 158 thereunder).
(e) In the event that Aon and the Trust would be required, pursuant to
Section 3(d)(vi)(F) above, to notify the selling holders of Registrable
Securities, the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, Aon and the Trust shall without delay prepare and
furnish to each such holder, to each placement or sales agent, if any, and to
each underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material respects
to the applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission promulgated thereunder and shall
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Each broker-dealer
holding Exchange Securities and each holder of Registrable Securities agrees
that upon receipt of any notice from Aon and the Trust pursuant to Section
3(c)(iii)(F) or 3(d)(vi)(F) hereof, as the case may be, such holder shall
forthwith discontinue the disposition of Exchange Securities or Registrable
Securities, as the case may be, pursuant to the registration statement
applicable to such Exchange Securities or Registrable Securities, as the case
may be, until such holder shall have received copies of such amended or
supplemented prospectus, and if so directed by Aon and the Trust, such holder
shall deliver to Aon (at Aon's expense) all copies, other than permanent file
copies, then in such holder's possession of the prospectus covering such
Exchange Securities or Registrable Securities, as the case may be, at the time
of receipt of such notice.
(f) Aon and the Trust may require each holder of Registrable Securities as
to which any registration is being effected to furnish in writing to Aon and the
Trust such information regarding such holder and such holder's intended method
of distribution of such Registrable Securities as Aon and the Trust may from
time to time reasonably request in writing, but only to the extent that such
information is required in order to comply with the Securities Act. Each such
holder agrees to notify Aon and the Trust as promptly as practicable of any
inaccuracy or change in information previously furnished by such holder to Aon
and the Trust or of the occurrence of any event in either case as a result of
which any prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such holder or such holder's
intended method of distribution of such Registrable Securities or omits to state
any material fact regarding such holder or such holder's intended method of
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to Aon and the Trust any
additional information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with respect
to such holder or the distribution of such Registrable Securities, an untrue
statement of a material fact or omit to state a material fact required to
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<PAGE>
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing. Each such holder shall comply with the
provisions of the Securities Act applicable to such holder with respect to the
disposition by such holder of Registrable Securities covered by such
registration statement in accordance with the intended methods of disposition by
such holder set forth in such registration statement.
(g) Until the expiration three years after the Issue Date, Aon will not,
and will not permit any of its "affiliates" (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them except
pursuant to an effective registration statement under the Securities Act or any
exemption therefrom; provided, however, that, for purposes of this paragraph,
"affiliates" shall not include the Purchasers or any of their affiliates other
than Aon and its subsidiaries, officers, managers and directors.
4. Registration Expenses.
If Aon and the Trust file a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
Aon agrees to bear and to pay or cause to be paid promptly upon request
being made therefor all expenses incident to the performance by Aon and the
Trust or compliance with this Guarantee Exchange and Registration Rights
Agreement, including, without limitation, (a) all Commission and any NASD
registration and filing fees and expenses, (b) all fees and expenses in
connection with the qualification of the Securities and the Guarantee for
offering and sale under the state securities and blue sky laws referred to in
Section 3(d)(x) hereof, including reasonable fees and disbursements of counsel
in connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, and the certificates representing the Securities and all documents
relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of
the Debenture Trustee under the Indenture, the Issuer Trustees under the Trust
Agreement and the Guarantee Trustee under the Guarantee Agreement, and of any
escrow agent or custodian, (f) internal expenses (including, without limitation,
all salaries and expenses of Aon's officers and employees performing legal or
accounting duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of Aon and the Trust (including the
expenses of any opinions or "cold comfort" letters required by or incident to
such performance and compliance), (h) fees, disbursements and expenses of any
"qualified independent underwriter" engaged pursuant to Section 3(d)(xvii)
hereof, (i) fees, disbursements and expenses of one counsel for the holders of
Registrable Securities retained in connection with a Shelf Registration, as
selected by the holders of at least a majority in aggregate Liquidation Amount,
or the aggregate principal amount, as the case may be, of the Registrable
Securities being registered, and fees, expenses and disbursements of any other
persons, including special experts, retained by Aon or the Trust in connection
with such registration (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by any
holder of Registrable Securities or any placement or sales agent therefor or
underwriter thereof, Aon shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
written request therefor. Notwithstanding the foregoing, the holders of the
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<PAGE>
Registrable Securities being registered shall pay all agency or brokerage fees
and commissions and underwriting discounts and commissions attributable to the
sale of such Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by such holders (severally or
jointly), other than the counsel and experts specifically referred to above,
transfer taxes on resale of any of the Securities by such holders and any
advertising or solicitation expenses other than expenses specifically referred
to above incurred by or on behalf of such holders in connection with any offers
they may make.
5. Representations and Warranties.
Aon and the Trust, jointly and severally, represent and warrant to, and
agree with, each Purchaser and each of the holders from time to time of
Registrable Securities that:
(a) Each registration statement covering the Exchange Securities, the
Exchange Guarantee and the Exchange Debentures or the Registrable Securities,
the Guarantee and the Debentures and each prospectus (including any preliminary
or summary prospectus) contained therein or furnished pursuant to Section
3(d)(ix) hereof and any further amendments or supplements to any such
registration statement or prospectus, when it becomes effective or is filed with
the Commission, as the case may be, and, in the case of an underwritten offering
of Registrable Securities, at the time of the closing under the underwriting
agreement relating thereto, will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act, the
rules and regulations of the Commission promulgated thereunder and any such
registration statement and any amendment thereto will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
any such prospectus or any amendment or supplement thereto will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and at all times subsequent to the
Effective Time of any such registration statement when a prospectus would be
required to be delivered under the Securities Act, other than from (i) such time
as a notice has been given to holders of Registrable Securities pursuant to
Section 3(c)(iii)(F) or Section 3(d)(vi)(F) hereof until (ii) such time as Aon
and the Trust furnish an amended or supplemented prospectus pursuant to Section
3(c)(iv) or Section 3(e) hereof, as the case may be, each such registration
statement, and each prospectus (including any summary prospectus) contained
therein or furnished pursuant to Section 3(c) or Section 3(d)(ix) hereof, as
then amended or supplemented, will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission promulgated thereunder and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to Aon and the Trust by a holder of Registrable Securities or any
placement or sales agent therefor or underwriter thereof expressly for use
therein.
(b) Any documents incorporated by reference in any prospectus referred to
in Section 5(a) hereof, when they become or became effective or are or were
filed with the
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Commission, as the case may be, will conform or conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to Aon and the Trust by a holder of
Registrable Securities expressly for use therein.
(c) The representations and warranties of the Trust and Aon contained in
Section 1 of the Purchase Agreement are true and correct with the same force and
effect as though expressly made at and as of the date hereof.
6. Indemnification.
(a) Upon the registration of the Exchange Guarantee or the Guarantee, as
the case may be, pursuant to Section 2 hereof, and in consideration of the
agreements of the Purchasers contained herein, and as an inducement to the
Purchasers to purchase the Securities, the Trust and Aon, jointly and severally,
agree to indemnify and hold harmless, each of the holders of Registrable
Securities to which the Exchange Guarantee or the Guarantee relates, and each
person who participates as a placement or sales agent or as an underwriter in
any offering or sale of such Registrable Securities and each person, if any, who
controls such holder, or such placement or sales agent, if any, or such
underwriter, if any, within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each an "Indemnified Person") as follows:
(i) against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which
the Exchange Guarantee or the Guarantee were registered under the
Securities Act, or caused by the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading or caused by any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary, final or summary prospectus (or any amendment or
supplement thereto) contained in such registration statement or caused
by any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission that was made in reliance upon
and in conformity with written information relating to such
Indemnified Person furnished to the Trust and Aon by, or on behalf of,
such Indemnified Person expressly for use in such registration
statement or such preliminary, final or summary prospectus (or any
amendment or supplement thereto);
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<PAGE>
(ii) against any and all losses, claims, damages and liabilities
whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission (except as made in reliance upon and in
conformity with information relating to such Indemnified Person
furnished by, or on behalf of, such Indemnified Person as aforesaid),
if such settlement is effected with the written consent of the Trust
and Aon; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by such Indemnified Person),
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission (except as made in reliance upon and in
conformity with information relating to such Indemnified Person
furnished by, or on behalf of, such Indemnified Person as aforesaid)
to the extent that any such expense is not paid under (i) or (ii)
above.
provided, however, that indemnification with respect to any prospectus shall not
inure to the benefit of any holder of Registrable Securities or Exchange
Securities from whom the Person asserting any loss, claim, damage, liability or
expense purchased such Securities, if a copy of the prospectus (as then amended
or supplemented and furnished by Aon to such holder) was not sent or given by or
on behalf of such holder to such person if such is required by law at or prior
to the sale of such Registrable Securities or Exchange Securities, as the case
may be, and if the prospectus (as so amended and supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense.
(b) Aon may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2 hereof and to entering
into any placement or underwriting agreement with respect thereto, that Aon
shall have received an undertaking reasonably satisfactory to them from the
holder of such Registrable Securities and from each placement agent or
underwriter named in any such placement agreement or underwriting agreement,
severally and not jointly, to indemnify and hold harmless the Trust and Aon and
each person, if any, who controls the Trust or Aon within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against any and all
loss, claim, damage, liability and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in any registration
statement under which such Registrable Securities were registered under the
Securities Act, or any preliminary, final or summary prospectus contained
therein as furnished by the Trust or Aon to any such holder, agent or
underwriter (or any amendment or supplement thereto), in reliance upon and in
conformity with written information relating to such holder, or such placement
or sales agent, if any, or such underwriter, if any, furnished to the Trust and
Aon by or on behalf of such holder, or such placement or sales agent, if any, or
such underwriter, if any, expressly for use in such registration statement or
such preliminary, final or summary prospectus (or any amendment or supplement
thereto).
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(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances;
provided, however, that when more than one of such holders, such placement or
sales agents, if any, or such underwriters, if any, is an indemnified party each
such holder, placement or sales agent or such underwriter, as the case may be,
shall be entitled to separate counsel (in addition to any local counsel) in each
such jurisdiction to the extent such holder, placement or sales agent or such
underwriter, as the case may be, may have interests conflicting with those of
the other holder, placement or sales agent or such underwriter, as the case may
be. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in this Section 6 is for any reason
held to be unavailable to such holders, such placement or sales agents, if any,
or such underwriters, if any, in accordance with its terms, the Trust, Aon and
such holders, such placement and sales agents, if any, and such underwriters, if
any, shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Trust, Aon and such holders, such placement and sales agents, if any, and such
underwriters, if any, in such proportions as is appropriate to reflect the
relative benefits received by the Trust and Aon on the one hand and such
holders, such placement and sales agents, if any, and such underwriters, if any,
on the other. The relative benefits received by the Trust and Aon on the one
hand and such holders, such placement and sales agents, if any, and such
underwriters, if any, on the other shall be deemed to be in such proportion
represented by the percentage that the total commissions and underwriting
discounts received by such holders, such placement and sales agents, if any, and
such underwriters, if any, to the date of such liability bears to the total
sales price (before deducting expenses) received by the Trust and such holders,
such placement and sales agents, if any, and such underwriters, if any, from the
sale of such Securities made to the date of such liability, and the Trust and
Aon are jointly and severally responsible for the balance. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if such holders, such placement and sales agents, if any, and
such underwriters, if any, failed to give the notice required under this
subsection (c), then the Trust, Aon and such holders, such placement and sales
agents, if any, and such underwriters, if any, shall contribute to such
aggregate losses, liabilities, claims, damages and expenses in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Trust and Aon on the one hand and such holders, such
placement and sales agents, if any, and such underwriters, if any, on the other
in connection with the statements or omissions which resulted in such
liabilities, claims, damages and expenses, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
-18-
<PAGE>
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust and Aon on the one hand or is
supplied by, or on behalf of, such holders, such placement or sales agents, if
any, and such underwriters, if any, on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Trust, Aon and such holders, such placement or
sales agents, if any, and such underwriters, if any, agree that it would not be
just and equitable if contributions pursuant to this paragraph were determined
pro rata (even if such holders, such placement or sales agents, if any, and such
underwriters, if any, were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this paragraph. Notwithstanding the provisions of
this paragraph, such holders, such placement or sales agents, if any, and such
underwriters, if any, shall not be required to contribute any amount in excess
of the amount by which the total price at which the Securities referred to in
the second sentence of this paragraph that were offered and sold to the public
through such holders, such placement or sales agents, if any, and such
underwriters, if any, exceeds the amount of any damages that such holders, such
placement or sales agents, if any, and such underwriters, if any, have otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
under this paragraph to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls any such holders, such placement or sales agents, if any, and
such underwriters, if any, within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such holders, such placement or sales agents, if any, and such underwriters,
if any, and each person, if any, who controls the Trust or Aon within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Trust or Aon.
7. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Trust and Aon represents,
warrants, covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to the Guarantee or any other securities which
would be inconsistent with the terms contained in this Guarantee Exchange and
Registration Rights Agreement and that the Debenture Exchange and Registration
Rights Agreement and the Capital Securities Exchange and Registration Rights
Agreement should be construed to be consistent with the terms hereof.
(b) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Guarantee
Exchange and Registration Rights Agreement in accordance with the terms and
conditions of this Guarantee Exchange and Registration Rights Agreement, in any
court of the United States or any State thereof having jurisdiction.
-19-
<PAGE>
(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: if to the Trust or to
Aon, then to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606,
Attention: Treasurer, and if to a holder, to the address of such holder set
forth in the security register or other records of the Trust, or to such other
address as any party may have furnished to the others in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
(d) Parties in Interest. All the terms and provisions of this Guarantee
Exchange and Registration Rights Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto. In the event that any transferee of any holder of
Registrable Securities shall become a holder of Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed a
party hereto for all purposes and such Registrable Securities shall be held
subject to all of the terms of this Guarantee Exchange and Registration Rights
Agreement, and by taking and holding such Registrable Securities such transferee
shall be entitled to receive the benefits of and be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Guarantee Exchange and Registration Rights Agreement. If Aon shall so request,
any such successor, assign or transferee shall agree in writing to acquire and
hold the Registrable Securities subject to all of the terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Guarantee Exchange and
Registration Rights Agreement or made pursuant hereto shall remain in full force
and effect regardless of any investigation (or statement as to the results
thereof) made by or on behalf of any holder of Registrable Securities, any
director, officer or partner of such holder, any agent or underwriter or any
director, officer or partner thereof, or any controlling person of any of the
foregoing, and shall survive delivery of and payment for the Registrable
Securities pursuant to the Purchase Agreement and the transfer and registration
of Registrable Securities by such holder and the consummation of an Exchange
Offer. In addition, the respective indemnities, representations and warranties
set forth herein shall survive the termination hereof.
(f) LAW GOVERNING. THIS GUARANTEE EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Guarantee Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Guarantee
Exchange and Registration Rights Agreement and shall not affect in any way the
meaning or interpretation of this Guarantee Exchange and Registration Rights
Agreement.
(h) Entire Agreement; Amendments. This Guarantee Exchange and Registration
Rights Agreement and the other agreements referred to herein or delivered
pursuant hereto which form a part hereof contain the entire understanding of the
parties with respect to its
-20-
<PAGE>
subject matter. This Guarantee Exchange and Registration Rights Agreement and
such other agreements referred to herein supersede all prior agreements and
understandings between the parties with respect to its subject matter. This
Guarantee Exchange and Registration Rights Agreement may be amended and the
observance of any term of this Guarantee Exchange and Registration Rights
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a written instrument duly executed by
Aon, the Trust, and the holders of at least 66-2/3 percent in aggregate
principal amount of the Registrable Securities at the time outstanding. Each
holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any amendment or waiver effected pursuant to this Section 7(h),
whether or not any notice, writing or marking indicating such amendment or
waiver appears on such Registrable Securities or is delivered to such holder.
(i) Inspection. For so long as this Guarantee Exchange and Registration
Rights Agreement shall be in effect, this Guarantee Exchange and Registration
Rights Agreement and a complete list of the names and addresses of all the
registered holders of Registrable Securities shall be made available for
inspection and copying on any business day by any holder of Registrable
Securities at the offices of Aon at the address thereof set forth in Section
9(c) above.
(j) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
(k) Termination. Except for the respective indemnities, representations
and warranties set forth herein, this Guarantee Exchange and Registration Rights
Agreement shall terminate when all the Securities, Exchange Securities and
Registrable Securities cease to be outstanding.
-21-
<PAGE>
This Agreement is hereby executed as of the day and year first above
written.
AON CORPORATION
By: /s/ Harvey N. Medvin
------------------------------------
Name: Harvey N. Medvin
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
AON CAPITAL A
By: /s/ Harvey N. Medvin
------------------------------------
Name: Harvey N. Medvin
Administrative Trustee
MORGAN STANLEY & CO., INCORPORATED
As Representative of the Purchasers named in
Schedule I to the Purchase Agreement
By: /s/ Michael Fusco
------------------------------------
(Morgan Stanley & Co.
Incorporated)
Acting severally, and not jointly and
severally, on behalf of themselves and each
of the Purchasers named in Schedule I to the
Purchase Agreement
-22-
<PAGE>
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of January 13, 1997, between Aon Corporation, a Delaware
corporation ("Aon"), and Aon Capital A, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its 8.205% Common Securities (the
"Common Securities") to, and purchase 8.205% Junior Subordinated Deferrable
Interest Debentures (the "Debentures") from, Aon, and to issue and sell its
8.205% Capital Securities (the "Private Capital Securities") with such powers,
preferences and special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust dated as of January 13, 1997, as the
same may be amended from time to time (the "Trust Agreement");
WHEREAS, Aon will directly or indirectly own all of the 8.205% Common
Securities of the Trust and will issue the Debentures;
WHEREAS, the Trust may issue a new series of 8.205% capital securities (the
"Exchange Capital Securities" and, together with the "Private Capital
Securities," the "Capital Securities") in connection with an exchange offer (the
"Exchange Offer") registered under the Securities Act of 1933, as amended;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Capital Securities, which purchase Aon hereby agrees shall benefit Aon and which
purchase Aon acknowledges will be made in reliance upon the execution and
delivery of this Agreement, Aon and Trust hereby agree as follows:
ARTICLE I
SECTION 1.1. Guarantee by Aon Corporation
Subject to the terms and conditions hereof, Aon hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Trust, other than obligations of the Trust to pay to holders
of any Capital Securities or other similar interests in the Trust the amounts
due such holders pursuant to the terms of the Capital Securities or such other
similar interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
SECTION 1.2. Terms of Agreement.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Capital Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this
<PAGE>
Agreement shall continue to be effective or shall be reinstated, as the case may
be, if at any time any holder of Capital Securities or any Beneficiary must
restore payment of any sums paid under the Capital Securities, under any
Obligation, under the Capital Securities Guarantee Agreement dated the date
hereof by Aon Corporation and The Bank of New York, as guarantee trustee, or
under this Agreement for any reason whatsoever. This Agreement is continuing,
irrevocable, unconditional and absolute.
SECTION 1.3. Waiver of Notice.
Aon hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and Aon hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of Aon under this
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 extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) 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 Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, Aon with respect to the happening of any of the foregoing.
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Aon, and Aon
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against Aon.
2
<PAGE>
SECTION 1.6. Subrogation.
Aon shall be subrogated to all rights (if any) of the Trust in respect of
any amounts paid to the Beneficiaries by Aon under this Agreement; provided,
however, that Aon 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 Agreement, if, at the
time of any such payment, any amounts are due and unpaid under this Agreement.
ARTICLE II
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of Aon and shall
inure to the benefit of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Capital Securities of any
series are outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the Capital Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by personal
delivery, by facsimile transmission or by first-class mail, addressed as follows
(and if so given, shall be deemed given when so delivered, upon receipt of
confirmation if by facsimile, or three days after mailed if by first-class
mail):
Aon Capital A
c/o Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Attention: Treasurer
Facsimile No.: 312/701-3900
3
<PAGE>
Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Attention: Treasurer
Facsimile No.: 312/701-3900
SECTION 2.4. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without
regard to conflict of laws principles).
4
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
AON CORPORATION
By: /s/ Harvey N. Medvin
-------------------------
Name: Harvey N. Medvin
Title: Executive Vice President, Chief Financial
Officer and Treasurer
By: /s/ Raymond I. Skilling
-------------------------
Name: Raymond I. Skilling
Title: Executive Vice President and Chief Counsel
AON CAPITAL A
By: /s/ Harvey N. Medvin
------------------------
Name: Harvey N. Medvin
Administrative Trustee
5
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF SIDLEY & AUSTIN APPEARS HERE]
February 5, 1997
The Board of Directors
Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Re: Aon Corporation
Registration Statement on Form S-4
-----------------------------------
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-4 (the "Registration
Statement") being filed by Aon Corporation, a Delaware corporation (the
"Company"), and Aon Capital A, a special purpose statutory business trust
created under the laws of the State of Delaware (the "Trust"), with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to: (i) the exchange offer by the Trust of
$800,000,000 aggregate Liquidation Amount of the 8.205% Capital Securities
(liquidation amount $1,000 per Capital Security) of the Trust (the "New Capital
Securities") for up to $800,000,000 aggregate Liquidation Amount of the
outstanding 8.205% Capital Securities (liquidation amount $1,000 per Capital
Security) of the Trust (the "Old Capital Securities"); (ii) the exchange by the
Company with the Trust of $824,000,000 aggregate principal amount of the
Company's 8.205% Junior Subordinated Deferrable Interest Debentures due January
1, 2027 (the "New Debentures") for $824,000,000 aggregate principal amount of
the Company's outstanding 8.205% Junior Subordinated Deferrable Interest
Debentures due January 1, 2027 (the "Old Debentures"); and (iii) the guarantee
(the "New Guarantee") by the Company of the payment of Distributions on, and
payments on liquidation or redemption of, the New Capital Securities pursuant to
the Capital Securities Guarantee Agreement (the "New Guarantee Agreement") to be
entered into between the Company and The Bank of New York, as Trustee (the
"Guarantee Trustee"), which is to be exchanged for the guarantee (the "Old
Guarantee") by the Company of the payment of the Distributions on, and payments
on liquidation or redemption of, the Old Capital Securities pursuant to the
Capital Securities Guarantee Agreement dated as of January 13, 1997 between the
Company and The Bank of New York, as Trustee. The New Capital Securities are to
be issued under the Amended and Restated Trust Agreement dated as of January 13,
1997 (the "Trust Agreement") among the Company, as Depositor, The Bank of New
York, as Property
<PAGE>
CHICAGO
SIDLEY & AUSTIN
The Board of Directors
Aon Corporation
February 5, 1997
Page 2
Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust. The New Debentures
are to be issued under the Junior Subordinated Indenture dated as of January 13,
1997 between the Company and The Bank of New York, as Debenture Trustee, as
supplemented by the First Supplemental Indenture thereto dated as of January 13,
1997 (collectively, the "Indenture"). Capitalized terms not defined herein have
the meanings specified in the Registration Statement.
We are familiar with the proceedings to date with respect to the
proposed issuance of the New Capital Securities, the New Debentures and the New
Guarantee and have examined such records, documents and questions of law, and
have satisfied ourselves as to such matters of fact, as we have considered
relevant and necessary as a basis for the opinions expressed below.
Based on the foregoing, we are of the opinion that:
1. All necessary corporate action has been taken to authorize and
issue the New Debentures and the New Guarantee.
2. The New Debentures will be legally issued and binding obligations
of the Company (except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws relating to or affecting the enforcement of creditors' rights
generally and by the effect of general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law) when
(i) the Registration Statement, as finally amended, shall have become effective
under the Securities Act and the Indenture shall have been qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and (ii)
the New Debentures shall have been duly executed and authenticated as provided
in the Indenture and shall have been duly delivered against surrender and
cancellation of a like principal amount of the Old Debentures in the manner
described in the Registration Statement.
3. The New Guarantee will be a legally issued and binding obligation
of the Company (except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws relating to or affecting the enforcement of creditors' rights
generally and by the effect of general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law) when
(i) the Registration Statement, as finally amended, shall have become effective
under the Securities Act and the New Guarantee Agreement shall have been
qualified under the Trust Indenture Act and (ii) the New Guarantee Agreement
shall have been duly executed and delivered by the Company and the Guarantee
Trustee.
<PAGE>
CHICAGO
SIDLEY & AUSTIN
The Board of Directors
Aon Corporation
February 5, 1997
Page 3
For purposes of rendering the foregoing opinions, we have relied, as
to various questions of fact material to such opinions, upon certificates of
officers of the Company. We have also examined originals, or copies of
originals certified to our satisfaction, of such agreements, documents,
certificates and other statements of government officials and other instruments,
have examined such questions of law and have satisfied ourselves as to such
matters of fact as we have considered relevant and necessary as a basis for such
opinions. We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons and the conformity with the original documents of any copies thereof
submitted to us for our examination.
The opinions expressed above are limited to the General Corporate Law
of the State of Delaware, the laws of the State of New York and the federal laws
of the United States of America.
We do not find it necessary for the purposes of this opinion to cover,
and accordingly we express no opinion as to, the application of the securities
or blue sky laws of the various states to the issuance of the New Debentures in
exchange for the Old Debentures or to the issuance of the New Guarantee in
exchange for the Old Guarantee.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement.
Very truly yours,
/s/ Sidley & Austin
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger]
February 5, 1997
Aon Capital A
c/o Aon Corporation
123 N. Wacker Drive
Chicago, Illinois 60606
Re: Aon Capital A
-------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Aon Corporation, a
Delaware corporation (the "Company"), and Aon Capital A, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated December 27,
1996 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on December 27, 1996;
(b) The Trust Agreement of the Trust, dated as of December 27,
1996, among the Company, as Depositor, and the trustees of the Trust named
therein;
<PAGE>
Aon Capital A
February 5, 1997
Page 2
(c) The Amended and Restated Trust Agreement of the Trust,
dated as of January 13, 1997, including Exhibits A, B, C, D, E, I and J thereto)
(the "Trust Agreement"), among the Company, as Depositor, the trustees of the
Trust named therein, and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust;
(d) The Registration Statement on Form S-4, including a
preliminary prospectus ("Prospectus"), relating to the 8.205% Capital Securities
of the Trust representing undivided beneficial interests in the assets of the
Trust (each, a "Capital Security" and collectively, the "Capital Securities"),
as proposed to be filed by the Company and the Trust with the Securities and
Exchange Commission on or about February 5, 1997; and
(e) A Certificate of Good Standing for the Trust, dated
February 5, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein 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 listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein 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 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>
Aon Capital A
February 5, 1997
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 Capital Security is to
be issued by the Trust (collectively, the "Capital Security Holders") of a
Capital Securities Certificate for such Capital Security and the payment for the
Capital Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Capital Securities are issued and
sold to the Capital 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
(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 federal laws and 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 the assumptions, qualifications,
limitations and exceptions set forth herein, 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.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital 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 note that the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
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 thereunder. Except as
<PAGE>
Aon Capital A
February 5, 1997
Page 4
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.
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE>
EXHIBIT 8
[Letterhead of Sidley & Austin]
February 5, 1997
Aon Corporation
123 North Wacker Drive
Chicago, IL 60606
Ladies and Gentlemen:
We have acted as counsel to Aon Corporation, a Delaware corporation
(the "Company"), and Aon Capital A, a Delaware statutory business trust (the
"Trust"), in connection with the offer (the "Exchange Offer") by the Trust to
exchange its registered 8.205% Capital Securities for its outstanding non-
registered 8.205% Capital Securities, as described in the Registration Statement
on Form S-4 (the "Registration Statement"), which is being filed by the Company
and the Trust with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended. The Registration Statement includes the
Prospectus (the "Prospectus") relating to such offer. Capitalized terms not
defined herein have the meanings specified in the Prospectus.
In rendering the opinion expressed below, we have examined the
Prospectus and such other documents as we have deemed relevant and necessary,
including, without limitation, the Trust Agreement, the Indenture, the Old
Guarantee Agreement and the New Guarantee Agreement. Such opinion is
conditioned, among other things, upon the accuracy and completeness of the
facts, information and representations contained in the Prospectus as of the
date hereof and the continuing accuracy and completeness thereof as of the date
of the consummation of the Exchange Offer. We have assumed that the transactions
contemplated by the Prospectus and such other documents will occur as provided
therein and that there will be no material change to the Prospectus or any of
such other documents between the date hereof and the date of the consummation of
the Exchange Offer.
<PAGE>
Aon Corporation
February 5, 1997
Page 2
Based upon and subject to the foregoing, we are of the opinion that the
discussion set forth in the Prospectus under the caption "Certain Federal Income
Tax Consequences" constitutes, in all material respects, a fair and accurate
summary of the matters addressed therein, based upon current law and the
assumptions stated or referred to therein.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances which may hereafter come to our attention with
respect to the opinion expressed above, including any changes in applicable law
which may hereafter occur.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to all references to our Firm included in or made a
part of the Registration Statement.
Very truly yours,
/s/ Sidley & Austin
<PAGE>
Aon Corporation and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Supplemental(2) Supplemental(2)
(millions except ratios) Pro Forma(1) Pro Forma(1) Pro Forma Pro Forma
Twelve Months Nine Months Twelve Months Nine Months
Ended Dec. 31, Ended Sept 30, Ended Dec. 31, Ended Sept 30,
1995 1996 1995 1996
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income from continuing operations
before provision for income taxes 392.4 325.7 551.5 415.8
Less: minority interests (71.4) (54.2)
Interest on indebtedness 121.1 82.1 147.9 100.0
Interest on ESOP 5.3 3.5 5.3 3.5
Portion of rents representative
of interest factor 21.4 20.0 49.3 41.0
----------------------------------------------------------------------------
Income as adjusted 540.2 431.3 682.6 506.1
============================================================================
Fixed Charges:
Interest on indebtedness 121.1 82.1 147.9 100.0
Interest on ESOP 5.3 3.5 5.3 3.5
Portion of rents representative
of interest factor 21.4 20.0 49.3 41.0
----------------------------------------------------------------------------
Total fixed charges 147.8 105.6 202.5 144.5
============================================================================
Ratio of earnings to fixed charges 3.7 4.1 3.4 3.5
============================================================================
</TABLE>
(1) Gives effect to the increase in fixed charges as a result of the issuance
of the Capital Securities.
(2) Gives effect to the increase in fixed charges as a result of the issuance
of the Capital Securities and the acquisition of Alexander & Alexander as
reflected in the pro forma condensed consolidated statements of income.
The supplemental pro forma ratios exclude any restructuring charges that
may be incurred and any cost savings the Company may realize.
<PAGE>
Aon Corporation and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Nine Months Ended
Sept 30, Years Ended December 31,
----------------- --------------------------------- ------
(millions except ratios) 1996 1995 1995 1994 1993 1992(1) 1991
------- ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before provision for income taxes $374.9 $360.9 $458.0 $397.0 $331.6 $179.1 $242.4
Add back fixed charges:
Interest on indebtedness 32.9 41.2 55.5 46.4 42.3 41.9 40.7
Interest on ESOP 3.5 4.1 5.3 5.9 6.5 6.9 7.2
Portion of rents representative of
interest factor 20.0 18.0 21.4 28.7 26.1 19.2 15.4
------ ------ ------ ------ ------ ------ ------
Income as adjusted $431.3 $424.2 $540.2 $478.0 $406.5 $247.1 $305.7
====== ====== ====== ====== ====== ====== ======
Fixed charges:
Interest on indebtedness $ 32.9 $ 41.2 $ 55.5 $ 46.4 $ 42.3 $ 41.9 $ 40.7
Interest on ESOP 3.5 4.1 5.3 5.9 6.5 6.9 7.2
Portion of rents representative of
interest factor 20.0 18.0 21.4 28.7 26.1 19.2 15.4
------ ------ ------ ------ ------ ------ ------
Total fixed charges $ 56.4 $ 63.3 $ 82.2 $ 81.0 $ 74.9 $ 68.0 $ 63.3
====== ====== ====== ====== ====== ====== ======
Ratio of earnings to fixed charges 7.6 6.7 6.6 5.9 5.4 3.6 4.8
====== ====== ====== ====== ====== ====== ======
</TABLE>
(1) Income from continuing operations before provision for income taxes excludes
the cumulative effect of changes in accounting principles.
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Aon Corporation and
Aon Capital A for the registration of $800,000,000 of 8.205% Capital Securities
of Aon Capital A and to the incorporation by reference therein of our reports
dated February 8, 1996, with respect to the consolidated financial statements
and schedules of Aon Corporation included in and incorporated by reference in
its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
February 3, 1997
<PAGE>
EXHIBIT 23.2
We consent to the use in this Registration Statement of Aon Corporation and Aon
Capital A on Form S-4 of our report dated February 14, 1996 on the consolidated
balance sheets of Alexander & Alexander Services Inc. as of December 31, 1995
and 1994, and the results of operations and cash flows for each of the three
years in the period ended December 31, 1995, incorporated by reference in the
Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Deloitte & Touche LLP
Baltimore, Maryland
February 5, 1997
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
AON CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 36-3051915
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
123 N. Wacker Drive
Chicago, Illinois 60606
(Address of principal executive offices) (Zip code)
------------------------
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-
29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 24th day of January, 1997.
THE BANK OF NEW YORK
By: /S/ STEPHEN J. GIURLANDO
---------------------------
Name: STEPHEN J. GIURLANDO
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold.................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...................28,728,602
LESS: Allowance for loan and
lease losses ................584,525
LESS: Allocated transfer risk
reserve..........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .........8,158,472
Interest-bearing ...........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ............46,182
Interest-bearing ...........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased............... 1,565,288
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances
executed and outstanding.............. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
-----------
Total liabilities....................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency
translation adjustments............... ( 8,403)
-----------
Total equity capital.................... 3,586,850
-----------
Total liabilities and equity
capital ........................... $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
- --------------------------------------------------------------------------------
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT
TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
AON CAPITAL A
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o Aon Corporation
123 N. Wacker Drive
Chicago, Illinois 60606
(Address of principal executive offices) (Zip code)
----------------------
Capital Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION A TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT F 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
2. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 24th day of January, 1997.
THE BANK OF NEW YORK
By: /S/ STEPHEN J. GIURLANDO
___________________________
Name: STEPHEN J. GIURLANDO
Title: ASSISTANT VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin..................... $ 4,404,522
Interest-bearing balances............... 732,833
Securities:
Held-to-maturity securities............. 789,964
Available-for-sale securities........... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold...................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .....................28,728,602
LESS: Allowance for loan and
lease losses ..................584,525
LESS: Allocated transfer risk
reserve............................429
Loans and leases, net of unearned
income, allowance, and reserve.......... 28,143,648
Assets held in trading accounts........... 1,004,242
Premises and fixed assets (including
capitalized leases)..................... 605,668
Other real estate owned................... 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................... 205,031
Customers' liability to this bank on
acceptances outstanding................. 949,154
Intangible assets......................... 490,524
Other assets.............................. 1,305,839
-----------
Total assets.............................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices..................... $20,441,318
Noninterest-bearing ...........8,158,472
Interest-bearing .............12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs...... 11,710,903
Noninterest-bearing ..............46,182
Interest-bearing .............11,664,721
Federal funds purchased in
domestic offices of the bank:
Federal funds purchased................. 1,565,288
Demand notes issued to the U.S.
Treasury................................ 293,186
Trading liabilities....................... 826,856
Other borrowed money:
With original maturity of one year
or less............................... 2,103,443
With original maturity of more than
one year.............................. 20,766
Bank's liability on acceptances exe-
cuted and outstanding................... 951,116
Subordinated notes and debentures......... 1,020,400
Other liabilities......................... 1,522,884
-----------
Total liabilities......................... 40,456,160
-----------
EQUITY CAPITAL
Common stock.............................. 942,284
Surplus................................... 525,666
Undivided profits and capital
reserves................................ 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities.............................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments........................ ( 8,403)
-----------
Total equity capital...................... 3,586,850
-----------
Total liabilities and equity
capital ................................ $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
-5-
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
AON CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 36-3051915
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o Aon Corporation
123 N. Wacker Drive
Chicago, Illinois 60606
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Capital Securities of
Aon Capital A
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7A - 29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of
the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 24th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ Stephen J. Giurlando
-----------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
-4-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin................... $ 4,404,522
Interest-bearing balances............. 732,833
Securities:
Held-to-maturity securities........... 789,964
Available-for-sale securities......... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold.................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...................28,728,602
LESS: Allowance for loan and
lease losses ................584,525
LESS: Allocated transfer risk
reserve..........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts......... 1,004,242
Premises and fixed assets (including
capitalized leases)................... 605,668
Other real estate owned................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies............................. 205,031
Customers' liability to this bank on
acceptances outstanding............... 949,154
Intangible assets....................... 490,524
Other assets............................ 1,305,839
-----------
Total assets............................ $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices................... $20,441,318
Noninterest-bearing .........8,158,472
Interest-bearing ...........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs.... 11,710,903
Noninterest-bearing ............46,182
Interest-bearing ...........11,664,721
Federal funds purchased in
domestic offices of the bank:
Demand notes issued to the U.S.
Treasury.............................. 293,186
Trading liabilities..................... 826,856
Other borrowed money:
With original maturity of one year
or less............................. 2,103,443
With original maturity of more than
one year............................ 20,766
Bank's liability on acceptances exe-
cuted and outstanding................. 951,116
Subordinated notes and debentures....... 1,020,400
Other liabilities....................... 1,522,884
----------
Total liabilities....................... 40,456,160
----------
EQUITY CAPITAL
Common stock............................ 942,284
Surplus................................. 525,666
Undivided profits and capital
reserves.............................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities............................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments...................... ( 8,403)
----------
Total equity capital.................... 3,586,850
----------
Total liabilities and equity
capital ........................... $44,043,010
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
AON CAPITAL A
Offer to Exchange Its 8.205%
Capital Securities Which Have Been
Registered Under the
Securities Act of 1933
for Any and All of Its Outstanding
8.205% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
pursuant to the Prospectus dated _____, 1997
================================================================================
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 p.m., NEW YORK CITY
TIME, ON ______________, 1997 (AS SUCH DATE AND TIME MAY BE EXTENDED BY AON
CORPORATION AND AON CAPITAL A IN THEIR SOLE DISCRETION, THE "EXPIRATION DATE").
================================================================================
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed and delivered to:
<TABLE>
<CAPTION>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier:
The Bank of New York The Bank of New York The Bank of New York
101 Barclay Street - 7E Attn: Enrique Lopez 101 Barclay Street
New York, New York 10286 (212) 571 - 3080 Corporate Trust Services Window
Attn: Reorganization Section Ground Level
(For Eligible Institutions Only) New York, New York 10286
Confirm by Telephone: Attn: Reorganization Section
(212) 815-6333
For Information Call:
(212) 815-6333
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA A FACSIMILE NUMBER
OTHER THAN THAT SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated
____________, 1997 (as the same may be amended or supplemented from time to
time, the "Prospectus") of Aon Capital A, a Delaware business trust (the
"Trust"), and this Letter of Transmittal (the "Letter of Transmittal"), that
together constitute the Trust's offer (the "Exchange Offer") to exchange its
8.205% Capital Securities (the "New Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
<PAGE>
for a like Liquidation Amount of its outstanding 8.205% Capital Securities (the
"Old Capital Securities"). Capitalized terms used but not defined herein have
the meanings ascribed to them in the Prospectus.
This Letter of Transmittal is to be completed either if (a) certificates
are to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth under "The Exchange
Officer -- Procedures for Tendering Old Capital Securities" in the Prospectus
and an Agent's Message (as defined below) is not delivered. Certificates, or
book-entry confirmation of a book-entry transfer of such Old Capital Securities
into the Exchange Agent's account at the Depository Trust Company ("DTC"), as
well as this Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein on or prior to the Expiration
Date. Tenders by book-entry transfer may also be made by delivering an Agent's
Message in lieu of this Letter of Transmittal. The term "book-entry
confirmation" means a confirmation of book-entry transfer of Old Capital
Securities into the Exchange Agent's account at DTC. The term "Agent's Message"
means a message, transmitted by DTC to and received by the Exchange Agent and
forming a part of a book-entry confirmation, which states that DTC has received
an express acknowledgment from the tendering participant, which acknowledgment
states that such participant has received and agrees to be bound by this Letter
of Transmittal and that the Trust and Aon may enforce this Letter of Transmittal
against such participant.
If a registered holder (which term, for purposes of this document, shall
include a participant in the book-entry transfer facility system at DTC whose
name appears on a security position listing as the owner of the Old Capital
Securities) desires to tender Old Capital Securities and such Old Capital
Securities are not immediately available or time will not permit all documents
required by the Exchange Offer to reach the Exchange Agent (or if the procedures
for book-entry transfer cannot be completed on a timely basis) prior to the
Expiration Date, a tender may be effected in accordance with the guaranteed
delivery procedures set forth in Instruction 2.
The undersigned hereby tenders to the Trust and Aon Corporation, a Delaware
corporation ("Aon"), the aggregate Liquidation Amount of the Old Capital
Securities described in Box 1 below (the "Tendered Old Capital Securities") in
exchange for a like aggregate Liquidation Amount of the Trust's New Capital
Securities which have been registered under the Securities Act, upon the terms
and subject to the conditions described in the Prospectus and this Letter of
Transmittal. The undersigned is the registered holder of all the Tendered Old
Capital Securities and the undersigned represents that it has received from each
beneficial owner of Tendered Old Capital Securities ("Beneficial Owners") a duly
completed and executed form of "Instruction to Registered Holder from Beneficial
Owner" accompanying this Letter of Transmittal, instructing the undersigned to
take the action described in this Letter of Transmittal.
Subject to and effective upon the acceptance for exchange of the Tendered
Old Capital Securities tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
the Trust all right, title and interest in, to and under the Tendered Old
Capital Securities.
Unless otherwise indicated under "Special Delivery Instructions" below (Box
4), the undersigned hereby directs that the New Capital Securities exchanged for
the Tendered Old Capital Securities be issued in the name(s) of the undersigned
or, in the case of a book-entry transfer of Old Capital Securities, that such
New Capital Securities be credited to the account indicated below maintained at
DTC. If applicable, substitute certificates representing Old Capital Securities
not exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Capital Securities, will be credited
to the
-2-
<PAGE>
account indicated below maintained at DTC. Similarly, unless otherwise indicated
under "Special Delivery Instructions" below (Box 4), please send or cause to be
sent the certificates for New Capital Securities (and accompanying documents, as
appropriate) to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact (with full knowledge
that the Exchange Agent is also acting as agent of Aon and the Trust in
connection with the Exchange Offer) of the undersigned with respect to the
Tendered Old Capital Securities, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in Instruction 6, to (i)
deliver certificates for the Tendered Old Capital Securities to Aon or the Trust
or cause ownership of the Tendered Old Capital Securities to be transferred to,
or upon the order of, the Trust, on the books of the registrar for the Old
Capital Securities and deliver all accompanying evidences of transfer and
authenticity to, or transfer ownership of such Old Capital Securities on the
account books maintained by DTC to, or upon the order of, the Trust, upon
receipt by the Exchange Agent, as the undersigned's agent, of the New Capital
Securities to be issued in exchange for such Old Capital Securities pursuant to
the Exchange Offer, and (ii) receive for the account of the Trust all benefits
and otherwise exercise all rights of beneficial ownership of the Tendered Old
Capital Securities, all in accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities pursuant
to any one of the procedures described under the caption "The Exchange Offer -
Procedures for Tendering Old Capital Securities" in the Prospectus and in the
instructions hereto will, upon Aon's and the Trust's acceptance for exchange of
such Tendered Old Capital Securities, constitute a binding agreement among the
undersigned, Aon and the Trust upon the terms and subject to the conditions of
the Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in Instruction 6. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus, Aon and the Trust may not be required
to accept for exchange any of the Tendered Old Capital Securities. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and any Beneficial Owner(s), and every obligation of the
undersigned or any Beneficial Owners hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned and such
Beneficial Owner(s).
The undersigned hereby represents, warrants and agrees that the undersigned
has full power and authority to tender, exchange, sell, assign and transfer the
Tendered Old Capital Securities and that the Trust will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances when the Tendered Old Capital Securities are acquired
by the Trust as contemplated herein, and the Tendered Old Capital Securities are
not subject to any adverse claims or proxies. The undersigned warrants and
agrees that the undersigned and each Beneficial Owner will, upon request,
execute and deliver any additional documents deemed by Aon, the Trust or the
Exchange Agent to be necessary or desirable to complete the tender, exchange,
sale, assignment and transfer of the Tendered Old Capital Securities, and that
the undersigned will comply with its obligations under the Registration Rights
Agreement. The undersigned has read and agrees to all of the terms of the
Exchange Offer.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL (OR DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF), THE UNDERSIGNED
HEREBY REPRESENTS AND WARRANTS THAT (i) NEITHER THE UNDERSIGNED NOR ANY
BENEFICIAL OWNER(S) IS AN "AFFILIATE" OF AON OR THE TRUST, (ii) ANY NEW
-3-
<PAGE>
CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S)
ARE BEING ACQUIRED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S) IN THE
ORDINARY COURSE OF BUSINESS OF THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S),
(iii) THE UNDERSIGNED AND EACH BENEFICIAL OWNER HAVE NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE
EXCHANGE OFFER, AND (iv) IF THE UNDERSIGNED OR ANY BENEFICIAL OWNER IS NOT A
BROKER-DEALER, THE UNDERSIGNED AND ANY SUCH BENEFICIAL OWNER IS NOT ENGAGED IN,
AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD CAPITAL
SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL (OR DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF), THE UNDERSIGNED
OR ANY BENEFICIAL OWNER(S) OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE
COMMISSION TO THIRD PARTIES, THAT SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY
SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS THE RESULT OF MARKET-MAKING ACTIVITIES
OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER A PROSPECTUS MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
Aon and the Trust have agreed that, subject to the provisions of the
Registration Rights Agreement and to the limitations described in the
Prospectus, the Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer (as defined below) in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making
activities or other trading activities, for a period ending 90 days after the
Expiration Date or, if earlier, when all such New Capital Securities have been
disposed of by such Participating Broker-Dealer. In that regard, each broker-
dealer who acquired Old Capital Securities for its own account as a result of
market-making or other trading activities (a "Participating Broker-Dealer"), by
tendering such Old Capital Securities and executing this Letter of Transmittal
or effecting delivery of an Agent's Message in lieu thereof, agrees that, upon
receipt of notice from Aon or the Trust of the occurrence of any event or the
discovery of any fact which makes any statement contained or incorporated by
reference in the Prospectus untrue in any material respect or which causes the
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference therein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of New Capital Securities (or
the New Guarantee or the New Junior Subordinated Debentures, as applicable)
pursuant to the Prospectus until Aon or the Trust has amended or supplemented
the Prospectus to correct such misstatement or omission and has furnished copies
of the amended or supplemented Prospectus to such Participating Broker-Dealer or
Aon or the Trust has given notice that the sale of the New Capital Securities
(or the New Guarantee or the New Junior Subordinated Debentures, as applicable)
may be resumed, as the case may be.
Any person, including any Participating Broker-Dealer, who is an
"affiliate" of Aon or the Trust may not rely on the interpretive letters
referred to above and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
-4-
<PAGE>
Each New Capital Security will accumulate Distributions from the most
recent Distribution Date on the Old Capital Securities surrendered in exchange
for such New Capital Securities or, if no Distributions have been paid or
provided for on such Old Capital Securities, from January 1, 1997. As a result,
holders of Old Capital Securities that are accepted for exchange will not
receive accumulated Distributions on such Old Capital Securities for any period
from and after the most recent Distribution Date on such Old Capital Securities
or, if no Distributions have been paid or provided for on such Old Capital
Securities, from and after January 1, 1997, and such holders will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities. Except as stated in the Prospectus, this tender is irrevocable.
-5-
<PAGE>
<TABLE>
<CAPTION>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
BOX 1
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
(Attach additional signed pages, if necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Name(s) and address(es) of Certificate Aggregate
Registered Holder(s), Number(s)* Liquidation Aggregate
exactly as name(s) of Old Amount Liquidation
appear(s) on Old Capital Capital Represented Amount
Securities Certificate(s) Securities by Certificate(s) Tendered**
or on a security position
listing
(Please fill in, if blank)
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
====================================================================================================================================
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in denominations of $100,000 (100 Old Capital Securities)or any
integral multiple of $1,000 in excess thereof, provided that if any Old Capital Securities are tendered for exchange in
part, the untendered aggregate Liquidation Amount thereof must be $100,000 (100 Old Capital Securities) or any integral
multiple of $1,000 in excess thereof. All Old Capital Securities held shall be deemed tendered unless a lesser number is
specified in this column. See Instruction 6.
BOX 2
BENEFICIAL OWNER(S)
====================================================================================================================================
State of Principal Residence of Each Beneficial Aggregate Liquidation Amount of Tendered Old Capital
Owner of Tendered Old Capital Securities Securities Held for Account of Beneficial Owner
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
-6-
<PAGE>
If delivery of Old Capital Securities is to be made by book-entry transfer to
the account maintained by the Exchange Agent at DTC, then tenders of Old Capital
Securities must be effected in accordance with the procedures mandated by DTC's
Automated Tender Offer Program and the procedures set forth in the Prospectus
under the caption "The Exchange Offer - Procedures for Tendering Old Capital
Securities - Book Entry Transfer."
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
BOX 3
(TO BE COMPLETED BY ELIGIBLE INSTITUTIONS ONLY)
- ------------------------------------------------------------------------------
<C> <S>
[_] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution_______________________________
DTC Account Number__________________________________________
Transaction Code Number_____________________________________
[_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED
DELIVERY IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)________________________________
Window Ticket Number (if any)_______________________________
Date of Execution of Notice of Guaranteed Delivery__________
Name of Institution which Guaranteed Delivery_______________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution_______________________________
DTC Account Number__________________________________________
Transaction Code Number_____________________________________
- ------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE>
<TABLE>
- ------------------------------------------------------------------------
<S> <C>
BOX 3 (CONT'D)
[_] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL
SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ____________________________________________________________
Address: ____________________________________________________________
- ------------------------------------------------------------------------------
</TABLE>
-8-
<PAGE>
- ------------------------------------------------------------------------------
BOX 4
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 7 and 8)
To be completed ONLY if the New Capital Securities are to be issued in the name
of someone other than the registered holder(s) of the Old Capital Securities
whose name(s) appear(s) above (Box 1) or if Old Capital Securities delivered by
book-entry transfer which are not accepted for exchange are to be returned by
credit to an account other than the account indicated above (Box 3).
<TABLE>
<CAPTION>
<C> <S>
Issue
[_] Old Capital Securities not tendered
[_] New Capital Securities
to:
Name(s):
-----------------------------------------------------------------------
Address: -----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(include Zip Code)
Area Code and
Telephone Number: -------------------------------------------------------------
Tax Identification or
Social Security No.: -----------------------------------------------------------
[_] Credit unexchanged Old Capital Securities delivered by book-entry transfer to the DTC account set
forth below.
--------------------------------------
(DTC Account Number, if applicable)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
-9-
<PAGE>
================================================================================
BOX 5
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 7 and 8)
To be completed ONLY if certificates for the New Capital Securities exchanged
for the Old Capital Securities and for untendered Old Capital Securities are to
be sent to someone other than the registered holder(s) whose name(s) appear(s)
above (Box 1), or to such registered holder(s) at an address other than that
shown above (Box 1).
Mail New Capital Securities and any untendered Old Capital Securities to:
Name(s):
- --------------------------------------------------------------------------------
(please print)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(include Zip Code)
Area Code and
Telephone Number:
--------------------------------------------------------
Tax Identification or
Social Security No.:
--------------------------------------------------------
================================================================================
-10-
<PAGE>
===============================================================================
BOX 6
USE OF GUARANTEED DELIVERY
[_] CHECK HERE ONLY IF OLD CAPITAL SECURITIES ARE BEING TENDERED BY MEANS OF A
NOTICE OF GUARANTEED DELIVERY. See Instruction 2. If this box is checked,
please provide the following information:
Name(s) of Registered Holder(s):
---------------------------------------------
- -------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------------
Name of Institution which Guaranteed Delivery:
-------------------------------
===============================================================================
-11-
<PAGE>
================================================================================
BOX 7
TENDERING HOLDER SIGNATURE
(See Instructions 1, 4 and 7)
In Addition, Complete Substitute Form W-9 on page 13
- --------------------------------------------------------------------------------
X __________________________________________
X __________________________________________
(Signature(s) of Registered Holder(s)
or Authorized Signatory)
Note: The above lines must be signed by the registered holder(s) of Old Capital
Securities exactly as their name(s) appear(s) on certificate(s) for Old Capital
Securities hereby tendered or on a security position listing, or by person(s)
authorized to become the registered holder(s) by endorsements and documents
transmitted herewith (including such opinions of counsel, certifications and
other information as may be required by Aon or the Trust to comply with the
restrictions on transfer applicable to the Old Capital Securities). If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer, or other person acting in a fiduciary or representative capacity, such
person must set forth his or her full title below. See Instruction 7.
Dated: ___________________________________
Name(s): ___________________________________
___________________________________
(please print)
Capacity: ___________________________________
___________________________________
(full title)
Street Address: _____________________________
___________________________________
___________________________________
(include Zip Code)
Area Code and Telephone Number:
___________________________________
Tax Identification or Social Security Number(s):
___________________________________
Guarantee of Signature(s)
(If required by Instructions 4 and 7)
Authorized Signature
X __________________________________________
Name: _______________________________________
(please print)
Title: ______________________________________
Name of Firm: _______________________________
(Must be an Eligible Institution
as defined in Instruction 2)
Address: ____________________________________
____________________________________
____________________________________
(include Zip Code)
Area Code and Telephone Number:
______________________________________
Dated: ______________________________________
================================================================================
-12-
<PAGE>
Substitute Request for Taxpayer Give form to the
Form W-9 Identification Number and Certification requester. DO NOT
send to the IRS.
- --------------------------------------------------------------------------------
Please print or type
Name (if joint names, list first and circle the name of the person or entity
whose number you enter in Part 1 below. See instructions on page 2 if your name
has changed.)
- --------------------------------------------------------------------------------
Business name (Sole proprietors see instructions on page 2.)
- --------------------------------------------------------------------------------
Please check appropriate box: [_] Individual/Sole proprietor [_] Corporation
[_] Partnership [_] Other . _____________________
- --------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.)
- --------------------------------------------------------------------------------
City, State, and ZIP code Requestor's a name and address (optional)
- --------------------------------------------------------------------------------
Part 1 Taxpayer Identification Number (TIN) List account number(s) here
(optional)
- --------------------------------------------------------------------------------
Enter your TIN in the appropriate box. For individuals, this is your social
security number (SSN). For sole proprietors, see the enclosed guidelines. For
other entities, it is your employer identification number (EIN). If you do not
have a number, see How To Get a TIN below. Social security number:
[___-__-___]
OR
Employer identification number: [__-_______]
- --------------------------------------------------------------------------------
Note: If the account is in more than one name, see the chart on the enclosed
guidelines on whose number to enter.
- --------------------------------------------------------------------------------
Part II For Payees Exempt From Backup Withholding (See the enclosed guidelines
on page 2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Part III Certification
- --------------------------------------------------------------------------------
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me) and
2. I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
that I am subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certification Instructions.--You must cross out Item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return. For real estate
transactions, Item 2 does not apply. For mortgage interest paid, the
acquisition or abandonment of secured property, cancellation of debt,
contributions to an individual retirement arrangement (IRA), and generally
payments other than interest and dividends, you are not required to sign the
Certification, but you must provide your correct TIN. (Also see Part III
Instructions on page 2.)
- --------------------------------------------------------------------------------
Sign Here Signature . Date .
- --------------------------------------------------------------------------------
13
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Certificates. Certificates
for the Tendered Old Capital Securities, as well as a properly completed and
duly executed copy of this Letter of Transmittal, with any required signature
guarantees, a Substitute Form W-9 (or facsimile thereof) and any other documents
required by this Letter of Transmittal must be received by the Exchange Agent at
its address set forth herein on or prior to the Expiration Date; provided,
however, that book-entry transfers of Old Capital Securities may be effected in
accordance with the procedures mandated by DTC's Automatic Tender Offer Program
("ATOP"). Although delivery of Old Capital Securities may be effected through
ATOP, this Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message in
lieu of this Letter of Transmittal, and any other required documents, must in
any case be delivered to and received by the Exchange Agent at one of its
addresses set forth above on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth in Instruction 2 must be complied with.
THE METHOD OF DELIVERY OF CERTIFICATES FOR OLD CAPITAL SECURITIES, THIS
LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE
RISK OF THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS TO BE BY MAIL, THE USE
OF REGISTERED MAIL, WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN
OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither Aon nor the Trust will accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof or delivery of an Agent's Message in lieu
thereof), waives any right to receive any notice of the acceptance of such
tender.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Old
Capital Securities but (i) the certificates for such Old Capital Securities are
not immediately available, (ii) who cannot deliver their Old Capital Securities,
Letter of Transmittal and any other documents required by the Letter of
Transmittal to the Exchange Agent on or prior to the Expiration Date or (iii)
who cannot complete the procedures for delivery by book-entry transfer on a
timely basis, must tender their Old Capital Securities according to the
guaranteed delivery procedures set forth below, including completion of Box 6.
Pursuant to such procedures: (i) such tender must be made by or through an
Eligible Institution (as defined below); (ii) on or prior to the Expiration
Date, a completed and signed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery), substantially in the form accompanying
this Letter of Transmittal, must have been delivered to the Exchange Agent; and
(iii) the certificates (or a book-entry confirmation (as defined in the
Prospectus)) representing the Tendered Old Capital Securities, in proper form
for transfer, together with a completed and signed Letter of Transmittal or, in
the case of a book-entry tender, an Agent's Message in lieu of this Letter of
Transmittal, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within five New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such
-14-
<PAGE>
Notice. For Old Capital Securities to be properly tendered pursuant to the
guaranteed delivery procedure, the Exchange Agent must receive a Notice of
Guaranteed Delivery on or prior to the Expiration Date. As used herein and in
the Prospectus, "Eligible Institution" means a firm or other entity identified
in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association.
3. Beneficial Owner Instructions to Registered Holders. Only a holder in
whose name the Old Capital Securities are registered on the books of the
registrar or on a security position listing (or the legal representative or
attorney-in-fact of such registered holder) may execute and deliver this Letter
of Transmittal (or an Agent's Message in lieu thereof). Any Beneficial Owner of
Old Capital Securities who is not the registered holder must arrange promptly
with the registered holder to execute and deliver this Letter of Transmittal on
his or her behalf through the execution and delivery to the registered holder of
the Instructions to Registered Holder from Beneficial Owner form accompanying
this Letter of Transmittal.
4. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
of Old Capital Securities tendered herewith, unless such
holder(s) has completed either the box entitled "Special
Issuance Instructions" (Box 4) or the box entitled "Special
Delivery Instructions" (Box 5) above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 7.
5. Inadequate Space. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the certificate number(s)
and/or the aggregate Liquidation Amount of Old Capital Securities and any other
required information should be listed on a separate signed schedule which is
attached to this Letter of Transmittal.
6. Partial Tenders and Withdrawal Rights. Tenders of Old Capital
Securities will be accepted only in the aggregate Liquidation Amount of $100,000
(100 Old Capital Securities) or any integral multiple of $1,000 (1 Old Capital
Security) in excess thereof, provided that if any Old Capital Securities are
tendered for exchange in part, the untendered aggregate Liquidation Amount
thereof must be $100,000 (100 Old Capital Securities) or any integral multiple
of $1,000 (1 Old Capital Security) in excess thereof. If less than the entire
aggregate Liquidation Amount of Old Capital Securities evidenced by any
certificate submitted is tendered, the tendering holder should fill in the
Liquidation Amount tendered in the column labeled "Aggregate Liquidation Amount
Tendered" of the box entitled "Description of Old Capital Securities Tendered"
(Box 1) above. The entire aggregate Liquidation Amount of Old Capital Securities
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated. If the entire aggregate Liquidation Amount of all Old
Capital Securities is not tendered, new certificate(s) for Old Capital
Securities for the Liquidation Amount of Old Capital Securities not tendered and
New Capital Securities exchanged for any Old Capital Securities tendered will be
sent to the holder at his or her registered address, unless a different address
is
-15-
<PAGE>
provided in the appropriate box on this Letter of Transmittal, as soon as
practicable following the Expiration Date.
As set forth below, tenders of Old Capital Securities may be withdrawn at
any time on or prior to the Expiration Date. In order for a withdrawal to be
effective, a written or facsimile transmission of such notice of withdrawal must
be received by the Exchange Agent at one of its addresses set forth above on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and (if
certificates for Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the certificate
for the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If certificates for the Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such certificates for the Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular certificates for the Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been tendered
pursuant to the procedures for book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities," the notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawn Old Capital Securities. Withdrawals of tenders of Old Capital
Securities may not be rescinded. Old Capital Securities properly withdrawn will
not be deemed validly tendered for purposes of the Exchange Offer, but may be
retendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described in the Prospectus under "The Exchange
Offer--Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by Aon and the Trust, in
their sole discretion, whose determination shall be final and binding on all
parties. Aon, the Trust, any affiliates or assigns of Aon or the Trust, the
Exchange Agent or any other person shall not be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Old Capital Securities
which have been tendered but which are withdrawn will be returned to the holder
thereof promptly after withdrawal.
7. Signatures on the Letter of Transmittal; Bond Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Tendered Old Capital Securities, the signature(s) must correspond exactly with
the name(s) as written on the face of the certificates, or on a security
position listing, without alteration, enlargement or any change whatsoever.
If any of the Tendered Old Capital Securities are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal. If any
Tendered Old Capital Securities are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of the Letter of Transmittal documents as there are names in which
certificates are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Old Capital Securities and New Capital Securities are to be issued (and
any untendered aggregate Liquidation Amount of Old Capital Securities is to be
reissued) to the registered holder(s), the registered holder(s) need not and
should not endorse any Tendered Old Capital Securities nor provide a separate
bond power. In any other case, such registered holder(s) must either duly
endorse the certificate(s) for Old Capital Securities tendered or transmit a
properly executed bond power with the certificate(s), with the signature(s) on
the endorsement or bond power guaranteed by an Eligible Institution.
-16-
<PAGE>
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Old Capital Securities listed, the certificates must
be endorsed or accompanied by appropriate bond powers, in each case, signed
exactly as the name or names of the registered holder(s) appear(s) on the
certificates, and also must be accompanied by such opinions of counsel,
certifications and other information as Aon or the Trust may require in
accordance with the restrictions on transfer applicable to the Old Capital
Securities. The signature on the endorsement or bond power must be guaranteed
by an Eligible Institution.
If this Letter of Transmittal, any certificate for Old Capital Securities,
bond power, power of attorney or any other document required by this Letter of
Transmittal is signed by a trustee, executor, administrator, guardian, attorney-
in-fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing and, unless
waived by Aon and the Trust, proper evidence satisfactory to Aon and the Trust,
in their sole discretion, of such person's authority to so act must be submitted
with this Letter of Transmittal.
Endorsements on certificates or signatures on bond powers required by this
Instruction 7 must be guaranteed by an Eligible Institution.
8. Special Delivery Instructions. If New Capital Securities are to be
issued in the name of a person other than the registered holder(s) of Tendered
Old Capital Securities or are to be sent to a name and address other than the
name and address of the person signing this Letter of Transmittal or if Old
Capital Securities delivered by book-entry transfer which are not accepted for
exchange are to be returned by credit to a DTC account other than that of the
person signing this Letter of Transmittal, the appropriate boxes (Box 4 and/or
Box 5) on this Letter of Transmittal should be completed. Certificates for Old
Capital Securities not exchanged will be returned by mail or, if tendered by
book-entry transfer, by crediting the account indicated above maintained at DTC.
See Instruction 6.
9. Transfer Taxes. Holders who tender their Old Capital Securities for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Capital Securities are to be delivered to, or are to
be issued in the name of, any person other than the registered holder of the
Tendered Old Capital Securities, or if a transfer tax is imposed for any reason
other than the exchange of Old Capital Securities in connection with the
Exchange Offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
10. Tax Identification Number. A holder whose Tendered Old Capital
Securities are accepted for exchange should provide the Exchange Agent with such
holder's correct taxpayer identification number ("TIN"), which, in the case of a
holder who is an individual, is his or her social security number. If the
Exchange Agent is not provided with the correct TIN, the holder or other payee
may be subject to a $50 penalty imposed by the Internal Revenue Service (the
"IRS"). In addition, payments to such holders or other payees with respect to
Old Capital Securities exchanged pursuant to the Exchange Offer may be subject
to 31% backup withholding.
To prevent backup withholding with respect to payments of distributions on
the New Capital Securities, each tendering holder should provide such holder's
correct TIN by completing the Substitute Form W-9 set forth herein, certifying
that the TIN provided is correct (or that such holder is awaiting a TIN), and
that the holder is not subject to backup withholding because (i) the holder is
exempt from backup withholding, or (ii) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup
-17-
<PAGE>
withholding as a result of failure to report all interest or dividends, or (iii)
the Internal Revenue Service has notified the holder that such holder is no
longer subject to backup withholding.
If the New Capital Securities will be registered in more than one name or
are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
information on which TIN to report. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions.
Aon and the Trust reserve the right in their sole discretion to take
whatever steps are necessary to comply with the Trust's obligation regarding
backup withholding. Any amount paid as backup withholding will be creditable
against a holder's tax liability.
11. Validity of Tenders. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
Tendered Old Capital Securities will be determined by Aon and the Trust, in
their sole discretion, whose determination shall be final and binding on all
parties. Aon and the Trust reserve the absolute right, in their sole and
absolute discretion, to reject any and all tenders determined by them not to be
in proper form or the acceptance of which, or exchange for, may, in the view of
Aon and the Trust or of counsel to Aon and the Trust, be unlawful. Aon and the
Trust also reserve the absolute right, subject to applicable law, to waive any
of the conditions of the Exchange Offer as set forth in the Prospectus under
"The Exchange Offer -- Conditions to the Exchange Offer" or any condition,
defect or irregularity in any tender of Old Capital Securities of any particular
holder whether or not similar conditions, defects or irregularities are waived
in the case of other holders. The interpretation of the terms and conditions of
the Exchange Offer (including this Letter of Transmittal and the instructions
hereto) by Aon and the Trust will be final and binding on all parties. No
tenders of Old Capital Securities will be deemed to have been validly made until
all irregularities with respect to such tender have been cured or waived. Aon,
the Trust, any affiliates or assigns of Aon or the Trust, the Exchange Agent or
any other person shall not be under any duty to give any notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification.
12. Mutilated, Lost, Stolen or Destroyed Certificates. Any tendering
holder whose Old Capital Securities have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instruction. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing mutilated, lost, stolen or
destroyed certificate(s) have been followed.
13. Questions, Requests for Assistance and Additional Copies. Questions
and requests for assistance and requests for additional copies of the Prospectus
and this Letter of Transmittal may be directed to the Exchange Agent at the
address and telephone number set forth on the front of this Letter of
Transmittal. Holders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Exchange Offer.
14. Acceptance of Tendered Old Capital Securities and Issuance of New
Capital Securities; Return of Old Capital Securities. Subject to the terms and
conditions of the Exchange Offer, Aon and the Trust will accept for exchange all
validly tendered Old Capital Securities as soon as practicable after the
Expiration Date and will issue New Capital Securities therefor as soon as
practicable thereafter. For purposes of the Exchange
-18-
<PAGE>
Offer, Aon and the Trust shall be deemed to have accepted the Tendered Old
Capital Securities when, as and if Aon and the Trust have given written or oral
notice thereof to the Exchange Agent. If any Tendered Old Capital Securities are
not exchanged pursuant to the Exchange Offer for any reason, such unexchanged
Old Capital Securities will be returned, without expense, to the undersigned at
the address shown below or at a different address as may be indicated herein
under "Special Delivery Instructions."
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF OR AN
AGENT'S MESSAGE IN LIEU THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
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<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-
0000. Employer identification number have nine digits separated by only one
hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
================================================================================
Give the SOCIAL SECURITY
For this type of account number of --
================================================================================
1. Individual The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined funds,
the first individual on the
account/1/
3. Custodian account of a minor The minor/2/
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee/1/
trust account (grantor is
also trustee)
b. So-called trust account that The actual owner/1/
is not a legal or valid trust
under State law
================================================================================
Give the EMPLOYER IDENTIFICATION
For this type of account number of--
================================================================================
5. Sole proprietorship account The Owner/3/
6. A valid trust, estate, or Legal entity (Do not furnish the
pension trust identifying number of the
personal representative or
trustee unless the legal entity
itself is not designated in the
account title.)/4/
7. Corporate The Corporation
8. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
9. Partnership The partnership
10. A broker or registered The broker or nominee
nominee
11. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
State or local government,
school district, or person)
that receives agricultural
program payments
================================================================================
/1/ List first and circle the name of the person whose number you furnish.
/2/ Circle the minor's name and furnish the minor's social security number.
/3/ You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN.
/4/ List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name issued.
-20-
<PAGE>
Section references are to the Internal Revenue Code.
Purpose of Form.--A person who is required to file an information return with
the IRS must get your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, cancellation of debt, or contributions you made to an IRA. Use
Form W-9 to give your correct TIN to the requester (the person requesting your
TIN) and, when applicable, (1) to certify the TIN you are giving is correct (or
you are waiting for a number to be issued), (2) to certify you are not subject
to backup withholding, or (3) to claim exemption from backup withholding if you
are an exempt payee. Giving your correct TIN and making the appropriate
certifications will prevent certain payments from being subject to backup
withholding.
What is Backup Withholding?--Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions. This
is called "backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.
If you give the requester your correct TIN, make the proper certifications,
and report all your taxable interest and dividends on your tax return, your
payments will not be subject to backup withholding. Payments you receive will
be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS tells the requester that you furnished an incorrect TIN,
or
3. The IRS tells you that you are subject to backup withholding
because you did not report all your interest and dividends on your tax
return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or
5. You do not certify your TIN. See the Part III Instructions for
exceptions.
Certain payees and payments are exempt from backup withholding and
information reporting. See the Part II Instructions and the separate
Instructions for the Requester of Form W-9.
How to Get a TIN.--If you do not have a TIN, apply for one immediately. To
apply, get Form SS-5, Application for a Social Security Number Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
If you do not have a TIN, write "Applied For" in the space for the TIN in
Part I, sign and date the form, and give it to the requester. Generally, you
will then have 60 days to get a TIN and give it to the requester. If the
requester does not receive your TIN within 60 days, backup withholding, if
applicable, will begin and continue until you furnish your TIN.
-21-
<PAGE>
Note: Writing "Applied For" on the form means that you have already applied for
a TIN OR that you intend to apply for one soon.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
Penalties
Failure To Furnish TIN.--If you fail to furnish your correct TIN to a requester,
you are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding.--If you make a
false statement with no reasonable basis that results in no backup withholding,
you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
Misuse of TINs.--If the requester discloses or uses TINs in violation of Federal
law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Name.--If you are an individual, you must generally enter the name shown on your
social security card. However, if you have changed your last name, for instance,
due to marriage, without informing the Social Security Administration of the
name change, please enter your name, the last name shown on your social security
card and your new last name.
Sole Proprietor.--You must enter your individual name. (Enter either your SSN or
EIN in Part 1). You may also enter your business name or "doing business as"
name on the business name line. Enter your name as shown on your social security
card and business name as it was used to apply for your EIN on Form SS-4.
Part I--Taxpayer Identification Number (TIN)
You must enter your TIN in the appropriate box. If you are a sole proprietor,
you may enter your SSN or EIN. Also see the chart on page 20 for further
clarification of name and TIN combinations. If you do not have a TIN, follow
the instructions under How To Get A TIN on page 21.
Part II--For Payees Exempt From Backup Withholding
Individuals (including sole proprietors) are not exempt from backup withholding.
Corporations are exempt from backup withholding for certain payments, such as
interest and dividends.
If you are exempt from backup withholding, you should still complete this
form to avoid possible erroneous backup withholding. Enter your correct TIN in
Part I, write "Exempt" in Part II, and sign and date the form. If you are a
nonresident alien or a foreign entity not subject to backup withholding, give
the requester a completed Form W-8, Certificate of Foreign Status.
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<PAGE>
Part III--Certification
For a joint account, only the person whose TIN is shown in Part I should sign.
1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984
and Broker Accounts Considered Active During 1983. You must give your correct
TIN, but you do not have to sign the certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After
1983 and Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out Item 2 in the certification before signing the form.
3. Real Estate Transactions. You must sign the certification. You may
cross out Item 2 of the certification.
4. Other Payments. You must give your correct TIN, but you do not have to
sign the certification unless you have been notified of an incorrect TIN. Other
payments include payments made in the course of the requester's trade or
business for rents, royalties, goods (other than bills for merchandise), medical
and health care services, payments to a nonemployee for services (including
attorney and accounting fees), and payments to certain fishing boat crew
members.
5. Mortgage Interest Paid by You, Acquisitions or Abandonment of Secured
Property, Cancellation of Debt, or IRA Contributions. You must give your correct
TIN, but you do not have to sign the certification.
Privacy Act Notice
Section 6109 requires you to give your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you made
to an IRA. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. You must provide your TIN whether or not
you are required to file a tax return. Payers must generally withhold 31% of
taxable interest, dividend, and certain other payments to a payee who does not
give a TIN to a payer. Certain penalties may also apply.
-23-
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
for Tender of
8.205% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
of
Aon Capital A
As set forth in the Exchange Offer (as defined below), this Notice of
Guaranteed Delivery (or a facsimile hereof) or one substantially equivalent
hereto or the electronic form used by The Depository Trust Company ("DTC") for
this purpose must be used to accept the Exchange Offer if certificates for
8.205% Capital Securities due January 1, 2027 (the "Old Capital Securities") of
Aon Capital A, a Delaware statutory business trust (the "Trust"), are not
immediately available to the registered holder of such Old Capital Securities,
or if a participant in DTC is unable to complete the procedures for book-entry
transfer on a timely basis of Old Capital Securities to the account maintained
by The Bank of New York (the "Exchange Agent") at DTC, or if time will not
permit all documents required by the Exchange Offer to reach the Exchange Agent
prior to 5:00 p.m., New York City time, on ________________, 1997, unless
extended (the "Expiration Date"). This Notice of Guaranteed Delivery (or a
facsimile hereof) or one substantially equivalent hereto may be delivered by
mail (registered or certified mail is recommended), by facsimile transmission,
by hand or overnight carrier to the Exchange Agent. See "The Exchange Offer -
Procedures for Tendering Old Capital Securities." Capitalized terms used herein
and not defined herein have the meanings assigned to them in the Exchange Offer.
The Exchange Agent is:
The Bank of New York
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier:
The Bank of New York The Bank of New York The Bank of New York
101 Barclay Street - 7E Attn: Enrique Lopez 101 Barclay Street
New York, New York 10286 (212) 571-3080 Corporate Trust Services Window
Attn: Reorganization Section Ground Level
(For Eligible Institutions Only) New York, New York 10286
Confirm by Telephone: Attn: Reorganization Section
(212) 815-6333
For Information Call:
(212) 815-6333
</TABLE>
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via a
facsimile number other than the number listed above will not constitute a valid
delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution (as defined therein) under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Trust and to Aon Corporation, a
Delaware corporation ("Aon"), the aggregate liquidation amount of Old Capital
Securities indicated below pursuant to the guaranteed delivery procedures and
upon the terms and subject to the conditions set forth in the accompanying
Prospectus dated__________, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus") and in the related Letter of Transmittal
(which together with the Prospectus constitute the "Exchange Offer"), receipt of
which is hereby acknowledged.
The undersigned hereby represents, warrants and agrees that the undersigned
has full power and authority to tender, exchange, sell, assign, and transfer the
Tendered Old Capital Securities and that the Trust will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances when the Tendered Old Capital Securities are acquired
by the Trust as contemplated herein, and the Tendered Old Capital Securities are
not subject to any adverse claims or proxies. The undersigned warrants and
agrees that the undersigned and each Beneficial Owner will, upon request,
execute and deliver any additional documents deemed by Aon, the Trust or the
Exchange Agent to be necessary or desirable to complete the tender, exchange,
sale, assignment and transfer of the Tendered Old Capital Securities, and that
the undersigned will comply with its obligations under the Registration Rights
Agreement. The undersigned has read and agrees to all of the terms of the
Exchange Offer.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS NOTICE OF GUARANTEED
DELIVERY, THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT (i) NEITHER THE
UNDERSIGNED NOR ANY BENEFICIAL OWNER(S) IS AN "AFFILIATE" OF AON OR THE TRUST,
(ii) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED AND ANY
BENEFICIAL OWNER(S) ARE BEING ACQUIRED BY THE UNDERSIGNED AND ANY BENEFICIAL
OWNER(S) IN THE ORDINARY COURSE OF BUSINESS OF THE UNDERSIGNED AND ANY
BENEFICIAL OWNER(S), (iii) THE UNDERSIGNED AND EACH BENEFICIAL OWNER HAVE NO
ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (iv) IF THE UNDERSIGNED OR ANY BENEFICIAL
OWNER IS NOT A BROKER-DEALER, THE UNDERSIGNED OR ANY SUCH BENEFICIAL OWNER IS
NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS NOTICE OF
GUARANTEED DELIVERY, THE UNDERSIGNED OR ANY BENEFICIAL OWNER(S) OF OLD CAPITAL
SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH
CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION
FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT SUCH
OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT
AS THE RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT
WILL DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN
CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT, BY SO
ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES
ACT).
All questions as to the form of documents, validity, eligibility (including
time of receipt) and acceptance for exchange of Tendered Old Capital Securities
will be determined by Aon and the Trust, in their sole discretion, whose
determination shall be final and binding on all parties. Aon and the Trust
reserve the absolute right, in their sole and absolute discretion, to reject any
and all tenders determined by Aon and the Trust not to be in proper form or the
acceptance of which, or exchange for, may, in the view of Aon and the Trust or
of counsel to Aon and the Trust, be unlawful.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, legal representatives, successors and
assigns of the undersigned.
-2-
<PAGE>
Name(s) of Registered Holder(s):
------------------------------------------------
- --------------------------------------------------------------------------------
Please Print
Address(es):
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
Area Code and Tel. No(s):
-------------------------------------------------------
X
--------------------------------------------------------------------------
X
--------------------------------------------------------------------------
Signature(s) of Owner(s) or Authorized Signatory
Must be signed by the registered holder(s) of the Tendered Old Capital
Securities as their name(s) appear(s) on certificates for such Tendered Old
Capital Securities, or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.
<TABLE>
<CAPTION>
Aggregate Liquidation
Certificate No(s) Amount Represented Aggregate Liquidation
(if available) by Certificate Amount Tendered
- ------------------- ------------------------- ---------------------
<S> <C> <C>
- ------------------- ------------------------- ---------------------
- ------------------- ------------------------- ---------------------
- ------------------- ------------------------- ---------------------
- ------------------- ------------------------- ---------------------
</TABLE>
If Old Capital Securities will be delivered by book-entry transfer to The
Depository Trust Company, provide the following information:
Signature:
------------------------------------------------------------
Account
Number:
---------------------------------------------------------------
Date:
-----------------------------------------------------------------
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
-3-
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees delivery to the
Exchange Agent, at one of its addresses set forth above, either certificates for
the Old Capital Securities tendered hereby, in proper form for transfer, or
confirmation of the book-entry transfer of such Old Capital Securities to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof or an Agent's Message in lieu thereof) and any
other documents required by the Letter of Transmittal, all within five (5)
business days after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must communicate the guarantee to the
Exchange Agent and must deliver the Letter of Transmittal and certificates for
the Old Capital Securities tendered hereby to the Exchange Agent within the time
period shown hereon and that failure to do so could result in a financial loss
to the undersigned.
- ---------------------------------- -----------------------------------------
Firm Authorized Signature
Name
- ---------------------------------- -------------------------------------
Address (Please Type or Print)
- ---------------------------------- Title
Zip Code -----------------------------------
Dated _____________________________, 1996
Area Code and Tel. No.:
--------------------------------------------------------
DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS NOTICE OF
GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
-4-
<PAGE>
EXHIBIT 99.3
AON CAPITAL A
OFFER TO EXCHANGE
Its
8.205% Capital Securities
Which Have Been Registered Under the Securities Act of 1933
for Any and All of Its Outstanding
8.205% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
To Our Clients:
Enclosed for your consideration are the Prospectus, dated ____________,
1997 (as the same may be amended and supplemented from time to time, the
"Prospectus"), and the related Letter of Transmittal (which together with the
Prospectus constitute the "Exchange Offer"), in connection with the offer by Aon
Capital A, a Delaware statutory business trust (the "Trust), to exchange the
Trust's 8.205% Capital Securities due January 1, 2027 ( the "New Capital
Securities") which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for any and all of the Trust's outstanding
8.205% Capital Securities due January 1, 2027 (the "Old Capital Securities"),
upon the terms and subject to the conditions set forth in the Exchange Offer.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
_______________, 1997, unless extended (the "Expiration Date").
We are holding Old Capital Securities for your account. An exchange of the
Old Capital Securities can be made only by us and pursuant to your instructions.
The Letter of Transmittal is furnished to you for your information only and
cannot be used by you to exchange the Old Capital Securities held by us for your
account. The Exchange Offer provides a procedure for holders to tender by means
of guaranteed delivery.
We request information as to whether you wish us to exchange any or all of
the Old Capital Securities held by us for your account upon the terms and
subject to the conditions of the Exchange Offer.
Your attention is directed to the following:
1. The forms and terms of the New Capital Securities are the same in
all material respects as the forms and terms of the Old Capital Securities
(which they replace) except that the New Capital Securities have been
registered under the Securities Act. Distributions on the New Capital
Securities will accumulate from the most recent January 1 or July 1 on
which distributions were paid or provided for on the Old Capital
Securities, or, if no distributions have been paid or provided for on the
Old Capital Securities, from January 1, 1997.
2. Based on an interpretation by the staff of the Division of
Corporation Finance of the Securities and Exchange Commission (the "SEC")
as set forth in certain interpretive letters addressed to third parties in
other transactions, New Capital Securities issued pursuant to the Exchange
Offer in exchange for Old Capital Securities may be offered for resale,
resold and otherwise transferred by a holder thereof (other than a holder
which is an "affiliate" of Aon or the Trust within the meaning of Rule 405
under the Securities Act or a "broker" or "dealer" registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Capital Securities are acquired in
the ordinary course of such holder's business and such holder is not
engaging, does not intend to engage, and has no arrangement or
understanding with any person to participate, in the distribution of such
New Capital Securities. See "Shearman &
<PAGE>
Sterling," SEC No-Action Letter (available July 2, 1993), "Morgan Stanley &
Co., Inc.," SEC No-Action Letter (available June 5, 1991) and "Exxon
Capital Holdings Corporation," SEC No-Action Letter (available May 13,
1988).
3. The Exchange Offer is not conditioned on any minimum aggregate
liquidation amount of Old Capital Securities being tendered except that Old
Capital Securities may be tendered only in an aggregate liquidation amount
of $100,000 (100 Old Capital Securities) and integral multiples of $1,000
(1 Old Capital Security) in excess thereof. The New Capital Securities will
be exchanged for the Old Capital Securities at the rate of one New Capital
Security ($1,000 liquidation amount) for each Old Capital Security ($1,000
liquidation amount).
4. Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, Aon Corporation, a Delaware corporation
("Aon"), and the Trust will not be required to accept any Old Capital
Securities for exchange or to exchange any New Capital Securities for any
Old Capital Securities and may terminate the Exchange Offer (whether or not
any Old Capital Securities have been accepted for exchange) or may waive
any conditions to or amend the Exchange Offer, if any of the conditions
described in the Prospectus under "The Exchange Offer - Conditions of the
Exchange Offer" have occurred or exist or have not been satisfied.
5. Tendered Old Capital Securities may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date, if such Old
Capital Securities have not previously been accepted for exchange pursuant
to the Exchange Offer.
6. Any transfer taxes applicable to the exchange of Old Capital
Securities pursuant to the Exchange Offer will be paid by Aon, except as
otherwise provided in Instruction 9 of the Letter of Transmittal.
If you wish to have us tender any or all of your Old Capital Securities,
please so instruct us by completing, detaching and returning to us the
instruction form attached hereto. An envelope to return your instructions is
enclosed. If you authorize a tender of your Old Capital Securities, the entire
liquidation amount of Old Capital Securities held for your account will be
tendered unless otherwise specified on the instruction form. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf by the Expiration Date.
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of the Old Capital Securities in any jurisdiction in
which the making of the Exchange Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction or would otherwise not be in
compliance with any provision of any applicable security law.
-2-
<PAGE>
AON CAPITAL A
OFFER TO EXCHANGE
Its
8.205% Capital Securities
Which Have Been Registered Under the Securities Act of 1933
for Any and All of Its Outstanding
8.205% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Instructions to Registered Holder from Beneficial Owner
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus and the related Letter of Transmittal in connection with the offer by
the Trust to exchange New Capital Securities for Old Capital Securities.
This will instruct you to tender the liquidation amount of Old Capital
Securities indicated below held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Prospectus and the
related Letter of Transmittal.
The undersigned represents that (i) the New Capital Securities acquired
pursuant to the Exchange Offer are being obtained in the ordinary course of the
undersigned's business, (ii) the undersigned is not engaging, does not intend to
engage, and has no arrangement or understanding with any person to participate,
in the distribution of such New Capital Securities, and (iii) the undersigned is
not an "affiliate," as defined under Rule 405 of the Securities Act, of Aon or
the Trust.
If the undersigned is a "broker" or "dealer" registered under the Exchange
Act that acquired Old Capital Securities for its own account pursuant to its
market-making or other trading activities (other than Old Capital Securities
acquired directly from Aon or the Trust or an affiliate of Aon or the Trust) (a
"Participating Broker-Dealer"), the undersigned represents and agrees,
consistent with certain interpretive letters issued by the staff of the Division
of Corporation Finance of the SEC to third parties in other transactions, that
it will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. Notwithstanding the
foregoing, the undersigned does not thereby admit that it is an "underwriter"
within the meaning of the Securities Act.
The undersigned understands that Aon and the Trust have agreed that,
subject to the provisions of the Registration Rights Agreement (as defined in
the Prospectus) and to the limitations described under "The Exchange Offer -
Resales of New Capital Securities" in the Prospectus, the Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Capital Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its own account as a result of
market-making activities or other trading activities, for a period ending 90
days after the Expiration Date or, if earlier, when all such New Capital
Securities have been disposed of by such Participating Broker-Dealer. If the
undersigned is a Participating Broker-Dealer, the undersigned agrees that, upon
receipt of notice from Aon or the Trust of the occurrence of any event or the
discovery of any fact which makes any statement contained or incorporated by
reference in the Prospectus untrue in any material respect or which causes the
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference therein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the registration rights agreement, such
Participating Broker-Dealer will suspend the sale of New Capital Securities
pursuant to the Prospectus until Aon or the Trust has amended or supplemented
the Prospectus to correct such misstatement or omission and has furnished copies
of the amended or supplemented
-3-
<PAGE>
Prospectus to such Participating Broker-Dealer or Aon or the Trust has given
notice that the sale of the New Capital Securities may be resumed, as the case
may be.
Sign Here
.....................................
Signature(s)
Securities which are to be tendered:
Tender all of the Old Capital Securities
Aggregate Liquidation Amount*
----------------------------
[_] Old Capital Securities..........................
....................................................
Name(s) (Please Print)
....................................................
Address
....................................................
Zip Code
....................................................
Area Code and Telephone No.
Dated: ______________, 1997
________________________
*Unless otherwise indicated, it will be assumed that all of the Old Capital
Securities listed are to be tendered.
-4-
<PAGE>
EXHIBIT 99.4
AON CAPITAL A
OFFER TO EXCHANGE
Its
8.205% Capital Securities
Which Have Been Registered Under the Securities Act of 1933
for Any and All of Its Outstanding
8.205% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
____________, 1997
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing herewith an offer by Aon Capital A, a Delaware statutory
business trust (the "Trust"), to exchange the Trust's new 8.205% Capital
Securities due January 1, 2027 (the "New Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for any and all of the Trust's outstanding 8.205% Capital Securities due January
1, 2027 (the "Old Capital Securities"), upon the terms and subject to the
conditions set forth in the accompanying Prospectus, dated ____________, 1997
(as the same amended and supplemented from time to time, the "Prospectus"), and
related Letter of Transmittal (which together with the Prospectus constitutes
the "Exchange Offer").
The Exchange Offer provides a procedure for holders to tender the Old
Capital Securities by means of guaranteed delivery.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
____________, 1997, unless extended (the "Expiration Date"). Tendered Old
Capital Securities may be withdrawn at any time prior to 5:00 p.m., New York
City time, on the Expiration Date, if such Old Capital Securities have not
previously been accepted for exchange pursuant to the Exchange Offer.
Based on an interpretation by the staff of the Division of Corporation
Finance of the Securities and Exchange Commission (the "SEC") as set forth in
certain interpretive letters addressed to third parties in other transactions,
New Capital Securities issued pursuant to the Exchange Offer in exchange for Old
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder which is an "affiliate" of Aon or the
Trust within the meaning of Rule 405 under the Securities Act or a "broker" or
"dealer" registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of such holder's business and
such holder is not engaging, does not intend to engage, and has no arrangement
or understanding with any person to participate, in the distribution of such New
Capital Securities. See "Shearman & Sterling," SEC No-Action Letter (available
July 2, 1993), "Morgan Stanley & Co., Inc.," SEC No-Action Letter (available
June 5, 1991) and "Exxon Capital Holding Corporation," SEC No-Action Letter
(available May 13, 1988).
The Exchange Offer is not conditioned on any minimum aggregate liquidation
amount of Old Capital Securities being tendered except that Old Capital
Securities may be tendered only in an aggregate liquidation amount of $100,000
(100 Old Capital Securities) and integral multiples of $1,000 (1 Old Capital
Security) in excess thereof.
<PAGE>
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, Aon Corporation, a Delaware corporation
("Aon"), and the Trust will not be required to accept for exchange, or to
exchange, any New Capital Securities for any Old Capital Securities and may
terminate the Exchange Offer (whether or not any Old Capital Securities have
been accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the conditions described in the Prospectus under "The Exchange
Offer - Conditions of the Exchange Offer" have occurred or exist or have not
been satisfied.
For your information and for forwarding to your clients for whom you hold
Old Capital Securities registered in your name or in the name of your nominee,
we are enclosing the following documents:
1. A Prospectus, dated ____________, 1997.
2. A Letter of Transmittal for your use and for the information of
your clients.
3. A printed form of letter which may be sent to your clients for
whose accounts you hold Old Capital Securities registered in your name or
in the name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Exchange Offer.
4. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 of the Internal Revenue Service (included in the Letter
of Transmittal after the instructions thereto).
WE URGE YOU TO CONTACT YOUR
CLIENTS AS PROMPTLY AS POSSIBLE.
Any inquiries you may have with respect to the Exchange Offer may be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Exchange Agent at the following telephone number: (212) 815-6333.
Very truly yours,
Aon Capital A
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
AS THE AGENT OF THE TRUST, AON, THE EXCHANGE AGENT OR ANY OTHER PERSON, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
EXHIBIT 99.5
___________, 199__
EXCHANGE AGENT AGREEMENT
------------------------
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street - 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Aon Corporation, a Delaware corporation (the "Company"), and Aon
Capital A, a Delaware statutory business trust (the "Trust"), propose to make an
offer (the "Exchange Offer") to exchange up to $800,000,000 aggregate
liquidation amount of the Trust's 8.205% Capital Securities due January 1, 2027
(the "Old Securities"), which have been registered under the Securities Act of
1933, as amended, for a like aggregate liquidation amount of the Trust's
outstanding 8.205% Capital Securities due January 1, 2027 (the "New
Securities"). The terms and conditions of the Exchange Offer as currently
contemplated are set forth in a prospectus, dated ___________, 199__ (the
"Prospectus") and in the related Letter of Transmittal, proposed to be
distributed to all record holders of the Old Securities. The Old Securities and
the New Securities are collectively referred to herein as the "Securities."
The Company and the Trust hereby appoint The Bank of New York to act
as exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company and the
Trust on or about _____________, 1997. The Letter of Transmittal accompanying
the Prospectus (or in the case of book entry securities, the ATOP system) is to
be used by the holders of the Old Securities to accept the Exchange Offer and
contains instructions with respect to the delivery of certificates for Old
Securities tendered in connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
_____________, 1997 or on such later date or time to which the Company and the
Trust may extend the Exchange Offer (the "Expiration Date"). Subject to the
terms and conditions set forth in the Prospectus, the Company and the Trust
expressly reserve the right to extend the Exchange Offer from time to time and
may extend the Exchange Offer by giving oral (confirmed in writing) or written
notice to you before 9:00 A.M., New York City time, on the business day
following the previously scheduled Expiration Date.
<PAGE>
The Company and the Trust expressly reserve the right to amend or
terminate the Exchange Offer, and not to accept for exchange any Old Securities
not theretofore accepted for exchange, upon the occurrence of any of the
conditions of the Exchange Offer specified in the Prospectus under the caption
"The Exchange Offer -- Conditions to the Exchange Offer." The Company and the
Trust will give oral (confirmed in writing) or written notice of any amendment,
termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Securities
at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer within two business days after the date of the
Prospectus, and any financial institution that is a participant in the Book-
Entry Transfer Facility's systems may make book-entry delivery of the Old
Securities by causing the Book-Entry Transfer Facility to transfer such Old
Securities into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities, and any
book-entry confirmations (as defined in the Prospectus) received by you with
respect to Old Securities, to ascertain whether: (i) the Letters of Transmittal
and any such other documents are duly executed and properly completed in
accordance with instructions set forth therein and that such book-entry
confirmations are in due and proper form and contain the information required to
be set forth therein; (ii) the Old Securities have otherwise been properly
tendered; (iii) Old Securities are tendered in aggregate liquidation amounts of
$100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess
thereof and if any Old Securities are tendered for exchange in part, the
untendered aggregate liquidation amount thereof is $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof and (iv)
holders have provided their correct Tax Identification Number or required
certification. Determination of all questions as to validity, form, eligibility
and acceptance for exchange of any Old Securities shall be made by the Company
or the Trust, whose determination shall be final and binding. In each case
where the Letter of Transmittal or any other document has been improperly
completed or executed or any of the certificates for Old Securities are not in
proper form for transfer or some other irregularity in connection with the
acceptance of the Exchange Offer exists, you will endeavor to inform the
presenters of the need for fulfillment of all require-
-2-
<PAGE>
ments and to take any other action as may be necessary or advisable to cause
such irregularity to be corrected.
4. With the approval of the President, Senior Vice President,
Executive Vice President, or any Vice President of the Company or an
Administrative Trustee of the Trust (such approval, if given orally, to be
confirmed in writing) or any other party designated by such an officer in
writing, you are authorized to waive any irregularities in connection with any
tender of Old Securities pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer," and Old Securities shall be considered properly tendered to you
only when tendered in accordance with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Old Securities
which the President, Senior Vice President, Executive Vice President, or any
Vice President of the Company or an Administrative Trustee of the Trust shall
approve as having been properly ten dered shall be considered to be properly
tendered (such approval, if given orally, shall be confirmed in writing).
6. You shall advise the Company and the Trust with respect to any
Old Securities as soon as possible after 5:00 p.m. New York City time, on the
Expiration Date and accept their instructions with respect to disposition of
such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or more
names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old Securities
provided that customary transfer requirements, including any applicable transfer
taxes, are fulfilled.
You shall accept partial tenders of Old Securities where so indicated
and as permitted in the Letter of Transmittal and deliver certificates for Old
Securities to the transfer agent for split-up and return any untendered Old
Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
-3-
<PAGE>
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company or the Trust will notify you (such notice if given
orally, to be confirmed in writing) of its acceptance, promptly after the
Expiration Date, of all Old Securities properly tendered and you, on behalf of
the Company and the Trust, will exchange such Old Securities for New Securities
and cause such Old Securities to be cancelled. Delivery of New Securities will
be made on behalf of the Company and the Trust by you at the rate of $1,000
aggregate liquidation amount of New Securities for each $1,000 aggregate
liquidation amount of the corresponding series of Old Securities tendered
promptly after notice (such notice if given orally, to be confirmed in writing)
of acceptance of said Old Securities by the Company and the Trust; provided,
however, that in all cases, Old Securities tendered pursuant to the Exchange
Offer will be exchanged only after timely receipt by you of certificates for
such Old Securities (or confirmation of book-entry transfer into your account at
the Book-Entry Transfer Facility), a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) with any required signature guarantees and
any other required documents. You shall issue New Securities only in
denominations of $100,000 (100 Capital Securities) or any integral multiple of
$1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Date.
10. The Company and the Trust shall not be required to exchange any
Old Securities tendered if any of the conditions set forth in the Exchange Offer
are not met. Notice of any decision by the Company and the Trust not to
exchange any Old Securities tendered shall be given (and confirmed in writing)
by the Company or the Trust to you.
11. If, pursuant to the Exchange Offer, the Company and the Trust do
not accept for exchange all or part of the Old Securities tendered because of an
invalid tender, the occurrence of certain other events set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer" or otherwise, you shall as soon as practicable after the expiration or
termination of the Exchange Offer return those certificates for unaccepted Old
Securities (or effect appropriate book-entry transfer), together with any
related required documents and the Letters of Transmittal relating thereto that
are in your possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted Old
Securities or for New Securities shall be forwarded by (a) first-class certified
mail, return receipt requested under a blanket surety bond protecting you and
the Company and the Trust from loss or liability arising out of the non-receipt
or non-delivery of such certificates or (b) by registered mail insured
separately for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
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commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically
set forth herein or as may be subsequently agreed to in writing by you and the
Company and the Trust;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability, unless you
shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth and
accuracy of any information contained therein, which you shall in good faith
believe to be genuine or to have been signed or represented by a proper person
or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any officer of the Company and the Trust;
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities and the advice or opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by you hereunder in good faith
and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old Securities pursuant to
the Exchange Offer as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Old Securities.
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15. You shall take such action as may from time to time be requested
by the Company or the Trust or their respective counsel (and such other action
as you may reasonably deem appropriate) to furnish copies of the Prospectus,
Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in the
Prospectus) or such other forms as may be approved from time to time by the
Company and the Trust, to all persons requesting such documents and to accept
and comply with telephone requests for information relating to the Exchange
Offer, provided that such information shall relate only to the procedures for
accepting (or withdrawing from) the Exchange Offer. The Company or the Trust
will furnish you with copies of such documents at your request. All other
requests for information relating to the Exchange Offer shall be directed to the
Company and the Trust, Attention: ____________________.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to _____________________________ of the
Company and the Trust and such other person or persons as it may request, daily
(and more frequently during the week immediately preceding the Expiration Date
and if otherwise requested) up to and including the Expiration Date, as to the
number of Old Securities which have been tendered pursuant to the Exchange Offer
and the items received by you pursuant to this Agreement, separately report ing
and giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Company and the Trust or any such other person or persons upon oral
request made from time to time prior to the Expiration Date of such other
information as it or he or she reasonably requests. Such coopera tion shall
include, without limitation, the granting by you to the Company and the Trust
and such person as the Company and the Trust may request of access to those
persons on your staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date the Company and the Trust
shall have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders were accepted, the aggregate liquidation amount of Old
Securities tendered, the aggregate liquidation amount of Old Securities accepted
and deliver said list to the Company and the Trust.
17. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by you as to the date and the time of
receipt thereof and shall be preserved by you for a period of time at least
equal to the period of time you preserve other records pertaining to the
transfer of securities, or one year, whichever is longer, and thereafter shall
be delivered by you to the Company and the Trust. You shall dispose of unused
Letters of Transmittal and other surplus materials by returning them to the
Company or the Trust.
18. You hereby expressly waive any lien, encumbrance or right of set-
off whatsoever that you may have with respect to funds deposited with you for
the payment of trans fer taxes by reasons of amounts, if any, borrowed by the
Company or the Trust, or any of its subsidiaries or affiliates pursuant to any
loan or credit agreement with you or for compensation owed to you hereunder or
for any other matter.
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19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter
of Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
21. The Company and the Trust covenant and agree to indemnify and
hold you harmless in your capacity as Exchange Agent hereunder against any loss,
liability, cost or expense, including reasonable attorneys' fees and expenses,
arising out of or in connection with any act, omission, delay or refusal made by
you in reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
effecting any transfer of Old Securities reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or effect any transfer of Old Securities; provided, however, that the
Company and the Trust shall not be liable for indemnification or otherwise for
any loss, liability, cost or expense to the extent arising out of your bad
faith, gross negligence or willful misconduct. In no case shall the Company and
the Trust be liable under this indemnity with respect to any claim against you
unless the Company and the Trust shall be notified by you, by letter or cable or
by facsimile confirmed by letter, of the written assertion of a claim against
you or of any other action commenced against you, promptly after you shall have
received any such written assertion or notice of commencement of action. The
Company and the Trust shall be entitled to participate at their own expense in
the defense of any such claim or other action, and, if the Company and the Trust
so elect, the Company or the Trust may assume the defense of any pending or
threatened action against you in respect of which indemnification may be sought
hereunder with counsel reasonably acceptable to you, in which case the Company
or the Trust, as applicable, shall not thereafter be liable under this paragraph
for the fees and disbursements of legal counsel retained by you; provided that
the Company and the Trust shall not be entitled to assume the defense of any
such action if the named parties to such action include the Company or the Trust
and you and representation of the parties by the same legal counsel would, in
your opinion, be inappropriate due to actual or potential conflicting interests
between them. It is understood that neither the Company nor the Trust shall be
liable under this paragraph for the fees and disbursements of more than one
legal counsel for you. In the event that the Company or the Trust shall assume
the defense of any such suit with counsel reasonably acceptable to you, the
Company or the Trust, as applicable, shall not therewith be liable for the fees
and expenses of any counsel retained by you.
Without the prior written consent of the Company and the Trust, you
will not settle, compromise or consent to the entry of any judgment in any
pending or threatened claim,
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action or proceeding in respect of which indemnification could be sought in
accordance with the indemnification provisions of this Agreement (whether or not
you, the Company or the Trust or any of their directors, officers and
controlling persons is an actual or potential party to such claim, action or
proceeding), unless such settlement or consent includes an unconditional release
of the Company and the Trust and their directors, officers and controlling
persons from all liability arising out of such claim, action or proceeding.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company and the Trust understand that you are required to
deduct 31% on payments to holders who have not supplied their correct Taxpayer
Identification Number or required certification. Such funds will be turned over
to the Internal Revenue Service in accordance with applicable regulations.
23. You shall deliver or cause to be delivered, in a timely manner to
each governmental authority to which any transfer taxes are payable in respect
of the exchange of Old Securities, your check in the amount of all transfer
taxes so payable, and the Company and the Trust shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange of Old
Securities; provided, however, that you shall reimburse the Company or the Trust
for amounts refunded to you in respect of your payment of any such transfer
taxes, at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles.
25. Nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement. Without limiting the
foregoing, the parties hereto expressly agree that no holder of Old Securities
or New Securities shall have any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
26. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
27. In case any provision of this Agreement 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.
28. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument
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signed by a duly authorized representative of the party to be charged. This
Agreement may not be modified orally.
29. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company or the Trust:
___________________________
___________________________
___________________________
Facsimile: ________________
Attention: ________________
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
30. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver
to the Company or the Trust any certificates for Securities, funds or property
then held by you as Exchange Agent under this Agreement.
31. This Agreement shall be binding and effective as of the date
hereof.
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Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
AON CORPORATION
By:_____________________________
Name:
Title:
AON CAPITAL A
By:_____________________________
Name:
Title: Administrative Trustee
Accepted as of the date
first above written:
THE BANK OF NEW YORK,
as Exchange Agent
By:_____________________
Name:
Title:
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SCHEDULE I
FEES
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