<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 3, 1997
----------------
__________
ALLMERICA FINANCIAL CORPORATION
-------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-13754 04-3263626
-------- ------- ----------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer I.D.
of Incorporation) Number)
__________
440 Lincoln Street, Worcester, Massachusetts 01653
-------------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
(508) 855-1000
------------------------------------------------
Registrant's Telephone Number, including area code
Page 1 of 4 pages
Exhibit Index on page 4
- --------------------------------------------------------------------------------
<PAGE>
Item 5. Other Events
On February 3, 1997 AFC announced the sale of $300 million of Capital
Securities issued by AFC Capital Trust I (the "Trust"), a newly created
subsidiary business trust of AFC. Each Capital Security will pay cumulative cash
distributions at an annual rate of 8.207% of the stated $1,000 liquidation
amount per security, payable semi-annually commencing August 15, 1997.
Proceeds from the offering of approximately $296.3 million, after
commissions and other associated costs, are intended to fund a portion of
proposed acquisition of the 24.2 million, publicly-held shares of its 59.5%-held
subsidiary, Allmerica Property & Casualty Companies, Inc. No agreement on the
proposed acquisition has been reached. In the event the proposed acquisition
does not occur, the proceeds will be used for working capital and other
corporate purposes.
The Trust exists for the sole purpose of issuing the Capital Securities and
investing the proceeds thereof in an equivalent amount of 8.207% Junior
Subordinated Deferrable Interest Debentures (the "Junior Subordinated
Debentures") issued by AFC. The Junior Subordinated Debentures will mature
on February 3, 2027 (the "Stated Maturity Date").
So long as no event of default with respect to the Junior Subordinated
Debentures has occurred and is continuing, AFC has the right to defer payments
of interest on the Junior Subordinated Debentures at any time and 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 Date. Upon the
termination of any such Extension Period and the payment of all amounts then
due, AFC may elect to begin a new Extension Period, subject to certain
requirements. If and for so long as interest payments on the Junior Subordinated
Debentures are so deferred, distributions on the Capital Securities will also be
deferred and AFC will not be permitted, subject to certain exceptions, to
declare or pay any cash distributions with respect to AFC's capital stock (which
includes common and preferred stock) or to make any payment with respect to debt
securities of AFC that rank pari passu 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 Trust Securities are entitled will continue to accumulate) at the
rate of 8.207% per annum, compounded semi-annually.
AFC will, through certain guarantees, the Junior Subordinated Debentures,
the Indenture, and the Declaration of Trust, taken together, fully, irrevocably
and unconditionally guarantee all of the Trust's obligations under the Capital
Securities.
The Capital Securities will be subject to mandatory redemption, in whole
but not in part, (i) on the Stated Maturity Date upon repayment of the Junior
Subordinated Debentures at a redemption price equal to the principal amount of,
plus accrued and unpaid interest on, the Junior Subordinated Debentures (the
"Maturity Redemption Price") and (ii) at any time before the Stated Maturity
Date contemporaneously with the optional prepayment of the Junior Subordinated
Debentures.
The Junior Subordinated Debentures will be prepayable prior to the Stated
Maturity Date at the option of AFC in whole but not in part, if as a result of a
change in law, the interest payable by AFC on the Junior Subordinated Debentures
is not tax deductible for Federal income tax purposes or the Trust is deemed to
be an "investment company" for purposes of the Investment Company Act of 1940.
Under certain circumstances the prepayment of the Junior Subordinated Debentures
is subject to the payment of a premium over par. In additon, AFC has the right
to liquidate the Trust and distribute the Junior Subordinated Debentures to the
holders of the Capital Securities.
The Capital Securities were sold in a private placement to qualified
institutional buyers, and have not been registered under the Securities Act of
1993, as amended (the "Act"), and may not be offered or sold in the United
States absent of registration under, or an applicable exemption from the
registration requirements of the Act and applicable state securities laws. The
issue was managed by Merrill Lynch & Co., and Morgan Stanley & Co.
AFC and the Trust have agreed to file a registration statement relating to
an exchange offer pursuant to which another series of capital securities of the
Trust, guarantees and series of junior subordinated debentures of the Company
each covered by such registration statement and having the same terms as the
Capital Securities, and the current guarantees and the Junior Subordinated
Debentures, respectively (the "Exchange Securities"), would be offered in
exchange for the Capital Securities, the current guarantees and the Junior
Subordinated Debentures, respectively (the "Exchange Offer"). Under certain
circumstances, in lieu of effecting the registration of the Exchange Securities,
AFC and the Trust will file a shelf registration statement registering the
resale of the Capital Securities, the guarantees and the Junior Subordinated
Debentures.
A copy of AFC's press release announcing the sale of the Capital Securities
and certain agreements relating to the Capital Securities are attached hereto as
Exhibits and are incorporated by reference herein.
Item 7. Financial Statements and Exhibits
Exhibit 1 Press Release of AFC dated February 3, 1997 announcing the
Completion of the sale of $300 million of Capital
Securities by AFC Capital Trust I.
Exhibit 2 Amended and Restated Declaration of Trust of AFC Capital
Trust I dated February 3, 1997
Exhibit 3 Indenture dated February 3, 1997 relating to the Junior
Subordinated Debentures of AFC
Exhibit 4 Series A Capital Securities Guarantee Agreement dated
February 3, 1997
Exhibit 5 Common Securities Guarantee Agreement dated
February 3, 1997
Exhibit 6 Registration Rights Agreement dated February 3, 1997
Exhibit 7 Purchase Agreement dated February 3, 1997 relating to the
Capital Securities
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ALLMERICA FINANCIAL CORPORATION
By: /s/ Edward J. Parry III
---------------------------
Title: Vice President,
Chief Financial Officer,
and Treasurer
Date: February 3, 1997
3
<PAGE>
Exhibit Index Page
- ------------- ----
Exhibit 1 Press Release of AFC dated February 3, 1997 announcing the
completion of the sale of $300 million of Capital Securities by AFC
Capital Trust I.
Exhibit 2 Amended and Restated Declaration of Trust of AFC Capital
Trust I dated February 3, 1997
Exhibit 3 Indenture dated February 3, 1997 relating to the Junior
Subordinated Debentures of AFC
Exhibit 4 Series A Capital Securities Guarantee Agreement dated
February 3, 1997
Exhibit 5 Common Securities Guarantee Agreement dated
February 3, 1997
Exhibit 6 Registration Rights Agreement dated February 3, 1997
Exhibit 7 Purchase Agreement dated February 3, 1997 relating to the
Capital Securities
4
<PAGE>
Exhibit 1
ALLMERICA FINANCIAL CORPORATION COMPLETES $300 MILLION
OFFERING OF TRUST-ORIGINATED CAPITAL SECURITIES
WORCESTER, Mass., February 3, 1997 - Allmerica Financial Corporation (NYSE:AFC)
announced the sale of $300 million of Capital Securities issued by AFC Capital
Trust I, a newly-created subsidiary business trust of Allmerica Financial. Each
Capital Security will pay cumulative cash distributions at an annual rate of
8.207 percent of the stated $1,000 liquidation amount per security, payable
semi-annually commencing August 15, 1997. The Capital Securities are guaranteed
by Allmerica Financial.
Proceeds from the offering of approximately $296.3 million, after commissions
and other associated costs, are intended to fund a portion of Allmerica
Financial's proposed acquisition of the 24.2 million, publicly-held shares of
its 59.5%-held subsidiary, Allmerica Property & Casualty Companies, Inc.
(NYSE:APY). No agreement on the proposed acquisition has been reached. In the
event the proposed acquisition does not occur, the proceeds will be used for
working capital and other corporate purposes.
The Capital Securities were sold in a private placement to qualified
institutional buyers, and have not been registered under the Securities Act of
1993, as amended, and may not be offered or sold in the United States absent
registration under, or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities laws. The
issue was managed by Merrill Lynch & Co., and Morgan Stanley & Co.
Allmerica Financial, headquartered in Worcester, Mass., is the holding company
for a diversified group of insurance and financial services companies with total
assets of $19 billion. The Allmerica Financial companies market insurance and
retirement savings products, as well as group benefit programs, to individual
and institutional clients. Through Allmerica P&C, Allmerica Financial offers
property and casualty insurance products nationally through an independent agent
distribution.
CONTACTS
Investors: Jean Peters Media: Michael F. Buckley
Vice President, Investor Relations Director, Public Information
(508)855-3599 (508) 855-3099
<PAGE>
EXHIBIT 2
======================================
AMENDED AND RESTATED DECLARATION
OF TRUST
AFC CAPITAL TRUST I
Dated as of February 3 , 1997
======================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I INTERPRETATION AND DEFINITIONS............................................................2
Section 1.1. Definitions...............................................................2
ARTICLE II TRUST INDENTURE ACT.....................................................................9
Section 2.1. Trust Indenture Act; Application..........................................9
Section 2.2. Lists of Holders of Securities...........................................10
Section 2.3. Reports by the Property Trustee..........................................10
Section 2.4. Periodic Reports to Property Trustee.....................................10
Section 2.5. Evidence of Compliance with Conditions Precedent.........................11
Section 2.6. Events of Default; Waiver................................................11
Section 2.7. Event of Default; Notice.................................................13
ARTICLE III ORGANIZATION...........................................................................14
Section 3.1. Name.....................................................................14
Section 3.2. Office...................................................................14
Section 3.3. Purpose..................................................................14
Section 3.4. Authority................................................................14
Section 3.5. Title to Property of the Trust...........................................15
Section 3.6. Powers and Duties of the Administrative Trustees.........................15
Section 3.7. Prohibition of Actions by the Trust and the Trustees.....................18
Section 3.8. Powers and Duties of the Property Trustee................................19
Section 3.9. Certain Duties and Responsibilities of the Property Trustee..............21
Section 3.10. Certain Rights of Property Trustee.......................................23
Section 3.11. Delaware Trustee.........................................................25
Section 3.12. [INTENTIONALLY OMITTED]..................................................25
Section 3.13. Not Responsible for Recitals or Issuance of Securities...................25
Section 3.14. Duration of Trust........................................................26
Section 3.15. Mergers..................................................................26
ARTICLE IV SPONSOR.................................................................................28
Section 4.1. Sponsor's Purchase of Common Securities..................................28
Section 4.2. Responsibilities of the Sponsor..........................................28
Section 4.3. Right to Proceed.........................................................28
</TABLE>
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<TABLE>
<S> <C>
ARTICLE V TRUSTEES.................................................................................29
Section 5.1. Number of Trustees: Appointment of Co-Trustee............................29
Section 5.2. Delaware Trustee.........................................................29
Section 5.3. Property Trustee; Eligibility............................................30
Section 5.4. Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally........................................................31
Section 5.5. Administrative Trustees..................................................31
Section 5.6. Delaware Trustee.........................................................31
Section 5.7. Appointment, Removal and Resignation of Trustees.........................32
Section 5.8. Vacancies among Trustees.................................................33
Section 5.9. Effect of Vacancies......................................................33
Section 5.10. Meetings.................................................................34
Section 5.11. Delegation of Power......................................................34
Section 5.12. Merger, Conversion, Consolidation or Succession to Business..............35
ARTICLE VI DISTRIBUTIONS...........................................................................35
Section 6.1. Distributions............................................................35
ARTICLE VII ISSUANCE OF SECURITIES.................................................................35
Section 7.1. General Provisions Regarding Securities..................................35
Section 7.2. Execution and Authentication.............................................36
Section 7.3. Form and Dating..........................................................37
Section 7.4. Registrar, Paying Agent and Exchange Agent...............................39
Section 7.5. Paying Agent to Hold Money in Trust......................................39
Section 7.6. Replacement Securities...................................................40
Section 7.7. Outstanding Capital Securities...........................................40
Section 7.8. Capital Securities in Treasury...........................................40
Section 7.9. Temporary Securities.....................................................40
Section 7.10. Cancellation.............................................................42
ARTICLE VIII TERMINATION OF TRUST..................................................................42
Section 8.1. Termination of Trust.....................................................42
ARTICLE IX TRANSFER OF INTERESTS...................................................................43
Section 9.1. Transfer of Securities...................................................43
Section 9.2. Transfer Procedures and Restrictions.....................................44
Section 9.3. Book Entry Interests.....................................................52
Section 9.4. Notices to Clearing Agency...............................................53
</TABLE>
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<TABLE>
<S> <C>
Section 9.5. Appointment of Successor Clearing Agency.................................53
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS................................................................53
Section 10.1. Liability................................................................53
Section 10.2. Exculpation..............................................................54
Section 10.3. Fiduciary Duty...........................................................54
Section 10.4. Indemnification..........................................................55
Section 10.5. Outside Businesses.......................................................58
Section 10.6. Compensation; Fees.......................................................59
ARTICLE XI ACCOUNTING..............................................................................59
Section 11.1. Fiscal Year..............................................................59
Section 11.3. Banking..................................................................60
Section 11.4. Withholding..............................................................60
ARTICLE XII AMENDMENTS AND MEETINGS................................................................61
Section 12.1. Amendments...............................................................61
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE.............................................................64
Section 13.1. Representations and Warranties of Property Trustee.......................64
Section 13.2. Representations and Warranties of Delaware Trustee.......................65
ARTICLE XIV REGISTRATION RIGHTS....................................................................66
Section 14.1. Registration Rights Agreement............................................66
ARTICLE XV MISCELLANEOUS...........................................................................66
Section 15.1. Notices..................................................................66
Section 15.2. Governing Law............................................................67
Section 15.3. Intention of the Parties.................................................67
Section 15.4. Headings.................................................................67
Section 15.5. Successors and Assigns...................................................68
Section 15.6. Partial Enforceability...................................................68
Section 15.7. Counterparts.............................................................68
</TABLE>
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<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
AFC CAPITAL TRUST I
February 3, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of February 3, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Delaware Trustee (as defined herein) and the Sponsor
established AFC Capital Trust I (the "Trust"), a trust created under the
Delaware Business Trust Act pursuant to a Declaration of Trust dated as of
January 24, 1997 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on January 24, 1997, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer (each as
hereinafter defined);
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitutes the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the Trust and the Holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" has the meaning set forth in Section 5.1.
----------------------
"Affiliate" has the same meaning as given to that term in Rule
---------
405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
-----
"Authorized Officer" of a Person means any other Person that is
------------------
authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Capital Security Certificate registered in the name of a Clearing Agency or its
nominee, ownership and transfers of which shall be maintained and made through
book entries by a Clearing Agency as described in Section 9.2.
"Business Day" means any day other than a Saturday or a Sunday or
------------
a day on which banking institutions in the City of New York, New York or
Wilmington, Delaware are
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<PAGE>
authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S)3801 et seq., as it may be amended from time to time, or
------------ -- ---
any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a Book
---------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital
------------------
Securities and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the Series A
----------------------------
Capital Securities Guarantee and the Series B Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a "Clearing
---------------
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Capital Security and which shall
undertake to effect book entry transfers and pledges of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Time" means the "Closing Time" under the Purchase
------------
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
----
time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
----------
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
-----------------
"Common Securities Guarantee" means the guarantee agreement dated
---------------------------
as of February 3, 1997 of the Sponsor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative Trustee;
--------------------------
(b) any
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<PAGE>
Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Company" means the Debenture Issuer.
-------
"Corporate Trust Office" means the office of the Property Trustee at
----------------------
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 450 West 33rd St., New York, New York
10001.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Allmerica Financial Corporation, a Delaware
----------------
corporation, or any successor entity permitted under the Indenture including a
successor entity resulting from any consolidation, amalgamation, merger, sale of
assets as an entirety or substantially as an entirety, transfer, lease, or other
business combination, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means The Chase Manhattan Bank, a New York banking
-----------------
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the Series A Debentures and the
----------
Series B Debentures.
"Default" means an event, act or condition that with notice of lapse
-------
of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the meaning set forth in
-----------------------------
Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Direct Action" shall have the meaning set forth in Section 3.8(e).
-------------
"Distribution" means a distribution payable to Holders in accordance
------------
with Section 6.1 and Annex I.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
---
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as
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<PAGE>
defined in the Indenture) that has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4.
--------------
"Exchange Offer" means the offer that may be made pursuant to the
--------------
Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and the Series B Capital
Securities Guarantee for the Series A Capital Securities Guarantee.
"Fiduciary Indemnified Person" has the meaning set forth in
----------------------------
Section 10.4(b).
"Global Capital Securities" has the meaning set forth in
-------------------------
Section 7.3(a).
"Holder" means a Person in whose name a Security is registered on the
------
register for the Securities, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
------------------
Indemnified Person.
"Indenture" means the Indenture dated as of February 3, 1997, among
---------
the Debenture Issuer and The Chase Manhattan Bank, as amended from time to time.
"Investment Company" means an investment company as defined in the
------------------
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"liquidation amount" means, with respect to the Trust Securities,
------------------
except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, the liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages or amounts are
determined).
"Majority in liquidation amount" means, with respect to the Trust
------------------------------
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act,
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<PAGE>
Holder(s) of outstanding Trust Securities voting together as a single class or,
as the context may require, Holders of outstanding Capital Securities or Holders
of outstanding Common Securities voting separately as a class, who are the
record owners of more than 50% of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"Offering Memorandum" has the meaning set forth in Section 3.6(b).
-------------------
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Secretary or an
Assistant Secretary of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that the officer signing the 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 the officer in rendering the Certificate;
(c) a statement that 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 such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
------------------
be an employee of the Sponsor, and who shall be, and which opinion shall be,
acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
------------
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Property Trustee" has the meaning set forth in Section 5.3(a).
----------------
"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c).
-6-
<PAGE>
"Purchase Agreement" means the Purchase Agreement for the initial
------------------
offering and sale of Capital Securities in the form of Exhibit C.
"QIBs" shall mean qualified institutional buyers as defined in Rule
----
144A.
"Quorum" means a majority of the Administrative Trustees or, if there
------
are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
---------
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement dated as of February 3, 1997, by and among the Trust, the Debenture
Issuer and the Initial Purchaser named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the Registration
----------------------
Rights Agreement.
"Regulation S" means Regulation S under the Securities Act, as such
------------
regulation may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Regulation S Global Capital Security" has the meaning set forth in
------------------------------------
Section 7.3(a).
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
-------------------
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer, or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Restricted Definitive Capital Securities" has the meaning set forth
----------------------------------------
in Section 7.3(c).
"Restricted Capital Security" means a Capital Security required by
---------------------------
Section 9.2 to contain a Restricted Securities Legend.
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<PAGE>
"Restricted Securities Legend" has the meaning set forth in Section
----------------------------
9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
---------
successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such rule may
--------
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may
---------
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Rule 144A Global Capital Security" has the meaning set forth in
---------------------------------
Section 7.3(a).
"Securities" or "Trust Securities" means the Common Securities and the
---------- ----------------
Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
---------------------
Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in Section
---------------------------
7.1(a).
"Series B Capital Securities" has the meaning specified in Section
---------------------------
7.1(a).
"Series A Capital Securities Guarantee" means the guarantee agreement
-------------------------------------
dated as of February 3, 1997 of the Sponsor in respect of the Series A Capital
Securities.
"Series B Capital Securities Guarantee" means the guarantee agreement
-------------------------------------
to be entered in connection with the Exchange Offer by the Sponsor in respect of
the Series B Capital Securities.
"Series A Debentures" means the Series A 8.207% Junior Subordinated
-------------------
Deferrable Interest Debentures due February 3, 2027 of the Debenture Issuer
issued pursuant to the Indenture.
"Series B Debentures" means the Series B 8.207% Junior Subordinated
-------------------
Deferrable Interest Debentures due February 3, 2027 of the Debenture Issuer
issued pursuant to the Indenture.
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"Special Event" has the meaning set forth in Annex I hereto.
-------------
"Sponsor" means Allmerica Financial Corporation, a Delaware
-------
corporation, or any successor entity permitted under the Indenture including a
successor entity resulting from any merger, consolidation, amalgamation sale of
assets as an entirety or substantially as an entirety, transfer, lease or other
business combination, in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"10% in liquidation amount" means, with respect to the Trust
-------------------------
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set forth in
------------------------------------
Section 9.2(b) .
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed
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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 and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.2. Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
-------- ----
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Registrar (if acting in such
capacity), provided that the Property Trustee may destroy any List of Holders
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previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Property Trustee.
-------------------------------
Within 90 days after December 31 of each year, commencing December
31, 1997, the Property Trustee shall provide to the Holders of the Capital
Securities such reports as are required by (S) 313(a) of the Trust Indenture
Act, if any, in the form and in the manner provided by (S) 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the other
requirements of (S) 313 of the Trust Indenture Act. The Sponsor shall promptly
notify the Property Trustee when the Capital Securities are listed on any stock
exchange.
Section 2.4. Periodic Reports to Property Trustee.
------------------------------------
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<PAGE>
Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information as are required by (S) 314 (if any) and the compliance certificate
required by (S) 314 of the Trust Indenture Act in the form, in the manner and at
the times required by (S) 314(a)(4) of the Trust Indenture Act, such compliance
certificate to be delivered annually on or before 120 days after the end of each
fiscal year of the Sponsor.
Section 2.5. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent provided for in this Declaration that relate to any of
the matters set forth in (S) 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to (S) 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.
-------------------------
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
-------- ----
the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
aggregate principal amount of the holders of the Debentures (a "Super Majority")
to be waived under the Indenture, the Event of Default under the Declaration may
only be waived by the vote of the Holders of at least the proportion in
aggregate liquidation amount of the Capital Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to
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<PAGE>
the Common Securities for all purposes of this Declaration without any further
act, vote, or consent of the Holders of the Common Securities.
The Holders of a Majority in liquidation amount of the Capital
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee,
including the right to direct the Property Trustee to exercise the remedies
available to it as holder of the Debentures; provided, however, that (subject to
-------- -------
the provisions of Section 3.9) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee shall determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by its Responsible Officers,
shall determine that the action or proceedings so directed would involve the
Property Trustee in personal liability.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be waived by
the vote of the Holders of at least the proportion in aggregate liquidation
amount of the Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such (S)(S)
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture
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<PAGE>
Act are hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing provisions of
this Section 2.6(b), upon such waiver, any such default shall cease to exist and
any Event of Default with respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or Event of Default
with respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.7. Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within five Business Days after
the occurrence of an Event of Default is actually known to a Responsible Officer
of the Property Trustee, transmit by mail, first class postage prepaid, to the
Holders of the Securities, the Sponsor and the Administrative Trustees, notice
of all defaults with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, unless such defaults have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
-------- ----
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the
Indenture relating to the Debentures; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of the Declaration shall have actual
knowledge.
(c) Unless the notice under Section 2.7(a) shall not have been
transmitted, within five Business Days after the occurrence of any Event of
Default actually known to the Sponsor, the Sponsor shall transmit notice of such
Event of Default to the holders of the Capital Securities, the Administrative
Trustees and the Property Trustee, unless such Event of
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<PAGE>
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee in accordance with
Section 2.4 a certification as to whether or not they are in compliance with all
the conditions and covenants applicable to them under this Declaration.
ARTICLE III
ORGANIZATION
Section 3.1. Name.
----
The Trust is named "AFC Capital Trust I" as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
Section 3.2. Office.
------
The address of the principal office of the Trust is c/o Allmerica
Financial Corporation, 440 Lincoln Street, Worcester, Massachusetts 01653. On
ten Business Days written notice to the Holders of Securities, the
Administrative Trustees may designate another principal office.
Section 3.3. Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities, (b) use the proceeds from the sale of the Securities to
acquire the Debentures, and (c) except as otherwise limited herein, to engage in
only those other activities necessary, advisable or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
Section 3.4. Authority.
---------
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on
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<PAGE>
the power and authority of the Trustees as set forth in this Declaration.
Section 3.5. Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures
and the Property Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
Section 3.6. Powers and Duties of the Administrative Trustees.
------------------------------------------------
The Administrative Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that except, as contemplated in Section 7.1(a),
-------- -------
in the case of (i) and (ii), (i) the Trust may issue no more than one series of
Capital Securities and no more than one series of Common Securities, (ii) there
shall be no interests in the Trust other than the Securities, and (iii) the
issuance of Securities shall be limited to a simultaneous issuance of both
Capital Securities and Common Securities at any Closing Time;
(b) in connection with the issue and sale of the Capital
Securities and the consummation of the Exchange Offer to:
(i) execute, if necessary, an offering memorandum (the
"Offering Memorandum") in preliminary and final form prepared by the
Sponsor, in relation to the offering and sale of Series A Capital
Securities to qualified institutional buyers in reliance on Rule 144A
under the Securities Act and to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) and outside the United States to non-U.S. persons in offshore
transactions in reliance on Regulation S under the Securities Act, and
to execute and file with the Commission, at such time as determined by
the Sponsor, any Registration Statement, including any amendments
thereto, as contemplated by the Registration Rights Agreement;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Capital Securities in any State
in which the Sponsor has determined to qualify or register such Capital
Securities for sale;
(iii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange or
any other national stock exchange or the Nasdaq Stock Market's National
Market for listing or quotation of the Capital Securities;
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<PAGE>
(iv) to execute and deliver letters, documents, or instruments
with DTC and other Clearing Agencies relating to the Capital
Securities;
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital
Securities;
(c) to acquire the Series A Debentures with the proceeds of the
sale of the Series A Capital Securities and the Common Securities and to
exchange the Series A Debentures for a like principal amount of Series B
Debentures, pursuant to the Exchange Offer; provided, however, that the
-------- -------
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Trust and the
Holders;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of (S)316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices, which are not or have not been issued by the Property Trustee as
provided herein, to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of the Securities set forth
in Annex I hereto;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
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<PAGE>
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar and
Exchange Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to
Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Administrative Trustees determine in
their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes.
(q) to take all action necessary to consummate the Exchange
Offer or
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<PAGE>
otherwise cause the Capital Securities to be registered pursuant to an effective
registration statement in accordance with the provisions of the Registration
Rights Agreement; and
(r) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to
this Section 3.6 shall be reimbursed by the Sponsor. The Administrative Trustees
shall take all actions on behalf of the Trust that are not specifically required
by this Declaration to be taken by any other Trustee.
Section 3.7. Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. The Trust shall not:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders pursuant
to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures or pledge any assets or enter into any
mortgages;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever
except as otherwise expressly provided herein;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
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<PAGE>
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of conducting any proceeding with respect to
any remedy available to the Debenture Trustee, or exercise any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B) waive
any past default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (D) consent to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of a nationally recognized tax counsel
experienced in such matters to the effect that such modification will not cause
more than an insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
Section 3.8. Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit of the
Trust and the Holders. The right, title and interest of the Property Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the
Capital Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be
an account that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Capital Securities by a "nationally recognized
statistical rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Securities to the extent
the Debentures are redeemed or
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<PAGE>
mature; and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to effect
the distribution of the Debentures to Holders of Securities upon the occurrence
of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities set forth in Annex I hereto.
(e) Subject to Section 3.9(a), the Property Trustee may take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Declaration or the Trust
Indenture Act and if such Property Trustee shall have failed to take such Legal
Action, to the fullest extent permitted by law, the Holders of the Capital
Securities may take such Legal Action, to the same extent as if such Holders of
Capital Securities held an aggregate principal amount of Debentures equal to the
aggregate liquidation amount of such Capital Securities, without first
proceeding against the Property Trustee or the Trust; provided however, that if
an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay the principal of or
premium, if any, or interest on the Debentures on the date such principal,
premium, if any, or interest is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Capital Securities may pursuant to
Section 5.04 of the Indenture directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of Capital Securities in
such Direct Action. Except as provided in the preceding sentences, the Holders
of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) Subject to Section 5.7 hereof, the Property Trustee shall not
resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of the Securities
pursuant to the terms of the Securities set forth in Annex I hereto; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7 (a "Successor
Property Trustee").
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(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer of the
Property Trustee occurs and is continuing, the Property Trustee may, for the
benefit of Holders, enforce its rights as holder of the Debentures subject to
the rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee shall be authorized to undertake any actions
set forth in (S) 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with (S) 317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property
Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is so acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
Section 3.9. Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) of
which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration 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:
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(i) prior to the occurrence of an 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 Property Trustee shall be
determined solely by the express provisions of this Declaration and in
the Securities and the Property Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Declaration and in the Securities, and no implied
covenants or obligations shall be read into this Declaration or the
Securities against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property 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 Property
Trustee and conforming to the requirements of this Declaration;
provided, however, that in the case of any such certificates or
-------- -------
opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) 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 Capital 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 Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Declaration or indemnity satisfactory to the Property Trustee
against such risk or liability is not assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Property
Trustee 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
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liability afforded to the Property Trustee under this Declaration and the
Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) 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
Sponsor. Money held by the Property Trustee need not be segregated from other
funds held by it except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property Trustee be
liable for any default or misconduct of the Administrative Trustees or the
Sponsor.
Section 3.10. Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document 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 Sponsor or the Administrative
Trustees contemplated by this Declaration may be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and be entitled to
receive and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or the
Administrative Trustees;
(iv) 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 registration thereof;
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(v) the Property Trustee may consult with counsel or other experts
of its selection and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion, such counsel may be counsel to the
Sponsor or any of its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have provided to the Property
Trustee security and indemnity, satisfactory to the Property Trustee, against
the costs, expenses (including reasonable attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) 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 provided, that, nothing contained in this Section 3.10(a)(vi)
shall be taken to relieve the Property Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) 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, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of or for the
supervision of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
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(x) whenever in the administration of this Declaration 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
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the 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 conclusively relying on or acting in accordance
with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without negligence, and
reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Declaration.
(b) No provision of this Declaration 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 or which would expose the Property Trustee to liability, financial or
otherwise. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11. Delaware Trustee.
-----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2 (and subject to Section 5.2), 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 Administrative Trustees or the Property
Trustee described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S)3807 of the Business Trust Act.
Section 3.12. [INTENTIONALLY OMITTED]
Section 3.13. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property
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of the Trust or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration, the Debentures or the Securities.
Section 3.14. Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence up to February 3, 2028.
Section 3.15. Mergers.
-------
(a) The Trust may not merge with or convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c) or Section 3 of Annex I.
(b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders of Securities,
the Delaware Trustee or the Property Trustee, merge with or convert into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
-------- ----
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee as
the holder of the Debentures;
(iii) the Successor Securities that are issued in place of the
Capital Securities are listed, or any such Successor Securities will be
listed upon notification of issuance, on any national securities exchange or
with another organization on which the Capital Securities are then listed or
quoted, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities
(including any Successor
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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 Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the new entity);
(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 Sponsor has received an opinion of an
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 Securities (including any
Successor Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(viii) the Sponsor 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 Capital Securities Guarantee and the Common Securities
Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the Successor Entity not to be classified as a grantor trust for United
States federal income tax purposes.
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ARTICLE IV
SPONSOR
Section 4.1. Sponsor's Purchase of Common Securities.
---------------------------------------
At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Series A Capital Securities are
issued and sold.
Section 4.2. Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Memorandum and to prepare for filing by
the Trust with the Commission any Registration Statement, including any
amendments thereto as contemplated by the Registration Rights Agreement;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to do any
and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust an application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market for listing or quotation
of the Capital Securities;
(d) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust with the Commission a registration statement on Form 8-A
relating to the registration of the Capital Securities under Section 12(b) of
the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement and the
Registration Rights Agreement providing for the sale of the Capital Securities.
Section 4.3. Right to Proceed.
----------------
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on the
Capital Securities is attributable to the failure of the Company to pay interest
or principal on the Debentures, to institute a proceeding directly against the
Debenture Issuer for enforcement of its payment obligations on
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the Debentures.
ARTICLE V
TRUSTEES
Section 5.1. Number of Trustees: Appointment of Co-Trustee.
---------------------------------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; provided, however, that, the number of
-------- -------
Trustees shall in no event be less than two (2); provided further that (1) the
-------- -------
Delaware Trustee, in the case of a natural person, shall be a person who is a
resident of the State of Delaware or that, if not a natural person, is an entity
which has its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law; (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the time be
located, the Holders of a Majority in liquidation amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of the Trust's property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.
Section 5.2. Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
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(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its principal
-------- ----
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application.
Section 5.3. Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), 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 Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration for purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
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The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Section 5.4. Certain Qualifications of Administrative Trustees and Delaware
--------------------------------------------------------------
Trustee Generally.
- -----------------
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware 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 Authorized Officers.
Section 5.5. Administrative Trustees.
-----------------------
The initial Administrative Trustees shall be:
John P. Kavanaugh
John F. Kelly
Edward J. Parry, III
(a) Except as expressly set forth in this Declaration and except
if a meeting of the Administrative Trustees is called with respect to any matter
over which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act or applicable law,
any Administrative Trustee is authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
-------- ----
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Administrative Trustees; and
(c) An 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 purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
Section 5.6. Delaware Trustee.
-----------------
The initial Delaware Trustee shall be:
Chase Manhattan Bank Delaware
1201 Market Street, 9th Floor
Wilmington, Delaware 19801
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Section 5.7. Appointment, Removal and Resignation of Trustees.
-------------------------------------------------
(a) Subject to Section 5.7(b) of this Declaration and to Section 6(b)
of Annex I hereto, Trustees may be appointed or removed without cause at any
time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be continuing
after the issuance of any Securities, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred and be continuing
after the issuance of the Securities, with respect to the Property Trustee or
the Delaware Trustee, by vote of Holders of a Majority in liquidation amount
of the Capital Securities voting as a class at a meeting of Holders of the
Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Property Trustee
(the "Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
and delivered to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.7(b) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by such Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
-------- -------
that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor
and
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the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the
Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
Section 5.8. Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
Section 5.9. Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, 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
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Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 5.7, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Declaration.
Section 5.10. Meetings.
--------
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice
of any telephonic meetings of the Administrative Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
Section 5.11. 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 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
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Section 5.12. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any Person into which the Property Trustee or the Delaware Trustee
or any Administrative Trustee that is not a natural person, as the case may be,
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of the Property Trustee
or the Delaware Trustee or any Administrative Trustee that is not a natural
person, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee or any Administrative Trustee that is not a natural person,
as the case may be, hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
Section 6.1. Distributions.
-------------
Holders shall receive Distributions in accordance with the
applicable terms of Annex I and the relevant Holder's Securities. If and to the
extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Property Trustee or Liquidated Damages (as defined in the Registration
Rights Agreement) or any other payments pursuant to the Registration Rights
Agreement with respect to the Debentures held by the Property Trustee (the
amount of any such payment being a "Payment Amount"), the Property Trustee shall
and is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1. General Provisions Regarding Securities.
---------------------------------------
(a) The Administrative Trustees shall on behalf of the Trust issue
one class of capital securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Series A Capital Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Administrative Trustees
shall on behalf of the Trust issue one class of capital securities representing
undivided
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beneficial interests in the Trust having such terms as set forth in Annex I (the
"Series B Capital Securities") in exchange for Series A Capital Securities
accepted for exchange in the Exchange Offer, which Series B Capital Securities
shall not bear the legends required by Section 9.2(i) unless the Holder of such
Series A Capital Securities is either (A) a broker-dealer who purchased such
Series A Capital Securities directly from the Trust for resale pursuant to Rule
144A or any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Capital Securities or (C) a
Person who is an affiliate (as defined in Rule 144A) of the Trust. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Securities.
(b) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust.
(d) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
Section 7.2. Execution and Authentication.
----------------------------
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Administrative
Trustee before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the person who signed such
Securities had not ceased to be such Administrative Trustee; and any Securities
may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Capital Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Capital Security shall not be valid until authenticated by the
manual signature of an authorized officer of the Property Trustee. The signature
shall be conclusive evidence that the Capital Security has been authenticated
under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the
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Property Trustee shall authenticate the Capital Securities for original issue.
The aggregate number of Capital Securities outstanding at any time shall not
exceed the number set forth in the Terms in Annex I hereto except as provided in
Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate.
Section 7.3. Form and Dating.
---------------
The Capital Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Property Trustee in writing. Each
Capital Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration and
to the extent applicable, the Property Trustee and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby.
(a) Global Securities. Securities offered and sold to QIBs in
-----------------
reliance on Rule 144A or offered and sold outside the United States to non-U.S.
persons in offshore transactions in reliance on Regulation S, as provided in the
Purchase Agreement, shall be issued in the form of one or more, permanent global
Securities in definitive, fully registered form without distribution coupons
with the global legend and applicable Restricted Securities Legend set forth in
Exhibit A-1 hereto (respectively, a "Rule 144A Global Capital Security" or
"Regulation S Global Capital Security", each a "Global Capital Security" and
collectively, the "Global Capital Securities"), which shall be deposited on
behalf of the purchasers of the Capital Securities represented thereby with the
Clearing Agency or with the Property Trustee, at its New York office, as
custodian for the Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by the Trust and
authenticated by the Property Trustee as hereinafter provided. The number of
Capital Securities represented by the Rule 144A Global Capital Security and the
Regulation S Global
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Capital Security may from time to time be increased or decreased by adjustments
made on the records of the Property Trustee and the Clearing Agency or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to
---------------------
the Rule 144A Global Capital Security, the Regulation S Global Capital
Securities and such other Capital Securities in global form as may be authorized
by the Trust to be deposited with or on behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for delivery
initially one or more Rule 144A Global Capital Securities and one or more
Regulation S Global Capital Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to such Clearing
Agency's written instructions or held by the Property Trustee as custodian for
the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to any
Rule 144A Global Capital Security or any Regulation S Global Capital Security
held on their behalf by the Clearing Agency or by the Property Trustee as the
custodian of the Clearing Agency or under such Rule 144A Global Capital Security
or such Regulation S Global Capital Security, and the Clearing Agency may be
treated by the Trust, the Property Trustee and any agent of the Trust or the
Property Trustee as the absolute owner of such Rule 144A Global Capital Security
or such Regulation S Global Capital Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent or employee of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Rule 144A Global Capital Security or any Regulation S Global Capital Security.
(c) Definitive Capital Securities. Except as provided in Section
-----------------------------
7.9, owners of beneficial interests in a Rule 144A Global Capital Security or a
Regulation S Global Capital Security will not be entitled to receive physical
delivery of certificated Capital Securities ("Definitive Capital Securities").
Purchasers of Securities who are "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and did not purchase
Capital Securities in reliance on Regulation S will receive Capital Securities
in the form of individual certificates in definitive, fully registered form
without distribution coupons and with the applicable Restricted Securities
Legend set forth in Exhibit A-1 hereto ("Restricted Definitive Capital
Securities"); provided, however, that upon transfer of such Restricted
-------- -------
Definitive Capital Securities to a QIB, such Restricted Definitive Capital
Securities will, unless the Rule 144A Global Capital Security has previously
been exchanged, be exchanged for an interest in a
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Rule 144A Global Capital Security pursuant to the provisions of Section 9.2.
Restricted Definitive Capital Securities will bear the applicable Restricted
Securities Legend set forth on Exhibit A-1 unless removed in accordance with
Section 9.2.
(d) Authorized Denominations. The Capital Securities are issuable
------------------------
only in denominations of $1,000 and any integral multiple thereof.
Section 7.4. Registrar, Paying Agent and Exchange Agent.
------------------------------------------
The Trust shall maintain in the Borough of Manhattan, The City of
New York, (i) an office or agency where Capital Securities may be presented for
registration of transfer ("Registrar"), (ii) an office or agency where Capital
Securities may be presented for payment ("Paying Agent") and (iii) an office or
agency where Securities may be presented for exchange ("Exchange Agent"). The
Registrar shall keep a register of the Capital Securities and of their transfer.
The Trust may appoint the Registrar, the Paying Agent and the Exchange Agent and
may appoint one or more co-registrars, one or more additional paying agents and
one or more additional exchange agents in such other locations as it shall
determine which paying agent and/or exchange agent must be acceptable to the
Administrative Trustees and the Company. The term "Registrar" includes any
additional registrar, "Paying Agent" includes any additional paying agent and
the term "Exchange Agent" includes any additional exchange agent. The Trust may
change any Paying Agent, Registrar, or Exchange Agent without prior notice to
any Holder. The Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Exchange Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Exchange Agent. The Trust shall act as Paying Agent, Registrar and Exchange
Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar,
Paying Agent, and Exchange Agent for the Capital Securities. In the event that
the Property Trustee shall no longer be the Registrar, Paying Agent, or Exchange
Agent the Trust shall appoint a successor which successor shall be acceptable to
the Administrative Trustees and the Company.
Section 7.5. Paying Agent to Hold Money in Trust.
-----------------------------------
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions on the Securities, and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to
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account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or
an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
Section 7.6. Replacement Securities.
----------------------
If a Holder claims that a Security owned by it has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. An indemnity bond must be provided
by the Holder which, in the judgment of the Property Trustee, is sufficient to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Trust may charge
such Holder for its expenses in replacing a Security.
Section 7.7. Outstanding Capital Securities.
------------------------------
The Capital Securities outstanding at any time are all the Capital
Securities authenticated by the Property Trustee except for those cancelled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Capital Security is replaced, pursuant to Section 7.6 hereof,
it ceases to be outstanding unless the Property Trustee receives proof
satisfactory to it that the replaced Capital Security is held by a bona fide
purchaser.
If Capital Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
A Capital Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
Section 7.8. Capital Securities in Treasury.
------------------------------
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Securities
which a Responsible Officer of the Property Trustee actually knows are so owned
shall be so disregarded.
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Section 7.9. Temporary Securities.
--------------------
(a) Until definitive Securities are ready for delivery, the
Trust may prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and, in the case of the Capital Securities, the
Property Trustee shall authenticate definitive Securities in exchange for
temporary Securities.
(b) A Global Capital Security deposited with the Clearing Agency
or with the Property Trustee as custodian for the Clearing Agency pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form of
definitive certificated Capital Securities only if such transfer complies with
Section 9.2 and (i) the Clearing Agency notifies the Company that it is
unwilling or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not appointed by the
Sponsor within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to
cause the issuance of definitive certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of definitive certificated Capital
Securities pursuant to this Section 7.9 shall be surrendered by the Clearing
Agency to the Property Trustee located in the Borough of Manhattan, The City of
New York, to be so transferred, in whole or from time to time in part, without
charge, and the Property Trustee shall authenticate and make available for
delivery, upon such transfer of each portion of such Global Capital Security, an
equal aggregate liquidation amount of Securities of authorized denominations in
the form of certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered in such names
as the Clearing Agency shall direct. Any Capital Security in the form of
definitive certificated Capital Securities delivered in exchange for an interest
in the Restricted Capital Security in global form shall, except as otherwise
provided by Sections 7.3 and 9.2, bear the applicable Restricted Securities
Legend set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of a
Global Capital Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Capital Securities in fully
registered form without distribution coupons.
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Section 7.10. Cancellation.
------------
The Trust at any time may deliver Capital Securities to the
Property Trustee for cancellation. The Registrar, Paying Agent and Exchange
Agent shall forward to the Property Trustee any Capital Securities surrendered
to them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities, surrendered for
registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of cancelled Capital Securities as the Trust
directs, provided that the Property Trustee shall not be obligated to destroy
Capital Securities. The Trust may not issue new Capital Securities to replace
Capital Securities that it has paid or that have been delivered to the Property
Trustee for cancellation or that any Holder has exchanged.
Section 7.11. CUSIP Numbers.
-------------
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
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 Capital
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 Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1. Termination of Trust.
--------------------
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor; or the
revocation of the Sponsor's charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders, provided that, the Property Trustee has received
-------- ----
written notice from the Holder of Common Securities directing the Property
Trustee to terminate the Trust (which direction is optional, and except as
otherwise expressly provided below, within the discretion of the Holder of
Common Securities) and provided, further, that such direction and such
-------- -------
distribution is conditioned on the Administrative Trustees' receipt of
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an opinion of an independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published rulings of the
Internal Revenue Service, to the effect that the Holders will not recognize
any gain or loss for United States federal income tax purposes as a result
of the dissolution of the Trust and the distribution of Debentures;
(iv) upon the entry of a decree of judicial dissolution of the
Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(vi) upon the repayment of the Debentures or at such time as no
Debentures are outstanding; or
(vii) the expiration of the term of the Trust provided in
Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Administrative Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1. Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
security not made in accordance with this Declaration shall be null and void.
(c) The Sponsor may not transfer the Common Securities other
than to a directly or indirectly, wholly-owned subsidiary thereof.
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(d) The Administrative Trustees shall provide for the
registration of Capital Securities and of the transfer of Capital Securities,
which will be effected without charge but only upon payment (with such indemnity
as the Administrative Trustees may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Capital Securities, the Administrative Trustees
shall cause one or more new Capital Securities to be issued in the name of the
designated transferee or transferees. Every Capital Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Administrative Trustees and the Registrar
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Capital Security surrendered for registration of transfer shall be
canceled by the Property Trustee. A transferee of a Capital Security shall be
entitled to the rights and subject to the obligations of a Holder hereunder upon
the receipt by such transferee of a Capital Security. By acceptance of a Capital
Security, each transferee shall be deemed to have agreed to be bound by this
Declaration.
Section 9.2. Transfer Procedures and Restrictions
------------------------------------
(a) General. Except as otherwise provided in Section 9.2(b), if
-------
Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Restricted Securities Legend set forth in Exhibit
A-1 hereto, or if a request is made to remove such Restricted Securities Legend
on Capital Securities, the Capital Securities so issued shall bear the
Restricted Securities Legend, or the Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such evidence satisfactory to the Sponsor, which shall include
an Opinion of Counsel, as may be reasonably required by the Sponsor, that
neither the legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof are made pursuant to an exception from
the registration requirements of the Securities Act or, with respect to
Restricted Definitive Capital Securities, that such Securities are not
"restricted" within the meaning of Rule 144. Upon provision of such
satisfactory evidence, the Property Trustee, at the written direction of the
Trust, shall authenticate and deliver Capital Securities that do not bear the
legend.
(b) Transfers After Effectiveness of a Registration Statement.
---------------------------------------------------------
After the effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply, and beneficial interests in a Capital Security in global
form without legends will be available to transferees of such Capital
Securities, upon exchange of the transferring holder's Restricted Definitive
Capital Security or directions to transfer such Holder's beneficial interest in
the Rule 144A Global Capital Security or the Regulation S Global Capital
Security, as the case may be. No such transfer or exchange of a Restricted
Definitive Capital Security or of an interest in the Rule 144A Global Capital
Security or the Regulation S Global Capital Security shall be effective unless
the transferor delivers to the Trust a certificate in a form substantially
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similar to that attached hereto as the "Form of Assignment" in Exhibit A-1.
Except as otherwise provided in Section 9.2(l), after the effectiveness of a
Registration Statement, the Trust shall issue and the Property Trustee, upon a
written order of the Trust signed by one Administrative Trustee, shall
authenticate a Capital Security in global form without the Restricted Securities
Legend (the "Unrestricted Global Capital Security") for deposit with the
Clearing Agency or its custodian to evidence transfers of beneficial interests
from the (i) Rule 144A Global Capital Security or the Regulation S Global
Capital Security and (ii) Restricted Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital Securities.
------------------------------------------------------
When Definitive Capital Securities are presented to the Registrar
(x) to register the transfer of such Definitive Capital
Securities; or
(y) to exchange such Definitive Capital Securities for an equal
number of Definitive Capital Securities, the Registrar or co-registrar
shall register the transfer or make the exchange as requested if its
reasonable requirements for such transaction are met; provided, however,
-------- -------
that the Definitive Capital Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities that are
Restricted Definitive Capital Securities:
(A) if such Restricted Capital Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Restricted Capital Securities are being
transferred: (i) a certification from the transferor in a form
substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1, and (ii) if the Trust so requests,
evidence reasonably satisfactory to it as to the compliance with
the restrictions set forth in the Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security
---------------------------------------------------------
for a Beneficial Interest in a Global Capital Security. A Definitive Capital
- ------------------------------------------------------
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the
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Property Trustee and Administrative Trustees, together with:
(i) if such Definitive Capital Security is a Restricted Capital
Security, certification (in a form substantially similar to that attached
hereto as the "Form of Assignment" in Exhibit A-1); provided, however, that
such Definitive Capital Security may only be exchanged for an interest in a
Regulation S Global Security where such Definitive Capital Security is
being transferred pursuant to Regulation S or Rule 144 (if available); and
(ii) whether or not such Definitive Capital Security is a
Restricted Capital Security, written instructions directing the Property
Trustee to make, or to direct the Clearing Agency to make, an adjustment on
its books and records with respect to the appropriate Global Capital
Security to reflect an increase in the number of the Capital Securities
represented by such Global Capital Security, then the Property Trustee
shall cancel such Definitive Capital Security and cause, or direct the
Clearing Agency to cause, the aggregate number of Capital Securities
represented by the appropriate Global Capital Security to be increased
accordingly. If no Global Capital Securities are then outstanding, the
Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of Capital
Securities in global form.
(e) Transfer and Exchange of Global Capital Securities.
--------------------------------------------------
Subjec to Section 9.2(f), the transfer and exchange of Global Capital Securities
or beneficial interests therein shall be effected through the Clearing Agency,
in accordance with this Declaration (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Clearing Agency
therefor.
(f) Transfer of a Beneficial Interest in a Global Capital
-----------------------------------------------------
Security for a Definitive Capital Security.
- ------------------------------------------
(i) Any Person having a beneficial interest in a Global Capital
Security may upon request, but only upon 20 days prior notice to the
Property Trustee, and if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon receipt by the
Property Trustee from the Clearing Agency or its nominee on behalf of any
Person having a beneficial interest in a Global Capital Security of written
instructions or such other form of instructions as is customary for the
Clearing Agency or the Person designated by the Clearing Agency as having
such a beneficial interest in a Restricted Capital Security and a
certification from the transferor (in a form substantially similar to that
attached hereto as the "Form of Assignment" in Exhibit A-1), which may be
submitted by facsimile, then the Property Trustee will cause the aggregate
number of Capital Securities represented by Global Capital Securities to be
reduced on its books and records and, following such reduction, the Trust
will execute
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and the Property Trustee will authenticate and make available for delivery
to the transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in a Global Capital Security pursuant to this Section
9.2(f) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall deliver such
Capital Securities to the persons in whose names such Capital Securities
are so registered in accordance with such instructions of the Clearing
Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
-------------------------------------------------------
Securities. Notwithstanding any other provisions of this Declaration (other than
- ----------
the provisions set forth in subsection (b) of Section 7.9), a Global Capital
Security may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
Prior to the expiration of the restricted period, as contemplated
by Regulation S, beneficial interests in the Regulation S Global Capital
Security may be exchanged for beneficial interests in the Rule 144A Global
Capital Security only if such exchange occurs in connection with a transfer of
the Capital Securities pursuant to Rule 144A and the transferor first delivers
to the Property Trustee a written certificate (in a form substantially similar
to that attached hereto as the "Form of Assignment" in Exhibit A-1) to the
effect that the Capital Securities are being transferred pursuant to and in
compliance with Rule 144A under the Securities Act of 1933.
Beneficial interests in the Rule 144A Global Capital Security may
be transferred to a person who takes delivery in the form of an interest in the
Regulation S Global Capital Security, whether before or after the expiration of
such restricted period, as contemplated by Regulation S, only if the transferor
first delivers to the Property Trustee a written certificate (in a form
substantially similar to that attached hereto as the "Form of Assignment" in
Exhibit A-1) to the effect that such transfer is pursuant to and in compliance
with Regulation S under the Securities Act.
(h) Legend.
------
(i) Except as permitted by the following paragraph (ii), each
Capital Security certificate evidencing the Global Capital Securities and
the Definitive Capital Securities (and all Capital Securities issued in
exchange therefor or substitution thereof) shall bear a legend (the
"Restricted Securities Legend") in substantially the following form, as
applicable:
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THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, [OR NOT SUBJECT TO], REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY,
PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE
HEREOF AND THE LAST DATE ON WHICH ALLMERICA FINANCIAL CORPORATION
(THE "CORPORATION") OR ANY AFFILIATE OF THE CORPORATION WAS THE
OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL
SECURITY) ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR
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INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE CORPORATION PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF
THIS CAPITAL SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE
TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
and in addition, in the case of the Regulation S Global Capital Security:
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
(ii) Upon any sale or transfer of a Restricted Capital Security
(including any Restricted Capital Security represented by a Global Capital
Security) pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 under the Securities Act after such
registration statement ceases to be effective:
(A) in the case of any Restricted Capital Security that is
a Definitive Capital Security, the Registrar shall permit the
Holder thereof to exchange such Restricted Capital Security for a
Definitive Capital Security that does not bear the Restricted
Securities Legend and rescind any restriction on the transfer of
such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is
represented
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by a Global Capital Security, the Registrar shall permit the
Holder of such Global Capital Security to exchange such Global
Capital Security for another Global Capital Security that does not
bear the Restricted Securities Legend.
(i) Cancellation or Adjustment of Global Capital Security. At
-----------------------------------------------------
such time as all beneficial interests in a Global Capital Security have either
been exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be returned to the Property
Trustee for cancellation or retained and canceled by the Property Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the custodian for such Global Capital Security) with respect to such
Global Capital Security, by the Property Trustee or any securities custodian, to
reflect such reduction.
(j) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Capital Securities.
- ------------------
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Property Trustee shall authenticate Definitive
Capital Securities and Global Capital Securities at the Registrar's request
in accordance with the terms of this Declaration.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust or
the Sponsor may require) in respect of any tax or other governmental charge
that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) Capital Securities during a
period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption and ending at the close of business on
the day of such mailing; or (b) any Capital Security so selected for
redemption.
(iv) Prior to the due presentation for registrations of transfer
of any Capital Security, the Trust, the Property Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in whose
name a Capital Security is registered as the absolute owner of such Capital
Security for the purpose of receiving Distributions on such Capital
Security (subject to Section 2(c) of Annex I) and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the Paying Agent,
the Registrar or any co-registrar shall be affected by notice to the
contrary.
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(v) All Capital Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security
and shall be entitled to the same benefits under this Declaration as the
Capital Securities surrendered upon such transfer or exchange.
(k) No Obligation of the Property Trustee.
-------------------------------------
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Capital Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership interest in the Capital
Securities or with respect to the delivery to any Participant, beneficial
owner or other Person (other than the Clearing Agency) of any notice
(including any notice of redemption) or the payment of any amount, under or
with respect to such Capital Securities. All notices and communications to
be given to the Holders and all payments to be made to Holders under the
Capital Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Clearing Agency or its nominee in
the case of a Global Capital Security). The rights of beneficial owners in
any Global Capital Security shall be exercised only through the Clearing
Agency subject to the applicable rules and procedures of the Clearing
Agency. The Property Trustee may conclusively rely and shall be fully
protected in relying upon information furnished by the Clearing Agency or
any agent thereof with respect to its Participants and any beneficial
owners.
(ii) The Property Trustee and Registrar shall have no obligation
or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Declaration or under applicable
law with respect to any transfer of any interest in any Capital Security
(including any transfers between or among Clearing Agency Participants or
beneficial owners in any Global Capital Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
(l) Exchange of Series A Capital Securities for Series B Capital
------------------------------------------------------------
Securities. The Series A Capital Securities may, at the option of the Company,
- ----------
be exchanged for Series B Securities pursuant to the terms of the Exchange
Offer. The Trustee shall make the exchange as follows:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities, the
transactions
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contemplated by the Exchange Offer have been consummated; and
(B) the number of Series A Capital Securities properly
tendered in the Exchange Offer that are represented by a Global
Capital Security and the number of Series A Capital Securities
properly tendered in the Exchange Offer that are represented by
Definitive Capital Securities, the name of each Holder of such
Definitive Capital Securities, the liquidation amount of Capital
Securities properly tendered in the Exchange Offer by each such
Holder and the name and address to which Definitive Capital
Securities for Series B Capital Securities shall be registered and
sent for each such Holder.
The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Series B
Capital Securities have been registered under Section 5 of the Securities Act
and the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(p) of the Registration Rights
Agreement and (iii) an order of the Trust as set forth in Section 7.2, shall
authenticate (A) a Global Capital Security for Series B Capital Securities in
aggregate liquidation amount equal to the aggregate liquidation amount of Series
A Capital Securities represented by a Global Capital Security indicated in such
Officers' Certificate as having been properly tendered and (B) Definitive
Capital Securities representing Series B Capital Securities registered in the
names of, and in the liquidation amounts indicated in such Officers'
Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in the
number and aggregate liquidation amount represented thereby as a result of the
Exchange Offer.
The Trust shall deliver such Definitive Capital Securities for
Series B Capital Securities to the Holders thereof as indicated in such
Officers' Certificate.
(m) Minimum Transfers. Series A Capital Securities may only be
-----------------
transferred in minimum blocks of $100,000 aggregate liquidation amount until
such Series A Capital Securities or Series B Capital Securities issued in
exchange therefor are registered pursuant to an effective registration statement
filed under the Securities Act.
Section 9.3. Book Entry Interests.
--------------------
Global Capital Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Capital Securities, except as
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provided in Section 9.2 and Section 7.9. Unless and until definitive, fully
registered Capital Securities certificates have been issued to the Capital
Security Beneficial Owners pursuant to Section 9.2 or Section 7.9:
(a) the provisions of this Section 9.3 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Capital Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Capital Securities and the sole
holder of the Global Certificates and shall have no obligation to the Capital
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.3
conflict with any other provisions of this Declaration, the provisions of this
Section 9.3 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and the
Clearing Agency shall receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. The Clearing Agency
will make book entry transfers among the Clearing Agency Participants.
Section 9.4. Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Capital Security
Holders is required under this Declaration, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Capital Securities to the Clearing Agency, and shall have no notice obligations
to the Capital Security Beneficial Owners.
Section 9.5. Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1. Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution or termination of the Trust or
otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the
Holders of the Capital Securities 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.
Section 10.2. Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of 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 the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care on behalf of
the Trust, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and
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amount of assets from which Distributions to Holders of Securities might
properly be paid.
Section 10.3. Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and reasonable to
the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
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Section 10.4. Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and
except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a)
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(unless ordered by a court) shall be made by the Sponsor or the Debenture
Issuer, as the case may be, only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). Such determination shall be
made (1) by the Administrative Trustees by a majority vote of a quorum
consisting of such Administrative Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Sponsor or the Debenture Issuer, as the case may be, in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made (i) by
the Administrative Trustees by a majority vote of a quorum of disinterested
Administrative Trustees, (ii) if such a quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the facts known to
the Administrative Trustees, counsel or the Common Security Holder at the
time such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Administrative Trustees, independent
legal counsel or Common Security Holder reasonably determine that such
person deliberately breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Capital Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Sponsor or
the Debenture Issuer as the case may be and each Company Indemnified Person
who serves in such capacity at
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any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Sponsor or the Debenture Issuer would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the termination of
this Declaration or the earlier resignation or removal of the Property Trustee
or the Delaware Trustee.
Section 10.5. Outside Businesses.
------------------
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Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 5.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders shall have no rights by virtue of this Declaration 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. No Covered Person, the Sponsor, the
Delaware Trustee, or the Property 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 any Covered Person, the Sponsor, the Delaware Trustee and the Property
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 Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
Section 10.6. Compensation; Fees.
------------------
The Sponsor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust); and
(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 Declaration and the offering of the Capital Securities (including the
reasonable compensation and the expenses and disbursements of their respective
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith.
The provisions of this Section 10.6 shall survive the dissolution
of the Trust and the termination of this Declaration and the removal or
resignation of any Trustee.
No Trustee may claim any lien or charge on any property of the
Trust as a result of any amount due pursuant to this Section 10.6
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ARTICLE XI
ACCOUNTING
Section 11.1. Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
Section 11.2. Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Administrative Trustees shall cause to be duly prepared
and delivered to each of the Holders, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Administrative Trustees shall endeavor
to deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared
and filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
Section 11.3. Banking.
-------
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
-------- -------
funds in respect of the
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Debentures held by the Property Trustee shall be made directly to the Property
Trustee Account and no other funds of the Trust shall be deposited in the
Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
-------- -------
Trustee shall designate the signatories for the Property Trustee Account.
Section 11.4. Withholding.
-----------
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claim over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1. Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by
a written instrument approved and executed by:
(i) the Administrative Trustees (or if there are more than two
Administrative Trustees a majority of the Administrative Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
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(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, the Property Trustee shall have first received;
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of the
Securities),
provided, however, that the Property Trustee and the Delaware Trustee shall not
- -------- -------
be required to sign any such amendment which affects the rights, powers, duties,
obligations or immunities of the Property Trustee, and
(ii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a
grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article Four shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
(f) The rights of the holders of the Common Securities under
Article Five to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
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(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any provision in
this Declaration that may be inconsistent with any other provision of
this Declaration or to make any other provisions with respect to matters
or questions arising under this Declaration which shall not be
inconsistent with the other provisions of the Declaration; and
(ii)to modify, eliminate or add to any provisions of the
Declaration 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 Securities are outstanding or
to ensure that the Trust will not be required to register as an
Investment Company under the Investment Company Act.
provided, however, that in the case of clause (i) and (ii), such action shall
- -------- -------
not adversely affect in any material respect the interests of the Holders of the
Securities, and any amendments of this Declaration pursuant to (i) or (ii) shall
become effective when notice thereof is given to the Holders of the Securities.
Section 12.2. Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in a writing stating that the signing Holders of Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders calling a meeting shall specify in writing
the certificates evidencing the Securities held by the Holders exercising the
right to call a meeting and only those Securities specified shall be counted for
purposes of determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least seven days and not
more than 60 days before the
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date of such meeting. Whenever a vote, consent or approval of the Holders is
permitted or required under this Declaration or the rules of any stock exchange
on which the Capital Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the Holders. Any action that
may be taken at a meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is signed by
the Holders of Securities owning not less than the minimum amount of Securities
in liquidation amount that would be necessary to authorize or take such action
at a meeting at which all Holders having a right to vote thereon were present
and voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders entitled to vote who have not consented in writing. The
Administrative Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on
all matters in which a Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable prior to the
vote by the Holder of Securities executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading, otherwise
provides, the Administrative Trustees, in their sole discretion, shall establish
all other provisions relating to meetings of Holders, including notice of the
time, place or purpose of any meeting at which any matter is to be voted on by
any Holders of Securities, waiver of any such notice, action by consent without
a meeting, the establishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the exercise of any such
right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1. Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a New York banking corporation with
trust powers and authority under the laws of the State of New York to execute
and deliver, and to carry out and perform its obligations under the terms of,
this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of this Declaration
by the Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is required
for the execution, delivery or performance by the Property Trustee of this
Declaration.
Section 13.2. Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a duly organized Delaware banking
corporation, validly existing and in good standing under the laws of the State
of Delaware, with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
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(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration; and
(d) The Delaware Trustee is 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.
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1. Registration Rights Agreement.
-----------------------------
The Holders of the Capital Securities, the Debentures and the
Capital Securities Guarantee (collectively, the "Registrable Securities") are
entitled to the benefits of the Registration Rights Agreement.
ARTICLE XV
MISCELLANEOUS
Section 15.1. Notices.
-------
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders and the Property Trustee):
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AFC Capital Trust I
c/o Allmerica Financial Corporation
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: John F. Kelly, Administrative Trustee
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give notice of to
the Holders):
Chase Manhattan Bank Delaware
1201 Market Street, 9th Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders):
The Chase Manhattan Bank
Global Trust Services
450 West 33rd Street, 15th Floor
New York, New York 10001-2697
Attention: Global Trust Services
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust and the Property
Trustee):
Allmerica Financial Corporation
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: John F. Kelly, General Counsel
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed
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address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
Section 15.2. Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws, provided that the immunities and
standard of care of the Property Trustee in connection with the administration
of its trusts hereunder shall be governed by the laws of the jurisdiction of its
incorporation. The provisions of Section 3540 and 3561 of Title 12 of the
Delaware Code shall not apply to the Trust.
Section 15.3. Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
Section 15.4. Headings.
--------
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
Section 15.5. Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 15.6. Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 15.7. Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read
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as though one, and they shall have the same force and effect as though all of
the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
/s/ John P. Kavanaugh
-----------------------------------------------
John P. Kavanaugh, as Administrative Trustee
/s/ John F. Kelly
-----------------------------------------------
John F. Kelly, as Administrative Trustee
/s/ Edward J. Parry III
-----------------------------------------------
Edward J. Parry III, as Administrative Trustee
CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee
By:/s/ John J. Cashin
-----------------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK
as Property Trustee
By:/s/ Andrea Koster-Crain
-----------------------------------------------
Name: Andrea Koster-Crain
Title: Vice President
ALLMERICA FINANCIAL CORPORATION
as Sponsor
By:/s/ Edward J. Parry III
-----------------------------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
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ANNEX I
TERMS OF
8.207% SERIES A/SERIES B CAPITAL SECURITIES
8.207% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of February 3, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Offering
Memorandum referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
----------------------
(a) Capital Securities. 300,000 Series A Capital Securities of the
------------------
Trust and 300,000 Series B Capital Securities of the Trust, with an aggregate
liquidation amount at any time outstanding with respect to the assets of the
Trust of three hundred million dollars ($300,000,000), and each Capital Security
with a liquidation amount with respect to the assets of the Trust of $1,000 per
Security, are hereby designated for the purposes of identification only as
"8.207% Series A Capital Securities" and "8.207% Series B Capital Securities",
respectively (collectively, the "Capital Securities"). The certificates
evidencing the Capital Securities shall be substantially in the form of Exhibit
A-1 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice or to conform
to the rules of any stock exchange on which the Capital Securities are listed.
(b) Common Securities. 9,279 Common Securities of the Trust with an
-----------------
aggregate liquidation amount with respect to the assets of the Trust of nine
million two hundred and seventy-nine thousand dollars ($9,279,000) and each
Common Security with a liquidation amount with respect to the assets of the
Trust of $1,000 per Security, are hereby designated for the purposes of
identification only as "8.207% Common Securities" (the "Common Securities"). The
certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate
per annum of 8.207% (the "Coupon Rate") of the liquidation amount of $1,000 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the
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Property Trustee. Except for Distributions which are deferred as provided in
Section 2(b), Distributions in arrears for more than one semi-annual period will
bear additional distributions thereon compounded semi-annually at the Coupon
Rate (to the extent permitted by applicable law). Pursuant to the Registration
Rights Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions", as used
herein, includes distributions of any such interest and Liquidated Damages
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Property Trustee
and to the extent the Property Trustee has funds on hand legally available
therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from February 3, 1997, and will be payable semi-annually in arrears on February
15 and August 15 of each year, commencing on August 15, 1997 (each, a
"Distribution Date"), except as otherwise described below. Distributions will
be computed on the basis of a 360-day year consisting of twelve 30-day months
and for any period less than a full calendar month on the basis of the actual
number of days elapsed in such month. As long as no Event of Default has
occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive semi-annual periods, including the first
such semi-annual period during such period (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall end on a day other than an Interest
- -------- ----
Payment Date (as defined in the Indenture) for the Debentures or shall extend
beyond the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions shall not be due and payable and will also be deferred. Despite
such deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a
rate greater than the rate at which interest is then accruing on the Debentures)
at the Coupon Rate compounded semi-annually during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
- -------- ----
extensions within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during such Extension
Period, or extend beyond the Maturity Date of the Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
(c) Except as provided above, Distributions on the Securities will be
payable to the Holders thereof as they appear on the books and records of the
Trust on the first day of the month in which the relevant Distribution Date
occurs, which Distribution Dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment in respect of the Global Capital
Securities will
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<PAGE>
be made as described under the heading "Description of the Capital
Securities -- Form, Denomination, Book-Entry Procedures and Transfer" in the
Offering Memorandum dated January 29, 1997, of the Debenture Issuer and the
Trust relating to the Securities and the Debentures. Payments in respect of
Capital Securities held in certificated form will be made by check mailed to the
Holder entitled thereto. The relevant record dates for the Common Securities
shall be the same as the record dates for the Capital Securities. Distributions
payable on any Securities that are not punctually paid on any Distribution Date,
as a result of the Debenture Issuer having failed to make a payment under the
Debentures, will cease to be payable to the Holder on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on
which Distributions are payable on the Securities is not a Business Day, then
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 of any such delay), except that if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any termination of the Trust or the Holder of Common
Securities otherwise gives notice of its election to liquidate the Trust
pursuant to Section 8.1(a)(iii) of the Declaration, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
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 Securities a Like Amount (as defined below) of the Debentures, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally 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 of $1,000 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets on hand legally
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Securities shall
-3-
<PAGE>
be paid on a Pro Rata basis, except that if an Event of Default has occurred and
is continuing, the Capital Securities shall have priority over the Common
Securities.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures, at maturity or upon early
redemption (pursuant to a Special Event, as described below), the proceeds from
such repayment shall be simultaneously applied by the Property Trustee (subject
to the Property Trustee having received notice no later than 45 days prior to
such repayment) to redeem the Securities at a redemption price equal to (i) in
the case of the repayment of the Debentures at maturity, the Maturity Redemption
Price (as defined below) and (ii) in the case of the optional redemption of the
Debentures upon the occurrence and continuation of a Special Event, the Special
Event Redemption Price (as defined below). The Maturity Redemption Price and
the Special Event Redemption Price are referred to collectively as the
"Redemption Price". Holders will be given not less than 30 nor more than 60
days notice of such redemption.
(b) The "Maturity Redemption Price", with respect to a redemption of
Securities, shall mean an amount equal to the principal of and accrued and
unpaid interest on the Debentures as of the maturity date thereof.
(ii) In the case of an optional redemption, the Capital Securities to
be redeemed will be determined as described in Section 4(f)(ii) below.
(c) If at any time a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event") occurs, the Debenture Issuer shall
have the right (subject to the conditions set forth in the Indenture), upon not
less than 30 nor more than 60 days notice, to redeem the Debentures in whole,
but not in part, within the 90 days following the occurrence of such Special
Event (the "90 Day Period"), and, simultaneous with such redemption, to cause a
Like Amount of the Securities to be redeemed by the Trust at the Special Event
Redemption Price on a Pro Rata basis.
"Tax Event" shall occur upon receipt by the Sponsor and the
Administrative Trustee of an opinion (a "Tax Event Opinion") of a nationally
recognized tax counsel experienced in such matters to the effect that, as a
result of (a) 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 (b) 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 29, 1997, there
is more than an insubstantial risk that (i) the Trust is, or as a result of the
issuance of the securities pursuant to the Exchange Offer (the "Exchange
Securities") would be or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Debentures or any of the Exchange Securities, (ii) interest
payable by the Debenture Issuer on the Debentures is not or upon the issuance of
any
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of the Exchange Securities would not be, or within 90 days of the date of such
opinion, will not be, deductible by the Debenture Issuer, in whole or in part,
for United States federal income tax purposes, or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Issuer Trust of an
opinion of counsel to the Company experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
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 (the
"Investment Company Act"), which change or prospective change becomes effective
or would become effective, as the case may be, on or after the date of the
issuance of the Capital Securities.
"Special Event Redemption Price" shall mean, with respect to a
redemption of Securities, a price equal to the greater of (i) 100% of the
principal of the Debentures to be redeemed or (ii) the sum, as determined by a
Quotation Agent (as defined in the Indenture), of the present values of the
principal amount and premium payable with respect to the Debentures upon the
maturity thereof, together with scheduled payments of interest thereon from the
redemption date to and including the Debenture maturity date, discounted to the
redemption 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 the
Indenture), plus, in either case, accumulated and unpaid Distributions thereon,
if any, to the date of such redemption.
(d) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee), as the Holder of the
Capital Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in the Debentures until such certificates are
presented to the Debenture Issuer or its agent for cancellation.
(e) The procedure with respect to redemptions or distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed
for redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Debentures. For purposes of
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the calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(e)(i), a Redemption/
Distribution Notice shall be deemed to be given on the day such notice is
first mailed by first-class mail, postage prepaid, to Holders. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable), then
(A) with respect to Capital Securities issued in book-entry form, by 12:00
noon, New York City time, on the redemption date, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures by
10:00 a.m., New York City time, on the maturity date or the date of
redemption, as the case requires, the Property Trustee will deposit
irrevocably with the Clearing Agency or its nominee (or successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption
Price with respect to such Capital Securities and will give the Clearing
Agency irrevocable instructions and authority to pay the Redemption Price
to the relevant Clearing Agency Participants, and (B) with respect to
Capital Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to
the close of business on the date of such deposit, or on the redemption
date, as applicable, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of Holders so called for
redemption will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
(iii) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Securities will be subject to the rights of Holders of
Securities on the close of business on a regular record date in respect of
a Distribution Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of (i) any Securities beginning
on the opening of business 15 days before the day of mailing of a notice of
redemption and ending at the close of business on the day of such mailing or
(ii) any Securities selected for redemption except the unredeemed portion of any
Security being redeemed. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next
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succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that if such Business Day falls on the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the Property
Trustee or by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will continue to accumulate from the
original redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) in respect of the Capital Securities,
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) if certificates evidencing Global Capital Securities have been
issued or, if certificates evidencing Definitive Capital Securities have
been issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of
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.
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities will
have no voting rights.
(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 such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required to be made by the holders of a
majority in aggregate principal amount of the Debentures then outstanding,
without, in each case, obtaining the prior approval of the Holders of 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 approval of each Holder of the Capital
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Capital Securities except by subsequent
vote of such Holders. Subject to and except as provided in Section 2.7 of the
Declaration, the Property Trustee shall notify each Holder of Capital Securities
of any notice of default with respect to the Debentures.
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In addition to obtaining the foregoing approvals of such Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that the
Trust will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of redemption, on the redemption date), then a Holder of
Capital Securities may pursuant to Section 5.04 of the Indenture institute a
proceeding for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a "Direct Action")
on or after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Common Securities Holder will be
subrogated to the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of Capital Securities in
such Direct Action. Except as provided in the second preceding sentence and in
Section 3.8(e) of the Declaration, the Holders of Capital Securities will not be
able to exercise directly any other remedy available to the holders of the
Debentures.
Any approval or direction of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustee will cause a notice of
any meeting at which Holders of Capital Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Capital Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of 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 Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
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6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), 6(c), and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) Unless an Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the holder of the Common Securities.
If an Event of Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders of a majority in
liquidation amount of the outstanding 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 Company as the holder of the Common Securities. No resignation or
removal of a Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the Declaration.
(c) 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 such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required to be made by the holders of a
majority in aggregate principal amount of the Debentures then outstanding,
without, in each case, obtaining the prior approval of the Holders of a majority
in liquidation amount of all outstanding Common 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 approval of each Holder of the Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. Subject to Section 2.7 of the Declaration, the Property
Trustee shall notify each Holder of Common Securities of any notice of default
with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Common Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on a Like Amount
of Debentures on or after the respective due date specified in the Debentures.
In connection with Direct Action, the rights of the Common Securities Holder
will be subordinated
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to the rights of such Holder of Capital Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Common Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Common Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees, without the consent of the
Holders of the Securities (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other
provisions, or to make any other provisions with respect to matters or questions
arising under the Declaration which shall not be inconsistent with the other
provisions of the Declaration, or (ii) to modify, eliminate or add to any
provisions of the Declaration 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 Securities are outstanding or to ensure
that the Trust will not be required to register as an "Investment Company" under
the Investment Company Act; provided, however, that such action shall not
-------- -------
adversely affect in any material respect the interests of any Holder of
Securities, and any amendments of the Declaration shall become effective when
notice thereof is given to the holders of the Securities. Under the
circumstances referred to in Section 12.1(c) of the Declaration, the Declaration
may be amended by the Trustees and the Sponsor with (i) the consent of Holders
representing a majority in liquidation amount of all outstanding Securities, and
or (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
as an Investment Company under the Investment Company Act, provided that, (A)
-------- ----
without the consent of each Holder of Trust Securities, the Declaration may not
be amended to (i) change the amount or timing of any
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Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) restrict the right of a Holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date and
(B) without the consent of each Holder of Capital Securities, the Declaration
may not be amended to restrict the right of a Holder of Capital Securities to
bring a Direct Action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate liquidation amount of Capital
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding. In any such proration the Trust
may make such adjustments as may be appropriate in order that only Securities in
authorized denominations shall be redeemed (subject to the minimum block
requirement of Section 9.2(m) of the Declaration).
9. Ranking.
-------
The Capital Securities rank pari passu with the Common Securities and
---- -----
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption, repurchase or otherwise with respect to, the Common Securities shall
be made until the Holders of the Capital Securities shall be paid in full in
cash the Distributions, Redemption Price, Liquidation Distribution and other
payments to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities Guarantee
and the Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
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11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT: THIS
CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST 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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[IF THIS CAPITAL SECURITY IS A RESTRICTED CAPITAL SECURITY, INSERT:
THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
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<PAGE>
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH ALLMERICA FINANCIAL
CORPORATION (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OF 1993, AS AMENDED (THE "SECURITIES
ACT"), (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A
TO THE OFFERING MEMORANDUM DATED JANUARY __, 1997. SUCH HOLDER FURTHER AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
[IF THIS CAPITAL SECURITY IS A REGULATION S GLOBAL SECURITY, INSERT: THIS
CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE REGISTRATION
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<PAGE>
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.]
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY
BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE
U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM ANY SUCH
PROHIBITION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE OF THIS CAPITAL
SECURITY ALSO AGREES TO BE BOUND BY THE PROVISIONS OF A REGISTRATION RIGHTS
AGREEMENT DATED AS OF FEBRUARY 3, 1997 AMONG AFC CAPITAL TRUST I, ALLMERICA
FINANCIAL CORPORATION AND CERTAIN OTHER PARTIES NAMED THEREIN.
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Certificate Number Aggregate Liquidation Amount
of Capital Securities: $300,000,000
CUSIP NO. __________
Certificate Evidencing Capital Securities
of
AFC Capital Trust I
8.207% Series __ Capital Securities
(liquidation amount $1,000 per Capital Security)
AFC Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
(the "Holder") is the registered owner of [$__________ in aggregate liquidation
amount of Capital Securities of the Trust]/*/ [the aggregate liquidation amount
of Capital Securities of the Trust specified in Schedule A hereto.]/**/
representing undivided beneficial interests in the assets of the Trust
designated the 8.207% Series __ Capital Securities (liquidation amount $1,000
per Capital Security) (the "Capital Securities"). Subject to the Declaration
(as defined below), 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. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of February 3, 1997, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Capital Securities as set forth in Annex I to the Declaration.
Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
- ---------------------
* Insert in Definitive Capital Securities only.
** Insert in Global Capital Securities only.
-4-
<PAGE>
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of indirect beneficial ownership in the Debentures.
-5-
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of __________, ____.
AFC CAPITAL TRUST I
By:
-----------------------------------
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the within-
mentioned Declaration.
Dated:
--------, ----
THE CHASE MANHATTAN BANK
as Property Trustee
By:
-----------------------------------
Name:
Authorized Officer
-6-
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a rate
per annum of 8.207% (the "Coupon Rate") of the liquidation amount of $1,000 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Except for Distributions which are deferred
as provided below, Distributions in arrears for more than one semi-annual period
will bear interest thereon compounded semi-annually at the Coupon Rate (to the
extent permitted by applicable law). Pursuant to the Registration Rights
Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions", as used
herein, includes such cash distributions and any such interest and such
Liquidated Damages payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from February 3, 1997 and will be payable semi-annually in arrears, on February
15 and August 15 of each year, commencing on August 15, 1997, except as
otherwise described below. Distributions will be computed on the basis of a
360-day year consisting of twelve 30-day months and, for any period less than a
full calendar month, the number of days elapsed in such month. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 10 consecutive calendar semi-annual
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), provided that no Extension Period shall end
-------- ----
on a day other than an Interest Payment Date for the Debentures or shall extend
beyond the Maturity Date of the Debentures. As a consequence of such deferral
of payments of interest on the Debentures, Distributions will also be deferred.
Despite such deferral, semi-annual Distributions will continue to accumulate
with interest thereon (to the extent permitted by applicable law, but not at a
rate exceeding the rate of interest then accruing on the Debentures) at the
Coupon Rate compounded semi-annually during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
defer payments of interest by further extending such Extension Period; provided
--------
that such Extension Period, together with all such previous and further
- ----
extensions within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during such Extension
Period, or extend beyond the Maturity Date of the Debentures. Payments of
accumulated Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date preceding the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period, subject to the above requirements.
-7-
<PAGE>
Subject to certain conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
-8-
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
certificate 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:
------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee/***/:
-----------------------------------------
- -----------------------------
/***/ Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934, as
amended.
-9-
<PAGE>
-------------------------------------
Signature
-------------------------------------
Name:
-10-
<PAGE>
SCHEDULE A/*/
The initial aggregate liquidation amount of Capital Securities
evidenced by the Certificate to which this Schedule is attached is $
----------
(equivalent to Capital Securities). The notations on the following
---------
table evidence decreases and increases in the number of Capital Securities
evidenced by such Certificate.
Liquidation
Amount of
Capital
Increase in Securities
Decrease in Liquidation Liquidation Remaining After
Amount of Capital Amount of Capital Such Decrease or Notation by
Securities Securities Increase Registration
- ------------------------- -------------------- ----------------- --------------
- ---------------------
/*/ Append to Global Capital Securities only.
-11-
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW.
Certificate Number Number of Common Securities: 9,279
Certificate Evidencing Common Securities
of
AFC Capital Trust I
8.207% Common Securities
(liquidation amount $1,000 per Common Security)
AFC Capital Trust I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that Allmerica Financial
Corporation (the "Holder") is the registered owner of 9,279 common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the 8.207% Common Securities (liquidation amount $1,000 per Common
Security) (the "Common Securities"). Subject to the limitations in Section
9.1(c) of the Declaration (as defined below), the Common 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. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of February 3,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used but not defined herein shall
have the meaning given them in the Declaration. The Sponsor will provide a copy
of the Declaration, the Common Securities Guarantee and the Indenture (including
any supplemental indenture) to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder and to the benefits of the Common
Securities Guarantee to
-1-
<PAGE>
the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
-2-
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of ____________, ____.
AFC CAPITAL TRUST I
By:
------------------------------------
Name:
Administrative Trustee
-3-
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 8.207% (the "Coupon Rate") of the liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Except for Distributions which are deferred
as provided below, Distributions in arrears for more than one semi-annual period
will bear interest thereon compounded semi-annually at the Coupon Rate (to the
extent permitted by applicable law). Pursuant to the Registration Rights
Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions", as used
herein, includes such cash distributions and any such interest and such
Liquidated Damages payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds legally
available therefor.
Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or duly provided
for or, if no Distributions have been paid or duly provided for, from February
3, 1997 and will be payable semi-annually in arrears, on February 15 and August
15 of each year, commencing on August 15, 1997, except as otherwise described
below. Distributions will be computed on the basis of a 360-day year consisting
of twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month. As long as no Event of Default has
occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a day other
-------- ----
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral of payments of
interest on the Debentures, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law, but not at a rate exceeding the rate of
interest then accruing on the Debentures) at the Coupon Rate compounded semi-
annually during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period; provided that such Extension Period,
-------- ----
together with all such previous and further extensions within such Extension
Period, may not exceed 10 consecutive semi-annual periods, including the first
semi-annual period during such Extension Period, or extend beyond the Maturity
Date of the Debentures. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first record
date preceding the end of the Extension Period. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements.
Subject to certain conditions set forth in the Declaration and the
Indenture, the
-4-
<PAGE>
Property Trustee may, at the direction of the Sponsor, at any time liquidate the
Trust and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
-5-
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.
ALLMERICA FINANCIAL CORPORATION
By /s/ Edward J. Parry III
----------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT 3
ALLMERICA FINANCIAL CORPORATION
------------------------------
INDENTURE
Dated as of February 3, 1997
------------------------------
The Chase Manhattan Bank
as Trustee
------------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of December
23, 1996 between Allmerica Financial Corporation and The Chase Manhattan Bank,
as Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C>
310(a)(1) 6.09
(a)(2) 6.09
310(a)(3) N/A
(a)(4) N/A
310(a)(5) 6.10, 6.11
310(b) N/A
310(c) 6.13
311(a) and (b) N/A
311(c) 4.01, 4.02(a)
312(a) 4.02
312(b) and (c) 4.04
313(a) 4.04
313(b)(1) 4.04
313(b)(2) 4.04
313(c) 4.04
313(d) 4.04
314(a) 4.03
314(b) N/A
314(c)(1) and (2) 6.07
314(c)(3) N/A
314(d) N/A
314(e) 6.07
314(f) N/A
315(a)(c) and (d) 6.01
315(b) 5.08
315(e) 5.09
316(a)(1) 5.07
316(a)(2) N/A
316(a) last sentence 2.09
316(b) 9.02
317(a) 5.05
317(b) 6.05
318(a) 13.08
</TABLE>
- --------------------
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
TABLE OF CONTENTS/1/
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C>
SECTION 1.01. Definitions................................... 1
Additional Interest...................................................... 1
Adjusted Treasury Rate................................................... 1
AFC Capital Trust........................................................ 2
Affiliate................................................................ 2
Authenticating Agent..................................................... 2
Bankruptcy Law........................................................... 2
Board of Directors....................................................... 2
Board Resolution......................................................... 2
Business Day............................................................. 2
Capital Securities....................................................... 2
Capital Securities Guarantee............................................. 3
Commission............................................................... 3
Common Securities........................................................ 3
Common Securities Guarantee.............................................. 3
Common Stock............................................................. 3
Company.................................................................. 3
Company Request.......................................................... 3
Company Order............................................................ 3
Comparable Treasury Issue................................................ 4
Comparable Treasury Price................................................ 4
Compounded Interest...................................................... 4
Custodian................................................................ 4
Declaration.............................................................. 4
Default.................................................................. 4
Deferred Interest........................................................ 4
Definitive Securities.................................................... 4
Depositary............................................................... 4
Dissolution Event........................................................ 5
Event of Default......................................................... 5
Exchange Act............................................................. 5
Exchange Offer........................................................... 5
Extended Interest Payment Period......................................... 5
</TABLE>
- -----------------------
1
THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED
TO BE A PART OF THE INDENTURE.
<PAGE>
<TABLE>
<CAPTION>
ii
Page
----
<S> <C>
Global Security........................................................ 5
Indebtedness for Money Borrowed........................................ 5
Indebtedness Ranking Junior to the Securities.......................... 6
Indebtedness Ranking on a Parity with the Securities................... 6
Indenture.............................................................. 6
Interest Payment Date.................................................. 6
Investment Company Event............................................... 6
Issue Date............................................................. 6
Junior Subordinated Payment............................................ 7
Liquidated Damages..................................................... 7
Maturity Date.......................................................... 7
Mortgage .............................................................. 7
Non Book-Entry Capital Securities...................................... 7
Officers .............................................................. 7
Officers' Certificate.................................................. 7
Opinion of Counsel..................................................... 7
Optional Redemption Price.............................................. 7
Other Debentures....................................................... 7
Other Guarantees....................................................... 7
outstanding............................................................ 7
Person................................................................. 8
Predecessor Security................................................... 8
Principal Office of the Trustee........................................ 8
Property Trustee....................................................... 8
Purchase Agreement..................................................... 8
Quotation Agent........................................................ 8
Redemption Price....................................................... 8
Reference Treasury Dealer.............................................. 9
Reference Treasury Dealer Quotations................................... 9
Registration Rights Agreement.......................................... 9
Responsible Officer.................................................... 9
Restricted Security.................................................... 9
Rule 144A.............................................................. 9
Securities............................................................. 9
Securities Act......................................................... 9
Securityholder, holder of Securities................................... 9
Security Register...................................................... 10
Senior Indebtedness.................................................... 10
Series A Securities.................................................... 10
Series B Securities.................................................... 10
Special Event.......................................................... 10
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
Page
----
<S> <C>
Special Event Redemption Price........................................... 10
Subsidiary............................................................... 10
Tax Event................................................................ 11
Trustee.................................................................. 11
Trust Indenture Act of 1939.............................................. 11
Trust Securities......................................................... 11
U.S. Government Obligations.............................................. 11
ARTICLE II
SECURITIES
<S> <C>
SECTION 2.01. Forms Generally........................................... 11
SECTION 2.02. Execution and Authentication.............................. 12
SECTION 2.03. Form and Payment.......................................... 12
SECTION 2.04. Legends................................................... 12
SECTION 2.05. Global Security........................................... 13
SECTION 2.06. Interest.................................................. 15
SECTION 2.07. Transfer and Exchange..................................... 15
SECTION 2.08. Replacement Securities.................................... 17
SECTION 2.09. [Reserved]................................................ 18
SECTION 2.10. Temporary Securities...................................... 18
SECTION 2.11. Cancellation.............................................. 18
SECTION 2.12. Defaulted Interest........................................ 18
SECTION 2.13. CUSIP Numbers............................................. 19
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
<S> <C>
SECTION 3.01. Payment of Principal, Premium and Interest................ 20
SECTION 3.02. Offices for Notices and Payments, etc..................... 20
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office........ 21
SECTION 3.04. Provision as to Paying Agent.............................. 21
SECTION 3.05. Certificate to Trustee.................................... 22
SECTION 3.06. [Reserved]................................................ 22
SECTION 3.07. Limitation on Dividends................................... 22
SECTION 3.08. Covenants as to AFC Capital Trust......................... 23
SECTION 3.09. Payment of Expenses....................................... 23
SECTION 3.10. Payment Upon Resignation or Removal....................... 24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
iv
Page
----
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
<S> <C>
SECTION 4.01. Securityholders' Lists................................... 24
SECTION 4.02. Preservation and Disclosure of Lists..................... 25
SECTION 4.03. Reports by the Company................................... 26
SECTION 4.04. Reports by the Trustee................................... 27
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
<S>
SECTION 5.01. Events of Default........................................ 27
SECTION 5.02. Payment of Securities on Default; Suit Therefor.......... 29
SECTION 5.03. Application of Moneys Collected by Trustee............... 31
SECTION 5.04. Proceedings by Securityholders........................... 31
SECTION 5.05. Proceedings by Trustee................................... 32
SECTION 5.06. Remedies Cumulative and Continuing....................... 32
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.................................... 33
SECTION 5.08. Notice of Defaults....................................... 34
SECTION 5.09. Undertaking to Pay Costs................................. 34
ARTICLE VI
CONCERNING THE TRUSTEE
<S>
SECTION 6.01. Duties and Responsibilities of Trustee.................... 35
SECTION 6.02. Reliance on Documents, Opinions, etc...................... 36
SECTION 6.03. No Responsibility for Recitals, etc....................... 37
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities.......................... 38
SECTION 6.05. Moneys to Be Held in Trust................................ 38
SECTION 6.06. Compensation and Expenses of Trustee...................... 38
SECTION 6.07. Officers' Certificate as Evidence......................... 39
SECTION 6.08. Conflicting Interest of Trustee........................... 39
SECTION 6.09. Eligibility of Trustee.................................... 39
SECTION 6.10. Resignation or Removal of Trustee......................... 40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
v
Page
----
<S> <C>
SECTION 6.11. Acceptance by Successor Trustee........................... 41
SECTION 6.12. Succession by Merger, etc................................. 42
SECTION 6.13. Limitation on Rights of Trustee as a Creditor............. 42
SECTION 6.14. Authenticating Agents..................................... 42
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
<S> <C>
SECTION 7.01. Action by Securityholders................................. 43
SECTION 7.02. Proof of Execution by Securityholders..................... 44
SECTION 7.03. Who Are Deemed Absolute Owners............................ 44
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding........ 45
SECTION 7.05. Revocation of Consents; Future Holders Bound.............. 45
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
<S> <C>
SECTION 8.01. Purposes of Meetings...................................... 46
SECTION 8.02. Call of Meetings by Trustee............................... 46
SECTION 8.03. Call of Meetings by Company or Securityholders............ 46
SECTION 8.04. Qualifications for Voting................................. 47
SECTION 8.05. Regulations............................................... 47
SECTION 8.06. Voting.................................................... 48
ARTICLE IX
AMENDMENTS
<S> <C>
SECTION 9.01. Without Consent of Securityholders........................ 49
SECTION 9.02. With Consent of Securityholders........................... 50
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures...................................................... 51
SECTION 9.04. Notation on Securities.................................... 52
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee............................................... 52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
vi
Page
----
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
<S> <C>
SECTION 10.01. Company May Consolidate, etc., Only on Certain Terms..... 52
SECTION 10.02. Successor Person Substituted............................. 53
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
<S> <C>
SECTION 11.01. Discharge of Indenture................................... 54
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to Be
Held in Trust by Trustee........................................ 54
SECTION 11.03. Paying Agent to Repay Moneys Held........................ 55
SECTION 11.04. Return of Unclaimed Moneys............................... 55
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations..................................................... 55
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
<S> <C>
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.... 57
ARTICLE XIII
MISCELLANEOUS PROVISIONS
<S> <C>
SECTION 13.01. Successors............................................... 57
SECTION 13.02. Official Acts by Successor Corporation................... 57
SECTION 13.03. Surrender of Company Powers.............................. 57
SECTION 13.04. Addresses for Notices, etc............................... 58
SECTION 13.05. Governing Law............................................ 58
SECTION 13.06. Evidence of Compliance with Conditions Precedent......... 58
SECTION 13.07. Business Days............................................ 59
SECTION 13.08. Trust Indenture Act to Control........................... 59
SECTION 13.09. Table of Contents, Headings, etc......................... 59
SECTION 13.10. Execution in Counterparts................................ 59
SECTION 13.11. Separability............................................. 59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
vii
Page
----
<S> <C>
SECTION 13.12. Assignment............................................... 59
SECTION 13.13. Acknowledgment of Rights................................. 60
</TABLE>
<PAGE>
viii
<TABLE>
<CAPTION>
Page
----
ARTICLE XIV
REDEMPTION OF SECURITIES -- SINKING FUND
<S> <C>
SECTION 14.01. Special Event Redemption................................. 60
SECTION 14.02. [Reserved]............................................... 60
SECTION 14.03. No Sinking Fund.......................................... 61
SECTION 14.04. Notice of Redemption; Selection of Securities............ 61
SECTION 14.05. Payment of Securities Called for Redemption.............. 62
ARTICLE XV
SUBORDINATION OF SECURITIES
<S> <C>
SECTION 15.01. Agreement to Subordinate................................. 62
SECTION 15.02. Default on Senior Indebtedness........................... 63
SECTION 15.03. Prior Payment to Senior Indebtedness Upon Acceleration of
Securities......................................................... 63
SECTION 15.04. Liquidation; Dissolution; Bankruptcy..................... 64
SECTION 15.05. Subrogation.............................................. 65
SECTION 15.06. Trustee to Effectuate Subordination...................... 66
SECTION 15.07. Notice by the Company.................................... 66
SECTION 15.08. Rights of the Trustee; Holders of Senior Indebtedness.... 67
SECTION 15.09. Subordination May Not Be Impaired........................ 68
SECTION 15.10. Article Applicable to Paying Agents...................... 68
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period..................... 68
SECTION 16.02. Notice of Extension...................................... 69
</TABLE>
EXHIBIT AA-1
Testimonium
Signatures
Acknowledgments
<PAGE>
1
THIS INDENTURE, dated as of February 3, 1997, between Allmerica
Financial Corporation, a Delaware corporation (hereinafter sometimes called the
"Company"), and The Chase Manhattan Bank, a New York banking corporation, as
trustee (hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase 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, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture shall have the respective meanings specified in this Section
1.01. All other terms used in this Indenture which are defined in the Trust
Indenture Act, or which are by reference therein defined in the Securities Act,
shall (except as herein otherwise expressly provided or unless the context
otherwise requires) have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
Indenture as originally executed. The following terms have the meanings given
to them in the Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii)
Property Trustee; (iv) Administrative Trustees; (v) Direct Action; (vi) Purchase
Agreement; (vii) Distributions; (viii) Series A Capital Securities; and (ix)
Series B Capital Securities. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "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. Headings are
used for convenience of reference only and do not affect interpretation. The
singular includes the plural and vice versa.
"Additional Interest" shall have the meaning set forth in
Section 2.06(c).
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to (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
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2
constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Maturity Date (if no maturity is within three
months before or after the Maturity Date, yields for the two published
maturities most closely corresponding to the Maturity Date shall be
interpolated, and the Adjusted 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, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date plus, in each case, (a) 1.02% if such
redemption date occurs on or prior to February 3, 1998, and (b) .50% in all
other cases.
"AFC Capital Trust" shall mean AFC Capital Trust I, a Delaware
business trust created for the purpose of issuing its undivided beneficial
interests in connection with the issuance of Securities under this Indenture.
"Affiliate" means, with respect to a specified Person, any Person
directly or indirectly controlling, controlled by, or under common control with
the 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.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking institutions
in The City of New York or Wilmington, Delaware are authorized or required by
law or executive order to close.
"Capital Securities" shall mean undivided beneficial interests in the
assets of AFC Capital Trust which rank pari passu with the Common Securities
issued by AFC Capital Trust; provided, however, that if an Event of Default has
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occurred and is continuing, no payments in respect of Distributions on, or
payments upon liquidation, redemption or
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3
otherwise with respect to, the Common Securities shall be made until the holders
of the Capital Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
References to "Capital Securities" shall include collectively any Series A
Capital Securities and Series B Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that the
Company may enter into with The Chase Manhattan Bank, as guarantee trustee, or
other Persons that operates directly or indirectly for the benefit of holders of
Capital Securities of AFC Capital Trust and shall include a Series A Capital
Securities Guarantee and a Series B Capital Securities Guarantee with respect to
the Series A Capital Securities and the Series B Capital Securities,
respectively.
"Commission" shall mean the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests in the
assets of AFC Capital Trust which rank pari passu with Capital Securities issued
by AFC Capital Trust; provided, however, that if an Event of Default has
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occurred and is continuing, no payments in respect of Distributions on, or
payments upon liquidation, redemption or otherwise with respect to, the Common
Securities shall be made until the holders of the Capital Securities shall be
paid in full the Distributions and the liquidation, redemption and other
payments to which they are entitled.
"Common Securities Guarantee" shall mean any guarantee that the
Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities of AFC Capital Trust.
"Common Stock" shall mean the Common Stock, par value $.01 per share,
of the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Company" shall mean Allmerica Financial Corporation, a Delaware
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.
"Company Request" or " Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, a Vice Chairman, a Vice President, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
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4
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Maturity Date that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities with a maturity date corresponding to the Maturity Date. If no United
States Treasury security has a maturity date which is within three months before
or after the Maturity Date, the two most closely corresponding United States
Treasury securities shall be used as the Comparable Treasury Issue, and the
Adjusted Treasury Rate shall be interpolated or extrapolated on a straight-line
basis, rounding to the nearest month.
"Comparable Treasury Price" means, with respect to any redemption
date pursuant to Section 14.01, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of five Reference Treasury Dealer Quotations for
such redemption 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.
"Compounded Interest" shall have the meaning set forth in
Section 16.01.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Declaration" means the Amended and Restated Declaration of Trust of
AFC Capital Trust, dated as of the Issue Date.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 16.01.
"Definitive Securities" shall mean those Securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities of any series,
for which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.05(d).
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5
"Dissolution Event" means the liquidation of the Trust pursuant to
the Declaration, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by the Trust pro rata in
--- ----
accordance with the Declaration.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B Securities
for Series A Securities and to exchange a Series B Capital Securities Guarantee
for a Series A Capital Securities Guarantee and (ii) by AFC Capital Trust to
exchange Series B Capital Securities for Series A Capital Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Global Security" means, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the Indenture,
which shall be registered in the name of the Depositary or its nominee.
"Indebtedness for Money Borrowed" shall mean (i) any obligation of,
or any obligation guaranteed by, the Company or which the Company is responsible
or liable as obligor or otherwise including principal, premium, and interest
(whether accruing before or after filing of any petition in bankruptcy or any
similar proceedings by or against the Company and whether or not allowed as a
claim in bankruptcy or similar proceedings) for (A) indebtedness of the Company
for money borrowed and (B) indebtedness evidenced by securities, bonds,
debentures, notes or other similar written instruments (C) any deferred
obligation for the payment of the purchase price or conditional sale obligation
of property or assets acquired other than in the ordinary course of business,
(D) all obligations of the Company for the reimbursement of any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction, (E) all obligations of the Company under "keep-well" agreements
required by insurance regulators or (F) any obligation referred to in (A)
through (E) above of other persons secured by any lien on any property or asset
of the Company and (ii) all indebtedness of the Company for obligations of the
Company in respect of derivative products such as interest and foreign exchange
rate contracts, commodity contracts (including future or options contracts) swap
agreements, cap agreements, repurchase and reverse repurchase agreements and
similar arrangements, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter
<PAGE>
6
created, assumed or incurred, which specifically by its terms is subordinated
and ranks junior to and not equally with or prior to the Securities (and any
other Indebtedness Ranking on a Parity with the Securities) in right of payment
upon the happening of any dissolution or winding up or liquidation or
reorganization or similar events of the Company. The securing of any
Indebtedness for Money Borrowed of the Company, otherwise constituting
Indebtedness Ranking Junior to the Securities, shall not be deemed to prevent
such Indebtedness for Money Borrowed from constituting Indebtedness Ranking
Junior to the Securities.
"Indebtedness Ranking on a Parity with the Securities" shall mean
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter created, assumed or incurred, which specifically by
its terms ranks equally with and not prior to the Securities in the right of
payment upon the happening of any dissolution or winding up or liquidation or
reorganization or similar events of the Company. The securing of any
Indebtedness for Money Borrowed of the Company, otherwise constituting
Indebtedness Ranking on a Parity with the Securities, shall not be deemed to
prevent such Indebtedness for Money Borrowed from constituting Indebtedness
Ranking on a Parity with the Securities.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Interest Payment Date" shall have the meaning set forth in Section
2.06.
"Investment Company Event" means the receipt by AFC Capital Trust and
the Company of an opinion of counsel to the Company experienced in such matters
to the effect that, as a result of the occurrence of any amendment to, or change
in law or regulation or a written change (including any announced prospective
change) in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that AFC Capital Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Securities.
"Issue Date" means February 3, 1997.
"Junior Subordinated Payment" shall have the meaning set forth in
Section 15.03.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"Maturity Date" shall mean February 3, 2097.
<PAGE>
7
"Mortgage" shall mean and include any mortgage, pledge, lien,
security interest, conditional sale or other title retention agreement or other
similar encumbrance.
"Non Book-Entry Capital Securities" shall have the meaning set forth
in Section 2.05.
"Officers" shall mean any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion, acceptable to the
Trustee, of counsel, who may be an employee of the Company, and who shall be
acceptable to the Trustee.
"Optional Redemption Price" shall have the meaning set forth in
Section 14.02.
"Other Debentures" means all junior subordinated debentures issued by
the Company from time to time and sold to trusts to be established by the
Company (if any), in each case similar to the Trust.
"Other Guarantees" means all guarantees issued by the Company with
respect to capital securities (if any) and issued to other trusts established by
the Company (if any), in each case similar to the Trust.
The term "outstanding", when used with reference to Securities,
shall, subject to the provisions of Section 7.04, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Securities theretofore canceled by the Trustee or the
Authenticating Agent 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, if such Securities, or portions thereof, are to be
redeemed prior to maturity thereof, notice of such redemption
shall have been given as in Article XIV provided or provision
satisfactory to the Trustee shall have been made for giving such
notice; and
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8
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant
to the terms of Section 2.08 unless proof satisfactory to the
Company and the Trustee is presented that any such Securities are
held by bona fide holders in due course.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt and as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Principal Office of the Trustee", or other similar term, shall mean
the office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered, which office on the date hereof is
located at 450 West 33rd Street, New York, New York 10001-2697, Attention:
Global Trust Services.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Purchase Agreement" shall mean the Purchase Agreement dated January
29, 1997, among the Company, AFC Capital Trust and the initial purchasers named
therein.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Redemption Price" means the Special Event Redemption Price or the
Optional Redemption Price, as the context requires.
"Reference Treasury Dealer" means (i) Merrill Lynch Government
Securities, Inc. and its successors; provided, however, that if the foregoing
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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 Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date pursuant to Section 14.01, 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. New York City time on the third Business Day preceding such
redemption date.
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9
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Trust and
the Initial Purchasers named therein as such agreement may be amended, modified
or supplemented from time to time.
"Responsible Officer", when used with respect to the Trustee, shall
mean any officer within the Principal Office of the Trustee, including any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer or senior trust officer, any trust
officer or assistant trust officer, or any other officer or assistant officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Security" shall mean Securities that bear or are required
to bear the Securities Act legends set forth in Exhibit A hereto.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or under any similar rule or regulation
hereafter adopted by the Commission.
"Securities" means, collectively, the Series A Securities and the
Series B Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms,
shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Trustee pursuant to Section 4.01, and (ii)
following a Dissolution Event, any security register maintained by a security
registrar for the Securities appointed by the Company following the execution of
a supplemental indenture providing for transfer procedures as provided for in
Section 2.07(a).
"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed, incurred, or guaranteed except Indebtedness Ranking on a
Parity with the Securities or Indebtedness Ranking Junior to the Securities, and
any deferrals, modifications, renewals, refinancings or extensions of such
Senior Indebtedness.
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10
"Series A Securities" means the Company's 8.207% Series A Junior
Subordinated Deferrable Interest Debentures due February 3, 2027, as
authenticated and issued under this Indenture.
"Series B Securities" means the Company's Series B 8.207% Junior
Subordinated Deferrable Interest Debentures due February 3, 2027, as
authenticated and issued under this Indenture.
"Special Event" means a Tax Event or an Investment Company Event, as
the case may be.
"Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities pursuant to Section 14.01 hereof, an amount in cash
equal to the greater of (i) 100% of the principal amount to be redeemed, or (ii)
the sum, as determined by a Quotation Agent, of the present values of the
principal amount of such Securities, together with scheduled payments of
interest from the redemption date to the Maturity Date, in each case discounted
to the prepayment date on a semi-annual basis (assuming a 350-day year of twelve
30-day months) at the Adjusted Treasury Rate, plus, in each case, any accrued
and unpaid interest thereon, including Compounded Interest and Additional
Interest, if any, to the date of such redemption.
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries, or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" shall mean the receipt by AFC Capital Trust and the
Company of an opinion of a nationally recognized tax counsel experienced in such
matters to the effect that, as a result of (a) 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 (b) 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 29, 1997, there is more than an insubstantial risk that (i) AFC Capital
Trust is, or as a result of the issuance of Series B Securities would be, or
will be within 90 days of the date of such opinion, subject to United States
Federal income tax with respect to income received or accrued on the Securities,
<PAGE>
11
(ii) interest payable by the Company on the Securities is not, or upon the
issuance of any of the Series B Securities would not be, or within 90 days of
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) AFC Capital Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture, except as provided
in Section 9.03.
"Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.
"U.S. Government Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, the terms of which are incorporated
in and made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject or usage. Each Security shall be dated the date of
its authentication. The Securities shall be issued in denominations of $1,000
and integral multiples thereof.
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12
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature in the manner set forth in Exhibit A. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature of the Trustee
shall be conclusive evidence that the Security has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Securities shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a Company Order, authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at any
time may not exceed the sum of $309,279,000 aggregate principal amount of the
Securities, except as provided in Sections 2.07, 2.08, 2.10 and 14.05. The
series of Securities to be initially issued hereunder shall be the Series A
Securities.
SECTION 2.03. Form and Payment.
Except as provided in Section 2.05, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of,
premium, if any, and interest on the Securities issued in certificated form will
be payable, the transfer of such Securities will be registrable and such
Securities will be exchangeable for Securities bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
under Section 3.02; provided, however, that payment of interest with respect to
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the Securities may be made at the option of the Company (i) by check mailed to
the holder at such address as shall appear in the Security Register or (ii) by
transfer to an account maintained by the Person entitled thereto, provided that
proper transfer instructions have been received in writing by the relevant
record date. Notwithstanding the foregoing, so long as the holder of any
Securities is the Property Trustee, the payment of the principal of, premium, if
any, and interest (including Compounded Interest and Additional Interest, if
any) on such Securities held by the Property Trustee will be made at such place
and to such account as may be designated by the Property Trustee.
SECTION 2.04. Legends.
(a) Except as permitted by subsection (b) of this Section 2.04 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit A
hereto.
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13
(b) The Company shall issue and the Trustee shall authenticate Series
B Securities in exchange for Series A Securities accepted for exchange in the
Exchange Offer, which Series B Securities shall not bear the legends required by
subsection (a) above, in each case unless the holder of such Series A Securities
is either (1) a broker-dealer who purchased such Series A Securities directly
from the Company for resale pursuant to Rule 144A or any other available
exemption under the Securities Act, (2) a Person participating in the
distribution of the Series A Securities or (3) a Person who is an affiliate (as
defined in Rule 144 under the Securities Act) of the Company.
SECTION 2.05. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form, the related
Definitive Securities shall be presented to the Trustee (if an arrangement
with the Depositary has been maintained) by the Property Trustee in
exchange for one or more Global Securities (as may be required pursuant to
Section 2.07) in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Securities, to be registered in the
name of the Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant to
the instructions of the Administrative Trustees; the Company upon any such
presentation shall execute one or more Global Securities in such aggregate
principal amount and deliver the same to the Trustee for authentication and
delivery in accordance with this Indenture; and payments on the Securities
issued as a Global Security will be made to the Depositary; and
(ii) if any Capital Securities are held in certificated form, the
related Definitive Securities may be presented to the Trustee by the
Property Trustee and any Capital Security certificate which represents
Capital Securities other than Capital Securities in book-entry form ("Non
Book-Entry Capital Securities") will be deemed to represent beneficial
interests in Securities presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate liquidation
amount of the Non Book-Entry Capital Securities until such Capital Security
certificates are presented to the Security Registrar for transfer or
reissuance, at which time such Cap ital Security certificates will be
canceled and a Security, registered in the name of the holder of the
Capital Security certificate or the transferee of the holder of such
Capital Security certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Security certificate canceled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance with
the Indenture. Upon the issuance of such Securities, Securities with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been canceled.
<PAGE>
14
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided that the
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aggregate amount of out standing Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.05.
(c) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of such
successor Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to be
a clearing agency registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company will
execute, and the Trustee, upon written notice from the Company, will
authenticate and make available for delivery the Definitive Securities, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security.
If there is an Event of Default, the Depositary shall have the right to exchange
the Global Securities for Definitive Securities. In addition, the Company may at
any time determine that the Securities shall no longer be represented by a
Global Security. In the event of such an Event of Default or such a
determination, the Company shall execute, and subject to Section 2.07, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security. Upon the exchange of the Global Security for such Definitive
Securities, in authorized denominations, the Global Security shall be canceled
by the Trustee. Such Definitive Securities issued in exchange for the Global
Security 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. The Trustee shall
deliver such Definitive Securities to the Depositary for delivery to the Persons
in whose names such Definitive Securities are so registered.
(e) In the event the Securities are issued as Global Securities with
the Depositary: (i) the Trustee may deal with the Depositary as the authorized
representative of the Securityholders; (ii) the rights of the Securityholders
shall be exercised only through the Depositary and shall be limited to those
established by law and agreement between the Securityholders and the Depositary
and/or direct participants of the Depositary; (iii) the Depositary will make
book-entry transfers among the direct participants of the Depositary and will
receive and transmit distributions of principal and interest on the Securities
to such direct participants; and (iv) the direct participants of the Depositary
shall have no rights under this Indenture under or with respect to any of the
Securities held on their behalf by the Depositary,
<PAGE>
15
and the Depositary may be treated by the Trustee and its agents, employees,
officers and directors as the absolute owner of the Securities for all purposes
whatsoever.
SECTION 2.06. Interest.
(a) Each Security will bear interest at the rate of 8.207% per annum
(the "Coupon Rate") from the most recent date to which interest has been paid or
duly provided for or, if no interest has been paid or duly provided for, from
the Issue Date, until the principal thereof becomes due and payable, and at the
Coupon Rate on any overdue principal (and premium, if any) and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest, compounded semi-annually, payable (subject to
the provisions of Article XVI) semi-annually in arrears on February 15 and
August 15 of each year (each, an "Interest Payment Date") commencing on August
15, 1997, to the Person in whose name such Security or any predecessor Security
is registered, at the close of business on the regular record date for such
interest installment, which shall be the first day of the month in which the
relevant Interest Payment Date falls.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the actual number of days elapsed in such month. In the event
that any Interest Payment Date falls on a day that 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), with the same force and effect as if made on such date.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and payable
by the AFC Capital Trust on the outstanding Securities shall not be reduced as a
result of any additional taxes, duties and other governmental charges to which
the AFC Capital Trust has become subject as a result of a Tax Event ("Additional
Interest").
SECTION 2.07. Transfer and Exchange.
(a) Transfer Restrictions. The Series A Securities, and those Series
---------------------
B Securities with respect to which any Person described in Section 2.04(b)(1),
(2) or (3) is the beneficial owner, may not be transferred except in compliance
with the legend contained in Exhibit A unless otherwise determined by the
Company in accordance with applicable law. Upon any distribution of the
Securities following a Dissolution Event, the Company and the Trustee shall
enter into a supplemental indenture pursuant to Section 9.01 to provide for the
transfer restrictions and procedures with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at such time.
(b) General Provisions Relating to Transfers and Exchanges. Upon
------------------------------------------------------
surrender for registration of transfer of any Security at the office or agency
of the Company
<PAGE>
16
maintained for the purpose pursuant to Section 3.02, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series, of any
authorized denominations and of a like aggregate principal amount.
At the option of the holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive.
Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
The Company shall not be required to (i) issue, register the transfer
or exchange of the Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption or any
notice of selection of Securities for redemption under Article XIV hereof and
ending at the close of business on the day of such mailing; or (ii) register the
transfer or exchange of any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
(c) Exchange of Series A Securities for Series B Securities. The
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Series A Securities may be exchanged for Series B Securities pursuant to the
terms of the Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
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17
(B) the principal amount of Series A Securities properly tendered in
the Exchange Offer that are represented by a Global Security and the
principal amount of Series A Securities properly tendered in the Exchange
Offer that are represented by Definitive Securities, the name of each
holder of such Definitive Securities, the principal amount properly
tendered in the Exchange Offer by each such holder and the name and address
to which Definitive Securities for Series B Securities shall be registered
and sent for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Securities have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(p) of the Registration Rights Agreement and (iii) a Company
Order, shall authenticate (A) a Global Security for Series B Securities in
aggregate principal amount equal to the aggregate principal amount of Series A
Securities rep resented by a Global Security indicated in such Officers'
Certificate as having been properly tendered and (B) Definitive Securities
representing Series B Securities registered in the names of, and in the
principal amounts indicated in, such Officers' Certificate.
If the principal amount of the Global Security for the Series B
Securities is less than the principal amount of the Global Security for the
Series A Securities, the Trustee shall make an endorsement on such Global
Security for Series A Securities indicating a reduction in the principal amount
represented thereby.
The Trustee shall deliver such Definitive Securities for Series B
Securities to the holders thereof as indicated in such Officers' Certificate.
SECTION 2.08. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. An indemnity bond must be supplied by
the holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any agent thereof or any authenticating agent
from any loss that any of them may suffer if a Security is replaced. The
Company or the Trustee may charge for its expenses in replacing a Security.
Every replacement Security is an obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
of mutilated, destroyed, lost or stolen Securities.
<PAGE>
18
SECTION 2.09. [Reserved]
SECTION 2.10. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. The definitive Securities
shall be printed, lithographed or engraved, or provided by any combination
thereof, or in any other manner permitted by the rules and regulations of any
applicable securities exchange, all as determined by the officers executing such
definitive Securities. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency maintained by the
Company for such purpose pursuant to Section 3.02 hereof, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, in exchange therefor the same aggregate principal
amount of definitive Securities of authorized denominations. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of canceled Securities in accordance
with its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. The Company
may not issue new Securities to replace Securities that have been redeemed or
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the holder on the
relevant regular record date; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (a) or clause (b) below:
<PAGE>
19
(a) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Security Register, not less than 10 days prior to such
special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 2.13. 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 Securityholders; 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.
<PAGE>
20
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the place,
at the respective times and in the manner provided herein. Except as provided
in Section 2.03, each installment of interest on the Securities may be paid by
mailing checks for such interest payable to the order of the holder of the
Security entitled thereto as they appear in the Security Register. The Company
further covenants to pay any and all amounts including, without limitation,
Liquidated Damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Securities may be presented for payment, an office or agency where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Securities or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until
otherwise designated from time to time by the Company in a notice to the
Trustee, any such office or agency for all of the above purposes shall be the
Principal Office of the Trustee. In case the Company shall fail to maintain any
such office or agency in the Borough of Manhattan, The City of New York, or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of Manhattan,
The City of New York, where the Securities may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will give
to the Trustee prompt written notice of any such designation or rescission
thereof.
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21
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee
with respect to the Securities, it will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provision of this Section 3.04,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Securities (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;
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Securities) to make any payment of the
principal of and premium or interest on the Securities when the same shall
be due and payable; and
(3) that it will at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by it as such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest on the
Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Company (or by any other obligor under the
Securities) to make any payment of the principal of and premium, if any, or
interest on the Securities when the same shall become due and payable.
(c) Anything in this Section 3.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason, pay
or cause to be paid to the Trustee all sums held in trust for any such series by
the Trustee or any paying agent hereunder, as required by this Section 3.04,
such sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.04 is subject to
Sections 11.03 and 11.04 and Article XV.
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SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after
the end of each fiscal year in each year, commencing with the first fiscal year
ending after the date hereof, so long as Securities are outstanding hereunder,
an Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the Company
stating that in the course of the performance by the signers of their duties as
officers of the Company they would normally have knowledge of any default by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature thereof.
SECTION 3.06. [Reserved]
SECTION 3.07. Limitation on Dividends.
The Company will not (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 any Other
Debentures) that rank pari passu with or junior in right of payment to the
Securities or (iii) make any guarantee payments with respect to any guarantee by
the Company of any securities of any Subsidiary of the Company (including Other
Guarantees) if such guarantee ranks pari passu or junior in right of payment to
the Securities (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, capital
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 stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto; (c) payments under the Capital Securities Guarantee; (d) as a
direct result of, and only to the extent required in order to avoid the issuance
of fractional shares of capital stock following, a reclassification of the
Company's capital stock or the exchange or the conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock or pursuant to an acquisition in which fractional shares of the
Company's capital stock would otherwise be issued; (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged; and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any benefit plans for directors,
officers, agents or employees of the Company or its Subsidiaries, or any of the
Company's dividend reinvestment or director, officer, agent or employee stock
purchase plans, if at such time (1) an Event of Default shall have occurred and
be continuing or, would occur upon the taking of any action described in clauses
(i) through (iii) above, (2) 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 and (b) in respect of which
the Company shall not have taken reasonable steps to cure, (3) the
<PAGE>
23
Company shall be in default with respect to its payment obligations under the
Capital Securities Guarantee or (4) the Company shall have given notice of its
election of the exercise of its right to extend the interest payment period
pursuant to Section 16.01 (or notice of a valid extension of an interest payment
period in accordance with the terms of any Other Debentures) and any such
extension shall not have been rescinded or such Extended Interest Payment
Period, or any extension thereof, or extension period with respect to Other
Debentures, shall be continuing.
SECTION 3.08. Covenants as to AFC Capital Trust.
In the event Securities are issued to AFC Capital Trust or a trustee
of such trust in connection with the issuance of Trust Securities by AFC Capital
Trust, for so long as such Trust Securities remain outstanding, the Company will
(i) maintain 100% direct or indirect ownership of the Common Securities of AFC
Capital Trust; provided, however, that any successor of the Company, permitted
-------- -------
pursuant to Article X, may succeed to the Company's ownership of such Common
Securities, (ii) use its reasonable efforts, consistent with the terms and
provisions of the Declaration, to cause AFC Capital Trust (a) to remain a
business trust, except in connection with a distribution of Securities, the
redemption of all of the Trust Securities of AFC Capital Trust or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration
of AFC Capital Trust, and (b) to otherwise continue to be treated as a grantor
trust and not an association taxable as a corporation for United States federal
income tax purposes and (iii) to use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an individual beneficial interest in
the Securities.
SECTION 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the Securities
to the AFC Capital Trust and in connection with the sale of the Trust Securities
by the AFC Capital Trust, the Company, in its capacity as borrower with respect
to the Securities, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the initial purchasers
payable pursuant to the Purchase Agreement, fees and expenses in connection
with any exchange offer or other action to be taken pursuant to the
Registration Rights Agreement and compensation of the Trustee in accordance
with the provisions of Section 6.06;
(b) pay all costs and expenses of the AFC Capital Trust (including,
but not limited to, costs and expenses relating to the organization of the
AFC Capital Trust, the offering, sale and issuance of the Trust Securities
(including commissions to the initial purchasers in connection therewith),
the fees and expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the AFC Capital 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),
<PAGE>
24
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of assets of the AFC Capital Trust;
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;
(d) pay any and all taxes (other than United States withholding taxes
attributable to the AFC Capital Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the AFC Capital Trust; and
(e) pay all other fees, expenses, debts and obligations (other than
payments of principal of, premium, if any, or interest on the Trust
Securities) related to AFC Capital Trust.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of
the Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued and owing to the
date of such termination, removal or resignation.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Securityholders as of such record date; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company, of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
<PAGE>
25
except that, no such lists need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security registrar.
SECTION 4.02. Preservation and Disclosure of Lists.
(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 the
Securities (1) contained in the most recent list furnished to it as provided in
Section 4.01 or (2) received by it in the capacity of Securities registrar (if
so acting) hereunder. The Trustee may destroy any list furnished to it as
provided in Section 4.01 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities (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 or with holders of all Securities with respect to their rights under
this Indenture 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 5 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 4.02, or
(2) inform such applicants as to the approximate number of holders of
all Securities, 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 4.02, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder 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 4.02 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 of
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
<PAGE>
26
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 such Securityholders 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 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 4.02, 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).
SECTION 4.03. Reports by the Company.
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the date on which 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 said
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 to
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.
(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 said 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 by mail to all
holders of Securities, as the names and addresses of such holders appear upon
the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section 4.03 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
<PAGE>
27
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).
(e) So long as is required for an offer or sale of the Securities to
qualify for an exemption under Rule 144A under the Securities Act, the Company
shall, upon request, provide the information required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective purchaser
of Securities identified by any holder of Restricted Securities, unless such
information is furnished to the Commission pursuant to Section 13 or 15(d) of
the Exchange Act.
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within 90 days after each December 31 following the date of this
Indenture, commencing December 31, 1997, deliver to Securityholders a brief
report, dated as of such December 31, which complies with the provisions of such
Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with each stock exchange, if any,
upon which the Securities are listed, with the Commission and with the Company.
The Company will promptly notify the Trustee when the Securities are listed on
any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default.
One or more of the following events of default shall constitute an
Event of Default hereunder (whatever the reason for such Event of Default and
whether it shall be voluntary 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) default in the payment of any interest upon any Security or any
Other Debentures when it becomes due and payable, and continuance of such
default for a period of 30 days; provided, however, that a valid extension
-------- -------
of an interest payment period by the Company in accordance with the terms
hereof or of any Other Debentures shall not constitute a default in the
payment of interest for this purpose; or
<PAGE>
28
(b) default in the payment of all or any part of the principal of (or
premium, if any, on) any Security or any Other Debentures as and when the
same shall become due and payable either at maturity, upon redemption, by
declaration of acceleration of maturity or otherwise; or
(c) default in the performance, or breach, in any material respect of
any covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the outstanding 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
(d) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation
of its affairs and such decree or order shall remain unstayed and in effect
for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or shall make any general assignment for
the benefit of creditors, or admission by it in writing of its inability to
pay its debts as they become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding may declare the principal amount of all Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the holders of the outstanding Securities), and upon any
such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i)
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
(A) all matured installments of interest upon all the Securities and the
<PAGE>
29
principal of and premium, if any, on any and all Securities which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest specified in the Securities to the date of such payment or
deposit) and (B) such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith, and (ii) any and all Events of Default under
the Indenture, other than the non-payment of the principal of the Securities
which shall have become due solely by such declaration of acceleration, shall
have been cured, waived or otherwise remedied as provided herein, then, in every
such case, the holders of a majority in aggregate principal amount of the
Securities then outstanding, by written notice to the Company and to the
Trustee, may rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee 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, then and in every such case the
Company, the Trustee and the holders of the Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and when
the same shall become due and payable, and such default shall have continued for
a period of 30 days (provided, however, the valid extension of an interest
payment period in accordance with Section 16.01 hereof shall not constitute a
default in the payment of interest for this purpose), or (b) in case default
shall be made in the payment of the principal of or premium, if any, on any of
the Securities as and when the same shall have become due and payable, whether
at maturity of the Securities or upon redemption or 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, the whole amount that then shall have
become due and payable on all such Securities for principal and premium, if any,
or interest, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law and, if the Securities are held by AFC
Capital Trust or a trustee of such trust, without duplication of any other
amounts paid by AFC Capital Trust or a trustee in respect thereof) upon the
overdue installments of interest at the rate borne by the Securities; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including a reasonable compensation to the Trustee,
its agents,
<PAGE>
30
attorneys and counsel, and any expenses or liabilities incurred by the Trustee
hereunder other than through 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 on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities under
Title 11, United States Code, or any other applicable law, or in case a receiver
or trustee shall have been appointed for the property of the Company or such
other obligor, or in the case of any other similar judicial proceedings relative
to the Company or other obligor upon the Securities, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Securities and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Securities, or to the
creditors or property of the Company or such other obligor, unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the
Securities in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings, and to collect
and receive any moneys or other property payable or deliverable on any such
claims, and to distribute the same after the deduction of its charges and
expenses; and any receiver, assignee or trustee in bankruptcy or reorganization
is hereby authorized by each of the Securityholders 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 Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence or bad faith.
<PAGE>
31
Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, 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 for the ratable benefit of the holders of the
Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee 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 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 costs and expenses of collection applicable
to the Securities and reasonable compensation to the Trustee, its agents,
attorneys and counsel, and of all other expenses and liabilities incurred, and
all advances made, by the Trustee except as a result of its negligence or bad
faith;
Second: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Securities for principal of (and premium, if any) and interest on the
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference of priority of any kind, according to the
amounts due on such Securities for principal (and premium, if any) and interest,
respectively; and
Fourth: To the Company.
SECTION 5.04. Proceedings by Securityholders.
<PAGE>
32
No holder of any Security shall have any right by virtue of 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 an Event of Default and of the continuance thereof with respect to the
Securities specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate principal amount of
the Securities then outstanding 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 indemnity satisfactory to
it as it may reasonably 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 failed to institute any
such action, suit or proceeding, 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 of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of 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.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of
(premium, if any) and interest on such Security, on or after the same shall have
become due and payable, or to institute suit for the enforcement of any such
payment, shall not be impaired or affected without the consent of such holder
and by accepting a Security hereunder it is expressly understood, intended and
covenanted by the taker and holder of every Security with every other such taker
and holder and the Trustee, that no one or more holders of Securities shall have
any right in any manner whatsoever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of the holders of any
other 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 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.
The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default under this Indenture and the
Securities.
SECTION 5.05. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this
<PAGE>
33
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.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as provided in the last paragraph of Section 2.08, all powers
and remedies given by this Article V to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive 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 or
otherwise established with respect to the Securities, and no delay or omission
of the Trustee or of any holder of any of the Securities to exercise any right
or power accruing upon any Event of 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 5.04, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of the
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
Trustee, or exercising any trust or power conferred on the Trustee; provided,
--------
however, that (subject to the provisions of Section 6.01) the Trustee shall have
- -------
the right to decline to follow any such direction if the Trustee shall determine
that the action so directed would be unjustly prejudicial to the holders not
taking part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed would
involve the Trustee in personal liability. Prior to any declaration
accelerating the maturity of the Securities, the holders of a majority in
aggregate principal amount of the Securities at the time outstanding may on
behalf of the holders of all of the Securities waive any past default or Event
of Default and its consequences except a default (a) in the payment of principal
of or premium, if any, or interest on any of the Securities or (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Security affected; provided, however, that if the
-------- -------
Securities are held by the Property Trustee, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities shall have consented to such waiver or
modification to
<PAGE>
34
such waiver; provided further that if the consent of the holder of each
-------- -------
outstanding Security is required, such waiver shall not be effective until each
holder of the Trust Securities shall have consented to such waiver. Upon any
such waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 5.07, said
default or Event of Default shall for all purposes of the Securities and this
Indenture be deemed to have been cured and to be not continuing.
<PAGE>
35
SECTION 5.08. Notice of Defaults.
The Trustee shall, within five Business Days after actual knowledge by
a Responsible Officer of the Trustee of the occurrence of a default with respect
to the Securities mail to all Securityholders, as the names and addresses of
such holders appear upon the Security register, notice of all defaults known to
the Trustee, unless such defaults shall have been cured before the giving of
such notice (the term "defaults" for the purpose of this Section 5.08 being
hereby defined to be the events specified in clauses (a), (b), (c), (d) and (e)
of Section 5.01, not including periods of grace, if any, provided for therein,
and irrespective of the giving of written notice specified in clause (c) of
Section 5.01); and provided that, except in the case of default in the payment
--------
of the principal of or premium, if any, or interest on any of the Securities,
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 interests of the Securityholders; and
provided further that in the case of any default of the character specified in
- -------- -------
Section 5.01(c) no such notice to Securityholders shall be given until at least
60 days after the occurrence thereof but shall be given within 90 days after
such occurrence.
SECTION 5.09. Undertaking to Pay Costs.
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 5.09 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after the
same shall have become due and payable.
<PAGE>
36
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing 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
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, except that
(a) prior to the occurrence of an Event of Default and after the
curing 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; and
(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 Securityholders pursuant to Section 5.07, relating to the
time, method and place of conducting any
<PAGE>
37
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or indemnity against such risk reasonably satisfactory
to it is not assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
bond, note, debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company mentioned
herein may be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any Board Resolution 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 any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered omitted 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, order or
direction of any of the Securityholders, pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted 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;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (that has not been
cured or waived), to exercise such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill in their
exercise, as a
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38
prudent man would exercise or use under the circumstances in the conduct
of his own affairs;
(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, consent, order, approval,
bond, debenture, coupon or other paper or document, unless requested in
writing to do so by the holders of a majority in aggregate principal
amount of the outstanding Securities; 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, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expense or
liability as a condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
(including any Authenticating Agent) or attorneys, and the Trustee shall
not be responsible for any misconduct or negligence on the part of or for
the supervision of any such agent or attorney appointed by it with due
care;
(h) the Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Indenture;
(i) no permissive power or authority available to the Trustee shall be
construed as a duty; and
(j) in the event that the Trustee is also acting as Paying Agent or
Securities registrar hereunder, the rights and protections afforded to the
Trustee pursuant to this Article VI shall also be afforded to such Paying
Agent and Securities registrar.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company and the Trustee and the Authenticating
Agent assume no responsibility for the correctness of the same. The Trustee and
the Authenticating Agent make no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any Securities or the proceeds of any Securities authenticated and
delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture. The Trustee shall not be charged with knowledge
of any default or Event of Default unless (i) a Responsible Officer of the
Trustee assigned to its Principal Office shall have actual knowledge thereof or
(ii) the Company, any Securityholder or the holder of any Other Debenture shall
have given the Trustee written notice thereof in accordance with Section 13.04.
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39
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security registrar.
SECTION 6.05. Moneys to Be Held in Trust.
Subject to the provisions of Section 11.04, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by the Chairman of the Board of Directors,
the President or a Vice President or the Treasurer or an Assistant Treasurer of
the Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company, as borrower, 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 an 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 accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify each of the
Trustee or any predecessor Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Company under this Section 6.06 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. 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 benefit of the holders of particular Securities.
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40
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(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.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, the Trustee shall be entitled to receive, and
such matter (unless other evidence in respect thereof is herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by, an Officers'
Certificate delivered to the Trustee, and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken or omitted by it under the provisions of this
Indenture in reliance thereon.
SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the penultimate paragraph thereof.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America or any state
or territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Commission authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.09 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.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
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41
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice of such resignation to the Company
and by mailing notice thereof to the holders of the Securities at their ad
dresses as they shall appear on the Security register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee or
trustees by written instrument, in duplicate, 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 and have accepted appointment
within 60 days after the mailing of such notice of resignation to the
Securityholders, 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 for at least six months may,
subject to the provisions of Section 5.09, 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 the provisions of Section
6.08 after written request therefor by the Company or by any Securityholder
who has been a bona fide holder of a Security or Securities for at least
six months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.09 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 and appoint a
successor trustee by written instrument, in duplicate, 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 5.09, any
Securityholder who has been a bona fide holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. 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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42
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects thereto
or if no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after such removal, in which case the Trustee so
removed or any Securityholder, upon the terms and conditions and otherwise as in
subsection (a) of this Section 6.10 provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 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 retiring trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, 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 6.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring trustee thereunder. Upon
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 to secure any amounts then due it pursuant to the provisions of
Section 6.06.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they shall
appear on the Security register. If the Company fails to mail such notice
within 10 days after the acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
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43
SECTION 6.12. Succession by Merger, etc.
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 without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any 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 the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the
Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities issued
upon exchange or transfer thereof as fully to all intents and purposes as though
any such Authenticating Agent had been expressly authorized to authenticate and
deliver Securities; provided that the Trustee shall have no liability to the
--------
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Securities. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $5,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.14 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus
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44
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.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 6.14 without the execution or filing of
any paper or any further act on the part of the parties hereto or such
Authenticating Agent.
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 any 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
any Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.14, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all Securityholders as the names and addresses of such holders
appear on the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent herein.
The Company, as borrower, agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services. Any Authenticating
Agent shall have no responsibility or liability for any action taken by it as
such in accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities 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 that 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
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45
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 VIII, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action or to revoke any such action, but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the outstanding Securities shall be computed as of
the record date; provided, however, that no such authorization, agreement or
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consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of
the execution of any instrument by a Securityholder or his agent or proxy shall
be sufficient if made in accordance with such reasonable rules and regulations
as may be prescribed by the Trustee or in such manner as shall be satisfactory
to the Trustee. The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security registrar. The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and any Security registrar may deem the person in whose name such
Security shall be registered upon the Security Register to be, and may treat him
as, the absolute owner of such Security (whether or not such Security shall be
overdue) for the purpose of receiving payment of or on account of the principal
of and premium, if any, and (subject to Section 2.06) interest on such
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46
Security and for all other purposes; and neither the Company nor the Trustee nor
any Authenticating Agent nor any paying agent nor any transfer agent nor any
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any 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 for moneys payable upon any such Security.
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver 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 direction, consent or waiver, 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 7.04 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 the
Company or any such other obligor or person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any such other obligor. In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of 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 7.02, revoke such action so far as
concerns such Security (or so far as concerns the principal amount represented
by any exchanged or substituted Security). Except as aforesaid, any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution therefor.
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47
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) 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 Securityholders pursuant to any of the provisions of Article
V;
(b) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of such Securities
under any other provision of this Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.01, to be held at such time and at such place
in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of the Securityholders, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall be
mailed not less than 20 nor more than 180 days prior to the date fixed for the
meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a resolution of the Board
of Directors, or the holders of at least 10% in aggregate principal amount of
the Securities then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or such Securityholders may determine the time and the
place in said Borough of Manhattan for such meeting and may call such meeting to
take any action authorized in Section 8.01, by mailing notice thereof as
provided in Section 8.02.
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SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a person
shall be (a) a holder of one or more Securities or (b) a person appointed by an
instrument in writing as proxy by a 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 8.05. Regulations.
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.
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 8.03, 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 holder
of Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
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that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no 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
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
The Persons entitled to vote a majority in principal amount of the
outstanding Securities shall constitute a quorum for a meeting of Holders of
Securities; provided, however, that if any action is to be taken at such meeting
-------- -------
with respect to a consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Securities, the
Persons holding or representing such specified percentage in principal amount of
the outstanding Securities will constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of
<PAGE>
49
holders of Securities, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section 8.02,
except that such notice need be given only once not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the outstanding Securities which
shall constitute a quorum.
Except as limited by the first proviso to the first paragraph of
Section 9.02, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
outstanding Securities; provided, however, that, except as limited by the first
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proviso to the first paragraph of Section 9.02, any resolution with respect to
any consent, waiver, request, demand, notice, authorization, direction or other
action which this Indenture expressly provides may be given by the holders of
not less than a specified percentage in principal amount of the outstanding
Securities may be adopted at a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid only by the affirmative vote of
the holders of not less than such specified percentage in principal amount of
the outstanding Securities.
Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities whether or not present or represented at the meeting.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers 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 secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
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 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the
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50
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.
The Company and the Trustee may from time to time and at any time
amend the Indenture, without the consent of the Securityholders, 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
covenants, agreements and obligations of the Company pursuant to Article X
hereof;
(b) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon
the Company;
(c) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as the
Board of Directors and the Trustee shall consider to be for the protection
of the Securityholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions
or conditions a default or an Event of Default permitting the enforcement
of all or any of the remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional covenant,
-------- -------
restriction or condition such amendment may pro vide 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;
(d) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
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51
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture; provided that any such
--------
action shall not materially adversely affect the interests of the holders
of the Securities;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;
(g) to make provision for transfer procedures, certification, book-
entry provisions, the form of restricted securities legends, if any, to be
placed on Securities, minimum denominations and all other matters required
pursuant to Section 2.07 or otherwise necessary, desirable or appropriate
in connection with the issuance of Securities to holders of Capital
Securities in the event of a distribution of Securities by AFC Capital
Trust following a Dissolution Event;
(h) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act; or
(i) to make any change that does not adversely affect the rights of
any Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.01 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 9.02.
SECTION 9.02. With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the
holders of a majority in aggregate principal amount of the Securities at the
time outstanding, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time amend the Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the holders of the Securities; provided, however, that no such amendment shall
-------- -------
without the consent of the holders of each Security then outstanding and
affected thereby (i) extend the Maturity Date of any Security, or reduce the
rate or extend the time of payment of interest thereon (except as contemplated
by Article XVI), or reduce the principal amount
<PAGE>
52
thereof, or reduce any amount payable on redemption thereof, or make the
principal thereof or any interest or premium thereon payable in any coin or
currency other than that provided in the Securities, or impair or affect the
right of any Securityholder to institute suit for payment thereof, or (ii)
reduce the aforesaid percentage of Securities the holders of which are required
to consent to any such amendment to the Indenture, provided, however, that if
-------- -------
the Securities are held by AFC Capital Trust, such amendment shall not be
effective until the holders of a majority in liquidation amount of Trust
Securities shall have consented to such amendment; provided further that if the
-------- -------
consent of the holder of each outstanding Security is required, such amendment
shall not be effective until each holder of the Trust Securities shall have
consented to such amendment; and provided further that such amendment shall not
-------- -------
impair or affect the right of any holder of Capital Securities to commence a
Direct Action, in the circumstances and subject to the limitations set forth in
the Declaration, until each holder of Capital Securities shall have consented to
such amendment.
Upon the request of the Company accompanied by a copy of a resolution
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, 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.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act of 1939 as it may be in
effect from time to time. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article IX, 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
<PAGE>
53
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.
SECTION 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. 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, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Securities then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article IX.
The Trustee may receive an Opinion of Counsel as conclusive evidence
that any supplemental indenture executed pursuant to this Article is authorized
or permitted by, and conforms to, the terms of this Article and that it is
proper for the Trustee under the provisions of this Article to join in the
execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge with or into any other
Person or sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person,
unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires, by sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the
properties and assets of the Company as an entirety (A) shall be a
corporation, partnership or trust organized and validly
<PAGE>
54
existing under the laws of the United States of America, any State thereof
or the District of Columbia and (B) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the Company's obligation for the due and
punctual payment of the principal of (and premium, if any, on) and interest
on all the Securities and the performance and observance of every covenant
of this Indenture on the part of the Company to be performed or observed;
(2) immediately before and immediately after giving pro forma effect
to such transaction (and treating any Indebtedness not previously an
obligation of the Company or a Subsidiary which became the obligation of
the Company or any of its Subsidiaries in connection with or as a result of
such transaction as having been incurred at the time of such transaction),
no Default or Event of Default shall have occurred and be continuing; and
(3) the Company or such Person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
This Section and Section 10.02 shall only apply to a merger or
consolidation in which the Company is not the surviving corporation and to
conveyances, leases and transfers by the Company as transferor or lessor of all
or substantially all of the properties and assets of the Company and its
Subsidiaries on a consolidated basis to any Person.
SECTION 10.02. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any sale, assignment, conveyance, transfer,
disposition or lease of all or substantially all of the properties and assets of
the Company as an entirety to any Person in accordance with Section 10.01, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and in the event of any such conveyance or
transfer, the Company (which term shall for this purpose mean the Person named
as the "Company" in the first paragraph of this Indenture or any successor
Person which shall theretofore become such in the manner described in Section
10.01), except in the case of a lease, shall be discharged of all obligations
and covenants under this Indenture and the Securities and the coupons and may be
dissolved and liquidated.
<PAGE>
55
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.08) and not theretofore canceled, or (b) all the
Securities not theretofore canceled 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, in trust, funds sufficient to
pay on the Maturity Date or upon redemption all of the Securities (other than
any Securities which shall have been destroyed, lost or stolen and which shall
have been replaced as provided in Section 2.08) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and premium, if
any, and interest due or to become due to the Maturity Date or redemption date,
as the case may be, but excluding, however, the amount of any moneys for the
payment of principal of or premium, if any, or interest on the Securities (1)
theretofore repaid to the Company in accordance with the provisions of Section
11.04, or (2) paid to any State or to the District of Columbia pursuant to its
unclaimed property or similar laws, and if in either case the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company, then
this Indenture shall cease to be of further effect except for the provisions of
Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which
shall survive until such Securities shall mature and be paid. Thereafter,
Sections 6.06, 6.10 and 11.04 shall survive, and the Trustee, on demand of the
Company accompanied by any Officers' Certificate and an Opinion of Counsel and
at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture, the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee in connection with
this Indenture or the Securities.
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to Be
Held in Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Sections 11.01 or
11.05 shall be held in trust and applied by it to the payment, either directly
or through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Securities for the payment of which
such moneys or U.S. Government Obligations have been deposited with the Trustee,
of all sums due and to become due thereon for principal, premium, if any, and
interest.
<PAGE>
56
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 11.05 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of outstanding Securities.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee) shall, upon
written demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying agent
for payment of the principal of or premium, if any, or interest on Securities
and not applied but remaining unclaimed by the holders of Securities for two
years after the date upon which the principal of or premium, if any, or interest
on such Securities, as the case may be, shall have become due and payable, shall
be repaid to the Company by the Trustee or such paying agent on Company Request;
and the holder of any of the Securities shall thereafter look only to the
Company for any payment which such holder may be entitled to collect and all
liability of the Trustee or such paying agent with respect to such moneys shall
thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
The Company shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities on the 91st day after the
conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below) as
trust funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities (i) money in an
amount, or (ii) U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (ii) and (iii)) of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee and the Defeasance Agent, if any, to pay
and discharge each installment of principal of and interest and premium, if
any, on the outstanding Securities on the dates such installments of
principal, interest or premium are due;
<PAGE>
57
(2) if the Securities are then listed on any national securities
exchange, the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that the
exercise of the option under this Section 11.05 would not cause such
Securities to be delisted from such exchange until the Securities have been
discharged;
(3) no Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit; and
(4) the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that holders of the
Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option under
this Section 11.05 and will be subject to United States federal income tax
on the same amount and in the same manner and at the same times as would
have been the case if such option had not been exercised, and such opinion
shall be based on a statute so providing or be accompanied by a private
letter ruling to that effect received from the United States Internal
Revenue Service or a revenue ruling pertaining to a comparable form of
transaction to that effect published by the United States Internal Revenue
Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments provided to it acknowledging the same), except
(A) the rights of holders of Securities to receive, from the trust fund
described in clause (1) above, payment of the principal of and the interest and
premium, if any, on the Securities when such payments are due; (B) the Company's
obligations with respect to the Securities under Sections 2.02, 2.07, 2.08,
3.02, 3.04, 6.10 and 11.04; and (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which is
eligible to act as Trustee hereunder and which assumes all of the obligations of
the Trustee necessary to enable the Trustee to act under this Article. In the
event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:
(1) The Trustee shall have approval rights over the document
appointing such Defeasance Agent and the document setting forth such
Defeasance Agent's rights and responsibilities;
(2) The Defeasance Agent shall provide verification to the Trustee
acknowledging receipt of sufficient money and/or U. S. Government
Obligations to meet the applicable conditions set forth in this
Section 11.05.
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58
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture, or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to 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 all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns whether
so expressed or not.
SECTION 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and as
to any successor Person.
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59
SECTION 13.04. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, 440 Lincoln Street, Worcester, Massachusetts 01653, Attention:
Chief Financial Officer. Any notice, direction, request or demand by any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the office of
the Trustee, 450 West 33rd Street, New York, NY 10001-2697, Attention: Global
Trust Services (unless another address is provided by the Trustee to the Company
for the purpose).
Any notice or communication to a Holder shall be mailed by first class
mail to his or her address shown on the register kept by the Securities
registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
SECTION 13.05. Governing Law.
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 governed
by and construed in accordance with the laws of said State, without regard to
conflicts of laws principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand 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 in the opinion of
the signers 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.
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 (except pursuant to Section 3.05) 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 in formed 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.
<PAGE>
60
SECTION 13.07. Business Days.
In any case where the date of payment of principal of or premium, if
any, or interest on the Securities will not be a Business Day, the payment of
such principal of or premium, if any, or interest on the Securities need not be
made on such date but may be made on the next succeeding Business Day, with the
same force and effect as if made on the date of payment and no interest shall
accrue for the period from and after such date.
SECTION 13.08. Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, such imposed duties shall
control.
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 13.10. Execution 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 13.11. Separability.
In case any one or more of the provisions contained in this Indenture
or in the Securities 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 Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
--------
assignment, the Company will remain primarily liable for all its obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties thereto.
<PAGE>
61
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Securities held by
AFC Capital Trust or a trustee of such trust, if the Property Trustee of such
Trust fails to enforce its rights under this Indenture as the holder of the
Securities held as the assets of AFC Capital Trust any holder of Capital
Securities may institute legal proceedings directly against the Company to
enforce such Property Trustee's rights under this Indenture without first
instituting any legal proceedings against such Property Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay principal of or premium, if any, or interest on the Securities
when due, the Company acknowledges that a holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or premium, if any, or interest on the Securities having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such holder on or after the respective due date specified in the
Securities.
ARTICLE XIV
REDEMPTION OF SECURITIES -- SINKING FUND
SECTION 14.01. Special Event Redemption.
If a Special Event has occurred and is continuing then the Company
shall have the right, upon (i) not less than 45 days written notice to the
Trustee, which notice shall be accompanied by an Officers' Certificate
certifying that a Special Event entitling the Company to redeem the Securities
pursuant to this Section has occurred and (ii) not less than 30 days nor more
than 60 days written notice to the Securityholders, to redeem the Securities, in
whole (but not in part), within 90 days following the occurrence of such Special
Event at the Special Event Redemption Price. Following a Special Event, the
Company shall take such action as is necessary to promptly determine the Special
Event Redemption Price, including without limitation the appointment by the
Company of a Quotation Agent. The Special Event Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemption or such
earlier time as the Company determines, provided that the Company shall deposit
--------
with the Trustee an amount sufficient to pay the Special Event Redemption Price
by 10:00 a.m., New York time, on the date such Special Event Redemption Price is
to be paid. The Company shall provide the Trustee with written notice of the
Special Event Redemption Price promptly after the calculation thereof, which
notice shall include any calculation made by the Quotation Agent in connection
with the determination of the Special Event Redemption Price.
SECTION 14.02. [Reserved]
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SECTION 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking fund.
SECTION 14.04. Notice of Redemption; Selection of Securities.
In case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the holders of Securities so to be redeemed as a whole or in part
at their last addresses as the same appear on the Security Register. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number, if any,
of the Securities to be redeemed, the date fixed for redemption, the redemption
price at which the Securities are to be redeemed (or the method by which such
redemption price is to be calculated), the place or places of payment, that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. If less than all the Securities
are to be redeemed the notice of redemption shall specify the numbers of the
Securities to be redeemed. In case any Security is to be redeemed in part only,
the notice of redemption shall state the portion of the principal amount thereof
to be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued.
By 10:00 a.m. New York time on the redemption date specified in the
notice of redemption given as provided in this Section, the Company will deposit
with the Trustee or with one or more paying agents an amount of money sufficient
to redeem on the redemption date all the Securities so called for redemption at
the appropriate Redemption Price, together with accrued interest to the date
fixed for redemption.
The Company will give the Trustee notice not less than 45 days prior
to the redemption date as to the aggregate principal amount of Securities to be
redeemed and the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Securities or portions thereof (in
integral multiples of $1,000, except as otherwise set forth in the applicable
form of Security) to be redeemed.
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63
SECTION 14.05. Payment of Securities Called for Redemption.
If notice of redemption has been given as provided in Section 14.04,
the Securities or portions of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with interest
accrued to the date fixed for redemption (subject to the rights of holders of
Securities on the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the redemption date), and on and
after said date (unless the Company shall default in the payment of such
Securities at the Redemption Price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue. On presentation and surrender of such Securities at a
place of payment specified in said notice, the said Securities or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
Redemption Price, together with interest accrued thereon to the date fixed for
redemption (subject to the rights of holders of Securities on the close of
business on a regular record date in respect of an Interest Payment Date
occurring on or prior to the redemption date).
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.
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64
SECTION 15.02. Default on Senior Indebtedness.
Unless Section 15.03 shall be applicable, in the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness, or in the event
that the maturity of any Senior Indebtedness has been or would be permitted upon
notice or the passage of time to be accelerated because of a default, then,
unless and until such event of default shall have been cured or waived or shall
have ceased to exist and such acceleration shall have been rescinded or
annulled, then no payment or distribution of any kind or character, whether in
cash, properties or securities shall be made by the Company with respect to the
principal (including redemption payments) of or premium, if any, or interest on
the Securities or on account of the purchase or other acquisition of Securities
by the Company or any Subsidiary, in each case unless and until all amounts due
or to become due on such Senior Indebtedness are paid in full in cash or other
consideration satisfactory to the holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or a holder of any Security when such payment is
prohibited by the preceding paragraph of this Section 15.02, such payment shall
be held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing,
within 90 days of such payment.
SECTION 15.03. Prior Payment to Senior Indebtedness Upon Acceleration
of Securities.
In the event that any Securities are declared due and payable before
their Stated Maturity, 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 the principal (including redemption payments) of, or premium, if any,
or interest (including any Additional Interest) on the Securities or on account
of the purchase or other acquisition of Securities by the Company or any
Subsidiary, until all amounts due on or in respect of Senior Indebtedness
outstanding at the time of such acceleration shall have been paid in full to the
holders of such Senior Indebtedness in cash or other consideration satisfactory
to the holders of such Senior Indebtedness, or provision shall have been made
for such payment.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 15.03, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the
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65
holders of the Senior Indebtedness (or their representative or representatives
or a trustee) notify the Trustee in writing, within 90 days of such payment.
The provisions of this Section shall not apply to any payment with
respect to which Section 15.04 would be applicable.
SECTION 15.04. Liquidation; Dissolution; Bankruptcy.
In the case of the pendency of any receivership, insolvency,
dissolution, winding-up, liquidation, reorganization, assignment for the benefit
of creditors or any other marshaling of assets or liabilities of the Company or
other similar judicial proceeding relative to the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings
(each such event, if any herein sometimes referred to as a "Proceeding"), then
the holders of Senior Indebtedness shall be entitled to receive payment in full
of all amounts due or to become due on such Senior Indebtedness, or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Indebtedness, before the Holders of
the Securities are entitled to receive or retain any payment or distribution of
any kind or character, whether in cash, property or securities (including any
payment or distribution which may be payable or deliverable by reason of the
payment of any other debt of the Company (including any series of the
Securities) subordinated to the payment of the Securities, such payment or
distribution being hereinafter referred to as a "Junior Subordinated Payment"),
on account of principal of (or premium, if any) or interest (including
Additional Interest) on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary, and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any payment or distribution of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, which may be payable or deliverable in respect of the Securities in any
such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holders of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all amounts due or to become due on all Senior Indebtedness are
paid in full or payment thereof is provided for in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Indebtedness, and if
such fact shall, at or prior to the time of such payment or distribution, have
been made actually known to a Responsible Officer of the Trustee or, as the case
may be, such Holder, then in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
amounts due or to become due on all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all amounts due or to become due on all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
<PAGE>
66
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed (so long as the effect of any exclusion
employing this definition is not to cause the Securities to be treated in any
Proceeding as a part of the same class of claims as the Senior Indebtedness or
any class of claims pari passu with, or senior to the Senior Indebtedness) to
include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least to
the extent provided in this Article XV with respect to the Securities to the
payment of Senior Indebtedness that may at the time be outstanding, provided
that (i) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the sale, conveyance,
transfer or lease of its property as an entirety, or substantially as an
entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article X of this
Indenture.
SECTION 15.05. Subrogation.
Subject to the payment in full of all amounts due or to become due on
all Senior Indebtedness to the extent provided herein or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Indebtedness, the rights of the Securityholders shall be
subrogated to the rights of the holders of such Senior Indebtedness to receive
payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all Indebtedness of the Company which by its express terms is subordinated to
Senior Indebtedness of the Company to substantially the same extent as the
Securities are subordinated to the Senior Indebtedness and is entitled to like
rights of subrogation by reason of payments or distributions made to holders of
such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest
(including Additional Interest) on the Securities shall be paid in full; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or securities to which
the Securityholders or the Trustee would be entitled except for the provisions
of this Article XV, and no payment over pursuant to the provisions of this
Article XV to or for the benefit of the holders of such Senior Indebtedness by
Securityholders or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Securities, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV
are and are
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67
intended solely for the purposes of defining the relative rights of the holders
of the Securities, on the one hand, and the holders of such Senior Indebtedness
on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Securities and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, 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 the Indenture,
subject to the rights, if any, under this Article XV of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
SECTION 15.06. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
SECTION 15.07. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee assigned to its Principal Office of any fact known to the Company
that would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article XV.
Notwithstanding the provisions of this Article XV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Securities pursuant to the provisions of this Article
XV, unless and until a Responsible Officer of the Trustee assigned to its
Principal Office shall have received written notice thereof from the Company or
a holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Article VI of this Indenture, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
-------- -------
not have received the notice provided for in this Section 15.06 at least two
Business Days prior to the date (i) upon which by the terms hereof any money
may become payable for any purpose (including, without limitation, the payment
of the principal of (or premium, if any) or interest on any Security), or (ii)
moneys and/or U.S. Government Obligations are deposited in trust pursuant to
Article XI then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and U.S.
Government Obligations and to apply the
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68
same to the purposes for which they were received, and shall not be affected by
any notice to the contrary that may be received by it within two Business Days
prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. 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 such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, 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, 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 XV, 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.
Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee and the Securityholders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other 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 XV.
SECTION 15.08. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness 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 and, subject to the
provisions of Article VI of this Indenture, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to
Securityholders, the Company or any
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69
other Person money or assets to which any holder of Senior Indebtedness shall be
entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.
SECTION 15.09. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness 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 that any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or other wise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 15.10. Article Applicable to Paying Agents.
In case at any time any paying agent other than the Trustee shall have
been appointed by the Company and then be acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such paying agent within
its meanings as fully and for all intents and purposes as if such paying agent
were named in this article in addition to or in place of the Trustee.
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70
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
--------
Extended Interest Payment Period shall end on a date other than an Interest
Payment Date or extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 16.01, will
bear interest thereon at the Coupon Rate compounded semi-annually for each semi-
annual period of the Extended Interest Payment Period ("Compounded Interest").
At the end of the Extended Interest Payment Period, the Company shall pay all
interest accrued and unpaid on the Securities, including any Additional Interest
and Compounded Interest (together, "Deferred Interest") that shall be payable to
the holders of the Securities in whose names the Securities are registered in
the Security Register on the first record date preceding the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest
Payment Period, the Company may further defer payments of interest by further
extending such period, provided that such period, together with all such
--------
previous and further extensions within such Extended Interest Payment Period,
shall not exceed 10 consecutive semi-annual periods, including the first such
semi-annual period during such Extended Interest Payment Period, or extend
beyond the Maturity Date. Upon the termination of any Extended Interest Payment
Period and the payment of all Deferred Interest then due, the Company may
commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof, but the Company may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.
SECTION 16.02. Notice of Extension.
(a) If the Property Trustee is the only registered holder of the
Securities at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period five Business Days before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by AFC Capital Trust
are payable, or (ii) the date AFC Capital Trust is required to give notice of
the record date, or the date such Distributions are payable, to any national
securities exchange or to holders of the Capital Securities issued by AFC
Capital Trust, but in any event at least five Business Days before such record
date.
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71
(b) If the Property Trustee is not the only holder of the Securities
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Securities and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
before 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 national securities exchange.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
The Chase Manhattan Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.
ALLMERICA FINANCIAL CORPORATION
By /s/ Edward J. Parry
-------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
THE CHASE MANHATTAN BANK,
as Trustee
By /s/ Andrea Koster-Crain
-------------------------
Name: Andrea Koster-Crain
Title: Vice President
<PAGE>
1
EXHIBIT A
---------
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
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 OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS
<PAGE>
2
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO THE COMPANY, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEREE TO THE COMPANY. SUCH HOLDER FURTHER AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR (ii)
THE ACQUISITION AND HOLDING OF THIS SECURITY BY IT IS NOT PROHIBITED BY EITHER
SECTION 406 OF ERISA OR SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
AS AMENDED, OR EXEMPT FROM ANY SUCH PROHIBITION.
[IF THE SECURITY IS A REGULATION S SECURITY INSERT: THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
<PAGE>
3
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES TO BE BOUND BY
THE PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF FEBRUARY 3, 1997
AMONG AFC CAPITAL TRUST I, ALLMERICA FINANCIAL CORPORATION AND CERTAIN OTHER
PARTIES NAMED THEREIN.
<PAGE>
4
No. CUSIP No.
------------------------- --------------
ALLMERICA FINANCIAL CORPORATION
8.207% SERIES A JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE February 3, 2027
Allmerica Financial Corporation, a Delaware corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________ or registered assigns, the principal sum of _____________ Dollars
on February 3, 2027 (the "Maturity Date"), unless previously redeemed, and to
pay interest on the outstanding principal amount hereof from February 3, 1997,
or from the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for, semi-
annually (subject to deferral as set forth herein) in arrears on February 15 and
August 15 of each year, commencing August 15, 1997 at the rate of 8.207% per
annum until the principal hereof shall have become due and payable, and at the
same rate per annum on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum compounded semi-annually. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months and, for any period less than a full calendar month, the actual number of
days elapsed in such month. In the event that any date on which the principal
of (or premium, if any) or interest on this Security is payable is not a
Business Day, then the payment 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), with the same force and effect as if made on such
date. Pursuant to the Registration Rights Agreement, in certain limited
circumstances the Company will be required to pay Liquidated Damages (as defined
in the Registration Rights Agreement) with respect to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be the
first day of the month in which the relevant interest payment date falls. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the holders on such regular record date and may
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the holders of Securities not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
<PAGE>
5
The principal of (and premium, if any) and interest on this Security
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
--------
however, that, payment of interest may be made at the option of the Company by
- -------
(i) check mailed to the holder at such address as shall appear in the Security
Register or (ii) by transfer to an account maintained by the Person entitled
thereto, provided that proper written transfer instructions have been received
by the relevant record date. Notwithstanding the foregoing, so long as the
Holder of this Security is the Property Trustee, the payment of the principal of
(and premium, if any) and interest on this Security will be made at such place
and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of Senior Indebtedness, and this Security is issued subject to
the provisions of the Indenture with respect thereto. Each holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-
fact for any and all such purposes. Each holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior
Indebtedness, whether now out standing or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or 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.
<PAGE>
6
The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
ALLMERICA FINANCIAL CORPORATION
By:
-----------------------------------
Name:
Title
Attest:
By:
------------------------
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated
--------------
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------
Authorized Officer
<PAGE>
7
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of
December 23, 1996 (the "Indenture"), duly executed and delivered between the
Company and The Chase Manhattan Bank, as Trustee (the "Trustee"), to which
Indenture reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Securities.
Upon the occurrence and continuation of a Special Event, the Company
shall have the right at any time, within 90 days following the occurrence of a
Special Event, to redeem this Security in whole (but not in part) at the Special
Event Redemption Price. "Special Event Redemption Price" shall mean, with
respect to any redemption of the Securities following a Special Event, an amount
in cash equal to the greater of (i) 100% of the principal amount to be redeemed,
or (ii) the sum, as determined by a Quotation Agent, of the present values of
the principal amount of such Securities, together with scheduled payments of
interest from the redemption date to the Maturity Date, in each case discounted
to the prepayment date on a semi-annual basis (assuming a 350-day year of twelve
30-day months) at the Adjusted Treasury Rate, plus, in each case, any accrued
and unpaid interest thereon, including Compounded Interest and Additional
Interest, if any, to the date of such redemption.
Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the receipt by the Company of any required
regulatory approval.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the Indenture,
to execute supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
- -------- -------
consent of each holder of Securities then outstanding and affected thereby, (i)
extend the Maturity Date of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a
<PAGE>
8
majority in aggregate principal amount of the Securities at the time
outstanding, on behalf of all of the holders of the Securities, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture, and its consequences,
except a default in the payment of the principal of or premium, if any, or
interest on any of the Securities or a default in respect of any covenant or
provision under which the Indenture cannot be modified or amended without the
consent of each holder of Securities then outstanding. Any such consent or
waiver by the holder of this Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Security and of any Security issued in exchange
hereford or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period, and not to extend beyond the Maturity Date of the
Securities (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Securities to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended Interest
Payment Period, provided that such Extended Interest Payment Period, together
--------
with all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extended Interest Payment Period, shall
not end on any date other than an Interest Payment Date or extend beyond the
Maturity Date of the Securities. Upon the termination of any such Extended
Interest Payment Period and the payment of all accrued and unpaid interest and
any additional amounts then due, the Company may commence a new Extended
Interest Payment Period, subject to the foregoing requirements.
The Company has agreed that it will not (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 that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of any securities or any Subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Securities (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or
<PAGE>
9
purchase shares of, 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 stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; (c) payments under the Capital
Securities Guarantee; (d) as a direct result of, and only to the extent required
in order to avoid the issuance of fractional shares of capital stock following,
a reclassification of the Company's capital stock or the exchange or the
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or pursuant to an acquisition in
which the fractional shares of the Company's capital stock would otherwise be
issued; (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the exchange or conversion of such capital stock or
the security being exchanged or converted and (f) purchases of Common Stock
related to the issuance of Common Stock or rights under any benefit plan for
directors, officers, agents or employees of the Company or its Subsidiaries or
any of the Company's dividend reinvestment or director, officer, agent or
employee stock purchase plans) if at such time (1) an Event of Default shall
have occurred and be continuing, or would occur upon the taking of any action
specified in clauses (i) through (iii) above, (2) 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 be an Event of Default and (b) in
respect of which the Company shall not have taken reasonable steps to cure, (3)
the Company shall be in default with respect to its payment obligations under
the Capital Securities Guarantee or (4) the Company shall have given notice of
its election of the exercise of its right to extend the interest payment period
under the Indenture (or notice of a valid extension of an interest payment
period in accordance with the terms of any Other Debentures) and any such
extension shall not have been rescinded or such Extended Interest Payment
Period, or any extension thereof, or extension period with respect to Other
Debentures, shall be continuing.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable by
the holder hereof on the Security Register of the Company, upon surrender of
this Security for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Security
registrar duly executed by the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any authenticating agent, any paying agent,
any transfer agent and the registrar may deem and treat the holder hereof as the
absolute owner hereof (whether or not this Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Security Registrar) for the purpose of receiving payment of or on
<PAGE>
10
account of the principal hereof and premium, if any, and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any authenticating agent nor any paying agent nor
any transfer agent nor any registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, 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 part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding Agreement
between the Initial Purchasers and the Offerors in accordance with its terms.
Very truly yours,
ALLMERICA FINANCIAL CORPORATION
By /s/ Edward J. Parry III
---------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
AFC CAPITAL TRUST I
By /s/ Edward J. Parry III
---------------------------
Name: Edward J. Parry III
Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ Steven J. Goulart
------------------------
Name: Steven J. Goulart
Title: Managing Director
<PAGE>
EXHIBIT 4
- -------------------------------------------------------------------------------
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
Allmerica Financial Corporation
Dated as of February 3, 1997
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION...........................................................2
SECTION 1.1. Definitions and Interpretation................................................2
ARTICLE II TRUST INDENTURE ACT....................................................................6
SECTION 2.1. Trust Indenture Act; Application..............................................6
SECTION 2.2. Lists of Holders of Securities................................................6
SECTION 2.3. Reports by the Capital Securities Guarantee Trustee...........................6
SECTION 2.4. Periodic Reports to Capital Securities Guarantee Trustee......................7
SECTION 2.5. Evidence of Compliance with Conditions Precedent..............................7
SECTION 2.6. Events of Default; Waiver.....................................................7
SECTION 2.7. Event of Default; Notice......................................................7
SECTION 2.8. Conflicting Interests.........................................................8
ARTICLE III POWERS, DUTIES AND RIGHTS OF CAPITAL SECURITIES
GUARANTEE TRUSTEE.............................................................8
SECTION 3.1. Powers and Duties of the Capital Securities Guarantee
Trustee.......................................................................8
SECTION 3.2. Certain Rights of Capital Securities Guarantee Trustee.......................10
SECTION 3.3. Not Responsible for Recitals or Issuance of Series A Capital
Securities Guarantee.........................................................12
ARTICLE IV CAPITAL SECURITIES GUARANTEE TRUSTEE..................................................12
SECTION 4.1. Capital Securities Guarantee Trustee; Eligibility............................12
SECTION 4.2. Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee............................................................13
ARTICLE V GUARANTEE..............................................................................14
SECTION 5.1. Guarantee....................................................................14
SECTION 5.2. Waiver of Notice and Demand..................................................14
SECTION 5.3. Obligations Not Affected.....................................................14
SECTION 5.4. Rights of Holders............................................................15
SECTION 5.5. Guarantee of Payment.........................................................16
SECTION 5.6. Subrogation..................................................................16
SECTION 5.7. Independent Obligations......................................................16
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION.............................................17
SECTION 6.1. Limitation of Transactions...................................................17
SECTION 6.2. Ranking......................................................................18
ARTICLE VII TERMINATION..........................................................................18
SECTION 7.1. Termination..................................................................18
ARTICLE VIII COMPENSATION AND EXPENSES OF CAPITAL SECURITIES
GUARANTEE TRUSTEE..................................................................18
ARTICLE IX INDEMNIFICATION.......................................................................19
SECTION 9.1. Exculpation..................................................................19
SECTION 9.2. Indemnification..............................................................20
ARTICLE X MISCELLANEOUS..........................................................................20
SECTION 10.1. Successors and Assigns.......................................................20
SECTION 10.2. Amendments...................................................................20
SECTION 10.3. Notices......................................................................20
SECTION 10.4. Exchange Offer...............................................................21
SECTION 10.5. Benefit......................................................................22
SECTION 10.6. Governing Law................................................................22
</TABLE>
-ii-
<PAGE>
SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series A Capital Securities Guarantee"),
dated as of February 3, 1997, is executed and delivered by Allmerica Financial
Corporation, a Delaware corporation (the "Guarantor"), and The Chase Manhattan
Bank, a New York banking corpora tion, as trustee (the "Capital Securities
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Series A Capital Securities (as defined herein) of AFC
Capital Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of February 3, 1997, among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on the
date hereof 300,000 capital securities, having an aggregate liquidation amount
of $300,000,000, such capital securities being designated the 8.207% Series A
Capital Securities (collectively the "Series A Capital Securities") and, in
connection with an Ex change Offer (as defined in the Declaration) has agreed to
execute and deliver the Series B Capital Securities Guarantee (as defined in the
Declaration) for the benefit of holders of the Series B Capital Securities (as
defined in the Declaration).
WHEREAS, as incentive for the Holders to purchase the Series A Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Series A Capital Securities Guarantee, to pay to
the Holders the Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth herein.
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Series A Capital Securities Guarantee, for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated, to the extent and in the
manner set forth in the Common Securities Guarantee, to the rights of holders of
Series A Capital Securities and the Series B Capital Securities to receive
Guarantee Payments under this Series A Capital Securities Guarantee and the
Series B Capital Securities Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series A Capital Securities Guarantee for
the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation
------------------------------
In this Series A Capital Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Series A Capital Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Series A Capital Securities Guarantee have the same meaning when used in
this Series A Capital Securities Guarantee unless otherwise defined in this
Series A Capital Securities Guarantee;
(c) a term defined anywhere in this Series A Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Series A Capital Securities Guarantee" or
"this Series A Capital Securities Guarantee" are to this Series A Capital
Securities Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Series A Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series A Capital
Securities Guarantee, unless otherwise spec ified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Series A Capital Securities Guarantee, unless otherwise
defined in this Series A Capital Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
---------
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or a Sunday, or a
------------
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Capital Securities Guarantee Trustee" means The Chase Manhattan Bank,
------------------------------------
a New York banking corporation, until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Series A Capital Securities Guarantee and thereafter means each
such Successor Capital Securities Guarantee Trustee.
-2-
<PAGE>
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital Securities
----------------------
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at 450 West 33rd Street, New York, New York 10001, Attention: Global Trust
Services.
"Covered Person" means any Holder or beneficial owner of Series A
--------------
Capital Securities.
"Debentures" means the series of subordinated debt securities of the
----------
Guarantor designated the 8.207% Series A Junior Subordinated Deferrable Interest
Debentures due February 3, 2027 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Series A Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Series A Capital Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Series A Capital Securities to the extent the Issuer has funds on hand
legally available therefor at such time, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer has funds on hand legally available
therefor at such time, with respect to any Series A Capital Securities called
for redemption by the Issuer, and (iii) upon a voluntary or involuntary
termination and liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Series A Capital
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the
Series A Capital Securities to the date of payment, to the extent the Issuer has
funds on hand legally available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer. If an Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to the Common
Securities or any guarantee payment under any Other Common Securities Guarantees
shall be made until the Holders shall be paid in full the Guarantee Payments to
which they are entitled under this Series A Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Series A Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Series A Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
-3-
<PAGE>
"Indemnified Person" means the Capital Securities Guarantee Trustee,
------------------
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of February 3, 1997, between
---------
the Guarantor (the "Debenture Issuer") and The Chase Manhattan Bank, as trustee,
pursuant to which the Debentures are to be issued to the Property Trustee of the
Issuer.
"Majority in liquidation amount of the Series A Capital Securities"
-----------------------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Series A Capital Securities.
"Officers' Certificate" means, with respect to any person, a
---------------------
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President, the Comptroller, the Secretary or an
Assistant Secretary of the Guarantor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Series A
Capital Securities Guarantee (other than pursuant to Section 314(a)(4) of the
Trust Indenture Act) 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 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
(c) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same meaning as
----------------------------------
"Other Guarantees" in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures issued by
----------------
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the Guarantor
----------------
with respect to capital securities (if any) similar to the Series A Capital
Securities issued by other trusts to be established by the Guarantor (if any),
in each case similar to the Issuer.
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<PAGE>
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement, dated as of February 3, 1997, by and among the Guarantor, the Issuer
and the Initial Purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Capital Securities
-------------------
Guarantee Trustee, any officer within the Corporate Trust Office of the Capital
Securities Guarantee Trustee, including any vice president, any assistant vice
president, any secretary, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer, any senior trust officer or other officer in the
Corporate Trust Office of the Capital Securities Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Capital Securities Guarantee Trustee" means a successor
----------------------------------------------
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
"Trust Securities" means the Common Securities and the Series A Capital
----------------
Securities and Series B Capital Securities, collectively.
-5-
<PAGE>
ARTICLE XII
TRUST INDENTURE ACT
SECTION 12.1. Trust Indenture Act; Application
--------------------------------
(a) This Series A Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series A Capital Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Series A Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 12.2. Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee (unless the Capital Securities Guarantee Trustee is otherwise the
registrar of the Capital Securities) with a list, in such form as the Capital
Securities Guarantee Trustee may reasonably require, of the names and addresses
of the Holders ("List of Holders") as of such date, (i) within one Business Day
after June 1 and December 1 of each year, and (ii) at any other time within 30
days of receipt by the Guarantor of a written request for a List of Holders as
of a date no more than 14 days before such List of Holders is given to the
Capital Securities Guarantee Trustee provided, that the Guarantor shall not be
--------
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Capital Securities
Guarantee Trustee by the Guarantor. The Capital Securities Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 12.3. Reports by the Capital Securities Guarantee Trustee
---------------------------------------------------
Within 90 days after December 31 of each year, commencing December 31,
1997, the Capital Securities Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313(a) of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Capital Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
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<PAGE>
SECTION 12.4. Periodic Reports to Capital Securities Guarantee Trustee
--------------------------------------------------------
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) 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 provided that such compliance certificate shall be delivered on or
before 120 days after the end of each fiscal year of the Guarantor. Delivery of
such reports, information and documents to the Capital Securities Guarantee
Trustee is for informational purposes only and the Capital Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Capital Securities Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates).
SECTION 12.5. Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Series A Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 12.6. Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Series A Capital
Securities may, by vote, on behalf of all 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 Series A Capital Securiti es
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 12.7. Event of Default; Notice
------------------------
(a) The Capital Securities Guarantee Trustee shall, within five Business
Days after the occurrence of an Event of Default is actually known to a
Responsible Officer of the Capital Securities Guarantee Trustee, mail by first
class postage prepaid, to all Holders, notices of all defaults actually known to
a Responsible Officer of the Capital Securities Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, that,
except in the case of default in the payment of any Guarantee Payment, the
Capital Securities 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 Capital
Securities Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the holders of the Series A Capital
Securities.
-7-
<PAGE>
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice from the Guarantor or a Holder, or a
Responsible Officer of the Capital Securities Guarantee Trustee charged with the
administration of the Series A Capital Securities Guarantee shall have obtained
actual knowledge, of such Event of Default.
SECTION 12.8. Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Series A Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE XIII
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 13.1. Powers and Duties of the Capital Securities Guarantee Trustee
-------------------------------------------------------------
(a) This Series A Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Series A Capital
Securities Guarantee to any Person except a Holder exer cising his or her rights
pursuant to Section 5.4(b) or to a Successor Capital Securities Guarantee
Trustee on acceptance by such Successor Capital Securities Guarantee Trustee of
its appointment to act as Successor Capital Securities Guarantee Trustee. The
right, title and interest of the Cap ital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Capital Securities Guarantee Trustee has occurred and is continuing, the Capital
Securities Guarantee Trustee shall enforce this Series A Capital Securities
Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Series A Capital Securities Guarantee, and no implied covenants
shall be read into this Series A Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee, the
Capital Securities Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Series A
-8-
<PAGE>
Capital Securities Guarantee, 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 Series A Capital Securities Guarantee shall be
construed to relieve the Capital Securities 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 Capital Securities
Guarantee Trustee shall be determined solely by the express
provisions of this Series A Capital Securities Guarantee, and the
Capital Securities Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Series A Capital Securities Guarantee, and no
implied covenants or obligations shall be read into this Series A
Capital Securities Guarantee against the Capital Securities Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Capital
Securities Guarantee Trustee, the Capital Securities 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 Capital Securities
Guarantee Trustee and conforming to the requirements of this Series A
Capital Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Capital Securities
Guarantee Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Series A Capital Securities
Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of
the Capital Securities Guarantee Trustee, unless it shall be proved that
the Capital Securities Guarantee Trustee was negli gent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of a Majority in
liquidation amount of the Series A Capital Securities relat ing to the
time, method and place of conducting any proceeding for any remedy
available to the Capital Securities Guarantee Trustee, or exercising any
trust or power conferred upon the Capital Securities Guarantee Trustee
under this Series A Capital Securities Guarantee; and
-9-
<PAGE>
(iv) no provision of this Series A Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if the
Capital Securities Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Series A Capital Securities Guarantee
or indemnity, reasonably satisfactory to the Capital Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 13.2. Certain Rights of Capital Securities Guarantee Trustee
------------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document 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
Series A Capital Securities Guarantee may be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series A Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securiti es
Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request, shall be entitled to
receive and may conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or regis tration thereof).
(v) The Capital Securities Guarantee Trustee may consult with
counsel of its selection, 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 by it
hereunder in good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Capital Securities Guarantee Trustee
shall have
-10-
<PAGE>
the right at any time to seek instructions concerning the administration of
this Series A Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Series A Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have pro vided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Capital Securities Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Capital
Securities Guarantee Trustee's agents, nominees or custodians) 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
Capital Securities Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Series A
Capital Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investiga tion into such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or attorneys,
and the Capital Securities Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guarantee Trustee
or its agents hereunder shall bind the Holders, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Capital Securities
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Series A Capital Securities Guarantee, both of which
shall be conclusively evi denced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Series A Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall deem it
desirable to receive instrutions with respect to enforcing any remedy or
right or taking any other action hereunder, the Capital Securities
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Series A Capital Securities, (ii)
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<PAGE>
may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(xi) The Capital Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Series A Capital Securities Guarantee.
(xii) Except as otherwise expressly provided by this Series A
Capital Securities Guarantee, the Capital Securities Guarantee Trustee
shall not be under any obligation to take any action that is
discretionary hereunder.
(b) No provision of this Series A Capital Securities Guarantee
shall be deemed to impose any duty or obligation on the Capital Securities
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 Capital Securities 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, or
which would expose the Capital Securities Guarantee Trustee to liability,
financial or otherwise. No permissive power or authority available to the
Capital Securities Guarantee Trustee shall be construed to be a duty.
SECTION 13.3. Not Responsible for Recitals or Issuance of Series A Capital
------------------------------------------------------------
Securities Guarantee
--------------------
The recitals contained in this Series A Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Series A Capital Securities Guarantee.
ARTICLE XIV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 14.1. Capital Securities Guarantee Trustee; Eligibility
-------------------------------------------------
(a) There shall at all times be a Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a
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<PAGE>
corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii),
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 Capital Securities Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the penultimate paragraph thereof.
SECTION 14.2. Appointment, Removal and Resignation of Capital Securities
----------------------------------------------------------
Guarantee Trustee
-----------------
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
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<PAGE>
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Capital Securities Guarantee Trustee.
(f) Upon termination of this Series A Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE XV
GUARANTEE
SECTION 15.1. Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 15.2. Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Series A
Capital Securities 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 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 15.3. Obligations Not Affected
------------------------
Except as otherwise provided herein, the obligations, covenants,
agreements and duties of the Guarantor under this Series A Capital Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
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<PAGE>
(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 Series A 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, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Series A Capital Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Series A Capital Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures permitted by the Indenture);
(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 Series A 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 Series A Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) 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 with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 15.4. Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Series A
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Series A Capital Securities Guarantee or
exercising any trust or power conferred upon the Capital
-15-
<PAGE>
Securities Guarantee Trustee under this Series A Capital Securities Guarantee
provided, however, that, subject to Section 3.1, the Capital Securities
- -------- -------
Guarantee Trustee shall have the right to decline to follow any such direction
if the Capital Securities Guarantee Trustee shall determine that the action so
directed would be unjustly prejudicial to the holders not taking part in such
direction or if the Capital Securities Guarantee Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if the Capital Securities Guarantee Trustee in good faith by its
Responsible Officers shall determine that the action or proceedings so directed
would involve the Capital Securities Guarantee Trustee in personal liability.
(b) If the Capital Securities Guarantee Trustee fails to enforce such
Series A Capital Securities Guarantee, any Holder may institute a legal
proceeding directly against the Guarantor to enforce the Capital Securities
Guarantee Trustee's rights under this Series A Capital Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other person or entity. The Guarantor waives
any right or remedy to require that any action be brought first against the
Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 15.5. Guarantee of Payment
--------------------
This Series A Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 15.6. Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Series A Capital Securities Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Series A Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Series A Capital Securities Guarantee. 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 15.7. Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series A
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 Series
A Capital Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.
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<PAGE>
ARTICLE XVI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 16.1. Limitation of Transactions
--------------------------
So long as any Capital Securities remain outstanding, the Guarantor
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Guarantor's capital stock (which includes common and preferred stock), (ii) make
any payment of principal, interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor (including any Other Debentures)
that rank pari passu with or junior in right of payment to the Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Guarantor of any securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in right of payment to the Junior Subordinated Debentures (other than (a)
dividends or distributions in shares of or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a direct result of, and only to the extent
required in order to avoid the issuance of fractional shares of capital stock
following, a reclassification of the Guarantor's capital stock or the exchange
or conversion of one class or series of the Guarantor's capital stock for
another class or series of the Guarantor's capital stock or pursuant to an
acquisition in which fractional shares of the Guarantor's capital stock would
otherwise be issued, (e) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, and (f)
purchases of common stock related to the issuance of common stock or rights
under any benefit plan for directors, officers, agents or employees of the
Guarantor or its subsidiaries or any of the Guarantor's dividend reinvestment or
director, officer, agent or employee stock purchase plans) if at such time (i)
an Event of Default (as defined in the Indenture) shall have occurred and be
continuing, or would occur upon the taking of any action specified in clauses
(i) through (iii) above, (ii) there shall have occurred any event of which the
Guarantor has actual knowledge that (a) is, or with the giving of notice or the
lapse of time, or both, would be an Event of Default (as defined in the
Indenture) and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (iii) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Series A Capital Securities Guarantee or (iv) the
Guarantor shall have given notice of its election of the exercise of its right
to extend the interest payment period pursuant to Section 16.01 of the Indenture
or with respect to certain other debentures of the Guarantor and any such
extension shall be continuing.
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<PAGE>
SECTION 16.2. Ranking
-------
This Series A Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Series A Capital Securities Guarantee as if (x) such Article XV were
set forth herein in full and (y) such obligations were substituted for the term
"Securities" appearing in such Article XV, (ii) pari passu with the Debentures,
the Other Debentures and with the most senior preferred or preference stock now
or hereafter issued by the Guarantor and with any Other Guarantee (as defined
herein) and any Other Common Securities Guarantee and any guarantee now or
hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
ARTICLE XVII
TERMINATION
SECTION 17.1. Termination
-----------
This Series A Capital Securities Guarantee shall terminate (i) upon
full payment of the Redemption Price (as defined in the Declaration) of all
Series A Capital Securities, (ii) upon liquidation of the Issuer, the full
payment of the amounts payable in accordance with the Declaration or the
distribution of the Debentures to the Holders of all of the Series A Capital
Securities or (iii) upon exchange of all the Series A Capital Securities for the
Series B Capital Securities in the Exchange Offer and the execution and delivery
of the Series B Capital Securities Guarantee. Notwithstanding the foregoing,
this Series A Capital Securities Guarantee 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 under the Series A Capital Securities or under this
Series A Capital Securities Guarantee.
ARTICLE XVIII
COMPENSATION AND EXPENSES OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor covenants and agrees to pay to the Capital Securities
Guarantee Trustee from time to time, and the Capital Securities Guarantee
Trustee shall be entitled to, such compensation as shall be agreed to in
writing between the Guarantor and the Capital Securities Guarantee Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Guarantor will pay or
reimburse the Capital Securities Guarantee Trustee upon its request for all
reasonable expenses, disburse-
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ments and advances incurred or made by the Capital Securities Guarantee Trustee
in accordance with any of the provisions of this Capital Securities Guarantee
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Guarantor also covenants to indemnify the Capital Securities Guarantee
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Capital Securities
Guarantee Trustee) incurred without negligence or bad faith on the part of the
Capital Securities Guarantee Trustee and arising out of or in connection with
the acceptance or administration of this guarantee, including the costs and
expenses of defending itself against any claim of liability in the premises. The
obligations of the Guarantor under this Article VIII to compensate and indemnify
the Capital Securities Guarantee Trustee and to pay or reimburse the Capital
Securities Guarantee Trustee for expenses, disbursements and advances shall be
secured by a lien prior to that of the Series A Capital Securities upon all
property and funds held or collected by the Capital Securities Guarantee Trustee
as such, except funds held in trust for the benefit of the holders of particular
Series A Capital Securities.
The provisions of this Article shall survive the termination of this
Capital Securities Guarantee or the earlier resignation or removal of the
Capital Securities Guarantee Trustee.
ARTICLE XIX
INDEMNIFICATION
SECTION 19.1. Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Series A
Capital Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Series A Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
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<PAGE>
SECTION 19.2. Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 9.2 shall survive the termination of this
Series A Capital Securities Guarantee.
ARTICLE XX
MISCELLANEOUS
SECTION 20.1. Successors and Assigns
----------------------
All guarantees and agreements contained in this Series A Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
then outstanding.
SECTION 20.2. Amendments
----------
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Series A Capital Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Securities (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined). The provisions of the Declaration
with respect to consents to amendments thereof (whether at a meeting or
otherwise) shall apply to the giving of such approval.
SECTION 20.3. Notices
-------
All notices provided for in this Series A Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders and the Capital Securities Guarantee
Trustee):
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AFC Capital Trust I
c/o Allmerica Financial Corporation
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: Chief Financial Officer
Telecopy: (508) 852-7588
(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders and the Issuer):
The Chase Manhattan Bank
Global Trust Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Global Trust Services
Telecopy: (212) 946-8161
(c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Series A Capital Securities and the Capital Securities Guarantee
Trustee):
Allmerica Financial Corporation
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: Chief Financial Officer
Telecopy: (508) 852-7588
(d) If given to any Holder of Series A Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 20.4. Exchange Offer
--------------
In the event an Exchange Offer Registration Statement (as defined in
the Registration Rights Agreement) becomes effective and the Issuer issues any
Series B Capital Securities in the Exchange Offer, the Guarantor will enter into
a new capital securities guarantee agree-
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<PAGE>
ment, in substantially the same form as this Series A Capital Securities
Guarantee, with respect to the Series B Capital Securities.
SECTION 20.5. Benefit
-------
This Series A Capital Securities Guarantee is solely for the benefit of
the Holders and, subject to Section 3.1(a), is not separately transferable from
the Series A Capital Securities.
SECTION 20.6. Governing Law
-------------
THIS SERIES A CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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<PAGE>
THIS SERIES A CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
ALLMERICA FINANCIAL CORPORATION, as
Guarantor
By:/s/ Edward J. Parry III
--------------------------------------
Name: Edward J. Parry III
Title: Vice President and Chief Financial Officer
THE CHASE MANHATTAN BANK, as Capital
Securities Guarantee Trustee
By:/s/ Andrea Koster-Crair
--------------------------------------
Name: Andrea Koster-Crair
Title:
<PAGE>
EXHIBIT 5
- --------------------------------------------------------------------------------
COMMON SECURITIES GUARANTEE AGREEMENT
Allmerica Financial Corporation
Dated as of February 3, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS AND INTERPRETATION..................................... 3
ARTICLE II GUARANTEE......................................................... 4
SECTION 2.1. Guarantee.................................................. 4
SECTION 2.2. Waiver of Notice and Demand................................ 4
SECTION 2.3. Obligations Not Affected................................... 4
SECTION 2.4. Rights of Holders.......................................... 5
SECTION 2.5. Guarantee of Payment....................................... 5
SECTION 2.6. Subrogation................................................ 5
SECTION 2.7. Independent Obligations.................................... 6
ARTICLE III LIMITATION OF TRANSACTIONS; SUBORDINATION........................ 6
SECTION 3.1. Limitation of Transactions................................. 6
SECTION 3.2. Ranking.................................................... 7
ARTICLE IV TERMINATION....................................................... 7
SECTION 4.1. Termination................................................ 7
ARTICLE V MISCELLANEOUS...................................................... 8
SECTION 5.1. Successors and Assigns..................................... 8
SECTION 5.2. Amendments................................................. 8
SECTION 5.3. Notices.................................................... 8
SECTION 5.4. Benefit.................................................... 9
SECTION 5.5. Governing Law.............................................. 9
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<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as
of February 3, 1997, is executed and delivered by Allmerica Financial
Corporation, a Delaware corporation (the "Guarantor"), for the benefit of the
Holders (as defined herein) from time to time of the Common Securities (as
defined herein) of AFC Capital Trust I, a Delaware business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of February 3, 1997, among the Trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 9,279 common securities designated the 8.207% Common
Securities (the "Common Securities"), having an aggregate stated liquidation
amount of $9,279,000;
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Series A Capital Securities Guarantee") for the benefit of the
holders of the Series A Capital Securities (as defined in the Declaration) and
upon consummation of the Exchange Offer (as defined in the Declaration) will
execute and deliver a guarantee agreement (the "Series B Capital Securities
Guarantee") for the benefit of the holders of the Series B Capital Securities
(as defined in the Declaration), each in substantially identical terms to this
Common Securities Guarantee, except that if an Event of Default (as defined in
the Declaration) has occurred and is continuing, the rights of Holders of the
Common Securities to receive Guarantee Payments under this Common Securities
Guarantee are subordinated to the rights of holders of Capital Securities to
receive Guarantee Payments under the Series A Capital Securities Guarantee and
the Series B Capital Securities Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby acknowledges shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
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<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
In this Common Securities Guarantee, unless the context otherwise
requires:
SECTION 1.1. Capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Article I;
SECTION 1.2. Terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee;
SECTION 1.3. a term defined anywhere in this Common Securities Guarantee has
the same meaning throughout;
SECTION 1.4. all references to "the Common Securities Guarantee" or "this Common
Securities Guarantee" are to this Common Securities Guarantee as modified,
supplemented or amended from time to time;
SECTION 1.5. all references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee unless
otherwise specified; and
SECTION 1.6. a reference to the singular includes the plural and vice versa.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions that are
required to be paid on such Common Securities to the extent the Issuer has funds
on hand legally available therefor at such time, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer has funds on hand legally available
therefor at such time, with respect to any Common Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary termination
and liquidation of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Common Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Common Securities to the date of
payment, to the extent the Issuer has funds on hand legally available therefor,
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"). If an Event of Default has occurred and is continuing, no
Guarantee Payments with respect to the Common Securities shall be made until
holders of Capital Securities shall be paid in full the Guarantee Payments to
which they are entitled under the Series A Capital Securities Guarantee and the
Series B Capital Securities Guarantee.
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<PAGE>
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Common Securities.
"Issuer" means AFC Capital Trust I.
"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to common securities (if any) similar to the Common Securities
issued by other trusts to be established by the Guarantor (if any), in each case
similar to the Issuer.
ARTICLE II
GUARANTEE
SECTION 2.1. Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.2. Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this Common Securities
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 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 2.3. Obligations Not Affected.
------------------------
Except as otherwise provided herein, the obligations, covenants, agreements
and duties of the Guarantor under this Common Securities Guarantee 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 Common 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, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Common Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Common Securities (other than an
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<PAGE>
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures permitted by the Indenture);
(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 Common 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 Common 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 2.3 that the obligations of the Guarantor with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4. Rights of Holders
-----------------
The Guarantor expressly acknowledges that any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Common Securities Guarantee, without first instituting a legal proceeding
against the Issuer or any other Person.
SECTION 2.5. Guarantee of Payment
--------------------
This Common Securities Guarantee creates a guarantee of payment and not of
collection.
SECTION 2.6. Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Common Securities Guarantee; provided, however, that the
-------- -------
Guarantor shall not (except to the extent required
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<PAGE>
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 Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. 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 2.7. Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Common Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Common Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1. Limitation of Transactions
--------------------------
So long as any Common Securities remain outstanding, the Guarantor shall
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Guarantor's
capital stock (which includes common and preferred stock), (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Guarantor (including any Other Debentures) that rank pari
passu with or junior in right of payment to the Junior Subordinated Debentures
or (iii) make any guarantee payments with respect to any guarantee by the
Guarantor of any securities of any subsidiary of the Guarantor (including Other
Guarantees) if such guarantee ranks pari passu with or junior in right of
payment to the Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a direct result of, and only to the extent required in order
to avoid the issuance of fractional shares of capital stock following, a
reclassification of the Guarantor's capital stock or the exchange or conversion
of one class or series of the Guarantor's capital stock for another class or
series of the Guarantor's capital stock or pursuant to an acquisition in which
fractional shares of the Guarantor's capital stock would otherwise be issued,
(e) the purchase of fractional interests in shares of the Guarantor's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (f) purchases of common
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<PAGE>
stock related to the issuance of common stock or rights under any benefit plan
for directors, officers, agents or employees of the Guarantor or its
subsidiaries or any of the Guarantor's dividend reinvestment or director,
officer, agent or employee stock purchase plans) if at such time (i) an Event of
Default (as defined in the Indenture) shall have occurred and be continuing, or
would occur upon the taking of any action specified in clauses (i) through (iii)
above, (ii) there shall have occurred any event of which the Guarantor has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be an Event of Default (as defined in the Indenture) and (b) in
respect of which the Guarantor shall not have taken reason able steps to cure,
(iii) if such Debentures are held by the Property Trustee, the Guarantor shall
be in default with respect to its payment of any obligations under this Series A
Capital Securities Guarantee or (iv) the Guarantor shall have given notice of
its election of the exercise of its right to extend the interest payment period
pursuant to Section 16.01 of the Indenture or with respect to certain other
debentures of the Guarantor and any such extension shall be continuing.
SECTION 3.2. Ranking
-------
This Common Securities Guarantee will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
Senior Indebtedness (as defined in the Indenture), to the same extent and in the
same manner that the Debentures are subordinated to Senior Indebtedness pursuant
to the Indenture, it being understood that the terms of Article XV of the
Indenture shall apply to the obligations of the Guarantor under this Common
Securities Guarantee as if (x) such Article XV were set forth herein in full and
(y) such obligations were substituted for the term "Securities" appearing in
such Article XV, (ii) pari passu with the Debentures and with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any Other Guarantee and any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE IV
TERMINATION
SECTION 4.1. Termination
-----------
This Common Securities Guarantee shall terminate (i) upon full payment of
the Redemption Price of all Common Securities, (ii) upon the distribution of the
Debentures to all the Holders or (iii) upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Common Securities Guarantee 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 under the Common Securities or
under this Common Securities Guarantee.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1. Successors and Assigns
----------------------
All guarantees and agreements contained in this Common Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders then outstanding.
SECTION 5.2. Amendments
----------
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a majority in liquidation amount of all the outstanding
Common Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders apply to the giving of such approval.
SECTION 5.3. Notices
-------
All notices provided for in this Common Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders):
AFC Capital Trust I
c/o Allmerica Financial Corporation
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: Chief Financial Officer
Telecopy: (508) 852-7588
(b) if given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders):
Allmerica Financial Corporation
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: Chief Financial Officer
Telecopy: (508) 852-7588
-8-
<PAGE>
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 5.4. Benefit
-------
This Common Securities Guarantee is solely for the benefit of the Holders
of the Common Securities and is not separately transferable from the Common
Securities.
SECTION 5.5. Governing Law
-------------
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
-9-
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.
ALLMERICA FINANCIAL CORPORATION
By:/s/ Edward J. Parry III
-----------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
-10-
<PAGE>
EXHIBIT 6
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated February 3, 1997
among
ALLMERICA FINANCIAL CORPORATION
AFC CAPITAL TRUST I
and
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
as Initial Purchasers
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
---------
into as of February 3, 1997 among ALLMERICA FINANCIAL CORPORATION, a Delaware
corporation (the "Company"), AFC CAPITAL TRUST I, a business trust formed under
-------
the laws of the state of Delaware (the "Trust"), and MERRILL LYNCH, PIERCE,
-----
FENNER & SMITH INCORPORATED ("Merrill Lynch") and MORGAN STANLEY & CO.
-------------
INCORPORATED (together with Merrill Lynch, the "Initial Purchasers").
----------
This Agreement is made pursuant to the Purchase Agreement dated February
3, 1997 (the "Purchase Agreement"), among the Company, as issuer of the Series A
------------------
8.207% Junior Subordinated Deferrable Interest Debentures due 2027 (the "Series
------
A Subordinated Debentures"), the Trust and the Initial Purchasers, which
- -------------------------
provides for among other things, the sale by the Trust to the Initial Purchasers
of 300,000 of the Trust's Series A 8.207% Capital Securities, liquidation amount
$1,000 per Capital Security (the "Series A Capital Securities") the proceeds of
---------------------------
which will be used by the Trust to purchase Series A Subordinated Debentures.
The Series A Capital Securities, together with the Series A Subordinated
Debentures and the Company's guarantee of the Series A Capital Securities (the
"Series A Capital Securities Guarantee") are collectively referred to as the
-------------------------------------
"Series A Securities". In order to induce the Initial Purchasers to enter into
the Purchase Agreement, the Company and the Trust have agreed to provide to the
Initial Purchasers and their direct and indirect transferees the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following
-----------
capitalized defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
------
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
-----------------
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day
------------
on which banking institutions in the City of New York are authorized or required
by law or executive order to close.
"Closing Time" shall mean the Closing Time as defined in the Purchase
------------
Agreement.
"Company" shall have the meaning set forth in the preamble to this
-------
Agreement and also includes the Company's successors and permitted assigns.
<PAGE>
2
"Declaration" or "Declaration of Trust" shall mean the Amended and
----------- --------------------
Restated Declaration of Trust, dated as of February 3, 1997, by the trustees
named therein and the Company as sponsor.
"Depositary" shall mean The Depository Trust Company, or any other
----------
depositary appointed by the Trust; provided, however, that such depositary must
-------- -------
have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section 2(b)
--------------------
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the Trust to
--------------
the Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities pursuant
to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
---------------------------
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
-------------------------------------
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
---------------
hereof.
"Exchange Securities" shall mean (i) with respect to the Series A
-------------------
Subordinated Debentures, the Series B 8.207% Junior Subordinated Deferrable
Interest Debentures due February 3, 2027 (the "Exchange Debentures") containing
-------------------
terms identical to the Series A Subordinated Debentures (except that they will
not contain terms with respect to the transfer restrictions under the Securities
Act, will not require transfers thereof to be in minimum blocks of $100,000
principal amount and will not provide for any increase in the interest rate
thereon), (ii) with respect to the Series A Capital Securities, the Trust's
Series B 8.207% Capital Securities, liquidation amount $1,000 per Capital
Security (the "Exchange Capital Securities") which will have terms identical to
---------------------------
the Series A Capital Securities (except they will not contain terms with respect
to transfer restrictions under the Securities Act, will not require minimum
transfers thereof to be in blocks of $100,000 liquidation amount and will not
provide for any increase in the Distribution rate thereon) and (iii) with
respect to the Series A Capital Securities Guarantee, the Company's guarantee
(the "Exchange Capital Securities Guarantee")
-------------------------------------
<PAGE>
3
of the Exchange Capital Securities which will have terms identical to the Series
A Capital Securities Guarantee.
"Holder" shall mean the Initial Purchasers, for so long as they own any
------
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Series A
---------
Subordinated Debentures and the Exchange Debentures dated as of February 3, 1997
among the Company, as issuer, and The Chase Manhattan Bank, as trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble to
------------------
this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
----------
"Issue Date" shall mean the date of original issuance of the Securities.
----------
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
------------------
hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
----------------
liquidation amount (as defined in the Declaration) of outstanding Series A
Capital Securities or Exchange Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
---------------------------
Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
------
unincorporated organization, limited liability Company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
----------------
hereof.
"Private Exchange Securities" shall have the meaning set forth in
---------------------------
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
<PAGE>
4
"Purchase Agreement" shall have the meaning set forth in the preamble to
------------------
this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
-------
"Registrable Securities" shall mean the Series A Securities and, if
----------------------
issued, the Private Exchange Securities; provided, however, that Series A
-------- -------
Securities or Private Exchange Securities, as the case may be, shall cease to be
Registrable Securities when (i) a Registration Statement with respect to such
Series A Securities or Private Exchange Securities for the exchange or resale
thereof, as the case may be, shall have been declared effective under the
Securities Act and such Series A Securities or Private Exchange Securities, as
the case may be, shall have been disposed of pursuant to such Registration
Statement, (ii) such Series A Securities or Private Exchange Securities, as the
case may be, shall have been sold to the public pursuant to Rule 144 (or any
similar provision then in force, but not Rule 144A) under the Securities Act,
(iii) such Series A Securities or Private Exchange Securities, as the case may
be, shall have ceased to be outstanding or (iv) with respect to the Series A
Securities, such Series A Securities have been exchanged for Exchange Securities
upon consummation of the Exchange Offer and are thereafter freely tradeable by
the holder thereof (other than an affiliate of the Company).
"Registration Default" shall have the meaning set forth in Section 2(e)
--------------------
hereof.
"Registration Expenses" shall mean any and all expenses incident to
---------------------
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
----
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees,
(v) the fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company, including the expenses of any "cold
comfort" letters required by or incident to such performance and compliance,
(vi) the fees and expenses of the Trustee, and any exchange agent or custodian,
(vii) all fees and expenses incurred in connection with the listing, if any, of
any of the Registrable Securities on any securities
<PAGE>
5
exchange or exchanges, and (viii) the reasonable fees and expenses of any
special experts retained by the company in connection with any Registration
Statement.
"Registration Statement" shall mean any registration statement of the
----------------------
Company and the Trust which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein, provided
that for purposes of this Agreement, any reference in this Agreement to the
obligation of the Company to use its best efforts to have a Registration
Statement (whether an Exchange Offer Registration Statement or a Shelf
Registration Statement) become or be declared effective or remain effective
shall refer only to the registration statement forming a part of such
Registration Statement.
"Rule 144(k) Period" shall mean the period of three years (or such
------------------
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as amended from
--------------
time to time.
"Series A Securities" shall have the meaning set forth in the preamble
-------------------
to this Agreement.
"Shelf Registration" shall mean a registration effected pursuant to
------------------
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
------------------------
2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
-----------------------------
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
----------------------------
statement of the Company and the Trust pursuant to the provisions of Section
2(b) hereof which covers all of the Registrable Securities or all of the Private
Exchange Securities, as the case may be, on an appropriate form under Rule 415
under the Securities Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
---
<PAGE>
6
"Trustees" shall mean any and all trustees with respect to (i) the
--------
Series A Capital Securities under the Declaration, (ii) the Series A
Subordinated Debentures under the Indenture and (iii) the Series A Capital
Securities Guarantee.
2. Registration Under the Securities Act.
-------------------------------------
(a) Exchange Offer. Subject to Section 2(b) below, to the
--------------
extent not prohibited by any applicable law or applicable interpretation of the
staff of the SEC, the Company and the Trust shall, for the benefit of the
Holders, at the Company's cost, use its best efforts to (i) cause to be filed
with the SEC within 150 days after the Issue Date an Exchange Offer Registration
Statement on an appropriate form under the Securities Act covering the Exchange
Offer, (ii) cause such Exchange Offer Registration Statement to be declared
effective under the Securities Act by the SEC not later than the date which is
180 days after the Issue Date, and (iii) keep such Exchange Offer Registration
Statement effective for not less than 30 calendar days (or longer if required by
applicable law) after the date notice of the Exchange Offer is mailed to the
Holders. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company and the Trust shall promptly commence the Exchange Offer, it being
the objective of such Exchange Offer to enable each Holder eligible and electing
to exchange Registrable Securities for a like principal amount of Exchange
Debentures or a like liquidation amount of Exchange Capital Securities, together
with the Exchange Guarantee, as applicable (assuming that such Holder is not an
affiliate of the Company within the meaning of Rule 405 under the Securities Act
and is not a broker-dealer tendering Registrable Securities acquired directly
from the Company for its own account, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities) to transfer such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company and the
Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as the
"Exchange Period");
---------------
(iii) utilize the services of the Depositary for the Exchange Offer;
<PAGE>
7
(iv) permit Holders to withdraw tendered Series A Securities at any
time prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Series A Securities delivered for exchange, and
a statement that such Holder is withdrawing his election to have such Series A
Securities exchanged;
(v) notify each Holder, in such letter of transmittal or otherwise,
that any Series A Security not tendered by such Holder in the Exchange Offer
will remain outstanding and continue to accrue interest or accumulate
distributions, as the case may be, but will not retain any rights under this
Agreement (except in the case of the Initial Purchasers and Participating
Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If any Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company and the Trust of a written request from such Initial Purchaser, and
subject to any restrictions or requirements imposed on such exchange by law, the
Company and the Trust, as applicable, shall issue and deliver to such Initial
Purchaser in exchange (the "Private Exchange") for the Series A Securities held
----------------
by such Initial Purchaser, a like liquidation amount of Capital Securities of
the Trust, together with the Exchange Guarantee, or a like principal amount of
the Series A Subordinated Debentures of the Company, as applicable, that are
identical (except that such securities may bear a customary legend with respect
to restrictions on transfer pursuant to the Securities Act) to the Exchange
Securities (the "Private Exchange Securities") and which are issued pursuant to
---------------------------
the Indenture, the Declaration or the Guarantee (which provides that the
Exchange Securities will not be subject to the transfer restrictions set forth
in the Indenture or the Declaration, as applicable, and that the Exchange
Securities, the Private Exchange Securities and the Securities will vote and
consent together on all matters as one class and that neither the Exchange
Securities, the Private Exchange Securities nor the Securities will have the
right to vote or consent as a separate class on any matter). The Private
Exchange Securities shall be of the same series as the Exchange Securities and
the Company and the Trust will seek to cause the CUSIP Service Bureau to issue
the same CUSIP Numbers for the Private Exchange Securities as for the Exchange
Securities issued pursuant to the Exchange Offer. Any Initial Purchaser making a
request for a Private Exchange shall use its best efforts to assist the Company
in completing such Private Exchange.
<PAGE>
8
As soon as practicable after the close of the Exchange Offer
and, if applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Series A Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Series A Securities or portions thereof so accepted for
exchange by the Company and the Trust; and
(iii) issue, and cause the applicable Trustee under the Indenture, the
Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange Securities,
as applicable, equal in principal amount to the principal amount of the Series A
Subordinated Debentures or equal in liquidation amount to the liquidation amount
to the Series A Capital Securities (together with the guarantee thereof) as are
surrendered by such Holder.
Distributions on each Exchange Capital Security and interest
on each Exchange Debenture and Private Exchange Security issued pursuant to the
Registered Exchange Offer and in the Private Exchange will accrue from the last
date on which a Distribution or interest was paid on the Series A Capital
Security or the Series A Subordinated Debenture surrendered in exchange
therefore or, if no Distribution or interest has been paid on such Series A
Capital Security or Series A Subordinated Debenture, from the Issue Date. To the
extent not prohibited by any law or applicable interpretation of the staff of
the SEC, the Company and the Trust shall use their best efforts to complete the
Exchange Offer as provided above, and shall comply with the applicable
requirements of the Securities Act, the Exchange Act and other applicable laws
in connection with the Exchange Offer. The Exchange Offer shall not be subject
to any conditions, other than that the Exchange Offer does not violate
applicable law or any applicable interpretation of the staff of the SEC. Each
Holder of Registrable Securities who wishes to exchange such Registrable
Securities for Exchange Securities in the Exchange Offer will be required to
make certain customary representations in connection therewith, including, in
the case of any Holder of Series A Capital Securities and/or Series A
Subordinated Debentures, representations that (i) it is not an affiliate of the
Trust or the Company, (ii) the Exchange Securities to be received by it were
acquired in the ordinary course of its business and (iii) at the time of the
Exchange Offer, it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Capital
Securities. The Company and the Trust shall inform the Initial Purchasers, after
consultation with the Trustee, of the names and addresses of the Holders to whom
the Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
<PAGE>
9
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Trust shall have no further obligation
to register the Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Company,
------------------
the Trust or the Majority Holders reasonably determine, after conferring with
counsel (which may be in-house counsel), that the Exchange Offer Registration
provided in Section 2(a) above is not available because of any change in law or
in currently prevailing interpretations of the staff of the SEC, (ii) the
Exchange Offer Registration Statement is not declared effective within 180 days
of the Issue Date, (iii) upon the request of any Initial Purchaser with respect
to any Registrable Securities held by it, if such Initial Purchaser is not
permitted, in the reasonable opinion of Shearman & Sterling, pursuant to
applicable law or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities that are freely
tradeable without restriction under the Securities Act and applicable blue sky
or state securities laws or (iv) upon the request of the Company or the Trust if
a Tax Event (as defined in the Indenture) in respect of the issuance of the
Exchange Securities or the Private Exchange Securities (any of the events
specified in (i) - (iv) being a "Shelf Registration Event" and the date of
------------------------
occurrence thereof, the "Shelf Registration Event Date"), the Company and the
-----------------------------
Trust shall, at their cost, use their best efforts to cause to be filed, in the
case of a Shelf Registration Event pursuant to (ii) above, as promptly as
practicable after such Shelf Registration Event Date, and, in all other cases,
within 150 days of the Issue Date, a Shelf Registration Statement providing for
the sale by the Holders of all of the Registrable Securities, and shall use its
best efforts to have such Shelf Registration Statement declared effective by the
SEC as soon as practicable in the case of a Shelf Registration Event pursuant to
(ii) above and , in all other cases, within 180 days of the Issue Date. No
Holder of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
<PAGE>
10
The Company and the Trust agree to use their best efforts,
subject to Section 3(i) and the last paragraph of Section 3, to keep the Shelf
Registration Statement continuously effective for the Rule 144(k) Period
(subject to extension pursuant to the last paragraph of Section 3 hereof) or for
such shorter period which will terminate when all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding (the "Effectiveness Period").
--------------------
The Company and the Trust shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration. The Company and the Trust
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder a reasonable number of copies of the Prospectus which is part of
the Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and use its best efforts to take all other
actions required to permit resales of the Registrable Securities. The Company
and the Trust further agree, if necessary, to supplement or amend the Shelf
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and the Company and the Trust
agree to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration
--------
Expenses in connection with the registration pursuant to Section 2(a) or 2(b)
hereof and will reimburse the Initial Purchasers for the reasonable fees and
disbursements of Shearman & Sterling, counsel for the Initial Purchasers,
incurred in connection with the Exchange Offer and, if applicable, the Private
Exchange Offer, and either Shearman & Sterling or any one other counsel
designated in writing by the Majority Holders to act as counsel for the Holders
of the Registrable Securities in connection with a Shelf Registration Statement,
which other counsel shall be reasonably satisfactory to the Company. Except as
provided herein, each Holder shall pay all expenses of its counsel, underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
--------------------------------
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
-------- -------
that if, after such registration statement has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or request of the
SEC or any other governmental agency or court relating to the effectiveness of
such registration statement, such registration statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Trust will be deemed not to have used their best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration
<PAGE>
11
Statement, as the case may be, to become, or to remain, effective during the
requisite period if either of them voluntarily take any action which is not in
compliance with the terms of Section 2(b), Sections 3(i) or 3(t), and that would
result in any such Registration Statement not being declared effective or in the
Holders of Registrable Securities covered thereby not being able to exchange or
offer and sell such Registrable Securities during that period unless such action
is required by applicable law.
(e) Liquidated Damages. In the event that (i) (A) neither the
------------------
Exchange Offer Registration Statement nor a Shelf Registration Statement is
filed with the SEC on or prior to the 150th day after the Issue Date or (B)
notwithstanding that the Company and the Trust have consummated or will
consummate an Exchange Offer, the Company and the Trust are required to file a
Shelf Registration Statement and such Shelf Registration Statement is not filed
on or prior to the date required by Section 2(b) hereof, then commencing on the
day after the applicable required filing date, additional interest shall accrue
on the principal amount of the Series A Subordinated Debentures, and additional
Distributions shall accumulate on the liquidation amount of the Series A Capital
Securities, each at a rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the date
required by Section 2(a), in the case of an Exchange Offer Registration
Statement, or Section 2(b), in the case of a Shelf Registration Statement or (B)
notwithstanding that the Company and the Trust have consummated an Exchange
Offer, the Company and the Trust are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not declared effective by the
SEC on or prior to the date required by Section 2(b), then, commencing on the
31st day after the applicable required filing date, additional interest shall
accrue on the principal amount of the Series A Subordinated Debentures, and
additional distributions shall accumulate on the liquidation amount of the
Series A Capital Securities, each at a rate of 0.25% per annum; or
(iii) either (A) the Trust has not exchanged Exchange Capital
Securities for all Series A Capital Securities or the Company has not exchanged
Exchange Capital Securities Guarantees or Exchange Subordinated Debentures for
all Series A Capital Securities Guarantees or Series A Subordinated Debentures
validly tendered, in accordance with the terms of the Exchange Offer on or prior
to the 45th day after the date on which the Exchange Offer Registration
Statement was declared effective or (B) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time prior to expiration of the 144(k) Period
(other than after such time as all Series A Capital Securities have been
disposed of thereunder or otherwise cease to be Registrable Securities within
the meaning of this Agreement), then additional interest shall accrue on the
principal amount of Series A Subordinated Debentures, and additional
distributions shall accumulate on the liquidation amount of the Series A Capital
Securities, each at a rate of 0.25% per annum commencing on (x) the 46th day
after such effective date,
<PAGE>
12
in the case of (A) above, or (y) the day such Shelf Registration Statement
ceases to be effective in the case of (B) above; provided, that if, in the case
of (B) above, such Shelf Registration Statement ceases to be effective as a
result of a Material Event, neither such additional distributions shall
accumulate nor such additional interest shall accrue so long as such Shelf
Registration Statement again becomes effective within 60 days of the date notice
of such Material Event was received by holders of Capital Securities, Guarantees
and Junior Subordinated Debentures; and provided further, that if such Shelf
Registration Statement does not again become effective within such 60-day
period, additional interest shall accrue and additional distributions shall
accumulate, each at a rate of 0.25% per annum, commencing on the 61st day after
such Shelf Registration Statement ceases to be effective.
Notwithstanding the foregoing, neither the additional interest rate on the
Junior Subordinated Debentures, nor the additional distributions rate on the
Liquidation Amount of the Trust Securities may exceed 0.25% per annum, provided,
that (1) upon the filing of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, Exchange Capital Securities Guarantees
and Exchange Subordinated Debentures for all Series A Capital Securities, Series
A Capital Securities Guarantees and Series A Subordinated Debentures tendered
(in the case of clause (iii)(A) above), or, upon the effectiveness of the Shelf
Registration Statement which had ceased to remain effective (in the case of
clause (iii)(B) above), additional interest on the Series A Subordinated
Debentures, and additional distributions on the liquidation amount of the Series
A Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
Any amounts of additional interest and additional Distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above ("Liquidated Damages") will be
------------------
payable in cash on the next succeeding February 15 or August 15, as the case may
be, to holders on the relevant record dates for the payment of interest and
Distributions pursuant to the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies
--------------------
available to the Holders, the Company and the Trust acknowledge that any failure
by the Company or the Trust to comply with its obligations under Section 2(a)
and Section 2(b) hereof may result in material irreparable injury to the Holders
for which there is no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, any Holder may obtain such relief as may be required to specifically
enforce the Company's and the Trust's obligations under Section 2(a) and Section
2(b) hereof.
<PAGE>
13
3. Registration Procedures. In connection with the
-----------------------
obligations of the Company and the Trust with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and the Trust
shall use their best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company and the Trust, (ii) shall, in the case of a
Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and (iii) shall comply as to
form in all material respects with the requirements of the applicable
form and include (or incorporated by reference) all financial
statements required by the SEC to be included therein; and use its best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof; provided,
however, that if (1) such filing is pursuant to Section 2(b), or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company and
the Trust shall furnish to and afford the Holders of the Registrable
Securities and each such Participating Broker-Dealer, as the case may
be, covered by such Registration Statement, their counsel and the
managing underwriters, if any, a reasonable opportunity to review
copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to
be filed. The Company and the Trust shall not file any Registration
Statement or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review
prior to the filing of such document if the Majority Holders or such
Participating Broker-Dealer, as the case may be, their counsel or the
managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Company or the Trust or requested by the SEC, by any required
prospectus supplement
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provision then in force) under the Securities Act, and comply with the
provisions of the Securities Act, the Exchange Act and the rules and
regulations promulgated thereunder applicable to it with respect to the
disposition of all securities covered by each Registration Statement
during the Effectiveness Period or the Applicable Period, as the case
may be, in accordance with the intended method or methods of
distribution by the
<PAGE>
14
selling Holders thereof described in this Agreement (including sales by
any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is
being filed and advising such Holder that the distribution of
Registrable Securities will be made in accordance with the method
selected by the Majority Holders; and (ii) furnish to each Holder of
Registrable Securities included in the Shelf Registration Statement and
to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus,
including each Preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) consent to the use
of the Prospectus or any amendment or supplement thereto by each of the
Selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts
to register or qualify the Registrable Securities under all applicable
state securities or "blue sky" laws of such jurisdictions by the time
the applicable Registration Statement is declared effective by the SEC
as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request in writing in advance
of such date of effectiveness, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder
and underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided, however,
that the Company and the Trust shall not be required to (i) qualify as
a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d), (ii) file any general consent to service of process in
any jurisdiction where it would not otherwise be subject to such
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company or the Trust has
received prior written notice that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, are seeking to sell Exchange
Securities and are required to deliver Prospectuses, notify each Holder
of Registrable Securities, or such Participating Broker-Dealers, as the
case may be, their counsel and the managing underwriters, if any,
promptly and promptly confirm such notice in writing (i) when a
<PAGE>
15
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration Statement
or the qualification of the Registrable Securities or the Exchange
Securities to be offered sold by any Participating Broker-Dealer in any
jurisdiction described in paragraph 3(d) hereof or the initiation of
any proceedings for that purpose, (iv) [intentionally omitted], and (v)
of the happening of any event or the failure of any event to occur or
the discovery of any facts or otherwise (each a "Material Event"),
during the Effectiveness Period which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and (vi) the Company and the Trust's reasonable
determination that a post-effective amendment to the Registration
Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such
Shelf Registration Statement, without charge, at least one conformed
copy of each Registration Statement relating to such Shelf Registration
and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and in
such denominations (consistent with the provisions of the Indenture and
the Declaration) and registered in such names as the selling Holders or
the underwriters may reasonably request at least two Business Days
prior to the closing of any sale of Registrable Securities pursuant to
such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts, following the resolution or satisfaction of any Material
Event, to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein
<PAGE>
16
by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and to notify each Holder to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) [Reserved];
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Series A Capital Securities (and if the Trust has made a
distribution of the Series A Subordinated Debentures to the Holders of
the Series A Capital Securities, the Series A Subordinated Debentures
or the Exchange Subordinated Debentures) as the case may be, not later
than the effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible for
deposit with the Depositary;
(l) cause the Indenture, the Declaration, the Guarantee and
the Exchange Guarantee to be Qualified under the Trust Indenture Act of
1939 (the "TIA"), in connection with the registration of the Exchange
---
Securities or Registrable Securities, as the case may be, and effect
such changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute, and use
its best efforts to cause the relevant trustee to execute, all
documents as may be required to affect such changes, and all other
forms and documents required to be filed with the SEC to enable such
documents to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten
registration, if requested by (x) any Initial Purchaser, in the case
where an Initial Purchaser holds Series A Securities acquired by it as
part of its initial distribution and (y) other Holders of Series A
Securities covered thereby: (i) make such representations and
warranties to Holders of such Registrable Securities and the
underwriters (if any), with respect to the business of the Trust, the
Company and its subsidiaries as then conducted and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in
<PAGE>
17
underwritten offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and the Trust and
updates thereof (which may be in the form of a reliance letter) in form
and substance reasonably satisfactory to the managing underwriters (if
any) and the Holders of a majority in principal amount of the
Registrable Securities being sold, addressed to each selling Holder and
the underwriters (if any) covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (iii) obtain "cold comfort" letters and
updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountants
of the Company and the Trust (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company and the
Trust or of any business acquired by the Company and the Trust for
which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings and such other matters as reasonably
requested by such underwriters in accordance with, and subject to,
Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in
Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such
underwriters and selling Holders). The above shall be done at each
closing under such underwriting agreement, or as and to the extent
required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities during the Applicable Period, make
reasonably available for inspection by any selling Holder of such
Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
----------
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, the Company
and its subsidiaries (collectively, the "Records") as shall be
-------
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Company and its
<PAGE>
18
subsidiaries to supply all relevant information in each case reasonably
requested by any such Inspector in connection with such Registration
Statement provided, however, that the foregoing inspection and
-------- -------
information gathering shall be coordinated on behalf of the holders by
the Initial Purchasers and on behalf of the other parties, by one
counsel designated by the Initial Purchasers and on behalf of such
other parties as described in Section 2(c) hereof. Records which the
Company and the Trust determine, in good faith, to be confidential and
any records which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction or is necessary in connection with any
action, suit or proceeding or (iii) the information in such Records has
been made generally available to the public. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer
will be required as a condition to the receipt of such information to
agree in writing that information obtained by it as a result of such
inspections shall be kept confidential by the recipient thereof and
shall be deemed confidential and shall not be used by it as the basis
for any market transactions in the securities of the Trust or the
Company unless and until such is made generally available to the
public. Each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to further agree in
writing that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company
and allow the Company at its expense to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and
make generally available to its securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12- month
periods;
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to
the Company addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or the
Private Exchange, as the case may be, and which includes an opinion
that (i) the Company and the Trust, as the case requires, has duly
authorized,
<PAGE>
19
executed and delivered the Exchange Securities and Private Exchange
Securities, and (ii) each of the Exchange Securities or the Private
Exchange Securities, as the case may be, constitute a legal, valid and
binding obligation of the Company or the Trust, as the case requires,
enforceable against the Company or the Trust, as the case requires, in
accordance with its respective terms (in each case, with customary
exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Company or the Trust, as applicable (or to such other Person as
directed by the Company or the Trust, respectively), in exchange for
the Exchange Securities or the Private Exchange Securities, as the case
may be, the Company or the Trust, as applicable, shall mark, or cause
to be marked, on such Registrable Securities delivered by such Holders
that such Registrable Securities are being cancelled in exchange for
the Exchange Securities or the Private Exchange Securi ties, as the
case may be; in no event shall such Registrable Securities be marked as
paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," which section shall be
reasonably acceptable to the Initial Purchasers or another
representative of the Participating Broker-Dealers, and which shall
contain a summary statement of the positions taken or policies made by
the staff of the SEC with respect to the potential "underwriter" status
of any broker-dealer (a "Participating Broker-Dealer") that holds
---------------------------
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
of Exchange Securities to be received by such broker-dealer in the
Exchange Offer, whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies, in
the reasonable judgment of the Initial Purchasers or such other
representative, represent the prevailing views of the staff of the SEC,
including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer
may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the Securities Act in connection
<PAGE>
20
with any resale of such Exchange Securities, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company the notice
referred to in Section 3(e), without charge, as many copies of each
Prospectus included in the Exchange Offer Registration Statement,
including any preliminary prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request
(each of the Company and the Trust hereby consents to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or
any amendment or supplement thereto by any Person subject to the
prospectus delivery requirements of the Securities Act, including all
participating Broker-Dealers, in connection with the sale or transfer
of the Exchange Securities covered by the Prospectus or any amendment
or supplement thereto), (iii) use its best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange
Securities; provided, however, that such period shall not be required
-------- -------
to exceed 90 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "Applicable Period"), and (iv)
-----------------
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Registrable Securities, the
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Company and the Trust agree to deliver to the Initial Purchasers or
to another representative of the Participating Broker-Dealers, if
requested by any such Initial Purchasers or such other representative
of the Participating Broker-Dealers, on behalf of the Participating
Broker-Dealers upon consummation of the Exchange Offer (i) an opinion
of counsel in form and substance reasonably satisfactory to the Initial
Purchasers or such other representative of the Participating
Broker-Dealers, covering the matters customarily covered in opinions
requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that
<PAGE>
21
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions), (ii) an officers' certificate
containing certifications substantially similar to those set forth in
section 5(f) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public offering of
debt securities and (iii) as well as upon the effectiveness of the
Exchange Offer Registration Statement, a comfort letter, in each case,
in customary form if permitted by Statement on Auditing Standards No.
72 or 76.
The Company or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the company or the Trust, as applicable, such information regarding such
seller as may be required by the securities laws or regulations to be included
in a Registration Statement. The Company or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (i) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company and the Trust that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, are seeking to sell
Exchange Securities and are required to deliver Prospectuses each Holder agrees
that, upon receipt of any notice from the Company or the Trust of the happening
of any event of the kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or
3(e)(vi) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(i) hereof or until it is advised in writing (the "Advice") by the
Company and the Trust that the use of the applicable Prospectus may be resumed,
and, if so directed by the Company and the Trust, such Holder will deliver to
the Company or the Trust (at the Company's or the Trust's expense, as the case
requires) all copies in such Holder's possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities or Exchange Securities, as the case may be, current at
the time of receipt of such notice of suspension or disposition. If the Company
or the Trust shall give any such notice to suspend the disposition of
Registrable Securities or Exchange Securities, as the case may be, pursuant to a
Registration Statement, the Company and the Trust shall use their best efforts
to file and have declared effective (if an amendment) as soon as practicable
following the satisfaction or resolution of the Material Event an amendment or
supplement to the Registration Statement and shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days in the period from and including the date of the
giving of such notice to and including the date when the Company and the Trust
shall have made available to the
<PAGE>
22
Holders (x) copies of the supplemented or amended Prospectus necessary to resume
such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with
--------------------------------
any Registration Statement, the Company and the Trust agree to jointly and
severally indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of any
untrue statement or alleged untrue state ment of a material fact
contained in any Registration Statement (or any amendment thereto),
covering Registrable Securities or Exchange Securities, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom 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;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any 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, if such settlement is effected with the prior written consent
of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by such
Holder, such Participating Broker-Dealer, or any underwriter (except to
the extent otherwise expressly provided in Section 4(c) hereof)),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any court or
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, to the extent that any such
expense in not paid under subparagraph (i) or (ii) of this Section
4(b);
provided, however, that (i) this indemnity does not apply to any loss,
- -------- -------
liability, claim, damage of expense to the extent arising out of an untrue
<PAGE>
23
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
any underwriter or Participating Broker-Dealer sold Series A Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final Prospectus as then amended or
supplemented if the Company had previously furnished copies thereof to such
Holder, underwriter or Participating Broker-Dealer and the loss, liability,
claim, damage or expense of such Holder, underwriter, Participating Broker-
Dealer or controlling person results from an untrue statement or omission of a
material fact contained in the preliminary Prospectus which was corrected in the
final Prospectus. Any amounts advanced by the Company or the Trust to an
indemnified party pursuant to this Section 4 as a result of such losses shall be
returned to the Company or the Trust if it shall be finally determined by such a
court in a judgment not subject to appeal or final review that such indemnified
party was not entitled to indemnification by the Company or the Trust.
(c) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Trust, any underwriter and the
other selling Holders and each of their respective directors, officers and
trustees (including each director, officer or trustee of the Company and the
Trust who signed the Registration Statement), employees and agents and each
Person, if any, who controls the Company, the Trust, any underwriter or any
other selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 4(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company or the Trust by such selling Holder with respect to
such Holder expressly for use in the Registration Statement (or any amendment
thereto), or any such Prospectus (or any amendment thereto); provided, however,
-------- -------
that, in the case of Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
<PAGE>
24
(d) 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, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 4, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action. If an indemnifying party go elects within a reasonable
time after receipt of such notice, an indemnifying party, severally or jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably acceptable to
the indemnified parties defendant in such action, provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines that there are likely
to be legal defenses available to such indemnified party which are inconsistent
or in conflict with those available to such indemnifying party, then in the case
of clauses (i) and (ii) of this Section 4(c) such indemnifying party and counsel
for each indemnifying party or parties shall not be entitled to assume such
defense, if an indemnifying party is not entitled to assume the defense of
such action as a result of the proviso to the preceding sentence, counsel for
such indemnifying party and counsel for each indemnified party or parties shall
be entitled to conduct the defense of such indemnified party or parties, if an
indemnifying party assumes the defense of such action, in accordance with and as
permitted by the provisions of this paragraph, such indemnifying parties shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its own 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. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional written release in form and substance
satisfactory to the indemnified parties of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(e) Notwithstanding the last sentence of Section 4(c), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such
<PAGE>
25
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement; provided
--------
that an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party (1) reimburses such indemnified
party in accordance with such request to the extent it considers reasonable and
(2) provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
(f) In order to provide for just and equitable contribution
in circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, and
the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Trust and the Holders, as incurred; provided that
--------
no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person that
was not guilty of such fraudulent misrepresentation. As between the Company, the
Trust, and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and Trust, on the one hand, and the Holders, on
the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect hereof, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Trust, on the one hand, and of the Holders, on the other hand,
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 Company or the
Trust, on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each affiliate of a Holder, and each director, officer, employee, agent and
Person, if any, who controls a Holder or such affiliate 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 Holder, and each director of each of the
Company or the Trust, each officer of each of the Company or the Trust who
signed the Registration Statement, and each Person, if any, who controls each of
the Company or the
<PAGE>
26
Trust 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 each of the
Company or the Trust.
5. Participation in Underwritten Registrations. No Holder may
-------------------------------------------
participate in any underwritten registration hereunder unless such Holder (a)
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 (b) completes and executes all reasonable questionnaires,
lock-up letters and other documents reasonably required under the terms of such
underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
-------------------------
Securities covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such underwritten offering; provided, however, that such
-------- -------
underwriters and managers must be reasonably satisfactory to the Company and the
Trust.
7. Miscellaneous.
-------------
(a) Rule 144 and Rule 144A. For so long as the Company or the
----------------------
Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, the Company and
the Trust, as the case may be, will use their best efforts to file the reports
required to be filed by it under the Securities Act and Section 13(a) or 15(d)
of the Exchange Act and the rules and regulations adopted by the SEC thereunder,
that if it ceases to be so required to file such reports, it will, upon the
request of any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales of their Registrable Securities
pursuant to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities Act and it will take such further
action as any Holder of Registrable Securities may reasonably request, and (c)
take such further action that is reasonable in the circumstances, in each case,
to the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, (ii) Rule 144A under the
Securities Act, as such rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company and the Trusts will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
<PAGE>
27
(b) No Inconsistent Agreements. The Company or the Trust has
--------------------------
not entered into nor will the Company or the Trust on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders of
the Company's or the Trust's other issued and outstanding securities under any
such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Trust have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided no amendment, modification or
--------
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by written
agreement signed by the Company, the Trust and Merrill Lynch, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement, (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company, the Trust and Merrill Lynch to the extent that
any such amendment, modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with applicable law
(including any interpretation of the Staff of the SEC) or any change therein and
(iii) to the extent any provision of this Agreement relates to the Initial
Purchasers, such provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by written
agreement signed by Merrill Lynch, the Company and the Trust.
(d) Notices. All notices and other communications provided
-------
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
<PAGE>
28
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
-------- -------
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms of this Agreement and such Person shall be entitled to receive the
benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers
-----------------------
shall be a third party beneficiary of the agreements made hereunder between the
Company and the Trust, on the one hand, and the Holders, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
-------------
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING
<PAGE>
29
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company, the Trust or its
------------------------------------------------
Affiliates. Whenever the consent or approval of Holders of a specified
- ----------
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Trust or its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
ALLMERICA FINANCIAL CORPORATION
By: Edward J. Parry III
-----------------------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
AFC CAPITAL TRUST I
By: Edward J. Parry III
-----------------------------------------
Name: Edward J. Parry III
Title: Administrative Trustee
By: John F. Kelly
-----------------------------------------
Name: John F. Kelly
Title: Administrative Trustee
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: Steven J. Goulart
-------------------------------------------
Name: Steven J. Goulart
Title: Managing Director
<PAGE>
EXHIBIT 7
AFC CAPITAL TRUST I
ALLMERICA FINANCIAL CORPORATION
$300,000,000
in Aggregate Liquidation Amount
8.207% Series A Capital Securities
PURCHASE AGREEMENT
------------------
January 29, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center, North Tower
New York, New York 10281-1209
Ladies and Gentlemen:
AFC Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. (Sections 3801 et
seq.)) and Allmerica Financial Corporation, a Delaware corporation (the
"Company" and, together with the Trust, the "Offerors"), confirm their agreement
with Merrill Lynch & Co., Merrill Lynch, Pierce Fenner & Smith Incorporated
(collectively, "Merrill Lynch") and Morgan Stanley & Co. Incorporated (together,
the "Initial Purchasers", which term shall also include any initial purchaser
substituted as hereinafter provided in Section 11 hereof), with respect to the
issue and sale by the Trust and the purchase by the Initial Purchasers, acting
severally and not jointly, of the respective number set forth on Schedule I of
300,000 8.207% Series A Capital Securities
<PAGE>
2
(liquidation amount $1,000 per security) representing common undivided
beneficial interests in the assets of the Trust (the "Series A Capital
Securities").
The Series A Capital Securities will be guaranteed by the
Company, to the extent set forth in the Offering Memorandum (as defined below),
with respect to distributions and amounts payable upon liquidation or redemption
and otherwise pursuant to the Series A Capital Securities Guarantee Agreement
(the "Series A Guarantee Agreement", and such guarantee being referred to herein
as the "Series A Capital Securities Guarantee") to be dated as of the Closing
Time (as defined in Section 2(b) hereof) between the Company and The Chase
Manhattan Bank (the "Guarantee Trustee").
The entire proceeds from the sale of the Series A Capital
Securities will be com bined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities") and will be
used by the Trust to purchase $309,278,000 in aggregate principal amount of
8.207% Series A Subordinated Deferrable Interest Debentures due February 3, 2027
(the "Series A Junior Subordinated Debentures") issued by the Company. The
Series A Capital Securities and the Common Securities will be issued pursuant to
the Amended and Restated Declaration of Trust, to be dated as of the Closing
Time (the "Declaration"), among the Company, as Sponsor, John F. Kelly, Edward
J. Parry III and John P. Kavanaugh as administrative trustees (the
"Administrative Trustees"), The Chase Manhattan Bank, as property trustee (the
"Property Trustee"), and The Chase Manhattan Bank (Delaware), as Delaware
trustee (the "Delaware Trustee") and, together with the Property Trustee and the
Administrative Trustees, the "Trustees"). The Series A Junior Subordinated
Debentures will be issued pursuant to an Indenture, to be dated as of the
Closing Time (the "Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Debenture Trustee"). The Series A Capital Securities
issued in book-entry form will be issued to Cede & Co. as nominee of The
Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated as
of the Closing Time (the "DTC Agreement"), among the Trust, the Property Trustee
and DTC.
The Series A Capital Securities, the Series A Capital
Securities Guarantee and the Series A Junior Subordinated Debentures are
collectively referred to herein as the "Series A Securities". Capitalized terms
used herein without definition have the respective meanings specified in the
Offering Memorandum.
The Series A Capital Securities will be subject to the
registration rights set forth in a registration rights agreement (the
"Registration Rights Agreement"), to be executed on and dated as of the Closing
Time substantially in the form of Exhibit A. Pursuant to the Registration Rights
Agreement, the Trust and the Company will agree, among other things, to file
with the Securities and Exchange Commission ( the "Commission") (i) a
registration statement (the "Exchange Offer Registration Statement") under the
Securities Act of 1993, as
<PAGE>
3
amended (the "1933 Act") relating to the 8.207% Series B Capital Securities
(liquidation amount $1,000 per security) (the "Series B Capital Securities"),
the Series B Capital Securities Guarantee (the "Series B Capital Securities
Guarantee") of the Company pursuant to the Series B Capital Securities Guarantee
Agreement (the "Series B Guarantee Agreement"), and the 8.207% Series B
Subordinated Deferrable Interest Notes due February 3, 2027 (the "Series B
Junior Subordinated Debentures" and, collectively with the Series B Capital
Securities and the Series B Capital Securities Guarantee, the "Series B
Securities"), to be offered in exchange for the Series A Securities (such offer
to exchange being referred to herein as the "Exchange Offer") and/or (ii) a
shelf registration statement pursuant to Rule 415 under the 1933 Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Series
A Securities.
The Series A Securities and the Series B Securities are
jointly referred to as the "Securities"; the Series A Capital Securities and the
Series B Capital Securities are jointly referred to as the "Capital Securities";
the Series A Junior Subordinated Debentures and the Series B Junior Subordinated
Debentures are jointly referred to as the "Junior Subordinated Debentures"; and
the Series A Capital Securities Guarantee and the Series B Capital Securities
Guarantee are jointly referred to as the "Capital Securities Guarantees." The
Indenture, the Declaration, the Registration Rights Agreement, the DTC Agreement
and this Agreement are hereinafter referred to collectively as the "Operative
Documents."
The Offerors understand that the Initial Purchasers propose to
make an offering of the Series A Capital Securities (as guaranteed by the Series
A Capital Securities Guarantee) on the terms and in the manner set forth herein
and agree that the Initial Purchaser may resell in accordance with applicable
law, subject to the conditions set forth herein, all or a portion of the Capital
Securities to purchasers ("Subsequent Purchasers") at any time after the date of
this Agreement. The Series A Capital Securities are to be offered and sold
through the Initial Purchasers without being registered under the 1933 Act, in
reliance upon exemptions therefrom. Pursuant to the terms of the Series A
Capital Securities, investors that acquire Series A Capital Securities may only
resell or otherwise transfer such Capital Securities if such Capital Securities
are hereafter registered under the 1933 Act or if an exemption from the
registration requirements of the 1933 Act is available (including the exemption
afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S") of the
rules and regulations promulgated by the Commission under the 1933 Act (the
"1933 Act Regulations")).
The Offerors have prepared and delivered to each Initial
Purchaser copies of a preliminary offering memorandum dated January 24, 1997
(the "Preliminary Offering Memorandum") and will deliver to each Initial
Purchaser, as soon as practicable, but not later than February 3, 1997, copies
of an offering memorandum for use by such Initial Purchaser in connection with
its solicitation of purchases of, or offering of, the Series A Capital
Securities (the "Final Offering Memorandum" and, together with the Preliminary
Offering
<PAGE>
4
Memorandum, the "Offering Memorandums"). "Offering Memorandum" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (or any amendment or supplement to such document), including
exhibits thereto and any documents incorporated therein by reference, which has
been prepared and delivered by the Offerors to the Initial Purchasers in
connection with their solicitation of purchases of, or offering of, the Series A
Capital Securities.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included," "specified" or
"stated" in the Offering Memorandums (including other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which are incorporated by reference in the Offering
Memorandums; and all references in this Agreement to amendments or supplements
to the Offering Memorandums shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act") which is incorporated by reference in the Offering Memorandums.
SECTION 1. Representations and Warranties.
------------------------------
(a) Each of the Trust and the Company represents and warrants
to each Initial Purchaser as of the date hereof and as of the Closing Time
referred to in Section 2(b) hereof, and agrees with each Initial Purchaser as
follows:
(i) The Offerors have not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or
indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which
is or would be integrated with the sale of the Series A Capital
Securities in a manner that would require the Series A Capital
Securities to be registered under the 1933 Act.
(ii) Each of the Preliminary Offering Memorandum and the
Final Offering Memorandum as of their respective dates does not, and in
the case of the Final Offering Memorandum as of the Closing Time will
not, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided that this representation, warranty and agreement shall not
apply to statements or omissions made in reliance upon and in
conformity with information furnished to the Offerors by or on behalf
of any Initial Purchaser through Merrill Lynch expressly for use in the
Offering Memorandums.
(iii) Each of the Capital Securities, the Capital Securities
Guarantees and the Junior Subordinated Debentures satisfy the
eligibility requirements of Rule 144A(d)(3) under the 1933 Act.
<PAGE>
5
(iv) The documents incorporated or deemed to be incorporated
by reference in the Offering Memorandums at the time they were or
hereafter are filed with the Commission complied and will comply in all
material respects with the requirements of the 1934 Act and the rules
and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in
the Offering Memorandums, at the date of each respective Offering
Memorandum and, in the case of the Final Offering Memorandum, at the
Closing Time, do not and will not include 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, in the light of
the circumstances under which they were made, not misleading.
(v) Price Waterhouse LLP, who are reporting upon the audited
consolidated financial statements and supporting schedules 1 through 6
of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 included or incorporated by reference in the Offering
Memorandums, are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(vi) The consolidated financial statements, together with the
related schedules and notes thereto included in the Offering
Memorandums, present fairly in all material respects the financial
position of the Company and its subsidiaries at the dates indicated and
the consolidated statement of income, shareholders' equity and cash
flows of the Company and its subsidiaries for the periods specified;
said consolidated financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved except as noted
therein. The supporting schedules, if any, included in the Offering
Memorandums present fairly the information required to be stated
therein. The selected financial data included in the Offering
Memorandums present fairly the information shown therein and have been
compiled on a basis consistent with that of the consolidated audited
financial statements included in the Offering Memorandums except as
noted therein. The pro forma financial statements and other pro forma
financial information included in the Offering Memorandums present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements, have been properly compiled on the pro forma
bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the proposed
transactions referred to therein.
(vii) The statutory consolidated financial statements of the
Company and its subsidiaries, from which certain ratios and other
statistical data contained in the Offering Memorandums have been
derived, have for each relevant period been
<PAGE>
6
prepared in accordance with accounting practices prescribed or
permitted by the National Association of Insurance Commissioners and
the insurance division of the Commonwealth of Massachusetts, and such
accounting practices have been applied on a consistent basis throughout
the periods involved, except as disclosed therein.
(viii) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise described or
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Trust or the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by
the Trust or the Company or any of its subsidiaries, other than those
in the ordinary course of business, which are material with respect to
the Trust or the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends, there has
been no dividend of any kind declared, paid or made by the Company on
any class of its capital stock.
(ix) The Company is a corporation organized, validly
existing and in good standing under the laws of the State of Delaware,
with corporate power and authority under such laws to own, lease and
operate its properties and conduct its business as described in the
Offering Memorandums, to enter into and perform its obligations under
each of the Operative Documents, to hold the Common Securities issued
by the Trust, to issue and to deliver the Junior Subordinated
Debentures and the Capital Securities Guarantees; and the Company is
duly qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise.
(x) First Allmerica Financial Life Insurance Company
("FAFLIC"), SMA Financial Corp., Allmerica Financial Life Insurance and
Annuity Company ("AFLIAC"), Allmerica Property & Casualty Companies
("Allmerica P&C"), The Hanover Insurance Company, Citizens Corporation
("Citizens"), Citizens Insurance Company of America and any other
"significant subsidiary" of the Company (as such term is defined in
Rule 1-02 of Regulation S-X) are each a "Subsidiary" and, collectively,
the "Subsidiaries" of the Company. FAFLIC is duly organized and is
validly existing as a stock life insurance company in good standing
under the laws of the Commonwealth of Massachusetts with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Offering
Memorandums. Each other Subsidiary is a corporation duly organized,
<PAGE>
7
validly existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and authority
under such laws to own, lease and operate its properties and conduct
its business; and each Subsidiary is duly qualified to transact
business as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise. All of the
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable.
Except for Allmerica P&C and Citizens, which are owned 40.5% and 17.5%,
respectively, by the public, and except for any shares required by law
to be owned by directors and as of the date hereof, all of the
outstanding shares of capital stock of each Subsidiary will be owned by
the Company, directly or through one or more Subsidiaries, free and
clear of any pledge, lien, security interest, charge, claim equity or
encumbrance of any kind.
(xi) The authorized, issued and outstanding capital stock of
the Company as of September 30, 1996 is as set forth in the Offering
Memorandums under the caption "Capitalization".
(xii) The Agreement and the DTC Agreement have been duly
authorized and, at the Closing Time will have been duly executed and
delivered by the Company and the Trust, as applicable;
(xiii) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with
the power and authority to own its properties and to conduct its
business as described in the Offering Memorandums and to enter into and
perform its obligations under such of the Operative Documents to which
it is a party and the Series A Capital Securities; the Trust is duly
qualified to transact business as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust; the
Trust is not a party to or otherwise bound by any agreement other than
those described in the Offering Memorandum; the Trust is and will under
current law be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation;
and the Trust is and will be treated as a subsidiary of the Company
pursuant to generally accepted accounting principles.
(xiv) The Declaration has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered by
the Company and the
<PAGE>
8
Administrative Trustees (as defined in the Declaration) and (assuming
the due authorization, execution and delivery of the Declaration by the
Delaware Trustee and the Property Trustee (as defined in the
Declaration)) will, at the Closing Time, be a valid and binding
obligation of the Company and the Administrative Trustees, enforceable
against the Company and the Administrative Trustees in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, receivership, liquidation, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); and the Declaration will conform
in all material respects to the description thereof in the Offering
Memorandums.
(xv) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Offering Memorandums, will
be validly issued and (subject to the terms of the Declaration) fully
paid and nonassessable undivided common beneficial interests in the
assets of the Trust and will conform in all material respects to the
description thereof in the Offering Memorandums; the issuance of the
Common Securities is not subject to preemptive or other similar rights;
and, at the Closing Time, all of the issued and outstanding Common
Securities of the Trust will be directly or indirectly owned by the
Company, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity and all action required to be taken
for the authorization, issue and sale of such Common Securities by the
Trust will have been validly and sufficiently taken.
(xvi) At the Closing Time, the Series A Capital Securities
will have been duly authorized by the Declaration and, when and issued
and delivered by the Trust pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and
(subject to the terms of the Declaration) fully paid and nonassessable
undivided beneficial interests in the assets of the Trust, will be
entitled to the benefits of the Declaration and will conform in all
material respects to the description thereof in the Offering
Memorandums; the issuance of the Series A Capital Securities is not
subject to preemptive or other similar rights; and as of the Closing
Time, the Series B Capital Securities will have been duly authorized by
the Trust and, in the event of the consummation of the Exchange Offer,
will be validly issued and (subject to the terms of the Declaration)
fully paid and nonassessable undivided common beneficial interests in
the assets of the Trust; and (subject to the terms of the Declaration)
holders of Series A Capital Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the laws of the State of
Delaware.
<PAGE>
9
(xvii) Each of the Series A Guarantee Agreement and the
Series B Guarantee Agreement has been duly authorized by the Company
and, at the Closing Time, the Series A Guarantee Agreement will have
been duly executed and delivered by the Company and (assuming due
authorization, execution and delivery of the Series A Guarantee
Agreement by Chase Manhattan Bank, not in its individual capacity but
solely as trustee) will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, receivership, liquidation, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); and each of the Series A Capital
Securities Guarantee and the Series A Guarantee Agreement will conform
in all material respects to the description thereof in the Offering
Memorandums. In the event the Exchange Offer is consummated, the Series
B Guarantee Agreement will have been duly executed and delivered by the
Company and (assuming due authorization, execution and delivery of the
Series B Guarantee Agreement by Chase Manhattan Bank, not in its
individual capacity but solely as trustee) will constitute a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, receivership, liquidation,
fraudulent conveyance, moratorium or similar laws affecting creditors'
rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the Series B
Guarantee Agreement will have been duly qualified under the Trust
Indenture Act.
(xviii) The Indenture has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered by
the Company and (assuming due authorization, execution and delivery of
the Indenture by the Debenture Trustee) will constitute a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, receivership, liquidation,
fraudulent conveyance, moratorium or similar laws affecting creditors'
rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the Indenture will
conform in all material respects to the description thereof in the
Offering Memorandums. In the event the Exchange Offer is consummated,
the Indenture will have been duly qualified under the Trust Indenture
Act.
(xix) The issuance and delivery of the Junior Subordinated
Debentures have been duly authorized by the Company and, at the Closing
Time, the Series A Junior
<PAGE>
10
Subordinated Debentures will have been duly executed by the Company
and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Offering
Memorandums, will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture; and the Series B
Junior Subordinated Debentures have been duly authorized by the Company
and, when duly executed by the Company and authenticated in the manner
provided in the Indenture, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture,
in each case enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, receivership, liquidation, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law). The Junior Subordinated
Debentures will conform in all material respects to the description
thereof in the Offering Memorandums; and the Junior Subordinated
Debentures will be in the form contemplated by the Indenture.
(xx) At the Closing Time, the Registration Rights Agreement
will have been duly authorized, executed and delivered by each of the
Trust and the Company and (assuming the due authorization, execution
and delivery thereof by the other parties thereto) will constitute the
valid and binding obligation of each of the Trust and the Company
enforceable against each of the Trust and the Company in accordance
with the terms thereof, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, receivership, liquidation,
fraudulent conveyance, moratorium or similar laws affecting creditors'
rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the Registration
Rights Agreement will conform in all material respects to the
description thereof in the Offering Memorandums.
(xxi) The Series A Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness
(as defined in the Indenture) of the Company.
(xxii) Each of the Administrative Trustees of the Trust is an
officer of the Company and has been duly authorized by the Company to
execute and deliver the Declaration.
(xxiii) Except for separate investment accounts of FAFLIC and
AFLIAC, neither the Trust nor the Company nor any of the Company's
other subsidiaries is or, after giving effect to the consummation of
the transactions contemplated herein, will
<PAGE>
11
be, and neither the Company nor the Trust nor any of the Company's
other subsidiaries is directly or indirectly controlled by, or acting
on behalf of any person which is, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(xxiv) None of the Company, any Subsidiary or the Trust is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which
it is a party or by which it may be bound or to which any of its
properties may be subject, except for such defaults that would not have
a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise. The execution and delivery
of the Operative Documents, the issuance and delivery of the Series A
Capital Securities, the Series A Guarantee, the Series A Junior
Subordinated Debentures and the consummation of the transactions
contemplated herein and therein have been duly authorized by all
necessary corporate action on the part of the Company and the Trust and
do not and will not result in any violation of the charter or by-laws
of the Company or any Subsidiary nor any violation of the Declaration
or Trust Certificate, and do not and will not conflict with, or result
in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, the
Trust or any Subsidiary under (A) any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which
the Company, the Trust or any Subsidiary is a party or by which it may
be bound or to which any of its properties may be subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, or of the Trust) or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company, the Trust or any Subsidiary or any of their respective
properties.
(xxv) Neither the issuance and sale of the Capital Securities
by the Trust to the Initial Purchasers or the issuance and sale of the
Common Securities by the Trust to the Company, the extension of the
Series A Guarantee by the Company, the issuance and sale of the
Subordinated Debentures by the Company to the Trust, the execution,
delivery or performance of this Agreement, the Declaration, the
Indenture and the Series A Guarantee by the Offerors, nor the
consummation by the Offerors with their respective obligations
hereunder and thereunder requires any consent, approval, authorization
or other order of or registration or filing with, any court, regulatory
body (including any insurance regulatory body), administrative agency
or other governmental
<PAGE>
12
body, agency or official (except such as may be required under the 1933
Act, the 1934 Act and the Trust Indenture Act and compliance with the
securities, Blue Sky laws and state insurance laws of various
jurisdictions), except where the failure to obtain such consent,
approval, authorization or other order or make such registration or
filing would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs and business
prospects of the Company and its subsidiaries considered as one
enterprise.
(xxvi) To the best knowledge of the company, no labor problem
exists with its employees or with employees of the Subsidiaries or the
Trust, or is imminent that could adversely affect the Trust, or the
Company and its subsidiaries, considered as one enterprise.
(xxvii) Except as disclosed in the Offering Memorandum, there
is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign, now pending
or, to the knowledge of the Company, threatened against or affecting
the Trust, the Company, or any of its Subsidiaries that is required to
be disclosed in the Offering Memorandums or that could have a material
adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Trust, and the Company
and its subsidiaries, considered as one enterprise, or that could
materially and adversely affect the properties or assets thereof or the
consummation of any Operative Documents or the performance by the
Company of its obligations hereunder and thereunder; the aggregate of
all pending legal or governmental proceedings to which the Trust, or
the Company or any Subsidiary is a party or which affect any of their
respective properties or assets, including ordinary routine litigation
incidental to the business of the Trust, or the Company or any
Subsidiary, would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Trust, or the Company and its
subsidiaries, considered as one enterprise.
(xxviii) The Trust, the Company and each of the Subsidiaries
each has good and marketable title to all properties and assets
described in the Offering Memorandums as owned by it, free and clear of
all liens, charges, encumbrances or restrictions, except such as (A)
are described in the Offering Memorandums or (B) are not materially
significant in relation to the business of the Trust, the Company and
its subsidiaries, considered as one enterprise; all of the leases and
subleases material to the business of the Trust, the Company and its
subsidiaries, considered as one enterprise, and under which the Trust,
the Company or any Subsidiary holds properties, are described in the
Offering Memorandums, are in full force and effect; and neither the
Trust, the Company nor any Subsidiary has any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Trust, the Company or any
<PAGE>
13
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of such corporation to the
continued possession of the leased or subleased premises under any such
lease or sublease.
(xxix) The Trust, the Company and its Subsidiaries each owns,
possesses or has obtained all material governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, and
neither the Trust, the Company nor any of its Subsidiaries has received
any notice of proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders, approvals or
authorization.
(xxx) Each of the Subsidiaries which is engaged in the
insurance business, (the "Insurance Subsidiaries"), is duly licensed or
authorized to conduct its insurance business under the insurance laws
of each jurisdiction in which it conducts such business so as to
require such licensing or authorization, except where the failure to be
so licensed or authorized would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Trust, the Company and its subsidiaries, considered as one enterprise;
all such licenses or authorizations are in full force and effect and
neither the Trust, the Company nor any Insurance Subsidiary has
received any notice of any event, inquiry, investigation or proceeding
that would reasonably be expected to result in the suspension,
revocation or limitation of any such licenses or authorizations or
otherwise impose any limitation on the conduct of the business of the
Trust, the Company or any Insurance Subsidiary, except any such
suspension, revocation or limitation which would not, individually or
in the aggregate, have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Trust, the Company and its subsidiaries, considered as
one enterprise, and to the best of the Trust's, the Company's and the
Insurance Subsidiaries' knowledge, there is no sustainable basis for
any such suspension, revocation or limitation; each of the Insurance
Subsidiaries is in compliance with, and conducts its businesses in
conformity with, all applicable insurance laws and regulations, except
where the failure to so comply or conform would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise; and the Company has
disclosed to you all pending significant examinations, and all
significant examinations which have been completed and filed since
October 1995, by any governmental authority having jurisdiction to
regulate the insurance operations of any Insurance Subsidiary.
(xxxi) The Trust, the Company and the Subsidiaries each owns
or possesses, or can acquire on reasonable terms, adequate patents,
patent licenses, trademarks,
<PAGE>
14
service marks and trade names necessary to carry on its business as
presently conducted, and neither the Trust, the Company nor any
Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent licenses,
trademarks, service marks or trade names that in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could materially
adversely affect the condition (financial or otherwise), earnings,
business affairs or business prospects of the Trust, the Company and
its subsidiaries, considered as one enterprise.
(xxxii) To the best of the Company's knowledge, except as
disclosed in the Offering Memorandums, no change in any insurance laws
or regulations of Massachusetts, Michigan, New Hampshire or Delaware is
pending or has been introduced which could reasonably be expected to be
adopted and, if adopted, could reasonably be expected to have,
individually or in the aggregate with all such changes, a material
adverse effect upon the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise.
<PAGE>
15
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
------------------------------------------------
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Initial Purchaser and each Initial Purchaser agrees to
purchase from the Trust, at a price of $1,000 per Series A Capital Security, the
number of Series A Capital Securities set forth in Schedule A opposite the name
of such Initial Purchaser, plus any additional Series A Capital Securities which
such Initial Purchaser may become obligated to purchase pursuant to the
provisions of Section 11 hereof.
(b) Deliveries of certificates for the respective accounts of
the Initial Purchasers for the Series A Capital Securities shall be made at the
office of Merrill Lynch in New York, and payment of the purchase price for the
Series A Capital Securities shall be made by Merrill Lynch on behalf of the
several Initial Purchasers, to the Trust by wire transfer of immediately
available funds contemporaneous with closing at such place as shall be agreed
upon by Merrill Lynch and the Offerors, at 10:00 A.M. on February 3, 1997
(unless postponed in accordance with the provisions of Section 11), or such
other time not later than ten business days after such date as shall be agreed
upon by Merrill Lynch and the Offerors (such time and date of payment and
delivery being herein called the "Closing Time").
Certificates for the Series A Capital Securities shall be in such
denominations and registered in such names as the Initial Purchasers may request
in writing at least one business day before the Closing Time. It is understood
that each Initial Purchaser has authorized Merrill Lynch, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Series A Capital Securities which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Initial Purchasers, may (but shall
not be obligated to) make payment of the purchase price for the Series A Capital
Securities, to be purchased by any Initial Purchaser whose funds have not been
received by the Closing Time, but such payment shall not relieve such Initial
Purchaser from its obligations hereunder. The certificates representing the
Series A Capital Securities which are not resold to institutional "accredited
investors" shall be registered in the name of Cede & Co. pursuant to the DTC
Agreement and shall be made available for examination and packaging by the
Initial Purchasers in The City of New York not later than 10:00 A.M. on the last
business day prior to the Closing Time.
(c) As compensation to the Initial Purchasers for their commitment
hereunder and in view of the fact that the proceeds of the sale of the Series A
Capital Securities will be used to purchase Series A Junior Subordinated
Debentures of the Company, the Company hereby agrees to pay at the Closing Time
to Merrill Lynch in immediately available funds, for the accounts of the several
Initial Purchasers, $10 per Series A Capital Security to be delivered by the
Trust hereunder at the Closing Time.
<PAGE>
16
(d) Each Initial Purchaser represents and warrants to, and agrees
with, the Company that it is a Qualified Institutional Buyer (as defined in
Section 6(a)(i)) and an Institutional Accredited Investor (as defined in Section
6(a)(i)).
SECTION 3. Covenants of the Offerors.
-------------------------
The Offerors covenant with each Initial Purchaser as follows:
(a) The Offerors, as promptly as possible, will furnish to each
Initial Purchaser, without charge, such number of copies of the Final Offering
Memorandum and any amendments and supplements thereto and documents incorporated
by reference therein as such Initial Purchaser may reasonably request.
(b) The Offerors will immediately notify each Initial Purchaser, and
confirm such notice in writing, of (x) any filing made by the Offerors of
information relating to the offering of the Series A Capital Securities to the
Initial Purchasers with any securities exchange or any other regulatory body in
the United States or any other jurisdiction, and (y) prior to the completion of
the placement of the Series A Capital Securities by the Initial Purchasers as
evidenced by a notice in writing from the Initial Purchasers to the Offerors,
any material changes in or affecting the earnings, business affairs or business
prospects of the Trust, or the Company and its subsidiaries considered as one
enterprise, which (i) make any statement in the Offering Memorandums false or
misleading or (ii) are not disclosed in the Offering Memorandums. In such event
or if during such time any event shall occur as a result of which it is
necessary, in the reasonable opinion of the Company, its counsel or counsel for
the Initial Purchasers, to amend or supplement Final Offering Memorandum in
order that the Final Offering Memorandum not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances then
existing, the Company will forthwith amend or supplement the Final Offering
Memorandum by preparing and furnishing to each Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the reasonable opinion of counsel for the
Initial Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) The Offerors will advise each Initial Purchaser promptly
of any proposal to amend or supplement the Offering Memorandums and will not
effect such amendment or supplement without the consent of the Initial
<PAGE>
17
Purchasers, which consent shall not be unreasonably withheld. Neither the
consent of the Initial Purchasers, nor the Initial Purchasers' delivery of any
such amendment or supplement, shall constitute a waiver of any of the conditions
set forth in Section 5 hereof.
(d) The Offerors shall take all reasonable action necessary to enable
Standard & Poor's Ratings Services, a division of McGraw Hill, Inc. ("S&P"), and
Moody's Investors Service, Inc. ("Moody's") to provide their respective credit
ratings of the Capital Securities.
(e) The Offerors will cooperate with the Initial Purchaser and use
reasonable efforts to permit the Series A Capital Securities to be eligible for
clearance and settlement through the facilities of DTC.
(f) The Trust will use the net proceeds received by it from the sale
of the Series A Capital Securities; and the Company will use the proceeds
received by it from the sale of the Series A Junior Subordinated Debentures, in
the manners specified in the Offering Memorandums under "Use of Proceeds".
(g) Prior to 30 days after the date hereof, neither the Trust nor the
Company will, without the prior written consent of Merrill Lynch, directly or
indirectly, issue, sell, offer or agree to sell, grant any option for the sale
of, or otherwise dispose of, Capital Securities, any security convertible into
exchangeable or exercisable for Capital Securities or the Junior Subordinated
Debentures or any debt securities substantially similar (including provisions
with respect to the deferral of interest) to the Junior Subordinated Debentures
or any equity security substantially similar to the Capital Securities (except
for the Securities issued pursuant to this Agreement); provided, however, that
the foregoing restrictions shall not apply to any disposal of the Junior
Subordinated Debentures following any liquidation of the Trust.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandums (including
financial statements and any schedules or exhibits and any document incorporated
therein by reference) and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchasers of this Agreement,
the Operative Documents and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates for the Series
A Capital Securities, the Series A Capital Securities Guarantee and the Series A
Junior Subordinated Debentures to the Initial Purchasers, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v)
rating agency fees, and (vi) the fees and expenses of any trustee appointed
<PAGE>
18
under any of the Operative Documents, including the fees and disbursements of
counsel for such trustees in connection with the Operative Documents.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchasers in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
Shearman & Sterling, counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations.
---------------------------------------------
The obligations of the Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Offerors contained in
Section 1 hereof or in certificates of any Trustee of the Trust, officer of the
Company or any of its subsidiaries delivered pursuant to the provisions hereof,
to the performance by the Offerors of their obligations hereunder, and to the
following further conditions:
(a) Opinion of Outside Counsel for Offerors. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Ropes & Gray, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Initial Purchasers. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of Trustees of the
Trust, officers of the company and its subsidiaries and certificates of public
officials; provided that such certificates have been delivered to the Initial
--------
Purchasers.
(b) Opinion of Special Delaware Counsel for Offerors. At the Closing
Time, the Initial Purchasers shall have received the favorable opinion, dated as
of the Closing Time, of Richards, Layton & Finger, special Delaware counsel to
the Offerors, in form and substance reasonably satisfactory to counsel for the
Initial Purchasers. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of Trustees of the Trust, officers of the company and its
subsidiaries and certificates of public officials; provided that such
--------
certificates have been delivered to the Initial Purchasers.
(c) Opinion of Counsel for The Chase Manhattan Bank. At the Closing
Time, the Initial Purchasers shall have received the favorable opinion, dated as
of the Closing Time, of Seward & Kissel, counsel to The Chase Manhattan Bank, as
Property Trustee under the Declaration, as Guarantee Trustee under the Series A
Guarantee Agreement, and as Debenture Trustee under the Indenture in form and
substance reasonably satisfactory to counsel for the Initial Purchasers.
<PAGE>
19
(d) Opinion of Special Tax Counsel for the Offerors. At the Closing
Time, the Initial Purchasers shall have received an opinion, dated as of the
Closing Time, of Latham & Watkins, special tax counsel to the Offerors, that (i)
the Junior Subordinated Debentures will be classified for United States federal
income tax purposes as indebtedness of the Company, (ii) the Trust will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation and (iii) although the discussion
set forth in the Offering Memorandums under the heading "Certain Federal Income
Tax Consequences" does not purport to discuss all possible United States federal
income tax consequences of the purchase, ownership and disposition of the Series
A Capital Securities, such discussion constitutes, in all material respects, a
fair and accurate summary of the United States federal income tax consequences
of the purchase, ownership and disposition of the Series A Capital Securities
under current law. Such opinion may be conditioned on, among other things, the
initial and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and other documents deemed necessary for such opinion.
(e) Opinion of Counsel for Initial Purchasers. At the Closing Time,
the Initial Purchasers shall have received the favorable opinion, dated as of
the Closing Time, of Shearman & Sterling, counsel for the Initial Purchasers,
with respect to the incorporation and legal existence of the Company, the Series
A Capital Securities, the Indenture, the Series A Guarantee Agreement, this
Agreement, the Registration Rights Agreement, the Offering Memorandums and other
related matters as the Initial Purchasers may require. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of Trustees of the Trust,
officers of the Company and its subsidiaries and certificates of public
officials; provided that such certificates have been delivered to the Initial
Purchasers.
(f) Certificates. At the Closing Time there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Offering Memorandums, any material adverse change, or any development or
event involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust, or the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, except
that the announcement of or execution of an agreement relating to the terms and
conditions of the Acquisition (as defined in the Offering Memorandums) will not
be considered a material adverse change for purposes of this subsection (f), and
the Initial Purchasers shall have received a certificate of the President or
Chief Executive Officer, and the Treasurer, Chief Financial Officer or Vice-
President of the Company, and a certificate of an Administrative Trustee of the
Trust, dated as of the Closing Time, to the effect that except as disclosed in
the Offering Memorandums, (i) there has been no such material adverse change or
development or event, (ii) the representations and warranties in Section 1
hereof were true
<PAGE>
20
and correct with the same force and effect as though expressly made at and as of
the Closing Time, and (iii) the Offerors have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to the Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchasers shall have received from Price Waterhouse LLP
a letter dated such date, in form and substance satisfactory to the Initial
Purchasers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to Initial Purchasers with respect to
the financial statements and certain financial information contained in the
Offering Memorandums.
(h) Bring-down Comfort Letter. At the Closing Time, the Initial
Purchasers shall have received from Price Waterhouse LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (h) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(i) Maintenance of Rating. Notwithstanding the satisfaction of any
other condition set forth in this Section 5, at the Closing Time, the Capital
Securities shall be rated at least "a2" by Moody's Investor's Service, Inc. and
BBB+ by Standard & Poor's Ratings Services, and the Trust shall have delivered
to the Initial Purchasers a letter dated the Closing Time, from each such rating
agency, or other evidence satisfactory to the Initial Purchasers, confirming
that the Series A Capital Securities have such ratings; and between the date of
this Agreement and the Closing Time, there shall not have occurred a downgrading
in the rating assigned to the Series A Capital Securities or any of the
Company's other debt securities by any nationally recognized statistical rating
organization, and no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
any Capital Securities or any of the Company's other debt securities.
(j) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with the Registration Rights Agreement,
executed by the Company and the Trust, and such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Series A Capital Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations and warranties
of the Offerors, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Offerors in connection with the issuance and
sale of the Series A Capital Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Initial Purchasers and
counsel for the Initial Purchasers.
<PAGE>
21
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchasers by notice to the Offerors
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as Provided in Section
4 and except that Sections 7 and 9 shall survive any such termination and remain
in full force and effect.
SECTION 6. Subsequent Offers and Sales of the Series A Capital
---------------------------------------------------
Securities.
- ----------
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Offerors hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Series A Securities:
(i) Offers and Sales Only to Institutional Accredited Investors,
-----------------------------------------------------------
Qualified Institutional Buyers and Non-U.S. Persons. Offers and sales of
---------------------------------------------------
the Capital Securities will be made only by the Initial Purchasers or
affiliates thereof qualified to do so in the jurisdictions in which such
offers or sales are made. Each such offer or sale shall only be made (A) to
persons whom the offeror or seller reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the 1933 Act)
("Qualified Institutional Buyers"), or (B) to a limited number of other
institutional accredited investors (as such term is defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D) that the Initial Purchasers
reasonably believe to be and, with respect to sales and deliveries, that
are accredited investors ("Institutional Accredited Investors"), or (C)
non-U-S, persons outside the United States to whom the Initial Purchasers
reasonably believe offers and sales of the Series A Capital Securities may
be made in reliance upon Regulation S under the 1933 Act.
(ii) No General Solicitation. The Series A Capital Securities
-----------------------
will be offered by approaching prospective Subsequent Purchasers on an
individual basis. No general solicitation or general advertising (within
the meaning of Rule 502(c) under the 1933 Act) will be used in the United
States in connection with the offering of the Capital Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
---------------------------------
Subsequent Purchaser of a Series A Capital Security acting as a fiduciary
for one or more third parties, in connection with an offer and sale to such
purchaser pursuant to clause (a) above, each third party shall, in the
judgment of the applicable Initial Purchaser, be an Institutional
Accredited Investor or a Qualified Institutional Buyer or a non-U.S. person
outside the United States.
<PAGE>
22
(iv) Subsequent Purchaser Notification. Each Initial Purchaser will
---------------------------------
take reasonable steps to inform, and cause each of its U.S. affiliates to
take reasonable steps to inform, persons acquiring Series A Capital
Securities from such Initial Purchaser or affiliate, as the case may be, in
the United States that the Series A Capital Securities (A) have not been
and will not be registered under the 1933 Act, (B) are being sold to them
without registration under the 1933 Act in reliance on Rule 144A or in
accordance with another exemption from registration under the 1933 Act, as
the case may be, and (C) may not be offered, sold or otherwise transferred
except (1) to the Company, (2) outside the United States in accordance with
Regulation S, or (3) inside the United States in accordance with (x) Rule
144A to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for its own account
or for the account of a Qualified Institutional Buyer to whom notice is
given that the offer, sale or transfer is being made in reliance on Rule
144A or (y) an exemption from registration under the 1933 Act (including
the exemption provided by Rule 144), if available.
(v) Minimum Amount. No sale of the Series A Capital Securities to
--------------
any one Subsequent Purchaser will be in blocks of less than U.S.$100,000
liquidation amount.
(vi) Restrictions on Transfer. The transfer restrictions and the
------------------------
other provisions of the Declaration, including the legend required thereby,
shall apply to the Series A Capital Securities except as otherwise agreed
by the Offerors and the Initial Purchasers. Following the sale of the
Series A Capital Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not
be liable or responsible to the Offerors for any losses, damages or
liabilities suffered or incurred by the Offerors, including any losses,
damages or liabilities under the 1933 Act, arising from or relating to any
resale or transfer of any Capital Security.
(vii) Delivery of Offering Memorandum. Each Initial Purchaser will
-------------------------------
deliver to each purchaser of the Series A Capital Securities from such
Initial Purchaser, in connection with its original distribution of the
Series A Capital Securities, a copy of the Final Offering Memorandum, as
amended and supplemented at the date of such delivery.
(b) Covenants of the Offerors. Each of the Offerors, jointly and
severally, covenants with each Initial Purchaser as follows:
(i) Due Diligence. In connection with the original distribution of
-------------
the Series A Capital Securities, the Offerors agree that, prior to any
offer or sale of the
<PAGE>
23
Series A Capital Securities by the Initial Purchasers, the Initial
Purchasers and counsel for the Initial Purchasers shall have the right to
make reasonable inquiries into the business of the Trust, the Company and
its subsidiaries. The Offerors also agree to provide answers to each
prospective Subsequent Purchaser of Series A Capital Securities who so
requests concerning the Trust, Company and its subsidiaries (to the extent
that such information is available or can be acquired and made available to
each prospective Subsequent Purchaser without unreasonable effort or
expense and to the extent the provision thereof is not prohibited by
applicable law or contractual restriction) and the terms and conditions of
the offering of the Securities, as provided in the Offering Memorandums.
(ii) Integration. The Offerors agree that they will not and will
-----------
cause their affiliates not to make any offer or sale of securities of the
Offerors of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the 1933 Act, such offer or sale would render
invalid (for the purpose of (i) the sale of the Series A Capital Securities
by the Trust to the Initial Purchasers, (ii) the resale of the Series A
Capital Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the Series A Capital Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of
the 1933 Act provided by Section 4(2) thereof or by Rule 144A or by
Regulation S thereunder or otherwise,
(iii) Rule 144A Information. The Company agrees that, in order to
---------------------
render the Series A Capital Securities eligible for resale pursuant to Rule
144A under the 1933 Act, while any of the Series A Capital Securities
remain outstanding, the Company will make available, upon request, to any
holder of Series A Capital Securities or prospective purchasers of Series A
Capital Securities the information specified in Rule 144A(d)(4), unless
such information is furnished to the Commission pursuant to Section 13 or
15(d) of the 1934 Act (such information, whether made available to holders
or prospective purchasers or furnished to the Commission, is herein
referred to as "Additional Information").
(iv) Restriction on Repurchases. Until the expiration of three years
--------------------------
(or such shorter period as may hereafter be referred to in Rule 144(k) (or
similar successor rule)) after the original issuance of the Series A
Capital Securities, the Offerors will not, and will cause their affiliates
not to, purchase or agree to purchase or otherwise acquire any Series A
Capital Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial
owner, or otherwise unless, immediately upon any such purchase, the
Offerors or any affiliate shall submit such Series A Capital Securities to
<PAGE>
24
the Trustee for cancellation; provided, that any affiliate which is an
--------
insurance company need not deliver such securities to the Trustee for
cancellation for so long as such affiliate continues to hold such Series A
Capital Securities for its own account.
(c) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each
Initial Purchaser understands that the Series A Capital Securities have not been
and will not be registered under the 1933 Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S under the 1933 Act or pursuant to an
exemption from the registration requirements of the 1933 Act. Each Initial
Purchaser represents and agrees, that, except as permitted below, it has offered
and sold Series A Capital Securities and will offer and sell Series A Capital
Securities (i) as part of their distribution at any time and (ii) otherwise
until forty days after the later of the date upon which the offering of the
Series A Capital Securities commences and the Closing Time, only in accordance
with Rule 903 of Regulation S or Rule 144A under the 1933 Act or to
Institutional Accredited Investors. Accordingly, neither the Initial Purchasers
and their affiliates nor any persons acting on their behalf have engaged or will
engage in any directed selling efforts with respect to Series A Capital
Securities, and the Initial Purchasers, their affiliates and any person acting
on their behalf have complied and will comply with the offering restriction
requirements of Regulation S. Each Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Capital Securities (other than a sale of
Series A Capital Securities pursuant to Rule 144A or to Institutional Accredited
Investors), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
or through it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933 (the "Securities
Act") and may not be offered or sold within the United States
or to or for the account or benefit of U.S. persons (i) as
part of their distribution at any time and (ii) otherwise
until forty days after the later of the date upon which the
offering of the Securities commenced and the date of closing,
except in either case in accordance with Regulation S or Rule
144A under the Securities Act. Terms used above have the
meaning given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by
Regulation S.
Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Series A Capital Securities, except with its affiliates that
are Qualified Institutional Buyers or with the prior written consent of the
Offerors.
<PAGE>
25
(d) Compliance with United Kingdom Law. Each Initial Purchaser
represents and agrees that (i) it has not offered or sold and, prior to the
expiry of the period of six months from the date hereof, will not offer or sell
any Series A Capital Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received by
it in connection with the issue of the Series A Capital Securities to a person
who is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on; and (iii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to any Series
A Capital Securities in, from or otherwise involving the United Kingdom.
(e) Compliance with Other Laws. Each Initial Purchaser acknowledges
that no action has been taken to permit a public offering of the Series A
Capital Securities in any jurisdiction outside of the United States where action
would be required for such purpose. Each Initial Purchaser agrees that it will
not offer or sell any Series A Capital Securities in any jurisdiction outside of
the United States except under circumstances that will result in compliance with
all applicable laws thereof.
SECTION 7. Indemnification.
---------------
(a) The Offerors agree to jointly and severally indemnify and
hold harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandums,
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, 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
<PAGE>
26
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by you), 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, to the
extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that this indemnity agreement does not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Offerors by any
Initial Purchaser through Merrill Lynch expressly for use in the Offering
Memorandums; and provided, further that the foregoing indemnity agreement with
-------- -------
respect to any untrue statement contained in or any omission from a preliminary
Offering Memorandum shall not inure to the benefit of any Initial Purchaser (or
any person who controls such Initial Purchaser within the meaning of Section 15
of the 1933 Act) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Series A Securities that are the subject
thereof if such person was not sent or given a copy of the Final Offering
Memorandum in the quantities requested by such Initial Purchaser and the loss,
claim, damage or liability of such Initial Purchaser results from an untrue
statement contained in or the omission from such preliminary Offering Memorandum
which was corrected in the Final Offering Memorandum.
(b) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company, its directors and officers, the Trust, the Administrative
Trustees and each person, if any, who controls the Company or the Trust within
the meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity agreement in Section 7(a),
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Offering Memorandums in reliance
upon and in conformity with written information furnished to the Company or the
Trust by such Initial Purchaser through Merrill Lynch expressly for use in the
Offering Memorandums.
(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
<PAGE>
27
indemnifying party or parties be liable for the fees and expenses of more than
one 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.
SECTION 8. Contribution.
------------
In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in Section 7 is for any
reason held to be unenforceable by the indemnified parties although applicable
in accordance with its terms, the Offerors and the Initial Purchasers shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity incurred by the Company, the Trust and
one or more of the Initial Purchasers, as incurred, in such proportions that (a)
the Initial Purchasers are responsible for that portion represented by the
percentage that the total commission for the Initial Purchasers appearing on the
cover page of the Final Offering Memorandum bears to the aggregate offering
price to investors of the Series A Capital Securities appearing thereon and (b)
the Offerors are responsible for the balance; provided, however, that no person
-------- -------
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls an Initial Purchaser within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as such Initial
Purchaser, and each officer and director of the Company, each Administrative
Trustee and each person, if any, who controls the Company or the Trust within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company and the Trust.
SECTION 9. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery.
- --------
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or trustees of the Trust
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Initial Purchaser or
controlling person, or by or on behalf of the Trust or the Company, and shall
survive delivery of the Series A Capital Securities to the Initial Purchasers.
SECTION 10. Termination of Agreement.
------------------------
(a) Termination; General. The Initial Purchasers may terminate this
Agreement, by notice to the Offerors, at any time at or prior to the Closing
Time (i) if there has occurred any material adverse change in the financial
markets in the United Sates or any outbreak of hostilities or escalation thereof
or other calamity or crisis the effect of which on
<PAGE>
28
the financial markets of the United States is such as to make it, in your
judgment, impracticable to market the Series A Capital Securities or to enforce
contracts for the sale of the Series A Capital Securities, or (ii) if trading in
any securities of the Company has been suspended by the Commission or the New
York Stock Exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange or in the over-the-counter market has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by any of such
exchange or by order of the Commission or any other governmental authority or
(iii) if a banking moratorium has been declared by either federal, New York,
Massachusetts or Delaware authorities, or (iv) if there has been, since the date
hereof or since the respective dates as of which information is given in the
Offering Memorandums, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, except that the announcement
of or execution of an agreement relating to the terms and conditions of the
Acquisition (as defined in the Offering Memorandum) will not be considered a
material adverse change for purposes of this clause (iv).
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7 and 8 shall survive such termination and remain in full force and effect.
SECTION 11. Default by One or More of the Initial Purchasers.
------------------------------------------------
If one or more of the Initial Purchasers shall fail at the Closing
Time to purchase Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the Initial Purchasers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Initial Purchasers shall not have completed such arrangements within such 24-
hour period, then this Agreement shall terminate without liability on the part
of any non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Initial Purchasers or the Company
shall have the right to postpone the Closing Time until no later than February
5, 1997 in order to effect any required changes in the Offering Memorandums or
in any other documents or arrangements. As used herein, the
<PAGE>
29
term "Initial Purchaser" includes any person substituted for an Initial
Purchaser under this Section 11.
SECTION 12. Notices.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchasers shall be directed
to the Initial Purchasers c/o Merrill Lynch at North Tower, World Financial
Center, New York, New York 10281-1201, attention of Steven J. Goulart, with a
copy to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022,
Attention of Faith Grossnickle, Esq.; notices to the Offerors shall be directed
to Allmerica Financial Corporation, 440 Lincoln Street, Worcester, Massachusetts
01653, attention of Edward J. Parry III, with a copy to Ropes & Gray, One
International Square, Boston, Massachusetts 02110, Attention of Lauren I.
Norton, Esq.
SECTION 13. Parties.
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This Agreement shall each inure to the benefit of and be binding upon
the Initial Purchasers and the Offerors and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other thin the Initial Purchasers and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Initial Purchasers and the Offerors and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW.
-------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Effect of Headings.
------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding Agreement
between the Initial Purchasers and the Offerors in accordance with its terms.
Very truly yours,
ALLMERICA FINANCIAL CORPORATION
By Edward J. Parry III
-------------------------------
Name: Edward J. Parry III
Title: Vice President and Chief
Financial Officer
AFC CAPITAL TRUST I
By Edward J. Parry III
-------------------------------
Name: Edward J. Parry III
Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By Steven J. Goulart
---------------------------
Name: Steven J. Goulart
Title: Managing Director
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Series A
Capital
Name of Initial Purchaser Securities
- ------------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................ 150,000
Morgan Stanley & Co. Incorporated............................ 150,000
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Total........................................................ 300,000
=======
</TABLE>
