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EXHIBIT 4.2
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
ALLSTATE FINANCING II
Dated as of November 27, 1996
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TABLE OF CONTENTS
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ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application . . . . . . . 11
Section 2.2 Lists of Holders of Securities . . . . . . . . 11
Section 2.3 Reports by the Property Trustee . . . . . . . 12
Section 2.4 Periodic Reports to Property Trustee . . . . . 12
Section 2.5 Evidence of Compliance with
Conditions Precedent . . . . . . . . . . . 12
Section 2.6 Events of Default; Waiver . . . . . . . . . . 12
Section 2.7 Event of Default; Notice . . . . . . . . . . . 14
ARTICLE III
ORGANIZATION
Section 3.1 Name . . . . . . . . . . . . . . . . . . . . . 14
Section 3.2 Office . . . . . . . . . . . . . . . . . . . . 15
Section 3.3 Purpose . . . . . . . . . . . . . . . . . . . 15
Section 3.4 Authority . . . . . . . . . . . . . . . . . . 15
Section 3.5 Title to Property of the Trust . . . . . . . . 15
Section 3.6 Powers and Duties of the Regular Trustees . . 16
Section 3.7 Prohibition of Actions by the Trust
and the Trustees . . . . . . . . . . . . . 19
Section 3.8 Powers and Duties of the Property Trustee . . 20
Section 3.9 Certain Duties and Responsibilities
of the Property Trustee . . . . . . . . . . 22
Section 3.10 Certain Rights of Property Trustee . . . . . . 25
Section 3.11 Delaware Trustee . . . . . . . . . . . . . . . 28
Section 3.12 Execution of Documents . . . . . . . . . . . . 28
Section 3.13 Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . 28
Section 3.14 Duration of Trust . . . . . . . . . . . . . . 28
Section 3.15 Mergers . . . . . . . . . . . . . . . . . . . 28
ARTICLE IV
DEPOSITOR
Section 4.1 Depositor's Purchase of Common Securities . . 30
Section 4.2 Responsibilities of the Depositor . . . . . . 30
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ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees . . . . . . . . . . . . . . 31
Section 5.2 Delaware Trustee . . . . . . . . . . . . . . . 32
Section 5.3 Property Trustee; Eligibility . . . . . . . . 32
Section 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee Generally . . 33
Section 5.5 Regular Trustees . . . . . . . . . . . . . . . 33
Section 5.6 Delaware Trustee . . . . . . . . . . . . . . . 34
Section 5.7 Appointment, Removal and Resignation
of Trustees . . . . . . . . . . . . . . . . 34
Section 5.8 Vacancies among Trustees . . . . . . . . . . . 36
Section 5.9 Effect of Vacancies . . . . . . . . . . . . . 36
Section 5.10 Meetings . . . . . . . . . . . . . . . . . . . 36
Section 5.11 Delegation of Power . . . . . . . . . . . . . 37
Section 5.12 Merger, Conversion, Consolidation
or Succession to Business . . . . . . . . . 37
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions . . . . . . . . . . . . . . . . 38
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities . . . 38
Section 7.2 Registrar, Paying Agent and Exchange Agent . . 39
Section 7.3 Paying Agent to Hold Money in Trust . . . . . 40
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust . . . . . . . . . . . . . 40
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities . . . . . . . . . . . . 41
Section 9.2 Transfer of Certificates . . . . . . . . . . . 42
Section 9.3 Deemed Security Holders . . . . . . . . . . . 42
Section 9.4 Book Entry Interests . . . . . . . . . . . . . 42
Section 9.5 Notices to Clearing Agency . . . . . . . . . . 43
Section 9.6 Appointment of Successor Clearing Agency . . . 43
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Section 9.7 Definitive Capital Security Certificates . . . 44
Section 9.8 Mutilated, Destroyed, Lost or
Stolen Certificates . . . . . . . . . . . . 44
Section 9.9 Cancellation . . . . . . . . . . . . . . . . . 45
Section 9.10 CUSIP Numbers . . . . . . . . . . . . . . . . 45
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability . . . . . . . . . . . . . . . . . . 46
Section 10.2 Exculpation . . . . . . . . . . . . . . . . . 46
Section 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . 47
Section 10.4 Indemnification . . . . . . . . . . . . . . . 48
Section 10.5 Outside Businesses . . . . . . . . . . . . . . 51
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year . . . . . . . . . . . . . . . . . 52
Section 11.2 Certain Accounting Matters . . . . . . . . . . 52
Section 11.3 Banking . . . . . . . . . . . . . . . . . . . 53
Section 11.4 Withholding . . . . . . . . . . . . . . . . . 53
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments . . . . . . . . . . . . . . . . . . 53
Section 12.2 Meetings of the Holders of Securities;
Action by Written Consent . . . . . . . . . 56
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of
Property Trustee . . . . . . . . . . . . . 57
Section 13.2 Representations and Warranties of
Delaware Trustee . . . . . . . . . . . . . 58
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices . . . . . . . . . . . . . . . . . . . 59
Section 14.2 Governing Law . . . . . . . . . . . . . . . . 60
Section 14.3 Intention of the Parties . . . . . . . . . . . 61
Section 14.4 Headings . . . . . . . . . . . . . . . . . . . 61
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Section 14.5 Successors and Assigns . . . . . . . . . . . . 61
Section 14.6 Partial Enforceability . . . . . . . . . . . . 61
Section 14.7 Counterparts . . . . . . . . . . . . . . . . . 61
ANNEX I TERMS OF SECURITIES . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . A2-1
EXHIBIT B SPECIMEN OF DEBENTURE . . . . . . . . . . . B-1
EXHIBIT C UNDERWRITING AGREEMENT . . . . . . . . . . C-1
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
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310(a) . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . 3.6(e)
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* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any of
its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
ALLSTATE FINANCING II
November 27, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of November 27, 1996, by the Trustees (as
defined herein), the Depositor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Depositor established
Allstate Financing II (the "Trust"), a trust under the Delaware
Business Trust Act pursuant to a Declaration of Trust dated as of
August 21, 1996 (the "Original Declaration") and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on
August 21, 1996, 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;
WHEREAS, as of the date hereof, no interests in the Trust
have been issued;
WHEREAS, all of the Trustees and the Depositor, 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 constitute 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 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.
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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.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under any applicable Federal or State
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bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of such Person or of any substantial part
of its property or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 90 consecutive days; or
(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or similar official) of such Person or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt, or the taking
of corporate action by such Person in furtherance of any such action.
"Book Entry Interest" means a beneficial interest in a
Global 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 9.4.
"Business Day" means any day other than a Saturday or
Sunday or any day on which banking institutions in New York, New York
are authorized or required by law or executive order or a day on
which the corporate trust office of the Property Trustee or the
Debenture Trustee is closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be
amended from time to time, or any successor legislation.
"Capital Securities" and "Capital Security" have the
meanings specified in Section 7.1.
"Capital Securities Guarantee" means the guarantee
agreement to be dated as of November 27, 1996, of the Depositor in
respect of the Capital Securities.
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"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 Security Certificate" means a certificate
representing a Capital Security substantially in the form of Exhibit
A-1.
"Certificate" means a Common Security Certificate or a
Capital Security Certificate.
"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 Certificate 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 Date" means the "Closing Date" and each "Time of
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the 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" and "Common Security" have the meanings
specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement
to be dated as of November 27, 1996 of the Depositor in respect of
the Common Securities.
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"Common Security Certificate" means a definitive
certificate in fully registered form representing a Common Security
substantially in the form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers,
directors, shareholders, members, partners, employees,
representatives or agents of any Regular Trustee; or (d) any officer,
employee or agent of the Trust or its Affiliates.
"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 Two
International Place, Boston, Massachusetts 02110.
"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 The Allstate Corporation, a
Delaware corporation, or any successor entity resulting from any
consolidation, amalgamation, merger or other business combination, in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means State Street Bank and Trust
Company, a Massachusetts trust company, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer under the Indenture to be held by the Property
Trustee, a specimen certificate for such series of Debentures being
Exhibit B.
"Delaware Trustee" means Delaware Trust Capital Management,
Inc., a Delaware banking corporation, solely in its capacity as
Delaware Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor Delaware Trustee
appointed as herein provided in Section 5.2.
"Definitive Capital Security Certificates" has the meaning
set forth in Section 9.7.
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"Depositor" means The Allstate Corporation, a Delaware
corporation, in its capacity as depositor of the Trust.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" means any one of the following events
(whatever the reasons for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) the occurrence of an Indenture Event of Default;
or
(b) default by the Property Trustee in the payment of
any Distribution when it becomes due and payable, and continuation of
such default for a period of 30 days; or
(c) default by the Property Trustee in the payment of
any Redemption Price of any Security when it becomes due and payable;
or
(d) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Trustees in this
Declaration (other than a covenant or warranty, a default in the
performance of which or the breach of which is dealt with in clause
(b) or (c) above) and continuation of such default or breach for a
period of 60 days after there has been given, by registered or
certified mail, to the defaulting Trustee or Trustees by the Holders
of at least 25% in aggregate liquidation preference of the
outstanding Capital Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect
to the Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.
"Event Redemption Price", with respect to any redemption of
Securities upon a redemption of Debentures pursuant to Section 2.7(b)
of the Second Supplemental Indenture, means an
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amount equal to the redemption price of a Like Amount of such
Debentures pursuant to said Section 2.7(b), plus accrued and unpaid
Distributions on such Securities to the Redemption Date.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section
9.4.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, 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 Subordinated Indenture, dated as of
November 27, 1996, between the Debenture Issuer and the Debenture
Trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued, as amended from time to time.
"Indenture Event of Default" means an Event of Default as
defined in the Indenture.
"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.
"Investment Company Event" means the receipt by the Trust
of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation
or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory
authority (a "Change in Investment Company Act Law"), the Trust is or
will be considered an "investment company" that is required to be
registered under the Investment Company Act, which Change in
Investment Company Act Law becomes effective on or after the date of
original issuance of the Preferred Securities under this Declaration.
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"Legal Action" has the meaning set forth in Section 3.6(g).
"Like-Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Value 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 Value of the Securities of the holder to whom such
Debentures are distributed.
"Liquidation Value" means $1,000 per Security.
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding 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.
"Maturity Redemption Price" means the price equal to the
Liquidation Value of, plus accrued Distributions on, the Securities.
"Ministerial Action" has the meaning set forth in the terms
of the Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person,
a certificate signed by two Authorized Officers 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 each 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 each officer in rendering
the Certificate;
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(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Optional Redemption Price", with respect to any redemption
of Securities upon a redemption of Debentures pursuant to Section
2.7(a) of the Second Supplemental Indenture, means an amount equal to
the redemption price of a Like Amount of such Debentures pursuant to
said Section 2.7(a), together with accrued and unpaid Distributions
on such Securities to the Redemption Date.
"Paying Agent" has the meaning specified in Section 7.2.
"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.
"Pricing Agreement" means the pricing agreement among the
Trust, the Depositor, and the underwriters designated by the Regular
Trustees with respect to the offer and sale of the Capital
Securities.
"Property Trustee" means State Street Bank and Trust
Company, a Massachusetts trust company, solely in its capacity as
Property Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor Property Trustee
appointed as herein provided.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
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"Redemption Price" means the Maturity Redemption Price, the
Event Redemption Price or the Optional Redemption Price, as the
context requires.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Depositor, any
direct or indirect wholly owned subsidiary of the Depositor or any
other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Depositor.
"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 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.
"Rule 3a-5" means Rule 3a-5 under the Investment Company
Act, or any successor rule or regulation.
"Second Supplemental Indenture" means the Second
Supplemental Indenture, dated as of November 27, 1996, between the
Depositor and the Debenture Trustee, as amended from time to time.
"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.
"Special Event" means the occurrence of a Tax Event or an
Investment Company Event, as so collectively defined.
"Stated Maturity" means December 1, 2045.
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"Tax Event" means the receipt by the Trust of an opinion of
counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date hereof,
there is more than an insubstantial risk that (i) the Trust is, 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, (ii) interest payable by the Debenture Issuer on
such Debentures is not, 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.
"25% in liquidation amount of the Securities" means, except
as provided in the terms of the Capital Securities or by the Trust
Indenture Act, Holder(s) of outstanding 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 25% 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.
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"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement
for the offering and sale of Capital Securities in the form of
Exhibit C.
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 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
Sections 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 Depositor and the Regular 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 of the Securities ("List of Holders") as of
such record date; provided that neither the Depositor nor the Regular
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
Depositor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a
written
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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 Paying Agent (if
acting in such capacity); provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Property Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing May
15, 1997, the Property Trustee shall provide to the Holders of the
Capital Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Depositor and the Regular Trustees on behalf of
the Trust shall provide to the Property 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.
Section 2.5 Evidence of Compliance with Conditions
Precedent.
Each of the Depositor and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of
compliance with any conditions precedent, if any, provided for in
this Declaration that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
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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 is not waivable under
the Indenture, the Event of Default under this Declaration shall also
not be waivable.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 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 the Common Securities for all
purposes of this Declaration without any further act, vote or consent
of the Holders of the Common Securities.
(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 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; 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 until 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
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with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture 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 Section 316(a)(1)(B) of the
Trust Indenture Act and such Section 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 actually known to
the Property Trustee, transmit by mail, first class postage prepaid,
to the Holders of the Securities, the Regular Trustees and the
Depositor, notices of all defaults with respect to the Securities
actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured or waived 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 or in the payment of any sinking fund installment
established for 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 of the
Securities.
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(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(1) a default under Sections 5.01(a) and 5.01(b)
of the Indenture; or
(2) 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.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "Allstate Financing II", as such name
may be modified from time to time by the Regular 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 Regular Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o The
Allstate Corporation, 2775 Sanders Road, Northbrook, Illinois 60062.
On ten Business Days written notice to the Holders of Securities, the
Regular 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 and use the proceeds from such sale to
acquire the Debentures, and (b) 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, 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.
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Section 3.4 Authority.
Subject to the limitations provided in this Declaration and
to the specific duties of the Property Trustee, the Regular Trustees
shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular 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 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 Regular Trustees.
The Regular 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 Capital Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Capital
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities, and the issuance of Securities shall be limited
to a simultaneous issuance of both Capital Securities and Common
Securities on each Closing Date;
(b) in connection with the issuance and sale of the
Capital Securities, at the direction of the Depositor, to:
(i) execute and file with the Commission the
registration statement on Form S-3 prepared by
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the Depositor, including any amendments thereto, pertaining to
the Capital Securities;
(ii) execute and file any documents prepared by
the Depositor, or take any acts as determined by the Depositor
to be necessary in order to qualify or register all or part of
the Capital Securities in any State in which the Depositor has
determined to qualify or register such Capital Securities for
sale;
(iii) execute and file an application, prepared
by the Depositor, to the New York Stock Exchange, Inc. or any
other national stock exchange or the Nasdaq Stock Market's
National Market for listing upon notice of issuance of any
Capital Securities;
(iv) execute and deliver letters, documents or
instruments with DTC and other Clearing Agencies relating to the
Capital Securities;
(v) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Depositor, relating to the registration
of the Capital Securities under Section 12(b) of the Exchange
Act; and
(vi) execute and enter into the Underwriting
Agreement and Pricing Agreement providing for the sale of the
Capital Securities;
(c) to acquire the Debentures with the proceeds of
the sale of the Capital Securities and the Common Securities;
provided, however, that the Regular 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 Holders of the Capital Securities and
the Holders of Common Securities;
(d) to give the Depositor and the Property Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Depositor and the
Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
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established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant notices 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 Regular Trustees pursuant to the terms of the
Securities;
(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;
(j) to give the certificate required by Section
314(a)(4) of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular 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 transfer agent for the Securities;
(m) to give prompt written notice to the Holders of
the Securities 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
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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 Regular 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;
provided that such action does not adversely affect the interests of
Holders; and
(q) 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 Regular Trustees, on behalf of the Trust.
The Regular 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 Regular
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 Regular 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 Regular Trustees pursuant to
this Section 3.6 shall be reimbursed by the Debenture Issuer.
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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. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall
cause the Trust not to:
(i) invest any proceeds received by the Trust
from holding the Debentures, but shall distribute all such
proceeds to Holders of Securities 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;
(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;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Declaration
or Annex I, (A) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture
Trustee, or exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B) waive any
past default that is waivable under the Indenture, or (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; without in each case, obtaining the prior approval of
a Majority in liquidation amount of the Securities and, in the
case of clause (D), the Trust shall have received an opinion
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of counsel to the effect that such amendment, modification or
termination 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, or
(viii) revoke any action previously authorized
or approved by a vote of the holders of the Capital Securities
except by subsequent vote of the holders of such Capital
Securities.
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 Holders of the Securities. 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 Regular 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 of the Securities 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, which institution may be the
Property Trustee in its individual capacity, the rating on whose
long-term unsecured indebtedness is at least
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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 Capital Securities and the Common Securities to the extent
the Debentures are redeemed or mature consistent with the terms
of Annex I; and
(iii) upon written notice of distribution issued
by the Regular 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 special events (as may be defined in the terms of the
Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the
terms of the Securities.
(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.
(e) The Property Trustee shall 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; provided, however, that if a
Declaration Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Capital Securities may directly
institute a proceeding against the Depositor, pursuant to Section 508
of the Indenture for enforcement of payment to such Holder of the
principal of 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
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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) 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
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been
appointed and has accepted that appointment in accordance with
Section 5.7.
(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 shall, for the benefit of Holders of
the Securities, 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 Section 317(a) of the Trust
Indenture Act.
(i) The Property Trustee may authorize one or more
Persons (each, a "Paying Agent") 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 Section
317(b) of the Trust Indenture Act. Any Paying Agent may be removed
by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee.
(j) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the authority
of the Regular Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the
contrary in this Declaration or any Annex or Exhibit hereto, (i) the
Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and
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functions of the Trust set out in Section 3.3 and (ii) 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 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:
(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 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 no implied covenants or obligations
shall be read into this Declaration 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 there-
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in, upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of this
Declaration; but 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 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
reasonably satisfactory to the Property Trustee against such
risk or liability is not reasonably 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 liability afforded to the
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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 Depositor. Money held by
the Property Trustee need not be segregated from other funds
held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i)
and except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the Regular
Trustees or the Depositor with their respective duties under
this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the
Depositor.
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 Depositor or
the Regular Trustees contemplated by this Declaration shall 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
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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 conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered
by the Depositor or the Regular 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;
(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 Depositor 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, reasonably satisfactory to the Property
Trustee, against the costs, expenses (including 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;
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(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 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;
(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;
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(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;
(xii) the Property Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Declaration; and
(xiii) If no Event of Default has occurred and
is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous
provisions in the Declaration or is unsure of the application of
any provision of the Declaration, and the matter is not one on
which holders of Capital Securities are entitled under the
Declaration to vote, then the Property Trustee shall take such
action as is directed by the Company and, if not so directed,
shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have
no liability except for its own bad faith, negligence or willful
misconduct.
(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. 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, 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 Regular 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 Section 3807 of
the Business Trust Act and shall have no powers,
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duties or responsibilities whatsoever, except as expressly provided
herein or except as required by the Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of
or, if there are only two, any Regular Trustee or, if there is only
one, such Regular Trustee is authorized to execute on behalf of the
Trust any documents that the Regular Trustees have the power and
authority to execute pursuant to Section 3.6.
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 Depositor, 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 of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration
or the Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for fifty-five (55) years
from the Closing Date.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any corporation
or other entity, except as described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Depositor,
with the consent of the Regular Trustees or, if there are more than
two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its property
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:
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(A) expressly assumes all of the
obligations of the Trust with respect to the Securities; or
(B) substitutes for the Capital Securities
other securities having substantially the same terms as the
Capital Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Capital
Securities rank in priority with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer 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 Capital Securities or any Successor
Securities are listed, or any 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;
(iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders of
the Capital Securities (including any Successor Securities) in
any material respect;
(vi) such Successor Entity has a purpose
identical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to
the effect that:
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(A) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and
privileges of the Holders of the Capital Securities
(including any Successor Securities) in any material
respect;
(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
(C) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal
income tax purposes.
(viii) the Depositor or any permitted successor
or assignee owns all of the Common Securities of such Successor
Entity and guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided
by the Capital 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 Capital Securities, consolidate, amalgamate, merge with or
into, be replaced by or convey, transfer or lease its property
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 or replacement would
cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
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ARTICLE IV
DEPOSITOR
Section 4.1 Depositor's Purchase of Common Securities.
On the Closing Date the Depositor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to
3% of the capital of the Trust, at the same time as the Capital
Securities are sold.
Section 4.2 Responsibilities of the Depositor.
In connection with the issuance and sale of the Capital
Securities, the Depositor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the
Capital Securities, including any amendments thereto;
(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 Depositor
deems necessary or advisable in order to comply with the applicable
laws of any such States;
(c) 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 upon notice of issuance of
any Capital Securities;
(d) 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) or 12(g)
of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement and Pricing Agreement providing for the sale of the Capital
Securities; and
(f) any other actions necessary or desirable to carry
out any of the foregoing activities.
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ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any
Securities, the Depositor 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) one 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; (2) there shall
be at least one Trustee who is an employee or officer of, or is
affiliated with the Depositor (a "Regular 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.
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
(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.
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Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Depositor; 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 Section 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 Section
310(b) of the Trust Indenture Act) shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed
to be specifically described in this Declaration for purposes of
clause (i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.
(e) The initial Property Trustee shall be:
State Street Bank and Trust Company
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Section 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular 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 Regular Trustees.
The initial Regular Trustees shall be:
Joseph T. Kane
Jennifer M. Hager
(a) Except as expressly set forth in this Declaration
and except if a meeting of the Regular Trustees is called with
respect to any matter over which the Regular Trustees have power to
act, any power of the Regular Trustees may be exercised by, or with
the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular
Trustees, and except as otherwise required by the Business Trust Act
or applicable law, any Regular Trustee is authorized to execute on
behalf of the Trust any documents which the Regular Trustees have the
power and authority to cause the Trust to execute pursuant to Section
3.6; and
(c) a Regular 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 Regular 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:
Delaware Trust Capital Management, Inc.
Section 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b), Trustees may be
appointed or removed without cause at any time except during an
Indenture Event of Default:
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(i) until the issuance of any Securities, by
written instrument executed by the Depositor; and
(ii) 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.
(b) After the occurrence of and during the
continuation an Indenture Event of Default, the Trustee that acts as
the Property Trustee may be removed at such time by the holders of a
Majority in liquidation amount of the outstanding Capital Securities.
(c) (i) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 5.7(a) and (b) until
a Successor Property Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Property
Trustee and delivered to the Regular Trustees and the Depositor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(a)
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 Regular Trustees and the
Depositor.
(d) 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 the Trustee and delivered to the Depositor 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
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such Successor Property Trustee and delivered to the Trust,
the Depositor and 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 Depositor and
the resigning Delaware Trustee.
(e) 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.
(f) 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.
(g) 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.
(h) In no event will the holders of Capital
Securities have the right to vote to appoint, remove or replace the
Regular Trustees, which voting rights are vested exclusively in the
Debenture Issuer.
Section 5.8 Vacancies among Trustees.
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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 Regular Trustees or, if there are more than two, a majority of
the Regular 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 annul the Trust. Whenever a
vacancy in the number of Regular Trustees shall occur, until such
vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the
Regular Trustees by this Declaration.
Section 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any
Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees.
Notice of any in-person meetings of the Regular Trustees shall be
hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the
Regular 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 a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular 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 properly called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a
meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect
to such matter, provided that a Quorum is present, or
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without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and
all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
Section 5.11 Delegation of Power.
(a) Any Regular 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 Regular 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 Regular Trustees or
otherwise as the Regular Trustees may deem expedient, to the extent
such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Property Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or
with which either may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee, as the case may be, shall be a
party, or any corporation succeeding to all or substantially all the
corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, 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.
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ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Capital Securities
and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the
Debenture Issuer makes a payment of interest (including Additional
Interest (as defined in the Indenture)) or principal on 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 Regular Trustees shall on behalf of the Trust
issue one class of preferred securities representing undivided
beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "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 Trust shall issue no securities or
other interests in the assets of the Trust other than the Capital
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the
Trust by a Regular Trustee. Such signature shall be the manual
signature of any present or any future Regular Trustee. In case any
Regular Trustee of the Trust who shall have signed any of the
Securities shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee;
and any Certificate may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Security, shall
be the Regular Trustees of the Trust, although at the date of the
execution and delivery of the Declara-
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tion any such person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which Securities may be listed,
or to conform to usage.
(c) 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.
(d) 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.
(e) 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 Registrar, Paying Agent and Exchange Agent.
In the event that the Capital Securities are not in
book-entry only form, 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. The term "Registrar" includes any additional
registrar, the term "Paying Agent" includes any additional paying
agent and the term "Exchange Agent" includes any additional exchange
agent. The Paying Agent shall initially be the Property Trustee and
co-paying agent chosen by the Property Trustee and acceptable to the
Regular Trustees and Debenture Issuer. The Trust may change any
Paying Agent, Registrar, or
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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 Regular 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.
Section 7.3 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 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 Depositor or an
Affiliate of the Trust or the Depositor 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. 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 Paying Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying
Agent. The Trust shall initially act as Paying Agent for the Capital
Securities and the Common Securities.
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ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the liquidation of or the occurrence of
a Bankruptcy Event with respect to the Depositor;
(ii) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent jurisdiction;
(iii) 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;
(iv) upon dissolution of the Trust pursuant to
Section 4(d) of Annex I; or
(v) before the issuance of any Securities, with
the consent of all of the Regular Trustees and the Depositor.
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a), the 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.
(d) If an early termination occurs as described in
clause (i), (ii) or (iv) above, the Trust shall be liquidated by the
Trustees as expeditiously as the Trustees determine to be possible by
distributing the Debentures, after satisfaction of liabilities to
creditors of the Debenture Issuer as provided by applicable law, to
the holders of Securities, unless such distribution is determined by
the Property Trustee not to be practical, in which event such holders
will be entitled to receive out of the assets of the Debenture Issuer
available for distribution to holders, after satisfaction of
liabilities to creditors of the Debenture Issuer as provided by
applicable law, an amount equal
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to, in the case of holders of Capital Securities, the aggregate
liquidation amount of such Capital Securities plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
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
shall be freely transferable.
(c) To the fullest extent permitted by law, other
than a transfer in connection with a consolidation or merger of the
Depositor into another corporation, or any conveyance, transfer or
lease by the Depositor of its properties and assets substantially as
an entirety to any Person, pursuant to Section 1009 of the Indenture,
any attempted transfer of the Common Securities shall be void. The
Regular Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating "THIS CERTIFICATE
IS NOT TRANSFERABLE".
Section 9.2 Transfer of Certificates.
The Property Trustee will act as registrar and transfer
agent for the Capital Securities. The Property Trustees shall
provide for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in
form satisfactory to the Regular Trustees duly executed by the Holder
or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall be
canceled by the Regular Trust-
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ees. A transferee of a Certificate shall be entitled to the rights
and subject to the obligations of a Holder hereunder upon the receipt
by such transferee of a Certificate. By acceptance of a Certificate,
each transferee shall be deemed to have agreed to be bound by this
Declaration. The Trustees will not be required to register or cause
to be registered the transfer of its Capital Securities after such
Capital Securities have been called for redemption.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust
as the sole holder of such Certificate and of the Securities
represented by such Certificate for purposes of receiving
Distributions, redemption payments and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any Person,
whether or not the Trust shall have actual or other notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Capital
Securities, the Capital Securities Certificates, on original
issuance, will be issued in the form of one or more, fully
registered, global Capital Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency,
by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the
name of Cede & Co., the nominee of DTC, and no Capital Security
Beneficial Owner will receive a definitive Capital Security
Certificate representing such Capital Security Beneficial Owner's
interests in such Global Certificates, except as provided in Section
9.7. Unless and until definitive, fully registered Capital Security
Certificates (the "Definitive Capital Security Certificates") have
been issued to the Capital Security Beneficial Owners pursuant to
Section 9.7:
(a) the provisions of this Section 9.4 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 Certificates
and receiving approvals, votes or consents hereunder)
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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
9.4 conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 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 receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, unless and until
Definitive Capital Security Certificates shall have been issued to
the Capital Security Beneficial Owners pursuant to Section 9.7, the
Regular Trustees shall give all such notices and communications
specified herein to be given to the Capital Security Holders to the
Clearing Agency, and shall have no notice obligations to the Capital
Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services
as securities depositary with respect to the Capital Securities, the
Regular Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Capital Securities.
Section 9.7 Definitive Capital Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Capital
Securities and a successor Clearing Agency is not appointed within 90
days after such discontinuance pursuant to Section 9.6; or
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(b) the Regular Trustees elect after consultation
with the Depositor to terminate the book entry system through the
Clearing Agency with respect to the Capital Securities;
then:
(c) Definitive Capital Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect
to such Capital Securities; and
(d) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions, the
Regular Trustees shall cause Definitive Capital Security Certificates
to be delivered to Capital Security Beneficial Owners in accordance
with the instructions of the Clearing Agency. Neither the Trustees
nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be
protected in relying on, said instructions of the Clearing Agency.
The Definitive Capital Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks
of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which
Capital Securities may be listed, or to conform to usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered
to the Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of
any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep each of
them harmless;
then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of
the Trust shall execute and deliver, in exchange for or
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in lieu of any such mutilated, destroyed, lost or stolen Certificate,
a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 9.9 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 9.10 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.
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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 Depositor 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 of the Trust
or otherwise.
(b) The Holder of the Common Securities 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 Section 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
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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 who has been selected with reasonable care by
or 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
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.
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(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.
Section 10.4 Indemnification.
(a) (i) 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, 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
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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) (unless ordered by a court)
shall be made by the Debenture Issuer 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 Regular Trustees by a majority vote of a quorum
consisting of such Regular 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
Regular Trustees so directs, by independent legal counsel
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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 Debenture Issuer 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 Regular Trustees by a majority vote of a quorum
of disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular 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 Regular 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 Regular 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.
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All rights to indemnification under this Section 10.4(a) shall
be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such
capacity at 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 Debenture Issuer 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
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 Debenture Issuer agrees to indemnify the (i)
Property Trustee, (ii) the Delaware Trustee (in its individual
capacity), (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
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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 or 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 satisfaction and discharge of this Declaration.
Section 10.5 Outside Businesses.
Any Covered Person, the Depositor, the Delaware Trustee and
the Property Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities 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 Depositor, 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 Depositor, 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 Depositor or any Affiliate of the
Depositor, 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 Depositor or its Affiliates.
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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 Regular 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 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 Regular Trustees.
(b) The Regular Trustees shall cause to be prepared
and delivered to each of the Holders of Securities, 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 Regular Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, 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 Regular Trustees
shall endeavor to deliver all such statements within 30 days after
the end of each Fiscal Year of the Trust.
(d) The Regular 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 Regular
Trustees on behalf of the Trust with any state or local taxing
authority.
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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 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 Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property
Trustee Account.
Section 11.4 Withholding.
The Trust and the Regular 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 Regular 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 claimed 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:
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(i) the Regular Trustees (or, if there are more
than two Regular Trustees a majority of the Regular 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;
(b) No amendment shall be made, and any such
purported amendment shall be void and ineffective:
(i) unless, in the case of any proposed
amendment, the Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the Depositor
that such amendment is permitted by, and conforms to, the terms
of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed
amendment which affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee
shall have first received:
(A) an Officers' Certificate from each of
the Trust and the Depositor 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 Depositor or the Trust) that such amendment
is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities); and
(iii) 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;
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(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 IV 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 V 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
(g) Notwithstanding Section 12.1(c), this Declaration
may be amended by the Depositor and the Trustees without the consent
of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or 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 this Declaration; or
(iii) modify, eliminate or add to any provision
of this Declaration to such extent as shall be necessary to
ensure that the Trust will be classi-
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fied for United Stated 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 clauses (i) and (ii) above, such
action shall not adversely affect in any material respect the
interests of any Holders of the Securities. Any amendment to
the Declaration shall become effective when written notice
thereof is given to the holders of the Securities.
Section 12.2 Meetings of the Holders of Securities; Action
by Written Consent.
(a) Meetings of the Holders of any class of
Securities may be called at any time by the Regular 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 Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the
Holders of at least 25% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the
Regular Trustees one or more calls 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 of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities
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 7 days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration or
the rules of any stock exchange on which the Capital Secu-
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rities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities.
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
of Securities 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 of Securities entitled to vote who
have not consented in writing. The Regular 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 Regular Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities 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 at the pleasure of 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 of the Securities were stockholders
of a Delaware corporation;
(iii) each meeting of the Holders of the
Securities shall be conducted by the Regular Trustees or by such
other Person that the Regular 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 Regular Trustees, in their sole discretion, shall
establish all
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other provisions relating to meetings of Holders of Securities,
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.
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 Depositor at the date
of this Declaration, and each Successor Property Trustee represents
and warrants to the Trust and the Depositor at the time of the
Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) the Property Trustee is a Massachusetts trust
company with trust powers and authority 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 it 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
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(d) no consent, approval or authorization of, or
registration with or notice to, any Massachusetts 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 Depositor at the date
of this Declaration, and each Successor Delaware Trustee represents
and warrants to the Trust and the Depositor at the time of the
Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is duly organized, 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.
(b) The Delaware Trustee has been authorized to
perform its obligations under the Certificate of Trust and this
Declaration. This Declaration under Delaware law 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 banking authority of the State of
Delaware or any federal banking authority governing the banking or
trust powers of the Delaware Trustee is required for the execution,
delivery or performance by the Delaware Trustee, of this Declaration.
(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.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1 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 Regular
Trustees at the Trust's mailing address set forth below (or such
other address as the Trust may give notice of to the Holders of the
Securities):
Allstate Financing II
c/o The Allstate Corporation
2775 Sanders Road
Northbrook, Illinois 60062
Attention: Secretary
Telecopy:
(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 of the Securities):
Delaware Trust Capital
Management, Inc.
900 Market Street, 2nd Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Administration/
Richard N. Smith
Telecopy:
(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 of the
Securities):
State Street Bank and
Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telecopy:
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(d) if given to the Holder of the Common Securities,
at the mailing address of the Depositor set forth below (or such
other address as the Holder of the Common Securities may give notice
to the Trust):
The Allstate Corporation
2775 Sanders Road
Northbrook, Illinois 60062
Attention: Secretary
Telecopy:
(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 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 14.2 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.
Section 14.3 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 14.4 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 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party
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shall be deemed to be included, and all covenants and agreements in
this Declaration by the Depositor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 14.6 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 14.7 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 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 have caused these
presents to be executed as of the day and year first above written.
/s/ Joseph T. Kane
----------------------------------
Joseph T. Kane, as Regular Trustee
/s/ Jennifer M. Hager
----------------------------------
Jennifer M. Hager, as Regular
Trustee
DELAWARE TRUST CAPITAL
MANAGEMENT, INC.,
as Delaware Trustee
By:/s/ Richard N. Smith
-------------------------------
Name: Richard N. Smith
Title: Vice President
STATE STREET BANK AND
TRUST COMPANY,
as Property Trustee
By:/s/ Henry W. Seemore
-------------------------------
Name: Henry W. Seemore
Title: Assistant Vice President
THE ALLSTATE CORPORATION,
as Depositor
By:/s/ James P. Zils
-------------------------------
Name: James P. Zils
Title: Vice President and
Treasurer
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ANNEX I
TERMS OF
7.83% CAPITAL SECURITIES
7.83% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of November 27, 1996 (as amended from
time to time, the "Declaration"), the designation, rights,
privileges, restrictions, preferences and other terms and provisions
of the Capital Securities and the Common 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 Prospectus referred to below):
1. Designation and Number.
(a) Capital Securities. 200,000 Capital Securities
of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of Two Hundred Million Dollars ($200,000,000) and
a liquidation amount with respect to the assets of the Trust of
$1,000 per capital security, are hereby designated for the purposes
of identification only as "7.83% Capital Securities" (the "Capital
Securities"). The Capital Security 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. 6,186 Common Securities of
the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of Six Million One Hundred Eighty Six Thousand
Dollars ($6,186,000), and a liquidation amount with respect to the
assets of the Trust of $1,000 per common security, are hereby
designated for the purposes of identification only as "7.83% Common
Securities" (the "Common Securities"). The Common Security
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.
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2. Distributions.
(a) Distributions payable on each Security will be
fixed at a rate per annum of 7.83% (the "Coupon Rate") of the stated
liquidation amount of $1,000 per Security, such rate being the rate
of interest payable on the Debentures to be held by the Property
Trustee. 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). The term
"Distributions" as used herein includes such cash distributions and
any such interest 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 available therefor. The amount of
Distributions payable for any period will be computed for any full
semi-annual Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full
semi-annual Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of
days elapsed per 180-day period.
(b) Distributions on the Securities will be
cumulative, will accrue from November 27, 1996, and will be payable
semi-annually in arrears, on June 1 and December 1 of each year,
commencing on June 1, 1997, except as otherwise described below. So
long as no Event of Default under the Indenture has occurred and is
continuing, the Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period
from time to time on the Debentures for a period not exceeding 10
consecutive semi-annual periods or extending beyond the maturity date
of the Debentures (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the
Debentures; provided that no Extension Period shall last beyond the
date of maturity of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such
deferral, semi-annual Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded semi-annually during any such Extension
Period. The term "Distribution" as used herein shall include any
such additional Distributions. During any such Extension Period, the
Debenture Issuer shall not, and shall not permit any subsidiary of
the Debenture Issuer to, (a) declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to any of the Debenture Issuer's
capital stock or (b) make any payment of principal, interest or
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premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Debenture Issuer
(including other debentures) that rank pari passu with or junior in
interest to the Debentures (other than (i) dividends or distributions
in common stock of the Debenture Issuer, (ii) redemptions or
repurchases of any rights, or the declaration of a dividend of any
rights, or the issuance of any security under any future rights plan
of the Debenture Issuer, (iii) purchases or acquisitions of shares of
common stock in connection with the satisfaction by the Debenture
Issuer of its obligations under any benefit plans for its or its
subsidiaries' directors, officers, employees or independent
contractors, (iv) as a result of a reclassification of the Debenture
Issuer's capital stock or the exchange or conversion of one class or
series of the Debenture Issuer's capital stock for another class or
series of the Debenture Issuer's capital stock or (v) the purchase of
fractional interests in shares of the Debenture Issuer's capital
stock pursuant to the conversion or exchange provisions of such
capital stock of the Debenture Issuer or the security being converted
or exchanged) or make any guarantee payments with respect to the
foregoing. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period;
provided that such Extension Period together with all such previous
and further extensions thereof may not exceed 10 consecutive
semi-annual periods or extend beyond the maturity 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
after 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.
(c) Distributions on the Securities will be payable
to the Holders thereof as they appear on the books and records of the
Trust on the relevant record dates. The relevant record dates shall
be the 15th day of the month immediately prior to the month in which
the relevant payment date occurs which payment 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 Capital Securities
will be made as described under the heading Book-Entry Only Issuance
in the Prospectus Supplement dated November 22, 1996, to the
Prospectus dated October 1, 1996 (together, the "Prospectus"), of the
Trust included in the Registration Statement on Form S-3 of the
Depositor, the Trust and certain other business trusts. The relevant
record dates for the Common Securities shall be the same record date
as for the
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Capital Securities. Distributions payable on any Securities that are
not punctually paid on any Distribution payment date, as a result of
the Debenture Issuer having failed to make a payment under the
Debentures, will cease to be payable to the Person in whose name such
Securities are registered 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, additional Distributions or other payment in
respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on 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 voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities
on the date of the dissolution, winding-up or termination, as the
case may be, will be entitled to receive out of the assets of the
Trust available for distribution to Holders of Securities after
satisfaction of liabilities of creditors an amount equal to the
aggregate of the stated liquidation amount of $1,000 per Security
plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination,
Debentures in an aggregate stated principal amount equal to the
aggregate stated liquidation amount of such Securities, with an
interest rate equal to the Coupon Rate of, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such
Securities. The Liquidation Distribution shall be consistent with
the provisions of paragraph 4(f) below.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insuffi-
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cient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment or redemption, in whole or in
part, of the Debentures, whether at Stated Maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be simultaneously applied by the
Property Trustee to redeem a Like Amount of the Securities having an
aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed, upon not less than 15 nor
more than 60 days notice prior to the date fixed for repayment or
redemption (the "Redemption Date"), at the applicable Redemption
Price, with respect to the Capital Securities which shall be equal to
(i) in the case of repayment of the Debentures at their Stated
Maturity, the Maturity Redemption Price, (ii) in the case of the
redemption of the Debentures upon the occurrence and during the
continuation of a Special Event, the Event Redemption Price and (iii)
in the case of the optional redemption of the Debentures pursuant to
Section 2.7(a) of the Second Supplemental Indenture, the Optional
Redemption Price.
(b) If fewer than all the outstanding Securities are
to be so redeemed, the Common Securities and the Capital Securities
will be redeemed Pro Rata, by lot or by any other method determined
by the Debenture Trustee to be equitable, and if the Debenture
Trustee redeems such Securities on a Pro Rata basis, the Capital
Securities to be redeemed will be as described in Section 4(e)(ii)
below.
(c) The Debenture Issuer will have the right to
redeem the Debentures as provided in the Second Supplemental
Indenture.
(d) At any time, the Depositor shall have the right
to dissolve the Trust and, after satisfaction of creditors, cause
Debentures held by the Property Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and
having the same record date for payment as the Securities, to be
distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, subject to the
Depositor having received an opinion of counsel experienced in such
matters to the effect that
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Holders of the Securities will not recognize income, gain or loss
for United States federal income tax purposes.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) DTC or
its nominee (or any successor Clearing Agency or its nominee), as the
record 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, except for certificates representing Capital
Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial
interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and bearing accrued and unpaid
interest equal to accrued and unpaid Distributions on, such
Securities until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissuance.
(e) "Redemption or Distribution Procedures."
(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 of Securities to be redeemed or exchanged
not fewer than 15 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 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 of
Securities. 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) In the event that fewer than all the
outstanding Securities are to be redeemed, the
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Securities to be redeemed may be redeemed Pro Rata from each
Holder of Capital Securities (or by lot or any other method
determined by the Property Trustee to be equitable), it being
understood that, in respect of Capital Securities registered in
the name of and held of record by the DTC or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such
nominee holds such securities) in accordance with the procedures
applied by such agency or nominee. The particular Securities to
be redeemed shall be selected on a Pro Rata basis not more than
60 days prior to the Redemption Date by the Property Trustee
from the outstanding Securities not previously called for
redemption, by such method as the Property Trustee shall deem
fair and appropriate.
(iii) If Securities are to be redeemed and the
Trust gives a Redemption/Distribution Notice, which notice may
only be issued if the Debentures are redeemed as set out in this
Section 4 (which notice will be irrevocable), then (A) while the
Capital Securities are in book-entry only form, with respect to
the Capital Securities, 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, the
Property Trustee will deposit irrevocably with DTC or its
nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect
to the Capital Securities and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the
Holders of the Capital Securities, and (B) with respect to
Capital Securities issued in definitive 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 irrevocably deposit with the paying agent
for the Securities Funds sufficient to pay the relevant
Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the
Holders of record of such Securities on the relevant record date
by check mailed to the address of such Holders appearing on the
books and
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records of the Trust on such record 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
accrue on the Securities so called for redemption and all rights
(except the rights described in the immediately preceding
sentence) of Holders of such Securities so called for redemption
will cease, except the right of the Holders of record on the
relevant record date of such Securities to receive the
Redemption Price, but without interest on such Redemption Price,
and such Securities shall cease to be Outstanding. Neither the
Regular Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Securities that have
been so called for redemption. 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
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
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 Depositor as
guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue 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 Regular Trustees on behalf of the Trust to (A) in
respect of the Capital Securities, DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global
Certificates have been issued or, if Definitive Capital Security
Certificates have been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holder thereof. Such
notice shall state: (I) the Redemption Date; (II) the Redemption
Price; (III) the CUSIP number; (IV) if less
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84
than all the Outstanding Trust Securities are to be redeemed,
the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and (V) that on the
Redemption Date the Redemption Price will become due and payable
upon each such Trust Security to be redeemed and that
distributions thereon will cease to accrue on and after said
date.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities
laws), provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Depositor 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.
(f) Payment of any Redemption Price on the Capital
Securities and any Distribution of Debentures to Holders of Capital
Securities shall be made only to the Holders thereof upon surrender
of their certificates evidencing such capital securities.
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) Subject to the requirements set forth in this
paragraph, the Holders of a Majority in aggregate liquidation amount
of the Capital Securities, voting separately as a class may direct
the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee, as holder of the
Debentures, to (i) exercise the remedies available under the
Indenture, conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under Section 513 of
the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and
payable. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital
Securi-
I-9
85
ties. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or
the Debenture Trustee as set forth above, the Property Trustee shall
not take any action in accordance with the directions of the Holders
of the Capital Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that for
the purposes of United States federal income tax the Trust will not
be classified as other than a grantor trust on account of such
action. If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on
the date such interest or principal is otherwise payable (or in the
case of redemption, on the redemption date), then a holder of Capital
Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of 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 Holder will be subrogated to the
rights of such holder of Capital Securities to the extent of any
payment made by the 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.
Any required approval or direction of Holders of Capital
Securities may be given at a 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 Property
Trustees 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
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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 Depositor
or any Affiliate of the Depositor 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.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a)
and 8 as otherwise required by law and the Declaration, the Holders
of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are
entitled, in accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee or to increase or decrease the
number of Trustees.
(c) Subject to Section 2.6 of the Declaration and
only after the Event of Default with respect to the Capital
Securities has been cured, waived, or otherwise eliminated and
subject to the requirements of the second to last sentence of this
paragraph, the Holders of a Majority in liquidation amount of the
Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding
for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is
waivable under Section 513 of the Indenture, or (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable. Pursuant to this Section 6(c),
the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital
Securities. Other than with respect to directing the time, method
and place of conducting any remedy available to the Property Trustee
or the Debenture Trustee as set forth above, the Property Trustee
shall not take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph unless the
Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income
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87
tax the Trust will not be classified as other than a grantor trust on
account of such action. If the Property Trustee fails to enforce its
rights under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to enforce
the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any
other Person.
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 Regular
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.
(a) In addition to any requirements under Section
12.1 of the Declaration, and except for the amendments permitted by
Section 12.1(g) of the Declaration, the Declaration may be amended by
the Trustees and the Company with, and shall not become effective
without, (i) the consent of holders representing not less than a
majority (based upon Liquidation Values) of the outstanding
Securities, and (ii) receipt by the Trustees of an opinion of counsel
experienced in such matters 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 without the consent of each holder of Securities,
such Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Securities or otherwise adversely
I-12
88
affect the amount of any Distribution required to be made in respect
of the Securities as of a specified date or (ii) restrict the right
of a holder of Securities to institute suit for the enforcement of
any such payment on or after such date. If any amendment or proposal
referred to in the preceding sentence would adversely affect only the
Capital Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the
approval of the requisite vote of such class of Securities.
(b) In the event the consent of the Property Trustee
as the holder of the Debentures is required under the Indenture with
respect to any amendment, modification or termination on the
Indenture or the Debentures, the Property Trustee shall request the
written direction of the Holders of the Securities with respect to
such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as
a single class; provided, that the Property Trustee shall not take
any action in accordance with the directions of the Holders of the
Securities under this Section 7(b) unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such 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 of Securities 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
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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.
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 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,
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.
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 Depositor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as
may be appropriate), and the Indenture to a Holder without charge on
written request to the Trust at its principal place of business.
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90
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered
in the name of The Depository Trust Company ("DTC") or a nominee of
DTC. This Capital Security is exchangeable for Capital Securities
registered in the name of a person other than DTC 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 DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC) may be registered
except in limited circumstances.
Unless this Capital Security is presented by an authorized
representative of DTC (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 DTC 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.
Certificate Number Number of Capital Securities
P - CUSIP NO. _______________
Certificate Evidencing Capital Securities
of
Allstate Financing II
7.83% Capital Securities (liquidation amount $1,000 per Capital
Security)
Allstate Financing II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby
certifies that ______________ (the "Holder") is the registered owner
of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the
7.83% Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Capital Securities"). The
A1-1
91
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
set forth in, and this certificate and 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 November 27, 1996, 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 herein but not defined shall
have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Capital Securities Guarantee to the
extent provided therein. The Depositor 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.
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.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ____ day of November, 1996.
ALLSTATE FINANCING II
By:
---------------------------
Name:
Title: Regular Trustee
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92
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(Insert assignee's name and 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 partici-
pation 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.
A1-3
93
EXHIBIT A-2
THIS CERTIFICATE IS NOT TRANSFERABLE
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
Allstate Financing II
7.83% Common Securities
(liquidation amount $1,000 per Common Security)
Allstate Financing II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby
certifies that The Allstate Corporation (the "Holder") is the
registered owner of ___ common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated
the 7.83% Common Securities (liquidation amount $1,000 per Common
Security) (the "Common Securities"). The Common Securities are not
transferable except in accordance with Section 4.1 of the Declaration
(as defined below), and any attempted transfer in violation thereof
shall be void. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities
represented hereby are set forth in, and this certificate and 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 November 27, 1996, 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
herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent provided therein. The Depositor
will provide a copy of the Declaration, the Common Securities
Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
A2-1
94
Upon receipt of this certificate, the Depositor is bound by
the Declaration and is entitled to the benefits thereunder.
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.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of November, 1996.
ALLSTATE FINANCING II
By:
---------------------------
Name:
Title: Regular Trustee
A2-2
95
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Insert assignee's name and social security or tax identification
number)
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ____________________________________________
_____________________________________________________________________
______________________________________________ agent to transfer this
Common 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 Common
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.
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96
EXHIBIT B
SPECIMEN OF DEBENTURE
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS TO BE 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 (55 Water Street, New
York, New York) 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 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.]
Certificate No. $________
CUSIP No.
THE ALLSTATE CORPORATION
7.83% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
Series B
THE ALLSTATE CORPORATION, a Delaware corporation (the
"Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby
promises to pay to __________ or registered assigns, the principal
sum of ___________ ($__________) on December 1, 2045. The Company
further promises to pay interest on said principal sum from November
27, 1996, 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 June 1 and December 1 of each year commencing
June 1, 1997, at the rate of 7.83% per annum, until the principal
hereof shall have become due and payable, until the principal hereof
is paid or duly provided for or made available for payment and on any
overdue prin-
B-1
97
cipal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue
installment of interest at the rate of 7.83% 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. The amount of interest payable for any partial
period shall be computed on the basis of the number of actual days
elapsed in a 360-day year of twelve 30-day months. In the event that
any date on which interest is payable on this Security is not a
Business Day, then payment of interest payable on such date will be
made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such date.
A "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not (i) a day on which banking institutions in
the City of New York or Chicago, Illinois are authorized or required
by law or executive order to close or (ii) a day on which the
Corporate Trust Office of the Trustee or the principal office of the
Property Trustee under the Declaration hereinafter referred to for
Allstate Financing II is closed for business. 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) is registered at the close of business on the Regular
Record Date for such interest installment, which shall be the close
of business on the May 15 or November 15 immediately preceding such
June 1 or December 1, respectively. Any such interest installment
not punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business
on a Special Record Date to be fixed by the Trustee for the payment
of such Defaulted Interest, notice whereof shall be given to the
Holders of this series of Securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
The principal of (and premium, if any) and the interest on
this Security shall be payable at the office or agency of the Company
maintained for that purpose in the United States in such 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 check mailed to the registered Holder at such address as
shall appear in the Security Register.
B-2
98
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 in right of payment to
the prior payment in full of all Senior Indebtedness of the Company,
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 outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
B-3
99
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
THE ALLSTATE CORPORATION
By:_________________________
Name:
Title:
Attest:
By:___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
Dated:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:_____________________________
Authorized Signatory
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100
(FORM OF REVERSE OF SECURITY)
This Security is one of a duly authorized issue of
securities of the Company, designated as its 7.83% Junior
Subordinated Deferrable Interest Debentures, Series B (herein
referred to as the "Securities"), issued under and pursuant to an
Indenture, dated as of November 27, 1996, between the Company and
State Street Bank and Trust Company, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the
Indenture), as supplemented by the Second Supplemental Indenture,
dated as of November 27, 1996, between the Company and the Trustee
(the Indenture as so supplemented, the "Indenture"), to which
Indenture and all indentures supplemental thereto 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, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
All terms used in this Security that are defined in the
Indenture or in the Amended and Restated Declaration, dated as of
November 27, 1996 (the "Declaration"), of Allstate Financing II,
among The Allstate Corporation, as Depositor, and the Trustees named
therein, shall have the meanings assigned to them in the Indenture or
the Declaration, as the case may be.
So long as no Event of Default has occurred and is
continuing, the Company shall have the right at any time during the
term of this Security from time to time, to defer the payment of
interest on such Security for up to 10 consecutive semi-annual
periods with respect to each deferral period (each an "Extension
Period"), during which periods interest will compound semi-annually
and the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of which the
Company shall pay all interest then accrued and unpaid (together with
Additional Interest thereon to the extent permitted by applicable
law); provided that during any such Extension Period, the Company
shall not, and shall not permit any Subsidiary to, (a) declare or pay
any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of the
Company's capital stock or (b) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company
(including other Securities of any series) that rank pari passu with
or junior in interest to such Securities (other than (i) dividends or
distributions in common
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stock of the Company, (ii) redemptions or repurchases of any rights,
or the declaration of a dividend of any rights, or the issuance of
any security under any future rights plan of the Company, (iii)
purchases or acquisitions of shares of common stock in connection
with the satisfaction by the Company of its obligations under any
benefit plans for its or its Subsidiaries' directors, officers,
employees or independent contractors, (iv) as a result of a
reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock or (v) the
purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such
capital stock of the Company or the security being converted or
exchanged) or make any guarantee payments with respect to the
foregoing. Prior to the termination of any such Extension Period,
the Company may further extend such Extension Period, provided that
such Extension Period together with all such previous and further
extensions thereof shall not exceed 10 consecutive semi-annual
periods or extend beyond the Maturity of this Security. Upon the
termination of any such Extension Period and upon the payment of all
accrued and unpaid interest and any Additional Interest then due on
any Interest Payment Date, the Company may commence a new Extension
Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period except at the end thereof.
The Company shall give the Holders of the Securities of this series
and the Trustee notice of its election to begin any such Extension
Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on the Securities would be
payable but for such deferral or, so long as the Securities are held
by the Trust prior to the earlier of (i) the next succeeding date on
which the Distributions on the Capital Securities are payable or (ii)
the date the Regular Trustees are required to give notice to the New
York Stock Exchange, the Nasdaq National Market or other applicable
self-regulatory organization or to holders of such Capital Securities
of the record date or the date such Distributions are payable, but in
any event not less than one Business Day prior to such record date.
On or after December 1, 2006, the Company may at any time,
at its option, subject to the terms and conditions of Article Eleven
of the Indenture, redeem this Security in whole at any time or in
part from time to time, at the following Redemption Prices (expressed
as percentages of the principal amount) for the periods
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indicated, plus accrued and unpaid interest, including Additional
Interest, if any, to the Redemption Date:
December 1, 2006 to November 30, 2007: 103.915%
December 1, 2007 to November 30, 2008: 103.524%
December 1, 2008 to November 30, 2009: 103.132%
December 1, 2009 to November 30, 2010: 102.741%
December 1, 2010 to November 30, 2011: 102.349%
December 1, 2011 to November 30, 2012: 101.958%
December 1, 2012 to November 30, 2013: 101.566%
December 1, 2013 to November 30, 2014: 101.175%
December 1, 2014 to November 30, 2015: 100.783%
December 1, 2015 to November 30, 2016: 100.392%
On or after December 1, 2016: 100.000%
If a Special Event in respect of Allstate Financing II
shall occur and be continuing, the Company may, at its option, redeem
this Security at any time within 90 days of the occurrence of such
Special Event, in whole but not in part, subject to the provisions of
Section 1108 and the other provisions of Article Eleven of the
Indenture. The Redemption Price for such a redemption prior to
December 1, 2006 shall be equal to (A) the greater of (i) 100% of the
principal amount of this Security or (ii) as determined by a
Quotation Agent, the sum of the present values of the principal
amount and premium that would be payable as part of the Redemption
Price with respect to an optional redemption of this Security on
December 1, 2006 pursuant to the immediately preceding paragraph,
together with the present values (as determined pursuant to the
Indenture) of scheduled payments of interest from the Redemption Date
to December 1, 2006 (such time period between the Redemption Date and
December 1, 2006 being referred to as the "Remaining Life"), in each
case 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, plus, (B) accrued interest thereon to but
excluding the Redemption Date. If the Company redeems this Security
as a result of a Special Event on a Redemption Date which occurs on
or after December 1, 2006, the Redemption Price shall be the
Redemption Price that would be payable on or upon optional redemption
of this Security on such Redemption Date pursuant to the immediately
preceding paragraph.
In the event of redemption of this Security in part only, a
new Security or Securities of this series for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities
of this series may be declared due and
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payable in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions for satisfaction,
discharge and defeasance at any time of the entire indebtedness of
this Security upon compliance by the Company with certain conditions
set forth in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any
time by the Company and the Trustee with the consent of the Holders
of a majority in principal amount of the Securities of each series at
the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon
the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
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 (and premium, if any) and interest on the Security
at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Securities Register, upon surrender of this
Security for registration of transfer at the office or agency of the
Company maintained under Section 1002 of the Indenture duly endorsed
by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his or her attorney duly authorized
in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient
to cover any
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tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration
of transfer, the Company, the Trustee and any agent of this Company
or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
[The Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and any
integral multiple thereof.] [This Global Security is exchangeable
for Securities in definitive form only under certain limited
circumstances set forth in the Indenture. Securities of this series
so issued are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.] As
provided in the Indenture and subject to certain limitations [herein
and] therein set forth, Securities of this series [so issued] are
exchangeable for a like aggregate principal amount of Securities of
this series of a different authorized denomination, as requested by
the Holder surrendering the same.
The Company and, by its acceptance of this Security or a
beneficial interest therein, the Holder of, and any Person that
acquires a beneficial interest in, this Security agree that for
United States federal, state and local tax purposes it is intended
that this Security constitute indebtedness.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
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EXHIBIT C
UNDERWRITING AGREEMENT
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ALLSTATE FINANCING II
CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER SECURITY)
GUARANTEED ON A SUBORDINATED BASIS BY
THE ALLSTATE CORPORATION
------------------------------
UNDERWRITING AGREEMENT
------------------------------
November 22, 1996
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
As representatives of the
several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
From time to time Allstate Financing II, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), and The Allstate
Corporation, a Delaware corporation (the "Guarantor" and, together with the
Trust, the "Offerors"), as Depositor of the Trust and as Guarantor, propose to
issue and sell certain of the Trust's preferred securities registered under the
Registration Statement referred to in Section 2(a). The Trust and the Guarantor
intend to enter into one or more Pricing Agreements (each a "Pricing Agreement")
in the form of Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated herein
and therein, to issue and sell to the firms named in Schedule I of the Pricing
Agreement (such firms constituting the
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"Underwriters" with respect to such Pricing Agreement and the Securities
specified therein) the numbers of Capital Securities (liquidation amount $1,000
per security) of the Trust ("Capital Securities") specified in Schedule II to
the Pricing Agreement.
The Capital Securities will be guaranteed by the Guarantor with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Capital Securities Guarantee") pursuant to the Capital Securities
Guarantee Agreement identified in such Pricing Agreement (the "Capital
Securities Guarantee Agreement") between the Guarantor and State Street Bank and
Trust Company, as trustee (the "Guarantee Trustee"), and entitled to the
benefits of certain backup undertakings described in the Prospectus with respect
to the Company's agreement pursuant to the Supplemental Indenture (as defined
herein) to pay all expenses relating to administration of the Trust (the
"Undertakings"). The Capital Securities and the related Capital Securities
Guarantees are referred to herein as the "Securities."
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives (as defined herein)
deem advisable after the Pricing Agreement has been executed and delivered, and
the Declaration (as defined herein), the Indenture (as defined herein), and the
Capital Securities Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The entire
proceeds from the sale of the Securities will be combined with the entire
proceeds from the sale by the Trust to the Guarantor of its common securities
(the "Common Securities"), as guaranteed by the Guarantor, to the extent set
forth in the Prospectus, with respect to distributions and payments upon
liquidation and redemption (the "Common Securities Guarantee" and together with
the Capital Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement (the "Common Securities Guarantee Agreement" and,
together with the Capital Securities Guarantee Agreement, the "Guarantee
Agreements") by the Guarantor, and will be used by the Trust to purchase Junior
Subordinated Deferrable Interest Debentures (the "Subordinated Debt Securities")
issued by the Guarantor. The Capital Securities and the Common Securities will
be issued pursuant to the amended and restated declaration of trust
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of the Trust (the "Declaration"), among the Guarantor, as Depositor, Joseph T.
Kane and Jennifer M. Hager, as regular trustees (the "Regular Trustees"), State
Street Bank and Trust Company, a Massachusetts trust company, as property
trustee (the "Property Trustee"), and Delaware Trust Capital Management, Inc.,
a Delaware banking corporation, as Delaware trustee (the "Delaware Trustee"
and, together with the Regular Trustees and the Property Trustee, the
"Trustees"), and the holders from time to time of undivided beneficial
interests in the assets of the Trust. The Subordinated Debt Securities will be
issued pursuant to an indenture (the "Base Indenture"), between the Guarantor
and State Street Bank and Trust Company, as trustee (the "Debt Trustee"), and a
supplement to the Base Indenture (the "Supplemental Indenture," and together
with the Base Indenture and any other amendments or supplements thereto, the
"Indenture"), between the Guarantor and the Debt Trustee, each as identified in
such Pricing Agreement.
1.(a) Sales; Representatives. Particular sales of Securities may be
made from time to time to the Underwriters of such Securities, for whom the
firms designated as representatives of the Underwriters of such Securities in
the Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as the sole representative of the Underwriters and to Underwriters who
act without any firm being designated as their representative. This
Underwriting Agreement shall not be construed as an obligation of the Trust or
the Guarantor to sell any of the Securities or as an obligation of any of the
Underwriters to purchase any of the Securities.
(b) Pricing Agreements. The obligation of the Trust or the
Guarantor to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Securities specified therein. Such
Pricing Agreement shall specify the number of Capital Securities, the initial
public offering price of such Capital Securities, the purchase price to the
Underwriters of such Capital Securities, the names of the Underwriters of such
Capital Securities, the names of the Representatives of such Underwriters and
the number of such Capital Securities to
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be purchased by each Underwriter. In addition, such Pricing Agreement shall
set forth the date, time and manner of delivery of such Capital Securities and
payment therefor. Such Pricing Agreement shall also specify (in a manner
consistent with the Declaration and the Registration Statement and prospectus
with respect thereto), the principal terms of such Capital Securities,
including the terms on which, and the terms of the securities into which, the
Capital Securities will be exchangeable. A Pricing Agreement shall be in the
form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Representations and Warranties. The Offerors jointly and
severally represent and warrant to, and agree with, each of the Underwriters
that:
(a) The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 under the
Securities Act of 1933, as amended (the "Act") (the file number of which is set
forth in Schedule II to the Pricing Agreement), which has become effective, for
the registration under the Act of, inter alia, the Securities. The Offerors
propose to file with the Commission pursuant to Rule 424 under the Act a
supplement or supplements to the form of prospectus included in such
registration statement relating to the Securities and the plan of distribution
thereof. Such registration statement, including the exhibits thereto, as
amended at the date of this Agreement, is hereinafter called the "Registration
Statement"; such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the "Basic Prospectus"; and such supplemented
form of prospectus, in the form in which it shall be first filed with the
Commission pursuant to Rule 424 (including the Basic Prospectus as so
supplemented) is hereinafter called the "Final Prospectus." Any preliminary
form of the Final Prospectus which has heretofore been filed pursuant to Rule
424 is hereinafter called the "Preliminary Final Prospectus." Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to
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refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange Act of
1934 (the "Exchange Act") on or before the date of this Agreement, or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be; and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference;
(b) As of the date hereof, when the Final Prospectus is first
filed or transmitted for filing pursuant to Rule 424 under the Act, when the
Registration Statement became effective, when, prior to any Time of Delivery (as
hereinafter defined) with respect to any Capital Securities, any amendment to
the Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement), when any
supplement to the Final Prospectus is filed with the Commission and at the Time
of Delivery, (i) the Registration Statement, as amended as of any such time, and
the Final Prospectus, as amended or supplemented as applicable, and the
Indenture, the Declaration and the Guarantee Agreements will comply in all
material respects with the applicable requirements of the Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the Exchange
Act and the respective rules thereunder and (ii) neither the Registration
Statement, as amended as of any such time, nor the Final Prospectus, as amended
or supplemented as of such time, as applicable, will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; provided, however, that the Offerors make no representations or
warranties as to (i) that part of the Registration Statement which shall
constitute the Statements of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustees (the "Form T-1s") or (ii) the information
contained in or omitted from the Registration Statement or
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the Final Prospectus or any amendment thereof or supplement thereto in reliance
upon and in conformity with information relating to such Underwriter or the
underwriting arrangements furnished in writing to the Company by any Underwriter
specifically for use in the Registration Statement and the Final Prospectus.
(c) Each document incorporated by reference in the Registration
Statement and the Final Prospectus will comply in all material respects, as
amended at the time the Registration Statement becomes effective, with the
Exchange Act.
(d) This Agreement has been duly authorized, executed and delivered
by each of the Guarantor and the Trust.
(e) Except as described in or contemplated by the Registration
Statement and the Final Prospectus, there has not been any material adverse
change in, or any adverse development which materially affects, the business,
properties, financial condition or results of operations of the Trust or the
Guarantor and its subsidiaries taken as a whole from the dates as of which
information is given in the Registration Statement and the Final Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, there has not been any change
in the consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet incorporated by reference in
the Final Prospectus) or any material increase in the consolidated long-term
debt of the Guarantor and its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the general affairs, management, financial position, stockholders' equity or
results of operations of the Guarantor and its subsidiaries, otherwise than as
set forth or contemplated in the Final Prospectus.
(f) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of the
State of Delaware (the "Delaware Act") with the power and authori-
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ty to own its properties and conduct its business as described in the
Registration Statement, and any amendment or supplement thereto; the Trust is
not a party to or bound by any agreement or instrument other than those
described in the Final Prospectus; and the Trust is not an association taxable
as a corporation for United States federal income tax purposes.
(g) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Guarantor against
payment therefor as described in the Registration Statement and the Final
Prospectus, will be validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust; the issuance of the Common Securities is not subject to preemptive or
other similar rights; and at the First Time of Delivery (as hereinafter defined)
all of the issued and outstanding Common Securities of the Trust will be
directly owned by the Guarantor free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(h) The Declaration has been duly authorized by the Guarantor and, at
the First Time of Delivery, will have been duly executed and delivered by the
Guarantor and the Regular Trustees, and assuming due authorization, execution
and delivery of the Declaration by the Property Trustee and the Delaware
Trustee, the Declaration will, at the First Time of Delivery, be a valid and
binding obligation of the Guarantor and the Regular Trustees, enforceable
against the Guarantor and the Regular Trustees in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors
rights generally or by general principles of equity (the "Bankruptcy
Exceptions"); and at the First Time of Delivery, the Declaration will have been
duly qualified under the Trust Indenture Act.
(i) Each of the Guarantee Agreements has been duly authorized by the
Guarantor and, when validly executed and delivered by the Guarantor, and, in the
case of the Capital Securities Guarantee Agreement, assuming due authorization,
execution and delivery of the Capital Securities Guarantee Agreement by the
Guarantee Trustee,
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will constitute a valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions; and the
Capital Securities Guarantee Agreement, at the Time of Delivery, will have been
duly qualified under the Trust Indenture Act.
(j) The Capital Securities have been duly authorized by the
Declaration and, when issued and delivered pursuant to this Agreement against
payment of the consideration set forth in the Pricing Agreement, will be validly
issued and (subject to the terms of the Declaration) fully paid and
non-assessable undivided beneficial interests in the Trust and will be entitled
to the benefits of the Declaration; the issuance of the Capital Securities is
not subject to preemptive or other similar rights; and (subject to the terms of
the Declaration) holders of Capital Securities will be entitled to the same
limitation of personal liability under Delaware law as extended to stockholders
of private corporations for profit.
(k) The Indenture has been duly authorized by the Guarantor and, when
validly executed and delivered by the Guarantor, will constitute a valid and
binding agreement of the Guarantor, enforceable against the Guarantor in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions; and at the First Time of Delivery, the
Indenture will have been duly qualified under the Trust Indenture Act.
(l) The Subordinated Debt Securities have been duly authorized by the
Guarantor and, at the Time of Delivery for the related Capital Securities, will
have been duly executed by the Guarantor and, when authenticated in the manner
provided for in the Indenture and delivered against payment therefor as
described in the Final Prospectus, will constitute valid and binding obligations
of the Guarantor, enforceable against the Guarantor in accordance with their
terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and will be in the form contemplated by, and entitled to
the benefits of, the Indenture.
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(m) Each of the Regular Trustees of the Trust is an employee of the
Guarantor and has been duly authorized by the Guarantor to execute and deliver
the Declaration; the Declaration has been duly executed and delivered by the
Regular Trustees and is a valid and binding obligation of each Regular Trustee,
enforceable against such Regular Trustee in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy Exceptions.
(n) The issue and sale of the Capital Securities pursuant to the
Pricing Agreement, and compliance by the Offerors with all of the provisions of
the Securities, this Agreement and the Pricing Agreement, the Declaration, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements and the
Guarantees, will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement to which the
Trust, the Guarantor or any of the subsidiaries listed in Annex III hereto
(each, a "Principal Subsidiary") is a party or by which the Trust, the Guarantor
or any of the Principal Subsidiaries is bound or to which any of the property or
assets of the Trust, the Guarantor or any of the Principal Subsidiaries is
subject, nor will such action result in any violation of the provisions of the
Declaration or Certificate of Trust of the Trust or the Certificate of
Incorporation or By-laws of the Guarantor or any of the Principal Subsidiaries
or any statute or any order, rule or regulation of any court or insurance
regulatory authority or other governmental agency or body having jurisdiction
over the Trust, the Guarantor or any of the Principal Subsidiaries or any of
their properties, in each case other than such breaches, conflicts, violations
or defaults which, individually or in the aggregate, would not have a material
adverse effect on the Trust or the Guarantor and its subsidiaries considered as
a whole and would not affect the consummation of the transactions contemplated
by this Agreement, the Pricing Agreement, the Declaration, the Indenture, the
Guarantee Agreements and the Guarantees, and no authorization, approval, order,
consent, registration or qualification of or with any such court or insurance
regulatory authority or other governmental agency or body is required for the
issue or sale of the Securities, except (i) the registration under the Act of
the Securities; and (ii) such authorizations,
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approvals, orders, consents, registrations or qualifications as may be required
under the Trust Indenture Act or state or foreign securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Underwriters, in each case other than such authorizations, approvals, orders,
consents, registrations or qualifications which (individually or in the
aggregate) the failure to make, obtain or comply with would not have a material
adverse effect on the Trust or the Guarantor and its subsidiaries considered as
a whole and would not affect the consummation of the transactions contemplated
by this Agreement, the Pricing Agreement, the Declaration, the Indenture, the
Guarantee Agreements and the Guarantees.
3. Terms of Sale. Upon the execution of the Pricing Agreement and
authorization by the Representatives of the release of the Capital Securities,
the several Underwriters propose to offer such Capital Securities for sale upon
the terms and conditions set forth in the Final Prospectus as amended or
supplemented.
4. Delivery of Capital Securities. Capital Securities to be
purchased by each Underwriter pursuant to the Pricing Agreement, in definitive
form to the extent practicable, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Trust and the Guarantor, shall be
delivered by or on behalf of the Trust to the Representatives for the account of
such Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor in the funds specified in the Pricing Agreement, all at
the place and time and date specified in the Pricing Agreement or at such other
place and time and date as the Representatives and the Trust and the Guarantor
may agree upon in writing, such time and date being herein called the "Time of
Delivery" for such Securities. As used herein, "Time of Delivery" shall mean
the First Time of Delivery (as defined in the Pricing Agreement) and, if the
Pricing Agreement provides for an Underwriters' over-allotment option, all
references herein to a "Time of Delivery" shall also mean the time and date for
delivery of Securities purchased upon exercise of such over-allotment option as
specified by the Underwriters pursuant to the Pricing Agreement.
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5. Offeror Covenants. The Offerors jointly and severally agree with each
of the Underwriters as follows:
(a)(i) To prepare the Final Prospectus as amended and supplemented in
relation to the Capital Securities in a form approved by the Representatives and
to timely file such Final Prospectus pursuant to Rule 424(b) under the Act; (ii)
to make no further amendment or any supplement to the Registration Statement or
Final Prospectus as amended or supplemented after the date of the Pricing
Agreement and prior to the Time of Delivery for such Capital Securities unless
the Representatives for such Capital Securities shall have had a reasonable
opportunity to review and comment upon any such amendment or supplement prior to
any filing thereof; (iii) to advise the Representatives promptly of any such
amendment or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; (iv) to file promptly all reports and any
definitive proxy or information statements required to be filed by the Guarantor
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Capital Securities, and during such
same period to advise the Representatives, promptly after it receives notice
thereof, of (I) the time when any amendment to any Registration Statement has
been filed or becomes effective or any supplement to the Final Prospectus or any
amended Final Prospectus has been filed with the Commission, (II) the issuance
by the Commission of any stop order or of any order preventing or suspending the
use of the Final Prospectus or any amendment or supplement thereto, (III) the
suspension of the qualification of such Capital Securities for offering or sale
in any jurisdiction or of the initiation or threatening of any proceeding for
any such purpose, or (IV) any request by the Commission for the amending or
supplementing of any Registration Statement or the Final Prospectus or for
additional information; and, in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of the Final Prospectus or
suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request
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to qualify such Capital Securities (and the Capital Securities Guarantee) and
the Subordinated Debt Securities for offering and sale under the securities and
insurance securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Capital Securities, provided that in
connection therewith none of the Offerors shall be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Final Prospectus
as amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of such Capital
Securities, and if at such time any event shall have occurred as a result of
which the Final Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made when such Final Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such period to amend or
supplement the Final Prospectus or to file under the Exchange Act any document
incorporated by reference in the Final Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives
and upon their request to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended Final Prospectus or a supplement
to the Final Prospectus which will correct such statement or omission or effect
such compliance;
(d) The Trust will make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the later filed of the Registration Statement (as defined in
Rule 158(c)), an earnings statement of the Guarantor and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act
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and the rules and regulations thereunder (including, at the option of the
Guarantor, Rule 158); and
(e) During the period beginning from the date of the Pricing
Agreement for any Capital Securities and continuing to and including the earlier
of (i) the termination of trading restrictions for Capital Securities, as
determined by the Representatives and (ii) 30 days after the First Time of
Delivery for such Capital Securities, not to offer, sell, contract to sell or
otherwise dispose of any Capital Securities, any other beneficial interests in
the assets of the Trust, or any preferred securities or any other securities of
the Trust or the Guarantor which are substantially similar to the Capital
Securities, including any guarantee of such securities, or any securities
convertible into or exchangeable for or representing the right to receive
securities, preferred securities or any such substantially similar securities of
either the Trust or the Guarantor (collectively, "Similar Securities"), without
the prior written consent of the Representatives, which consent shall not be
unreasonably withheld, except for (i) the Subordinated Debt Securities and the
Capital Securities issued pursuant to this Agreement and (ii) up to 23,000,000
7.95% Cumulative Quarterly Preferred Securities, Series A (liquidation amount
$25 per Preferred Security), pursuant to the Underwriting Agreement, dated
November 20, 1996, and the Pricing Agreement, dated November 20, 1996, each
among the Guarantor, Allstate Financing I, a Delaware business trust ("Allstate
Financing I"), and Goldman, Sachs & Co., Dean Witter Reynolds Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
PaineWebber Incorporated, Prudential Securities Incorporated and Smith Barney
Inc., as representatives of the several underwriters named therein, and the
issuance and sale of the associated Junior Subordinated Deferrable Interest
Debentures by the Guarantor to Allstate Financing I.
6. Fees and Expenses. The Guarantor covenants and agrees with the several
Underwriters that the Guarantor will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Guarantor's counsel and accountants
in connection with the registration of the Capital Securities, the Capital
Securities Guarantee and the Subordinated Debt Securities under the Act and all
other expenses in connection with the prepara-
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tion, printing and filing of the Registration Statement, Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this
Agreement, the Pricing Agreement, any Blue Sky Survey and any Legal Investment
Memoranda; (iii) all reasonable expenses in connection with the qualification
of the Capital Securities, the Capital Securities Guarantee and the
Subordinated Debt Securities for offering and sale under state securities and
insurance securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky and Legal
Investment surveys; (iv) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc.; (v) any fees
charged by securities rating services for rating the Capital Securities and
Subordinated Debt Securities; (vi) the cost of preparing the Capital
Securities; (vii) the fees and expenses of the Debt Trustee, including the fees
and disbursements of counsel for the Debt Trustee in connection with the
Indenture and the Subordinated Debt Securities; (viii) the fees and expenses of
the Property Trustee, and the Guarantee Trustee, including the fees and
disbursements of counsel for the Property Trustee in connection with the
Declaration and the Certificate of Trust; and (ix) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided in this Section. It is understood, however,
that, except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Capital Securities by
them, and any advertising expenses connected with any offers they may make.
7. Conditions to Underwriters' Obligations. The obligations of the
Underwriters hereunder and under the Pricing Agreement to purchase Securities at
a Time of Delivery shall be subject to the condition that all representations
and warranties of the Offerors herein are, at and as of the Time of Delivery,
true and correct, the condition that the Offerors shall have performed all of
their respective obligations hereunder to be performed
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at or before such Time of Delivery, and the following additional
conditions:
(a) The Final Prospectus as amended or supplemented in relation to
the Capital Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated such Time of Delivery, with
respect to the incorporation of the Guarantor and the formation of the
Trust, the validity of the Capital Securities, the Subordinated Debt
Securities, the Capital Securities Guarantee, the Registration Statement
and the Final Prospectus as amended or supplemented and such other related
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Skadden, Arps, Slate, Meagher & Flom (ILLINOIS), special counsel
for the Guarantor, shall have furnished to you their written opinion, dated
as of such Time of Delivery, in form and substance reasonably satisfactory
to you, to the effect that:
(i) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Final Prospectus; and each
of Allstate Insurance Company ("AIC") and Allstate Life Insurance
Company ("ALIC") is validly existing as an insurance corporation under
the laws of the State of Illinois, with corporate power and authority to
own its prop-
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erties and conduct its business as described in the Final Prospectus;
(ii) The issue and sale of the Capital Securities and the
performance by the Offerors of their respective obligations under this
Agreement, the Pricing Agreement, the Declaration, the Capital
Securities, the Common Securities, the Indenture, the Subordinated
Debt Securities, the Guarantee Agreements and the Guarantees, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or
instrument relating to the Trust or the Guarantor or any of its
subsidiaries, as such agreements or instruments have been amended, all
as set forth on a schedule of such agreements identified to such
counsel by officers of the Guarantor; nor will any such action result
in any violation of the provisions of the Certificate of Incorporation
or the By-Laws of the Guarantor or the Declaration or the Certificate
of Trust of the Trust or any applicable United States law or statute
or any order, rule or regulation of any United States court or
governmental agency or body having jurisdiction over the Guarantor,
its subsidiaries or any of their respective properties, provided, that
the foregoing opinion is limited to those statutes, laws, rules and
regulations of the United States of America, the State of Delaware and
the State of Illinois, in each case, which, in such counsel's opinion,
are normally applicable to transactions of the type contemplated by
this Agreement, and provided further, that no opinion need be given
with respect to (i) the Act, the Exchange Act, the Trust Indenture
Act, the rules and regulations issued pursuant to each such act, any
order, rule or regulation made or established by any insurance
official or regulatory authority or the National Association of
Securities Dealers, Inc., or state securities or Blue Sky laws in
connection with the purchase and distribution
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of the Capital Securities by the Underwriters or (ii) conflicts,
breaches or violations which individually and in the aggregate both
are not material to the Trust or the Guarantor and its subsidiaries
taken as a whole and would not have a material adverse effect on the
sale or ownership of the Capital Securities or the Subordinated Debt
Securities.
(iii) No consent, approval, authorization, order,
registration or qualification of or with any United States court
or governmental agency or body is required for the issuance and sale
of the Common Securities or the offering of the Capital Securities,
the Subordinated Debt Securities or the Guarantees or the
consummation by the Company of the transactions contemplated by this
Agreement, except that we express no opinion with respect to such
consents, approvals, authorizations, orders, registrations or
qualifications (i) as may be required under the Act, the Exchange
Act, the Trust Indenture Act, the rules and regulations issued
pursuant to each such act, any order, rule or regulation made or
established by any insurance official or regulatory authority or the
National Association of Securities Dealers, Inc., or (ii) as may be
required under state securities or Blue Sky laws, (iii) the absence
of which individually or in the aggregate both are not material to
the Guarantor and its subsidiaries taken as a whole and would not
have a material adverse effect on the sale or ownership of the
Capital Securities or the Subordinated Debt Securities or (iv) as may
be required under foreign laws in connection with the purchase and
distribution of the Capital Securities by any international managers;
provided, that the foregoing opinion is limited to those consents,
approvals, authorizations, orders, registrations and qualifications
under laws which, in our experience, are normally applicable to
transactions of the type contemplated by this Agreement;
(iv) This Agreement and the Pricing Agreement have been
duly authorized,
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executed and delivered by each of the Trust and the Guarantor;
(v) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act;
all filings required under the laws of the State of Delaware with
respect to the formation and valid existence of the Trust as a
business trust have been made; the Trust has all necessary power and
authority to own property and to conduct its business as described in
the Registration Statement and the Final Prospectus and to enter into
and perform its obligations under this Agreement, the Pricing
Agreement, the Capital Securities and the Common Securities;
(vi) The Common Securities have been duly authorized for
issuance and, when issued, delivered and paid for in accordance with
the Declaration, will be validly issued and fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust, and the issuance of the Common Securities is not subject to
preemptive or other similar rights;
(vii) The Capital Securities have been duly authorized
for issuance and, when issued, delivered and paid for in
accordance with the Declaration and this Agreement, will be validly
issued, fully paid and non-assessable undivided beneficial interests
in the assets of the Trust; the holders of the Capital Securities
will be entitled to the same limitation of personal liability under
Delaware law as is extended to stockholders of private corporations
for profit; and the issuance of the Capital Securities is not subject
to preemptive or other similar rights. Such counsel may bring to
your attention that the Capital Securities holders may be obligated,
pursuant to the Declaration, to (a) provide indemnity and/or security
in connection with and pay taxes or governmental charges arising from
transfers of Capital Securities and the issuance of replacement
Capital Securities, and (b) provide security and indemnity in
connection
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with requests of or directions to the Property Trustee to exercise its
rights and powers under the Declaration; and the Declaration has been duly
qualified under the Trust Indenture Act;
(viii) No registration under the Investment Company Act of 1940,
as amended, is required of the Trust in connection with the initial
issuance and sale of the Capital Securities, or of the Guarantor in
connection with the initial issuance and sale of the Subordinated Debt
Securities or the Guarantee;
(ix) The summaries set forth in the Final Prospectus, insofar as
they are summaries of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, of certain terms and
provisions of the Capital Securities, the Common Securities, the Guarantee,
the Subordinated Debt Securities and the Indenture are in all material
respects accurate summaries of such terms and provisions;
(x) The Registration Statement and the Final Prospectus as
amended or supplemented and any further amendments thereto made by the
Guarantor prior to such Time of Delivery for the Capital Securities (in
each case other than with respect to the financial statements and financial
and accounting data and related schedules incorporated by reference or
included therein or excluded therefrom, or the exhibits to the Registration
Statement including the Form T-1s, as to which such counsel need express no
opinion or belief), appeared on their face to be appropriately responsive
in all material respects to the requirements of the Act and the Trust
Indenture Act and the applicable rules and regulations of the Commission
thereunder; and, such counsel shall not be deemed to be passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Final Prospectus; and
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(xi) As such counsel, such counsel reviewed the
Registration Statement and Final Prospectus as amended or supplemented,
participated in discussions with representatives of the Underwriters and of
the Guarantor and its accountants at which contents of the Registration
Statement and Final Prospectus as amended or supplemented and related
matters were discussed; on the basis of the information that such counsel
gained in the course of the performance of their services referred to
above, although such counsel shall not be deemed to be passing upon and
shall not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Final Prospectuses and not be required to have made an independent check or
verification thereof, on the basis of the foregoing, no facts have come to
the attention of such counsel in the course of such review which have led
such counsel to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Guarantor prior to
such Time of Delivery (other than the financial statements and the
financial and accounting data and related schedules incorporated by
reference or included therein or excluded therefrom, or the exhibits to the
Registration Statement including the Form T-1s, as to which such counsel
need express no opinion) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its
date, the Final Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Guarantor prior to such Time of
Delivery (other than the financial statements and financial and accounting
data and related schedules incorporated by reference or included therein or
excluded therefrom, or the exhibits to the Registration Statement including
the Form T-1s, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the
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statements therein, in light of the circumstances under which they
were made not misleading or that, as of such Time of Delivery, the
Final Prospectus as amended or supplemented or any further amendment
or supplement thereto made by the Guarantor prior to such Time of
Delivery (other than the financial statements and financial and
accounting data and related schedules incorporated by reference or
included therein or excluded therefrom, or the exhibits to the
Registration Statement including the Form T-1s, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances under which they
were made not misleading.
In rendering their opinion as aforesaid, such counsel may
rely upon an opinion or opinions, each dated such Time of Delivery, of its
affiliates as to laws of any jurisdiction other than the United States, the
State of Illinois and any matters relating to the Delaware business
organizational statutes (including statutes relating to Delaware Business
Trusts).
(d) Robert W. Pike, Vice President, Secretary and General
Counsel of the Guarantor, shall have furnished to you his written opinion,
dated such Time of Delivery, in form and substance reasonably satisfactory
to you, to the effect that:
(i) Each Principal Subsidiary has been duly
incorporated and is validly existing as an insurance corporation under
the laws of its jurisdiction of incorporation;
(ii) All of the issued shares of capital stock of each
Principal Subsidiary have been duly and validly authorized and issued,
are fully paid and nonassessable, and are owned of record directly or
indirectly by the Guarantor, AIC or ALIC, as the case may be (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local or in-house counsel and in respect of
matters of fact upon certificates of officers
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of the Guarantor or its subsidiaries, provided that such counsel shall
state that he believes that both you and he are justified in relying
upon such opinions and certificates);
(iii) Each Principal Subsidiary is duly licensed or
authorized as an insurer or reinsurer in each other jurisdiction where
it is required to be so licensed, except where the failure to be so
licensed or authorized in any such jurisdiction does not have a
material adverse effect on the financial condition, business or
properties of the Guarantor and its subsidiaries considered as a
whole; the Guarantor and each Principal Subsidiary have made all
required filings under applicable insurance holding company statutes,
and each is duly licensed or authorized as an insurance holding
company in each jurisdiction where it is required to be so licensed,
except where the failure to have made such filings or to be so
licensed or authorized in any such jurisdiction does not have a
material adverse effect on the financial condition, business or
properties of the Guarantor and its subsidiaries considered as a
whole; the Guarantor and each Principal Subsidiary have all necessary
authorizations, approvals, orders, consents, registrations or
qualifications of and from all insurance regulatory authorities to
conduct their respective businesses as described in the Final
Prospectus, except where the failure to have such authorizations,
approvals, orders, consents, registrations or qualifications does not
have a material adverse effect on the financial condition, business or
properties of the Guarantor and its subsidiaries considered as a
whole; and none of the Guarantor or any Principal Subsidiary has
received any notification from any insurance regulatory authority to
the effect that any additional authorization, approval, order,
consent, registration or qualification from such insurance regulatory
authority is needed to be obtained by any of the Guarantor or any
Principal Subsidiary in any case where it could be reasonably expected
that (x) the Guarantor or any Principal Subsidiary would in
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fact be required either to obtain any such additional authorization,
approval, order, consent, registration or qualification or cease or
otherwise limit writing certain business and (y) obtaining such
authorization, approval, order, consent, license, certificate, permit,
registration or qualification or limiting such business would have a
material adverse effect on the business, financial position or results
of operations of the Guarantor and its subsidiaries, considered as a
whole (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local or in-house counsel and in
respect of matters of fact upon certificates of officers of the
Guarantor or its subsidiaries, provided that such counsel shall state
that he believes that both you and he are justified in relying upon
such opinions and certificates);
(iv) Each Principal Subsidiary is in compliance with the
requirements of the insurance laws and regulations of its state of
incorporation and the insurance laws and regulations of other
jurisdictions which are applicable to such Principal Subsidiary, and
has filed all notices, reports, documents or other information
required to be filed thereunder, or is subject to no material
liability or disability by reason of the failure to so comply or file
(such counsel being entitled to rely in respect of this clause upon
opinions of local or in-house counsel and in respect of matters of
fact upon certificates of officers of the Guarantor and its
subsidiaries, provided that such counsel shall state that he believes
that both you and he are justified in relying upon such opinions and
certificates);
(v) The Trust is duly qualified and in good standing as a
foreign company in any other 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; and the Trust is not a party to or
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otherwise bound by any agreement other than those described in the
Final Prospectus;
(vi) To the best of such counsel's knowledge and other than
as set forth in the Final Prospectus as amended or supplemented, there
are no legal or governmental proceedings pending to which the
Guarantor or any of its subsidiaries is a party or to which any
property of the Guarantor or any of its subsidiaries is the subject
which, if determined adversely to the Guarantor or any of its
subsidiaries, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the financial condition,
business or properties of the Guarantor and its subsidiaries
considered as a whole; and, to the best of such counsel's knowledge,
no such proceedings are threatened;
(vii) The issue and sale of the Capital Securities, and the
performance by the Offerors of their respective obligations under the
Capital Securities, this Agreement, the Pricing Agreement, the
Declaration, the Common Securities, the Indenture, the Subordinated
Debt Securities, the Guarantee Agreements and the Guarantees, and the
consummation of the transactions contemplated herein and therein will
not result in any violation of any order, rule or regulation known to
such counsel of any insurance regulatory authority having jurisdiction
over the Guarantor or any of its subsidiaries or any of their
properties, other than such breaches, conflicts, violations or
defaults which, individually or in the aggregate, would not have a
material adverse effect on the financial condition, business or
properties of the Guarantor and its subsidiaries considered as a whole
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local or in-house counsel and in respect of
matters of fact upon certificates of officers of the Guarantor or its
subsidiaries, provided that such counsel shall state that he believes
that both you and he are justified in relying upon such opinions and
certificates);
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(viii) To the best of such counsel's knowledge, the Trust
and the Guarantor and its subsidiaries, as applicable, have filed all
notices, reports, documents or other information required to be filed
pursuant to, and have obtained all authorizations, approvals, orders,
consents, registrations or qualifications required to be obtained
under, and have otherwise complied with all requirements of, all
applicable insurance laws and regulations known to such counsel in
connection with the issuance and sale of the Capital Securities and,
except as have been obtained pursuant to the foregoing clause, no
filing, authorization, approval, order, consent, registration or
qualification of or with any insurance regulatory agency having
jurisdiction over the Guarantor or any of its subsidiaries or any of
their properties known to such counsel is required for the issue and
sale of the Capital Securities or the consummation of the transactions
contemplated by this Agreement, the Pricing Agreement, the
Declaration, the Indenture, the Guarantee Agreements and the
Guarantees, except such filings, authorizations, approvals, orders,
consents, registrations or qualifications which (individually or in
the aggregate) the failure to make, obtain or comply with would not
have a material adverse effect on the financial condition, business or
properties of the Guarantor and its subsidiaries considered as a whole
and would not affect the consummation of the transactions contemplated
by this Agreement, the Pricing Agreement, the Declaration, the
Indenture, the Guarantee Agreements and the Guarantees;
(ix) Each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Guarantor; the Capital
Securities Guarantee Agreement, assuming it is duly authorized,
executed, and delivered by the Guarantee Trustee, constitutes a valid
and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except to the extent that
enforcement thereof may be limited by Bankruptcy Ex-
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ceptions; and the Capital Securities Guarantee Agreement has been duly
qualified under the Trust Indenture Act;
(x) The Indenture has been duly executed and delivered by
the Guarantor and, assuming due authorization, execution, and
delivery thereof by the Debt Trustee, is a valid and binding
obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, and the
Indenture has been duly qualified under the Trust Indenture Act;
(xi) The Subordinated Debt Securities are in the form
contemplated by the Indenture, have been duly authorized,
executed and delivered by the Guarantor and, when authenticated by
the Debt Trustee in the manner provided for in the Indenture and
delivered against payment therefor, will constitute valid and binding
obligations of the Guarantor enforceable against the Guarantor in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions;
(xii) The Declaration has been duly authorized, executed
and delivered by the Guarantor and each of the Regular Trustees and
constitutes a valid and binding obligation of the Guarantor and each
of the Regular Trustees, enforceable against the Guarantor and each
of the Regular Trustees in accordance with its terms, except to the
extent that the enforcement thereof may be limited by the Bankruptcy
Exceptions;
(xiii) As general counsel to the Guarantor, such counsel
reviewed the Registration Statement and Final Prospectus as
amended or supplemented, participated in various discussions with
representatives of the Underwriters and of the Guarantor and its
accountants at which contents of the Registration Statement and Final
Prospectus as amended or supplemented
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were discussed; on the basis of the information that such counsel
gained in the course of his activities referred to above, such counsel
confirms that the Registration Statement, as of its effective date,
and the Final Prospectus, as amended or supplemented (in each case
other than with respect to the financial statements, financial and
accounting data and related schedules therein, as to which such
counsel need express no opinion or belief), appeared on their face to
be appropriately responsive in all material respects to the
requirements of the Act and the applicable rules and regulations of
the Commission thereunder; and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and Final Prospectus as amended or supplemented
(except as expressly set forth in such opinion), on the basis of the
foregoing, no facts have come to the attention of such counsel in the
course of such review which has caused such counsel to believe that,
as of its effective date, the Registration Statement or any further
amendment thereto made by the Offerors prior to such Time of Delivery
(other than the financial statements and financial and accounting data
and related schedules therein and other than information under the
captions "Description of Debt Securities," "Description of Debt
Warrants," "Description of Preferred Stock," "Description of Preferred
Securities," "Description of Preferred Securities Guarantees" and
"Plan of Distribution" in the Basic Prospectus and in the descriptions
of Capital Securities, Capital Securities Guarantees, Subordinated
Debt Securities and underwriting matters contained in the Final
Prospectus as amended or supplemented, as to which such counsel need
express no opinion) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statement therein not misleading or that, as of
its date, the Final Prospectus as amended or supplemented or any
further amendment or supplement thereto
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made by the Offerors prior to such Time of Delivery (other than the
financial statements and financial and accounting data and related
schedules therein and other than information under the captions
"Description of Debt Securities," "Description of Debt Warrants,"
"Description of Preferred Stock," "Description of Preferred
Securities," "Description of Preferred Securities Guarantees" and "Plan
of Distribution" in the Basic Prospectus and in the descriptions of
Capital Securities, Capital Securities Guarantees, Subordinated Debt
Securities and underwriting matters contained in the Final Prospectus
as amended or supplemented, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
or that, as of such Time of Delivery, either the Registration Statement
or the Final Prospectus as amended or supplemented or any further
amendment or supplement (when considered together with the document to
which such supplement relates) thereto made by the Offerors prior to
such Time of Delivery (other than the financial statements and
financial and accounting data and related schedules therein and other
than information under the captions "Description of Debt Securities,"
"Description of Debt Warrants," "Description of Preferred Stock,"
"Description of Preferred Securities," "Description of Preferred
Securities Guarantees" and "Plan of Distribution" in the Basic
Prospectus and in the descriptions of Capital Securities, Capital
Securities Guarantees, Subordinated Debt Securities, and underwriting
matters contained in the Final Prospectus as amended or supplemented,
as to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits 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 he does
not know of any amendment to the Registration Statement required to be
filed or of any contracts or
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other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by
reference into the Final Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Final Prospectus as amended or supplemented which are not filed or
described as required, in each case, other than with respect to the
information under the captions "Description of Debt Securities,"
"Description of Debt Warrants," "Description of Preferred Stock,"
"Description of Preferred Securities," Description of Preferred
Securities Guarantees" and "Plan of Distribution" in the Basic
Prospectus and in the descriptions of Capital Securities, Capital
Securities Guarantees, Subordinated Debt Securities and underwriting
matters contained in the Final Prospectus as amended or supplemented;
and
(xiv) On the basis of the information that such counsel
gained in the course of the review referred to in paragraph (xiii)
above (but without passing upon or assuming any responsibility
for the accuracy, completeness or fairness of the statements
contained in the documents described below), such counsel confirms
that no facts have come to the attention of such counsel in the
course of such review which have caused such counsel to believe that
the documents incorporated by reference in the Final Prospectus as
amended or supplemented (other than the financial statements and
financial and accounting data and related schedules therein or
excluded therefrom, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, did not comply as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material
fact or
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omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading.
(e) Shipman & Goodwin, counsel of State Street Bank
and Trust Company, as Property Trustee under the Declaration, and Guarantee
Trustee under the Capital Securities Guarantee Agreements, shall have furnished
to you their written opinion, dated as of such Time of Delivery, in form and
substance reasonably satisfactory to you, to the effect that:
(i) State Street Bank and Trust Company is
a Massachusetts trust company with trust powers, duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts with all necessary power and authority
to execute and deliver, and to carry out and perform its obligations
under the terms of the Declaration and the Capital Securities
Guarantee Agreement;
(ii) The execution, delivery and
performance by the Property Trustee of the Declaration and the
execution, delivery and performance by the Guarantee Trustee of the
Capital Securities Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Property Trustee, in
the case of the Declaration, and the Guarantee Trustee, in the case of
the Capital Securities Guarantee Agreement. The Declaration and the
Capital Securities Guarantee Agreement have been duly executed and
delivered by the Property Trustee, in the case of the Declaration, and
the Guarantee Trustee, in the case of the Capital Securities Guarantee
Agreement, and constitute the legal, valid and binding obligations of
the Property Trustee, in the case of the
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Declaration, and the Guarantee Trustee, in the case of the Capital
Securities Guarantee Agreement, enforceable against the Property
Trustee, in the case of the Declaration, and the Guarantee Trustee, in
the case of the Capital Securities Guarantee Agreement, in accordance
with their terms, except as enforcement thereof may be limited by the
Bankruptcy Exceptions;
(iii) The execution, delivery and
performance of the Declaration and the Capital Securities Guarantee
Agreement by the Property Trustee, in the case of the Declaration, and
the Guarantee Trustee, in the case of the Capital Securities Guarantee
Agreement, does not conflict with or constitute a breach of the
Articles of Organization or Bylaws of the Property Trustee, in the
case of the Declaration, or the Guarantee Trustee, in the case of the
Capital Securities Guarantee Agreement; and
(iv) No consent, approval or authorization
of, or registration with or notice to, any Massachusetts or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee of the Declaration or by the
Guarantee Trustee of the Capital Securities Guarantee Agreement.
(f) Morris, James, Hitchens & Williams, counsel of
Delaware Trust Capital Management, Inc., as Delaware Trustee under the
Declaration, shall have furnished to you their written opinion, dated as of
such Time of Delivery, in form and substance reasonably satisfactory to you, to
the effect that:
(i) Delaware Trust Capital Management,
Inc. is a Delaware banking corporation with trust powers, duly
organized, validly existing and in good standing under the laws of the
State of Delaware with all necessary power and authority to execute
and deliver, and to carry out and perform its obligations under the
terms of the Declaration;
(ii) The execution, delivery and
performance by the Delaware Trustee of the Dec-
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laration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes the
legal, valid and binding obligations of the Delaware Trustee,
enforceable against the Delaware Trustee, in accordance with its
terms, except as enforcement thereof may be limited by the Bankruptcy
Exceptions;
(iii) The execution, delivery and
performance of the Declaration by the Delaware Trustee does not
conflict with or constitute a breach of the Articles of Organization
or Bylaws of the Delaware Trustee; and
(iv) No consent, approval or authorization
of, or registration with or notice to, any banking or trust authority
of the State of Delaware or federal banking authority governing the
banking and trust powers of the Delaware Trustee is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
(g) The opinion of Skadden, Arps, Slate, Meagher &
Flom (ILLINOIS), special tax counsel to the Guarantor and the Trust, generally
to the effect that:
(i) Under current law, 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;
(ii) Under current law the Subordinated
Debt Securities will be classified for United States federal income
tax purposes as indebtedness of the Guarantor; and
(iii) The discussion set forth in the Final
Prospectus under the heading "Certain Federal Income Tax
Consequences," to the extent it constitutes matters of law or legal
conclusions, is correct in all material respects.
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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
Guarantor and the Trust and other documents deemed necessary for such opinion.
(h) On the date of the Pricing Agreement and such
Time of Delivery, Deloitte & Touche LLP shall have furnished to the
Representatives a letter, dated the effective date of the later filed of the
Registration Statement or the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, in form and substance satisfactory to the Representatives.
(i) Except as contemplated in the Final Prospectus,
in the form approved by you, since the respective dates as of which information
is given in the Final Prospectus, in the form approved by you, until such Time
of Delivery, there shall not have been any change in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest balance sheet included or incorporated by reference in the Final
Prospectus, in the form approved by you) or any material increase in the
consolidated long-term debt of the Guarantor and its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Guarantor and its subsidiaries, otherwise than as
set forth or contemplated in the Final Prospectus, in the form approved by you,
the effect of which, in any such case is in the judgment of the Representatives
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms and in
the manner contemplated in the Final Prospectus, in the form approved by you.
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(j) On or after the date of the Pricing Agreement
(i) no downgrading shall have occurred in the rating accorded the Guarantor's
debt securities or financial strength or claims paying ability by any of
Moody's Investor Services, Inc., Standard & Poor's Corporation or A.M. Best &
Co. and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating
of any of the Guarantor's debt securities or financial strength or claims
paying ability, the effect of which, in any such case described in Clause (i)
or (ii), is in your judgment (after consultation with the Guarantor) so
material and adverse as to make it impracticable or inadvisable to proceed with
the pubic offering or the delivery of the Securities on the terms and in the
manner contemplated in the Final Prospectus, in the form approved by you;
(k) On or after the date of the Pricing Agreement
there shall not have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in New
York declared by either Federal or New York State authorities; or (iii) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iii) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated by the Final Prospectus, in the form approved by you; and
(l) The Guarantor shall have furnished or caused to
be furnished to the Representatives at such Time of Delivery certificates of
officers of the Guarantor reasonably satisfactory to the Representatives as to
the accuracy of the representations and warranties of the Guarantor herein at
and as of such Time of Delivery, as to the performance by the Guarantor of all
of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (j) of this
Section and as to such other matters as the Representatives may reasonably
request.
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8.(a) Indemnification and Contribution. The Offerors will,
jointly and severally, indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Final Prospectus, the Registration
Statement, the Final Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or supplement (when
considered together with the document to which such supplement relates)
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Offerors shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Final Prospectus, the
Registration Statement, the Final Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Offerors by any Underwriter of Securities through the
Representatives expressly for use in the Final Prospectus as amended or
supplemented relating to such Securities and, provided, further, that the
Offerors shall not be liable to any Underwriter under the indemnity agreement
in this subsection (a) with respect to any Preliminary Final Prospectus, the
Final Prospectus or the Final Prospectus as amended or supplemented, as the
case may be, to the extent that any such loss, claim, damage or liability of
such Underwriter results from the fact such Underwriter sold 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 (excluding documents
incorporated by reference therein) or of the Final Prospectus as then amended
or supplemented (excluding documents incorporated by reference therein),
whichever is most recent, in any
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case where such delivery is required by the Act if the Guarantor had previously
furnished copies thereof to such Underwriter and the loss, damage or liability
of such Underwriter results from an untrue statement or omission of a material
fact contained in the Preliminary Final Prospectus which was corrected in the
Final Prospectus (or the Final Prospectus as amended or supplemented).
(b) Each Underwriter will indemnify and hold
harmless the Offerors against any losses, claims, damages or liabilities to
which the Offerors may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Final Prospectus, the
Registration Statement, the Final Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any amendment or supplement
(when considered together with the document to which such supplement relates)
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Final Prospectus, the
Registration Statement, the Final Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Offerors by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Offerors for any legal or
other expenses reasonably incurred by the Offerors in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which
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it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly, with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party and who may act in respect of actions
involving more than one indemnified party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party,
in connection with the defense thereof other than reasonable costs of
investigation. Notwithstanding anything to the contrary in this Section 8, an
indemnifying party shall only be liable for the legal fees and expenses of one
national counsel and appropriate local counsel for the indemnified parties with
respect to any proceeding or related proceedings and in connection with any one
such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Morgan Stanley & Co.
Incorporated.
(d) If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on the
one hand and the Underwriters of the
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Securities on the other from the offering of the Securities to which any such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Offerors on the one hand and the Underwriters of the
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable consideration. In addition,
if the indemnified party is not entitled to receive the indemnification provided
for in subsection (a) above because of the second proviso thereof, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect the relative
fault of the Offerors on the one hand and the Underwriters of the Securities on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof). The
relative benefits received by the Offerors on the one hand and such Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the Offerors
bear to the total underwriting discounts and commissions received by such
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus relating to such Securities. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Offerors on the one hand or
such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. With respect to any such Underwriter, such relative fault shall also
be determined by reference to the extent (if any) to which such losses, claims,
damages or liabilities (or actions in respect thereof) with respect to any
Preliminary Final Prospectus result from the fact that such Underwriter sold
Securities to a person to whom there was not sent or given, at
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or prior to the written confirmation of such sale, a copy of the Final
Prospectus (excluding documents incorporated by reference therein) or of the
Final Prospectus as then amended or supplemented (excluding documents
incorporated by reference therein), if the Offerors had previously furnished
copies thereof to such Underwriter. The Offerors and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of
Securities in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such Securities and
not joint.
(e) The obligations of the Offerors under this
Section 8 shall be in addition to any liability which the Offerors may
otherwise have and shall extend upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition
to any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Guarantor (including any person who, with his consent, is named in the
Registra-
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tion Statement as about to become a director of the Guarantor), to each trustee
of the Trust and to each person, if any, who controls an Offeror within the
meaning of the Act.
9.(a) Defaulting Underwriters. If any Underwriter shall
default in its obligation to purchase the Securities which it has agreed to
purchase under the Pricing Agreement, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
the Securities on the terms contained herein and in such Pricing Agreement. If
within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Securities, then the
Offerors shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the Representatives
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, the Representatives notify the Offerors that the
Representatives have so arranged for the purchase of such Securities, or the
Offerors notify the Representatives that they have so arranged for the purchase
of such Securities, the Representatives or the Offerors shall have the right to
postpone the Time of Delivery for such Securities for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Final Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Offerors agree
to file promptly any amendments to the Registration Statement or the Final
Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement.
(b) If, after giving effect to any arrangements for
the purchase of the Securities of any defaulting Underwriter or Underwriters by
the Representatives and the Offerors as provided in subsection (a) above, the
aggregate number of such Securities which remains unpurchased does not exceed
one-eleventh of the aggregate number of the Securities to be purchased at such
Time of Delivery, then the Offerors shall have the right to require each
non-defaulting Underwriter to
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purchase the number of Securities which such Underwriter agreed to purchase
under the Pricing Agreement and, in addition, to require each non- defaulting
Underwriter to purchase its pro rata share (based on the number of Securities
which such Underwriter agreed to purchase under such Pricing Agreement) of the
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for
the purchase of the Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Offerors as provided in subsection (a) above, the
aggregate number of Securities which remains unpurchased exceeds one-eleventh
of the number of all such Securities to be purchased at such Time of Delivery,
or if the Offerors shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Offerors, except for the expenses to be borne by the
Guarantor and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. Survival. The respective indemnities, agreements,
representations, warranties and other statements of the Offerors and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter, or the Offerors or any
officer or director or controlling person of the Offerors and shall survive
delivery of and payment for the Securities.
11. Effect of Termination of Pricing Agreement or Nondelivery
of Securities. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof, the Offerors shall not then be under any liability to any
Underwriter with respect to the Securities except as
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provided in Section 6 and Section 8 hereof; but, if for any other reason,
Securities are not delivered by or on behalf of the Offerors as provided herein,
the Guarantor will reimburse the Underwriters through the Representatives for
all out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Securities, but
the Offerors shall then be under no further liability to any Underwriter in
respect of such Securities except as provided in Section 6 and Section 8
hereof.
12. Reliance Upon Representatives. In all dealings
hereunder, the Representatives shall act on behalf of the Underwriters of
Securities and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such of the Representatives, if any, as may be designated for such
purpose in the Pricing Agreement.
13. Notices. All statements, requests, notices and
agreements hereunder shall be in writing, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Representatives as set forth in the Pricing Agreement; if to the Guarantor
and the Trust, shall be delivered or sent by mail, telex or facsimile
transmission to their respective addresses set forth in the Registration
Statement; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Offerors by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof.
14. Successors and Assigns. This Agreement and each Pricing
Agreement shall be binding upon, and inure solely to the benefit of, the
Underwriters, the Offerors, and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Guarantor, the trustees of the Trust
and each person who controls an Offeror or any Underwriter, and their
respective heirs,
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executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
15. Time; "Business Day." Time shall be of the essence of
each Pricing Agreement. As used herein, the term "business day" shall mean any
day when the Commission's office in Washington, D.C. is open for business.
16. GOVERNING LAW. THIS AGREEMENT AND EACH PRICING AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
17. Counterparts. This Agreement and each Pricing Agreement
may be executed by any one or more of the parties hereto and thereto in any
number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding,
please sign and return to us eight counterparts hereof.
Very truly yours,
THE ALLSTATE CORPORATION
By:____________________________
Name:
Title:
ALLSTATE FINANCING II
By: The Allstate Corporation,
as Depositor
By:____________________________
Name:
Title:
Accepted as of the date hereof:
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
By: Morgan Stanley & Co. Incorporated
By:____________________________
Name:
Title:
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ANNEX I TO
UNDERWRITING
AGREEMENT
PRICING AGREEMENT
_________, ____
[ ]
As representatives of the
several Underwriters
named in Schedule I hereto
c/o [ ]
Ladies and Gentlemen:
Allstate Financing [II], a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
and The Allstate Corporation, a Delaware corporation (the "Guarantor" and,
together with the Trust, the "Offerors"), propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated ___________,
____ (the "Underwriting Agreement"), among the Offerors on the one hand and
_________________________________________________________ on the other hand, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the
"Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Final Prospectus in Section 2 of the Underwriting Agreement shall be deemed to
be a representation or warranty as of the date of the Underwriting Agreement in
relation to the Final Prospectus (as therein defined) and also a representation
and warranty as of the date of this Pricing Agreement in relation to the Final
Prospectus as amended or supplemented relating to the Securities
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which are the subject of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representative designated to act on behalf of the
Representatives pursuant to Section 12 of the Underwriting Agreement and the
address of the Representatives referred to in Section 13 of the Underwriting
Agreement are set forth at the end of Schedule II hereto.
An amendment to the Registration
Statement, or a supplement to the Final Prospectus, as the case may be,
relating to the Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set
forth herein and in the Underwriting Agreement incorporated herein by
reference, the Offerors agree to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Trust,
at the time and place and at the purchase price to the Underwriters set forth
in Schedule II hereto, the number of Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with
your understanding, please sign and return to us [ ] counterparts hereof,
and upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding
agreement among each of the Underwriters and the Offerors. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is or
will be pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Offerors for
examination upon request, but without war-
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ranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
THE ALLSTATE CORPORATION
By:_______________________________
Name:
Title:
ALLSTATE FINANCING [II]
By: The Allstate Corporation,
as Depositor
By:_______________________________
Name:
Title:
Accepted as of the date hereof:
[ ]
On behalf of each of the Underwriters
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SCHEDULE I TO ANNEX I
[Number of
Optional
Number Securities to
of [Firm] Be Purchased if
Securities to Maximum Option
Underwriters Be Purchased Exercised
- ------------ ------------ ---------------
. . . . . . .
- -------------------
. . . . . . .
- -------------------
. . . . . . .
- -------------------
. . . . . . .
- -------------------
[Names of Underwriters]
-------- -------
Total . . ]
======== =======
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SCHEDULE II TO ANNEX I
UNDERWRITING AGREEMENT DATED ______________, ____
REGISTRATION STATEMENT NO. __________
TITLE, PURCHASE PRICE AND DESCRIPTION OF SECURITIES
Title: ___% ___________Capital Securities ("__")
(Liquidation Amount of $__ Per Security)
Aggregate Number:
Price to Public:
Purchase Price per Security to Be Paid by Underwriters:
Compensation Per Security to Be Paid by the Guarantor to the
Underwriters:
Specified Funds for payment of purchase price:
[First] Time of Delivery:
Provisions for Over-allotment Option:
Declaration:
Indenture:
Guarantees:
Other Provisions:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Representatives:
Address for Notices, etc.:
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ANNEX II TO
UNDERWRITING
AGREEMENT
Pursuant to Section 7(h) of the Underwriting Agreement,
the accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public
accountants with respect to the Guarantor and its subsidiaries within
the meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements,
certain summary and selected consolidated financial and operating
data, and any supplementary financial information and schedules (and,
if applicable, pro forma financial information) audited by them and
included or incorporated by reference in the Final Prospectus as
amended or supplemented or the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim
financial statements, and any supplementary financial information and
schedules, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Guarantor for the
periods specified in such letter, and, as indicated in their report
thereon, copies of which have been furnished to the representatives of
the Underwriters (the "Representatives");
(iii) On the basis of limited procedures, not
constituting an audit in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of the Guarantor and its
subsidiaries, inspection of the minute books of the Guarantor and its
subsidiaries since the date of the
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latest audited financial statements included or incorporated by
reference in the Final Prospectus as amended or supplemented,
inquiries of officials of the Guarantor and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows and certain summary and selected
consolidated financial and operating data included or
incorporated by reference in the Final Prospectus as
amended or supplemented do not comply as to form in all
material respects with the applicable accounting
requirements of the Act and the related published rules
and regulations thereunder;
(B) any other unaudited income statement
data and balance sheet items included or incorporated by
reference in the Final Prospectus as amended or
supplemented do not agree with the corresponding items in
the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited
data and items were not determined on a basis
substantially consistent with the basis for the
corresponding amounts in the audited consolidated
financial statements included or incorporated by reference
in the Final Prospectus as amended or supplemented;
(C) the unaudited financial statements which
were not included or incorporated by reference in the
Final Prospectus as amended or supplemented but from which
were derived any unaudited condensed financial statements
referred to in Clause (A) and any unaudited income
statement data and balance sheet items included or
incorporated by reference in the Final Prospectus as
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amended or supplemented and referred to in Clause (B) were
not determined on a basis substantially consistent with
the basis for the audited consolidated financial
statements included or incorporated by reference in the
Final Prospectus as amended or supplemented;
(D) any unaudited pro forma consolidated
condensed financial statements included or incorporated by
reference in the Final Prospectus as amended or
supplemented do not comply as to form in all material
respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of
those statements.
(E) as of a specified date not more than
five business days prior to the date of such letter, there
have been any changes in the consolidated capital stock or
any increase in the consolidated borrowings or
consolidated reserve for property-liability insurance
claims and claims expense or consolidated reserve for life
insurance policy benefits, or asset reserves of the
Guarantor and its subsidiaries, or any decreases in
consolidated fixed income securities available for sale,
consolidated equity securities, consolidated investments
or shareholder equity, or any decrease in AIC's or ALIC's
statutory capital and surplus, or other items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated
by reference in the Final Prospectus as amended or
supplemented, except in each case for changes, increases
or decreases which the Final Prospectus discloses have
occurred or may occur or which are described in such
letter; and
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(F) for the period from the date of the
latest financial statements included or incorporated by
reference in the Final Prospectus as amended or
supplemented to the specified date referred to in Clause
(E) there were any decreases in consolidated premiums
earned, consolidated net investment income, or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year
and with any other period of corresponding length
specified by the Representatives, except in each case for
decreases or increases which the Final Prospectus
discloses have occurred or may occur or which are
described in such letter; and
(iv) In addition to the examination referred to in
their report(s) included or incorporated by reference in the Final
Prospectus as amended or supplemented and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (ii) and (iii) above, they have carried out certain
procedures as specified in their letter, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting
records of the Guarantor and its subsidiaries, which appear or are
incorporated by reference in the Final Prospectus as amended or
supplemented or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such specified amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
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ANNEX III TO
UNDERWRITING
AGREEMENT
PRINCIPAL JURISDICTION
SUBSIDIARIES OF INCORPORATION
------------ ----------------
Allstate Insurance Company . . . . . . . . . . . . Illinois
Allstate Life Insurance Company . . . . . . . . . . Illinois
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