As filed with the Securities and Exchange Commission on
March 5, 2007
Registration Statement
No. 333-130323
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Post-Effective Amendment
No. 1
to
Form S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
The Travelers Companies,
Inc.
Travelers Capital
Trust II
Travelers Capital
Trust III
Travelers Capital
Trust IV
Travelers Capital
Trust V
(Exact name of Registrant as
specified in its charter)
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Minnesota
Delaware
Delaware
Delaware
Delaware
(State or other
jurisdiction of incorporation or organization)
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41-0518860
41-6495364
20-1341934
20-1341964
20-1342011
(I.R.S. Employer
Identification No.)
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385 Washington Street
St. Paul, Minnesota 55102
(651) 310-7911
(Address, including zip code,
and telephone number, including area code, of Registrants
principal executive offices)
Bruce A. Backberg, Esq.
Senior Vice President
The Travelers Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
(651) 310-7916
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copy to:
Alan D. Schnitzer, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
Approximate date of commencement of proposed sale to the
public:
From time to time after the effective
date of this registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box.
o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.
þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
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If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following box.
þ
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box.
þ
CALCULATION
OF REGISTRATION FEE
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of
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Amount to be
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Offering Price
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Aggregate
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Registration
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Securities to be Registered
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Registered(1)
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Per Unit(1)
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Offering Price(1)
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Fee(1)
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Senior Debt Securities of The
Travelers Companies, Inc.
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Subordinated Debt Securities of The
Travelers Companies, Inc.
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Junior Subordinated Debt Securities
of The Travelers Companies, Inc.
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Preferred Stock of The Travelers
Companies, Inc.
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Depositary Shares of The Travelers
Companies, Inc.(2)
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Common Stock, without par value, of
The Travelers Companies, Inc.
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Warrants of The Travelers
Companies, Inc.
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Stock Purchase Contracts of The
Travelers Companies, Inc.
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Units of The Travelers Companies,
Inc.
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Preferred Securities of Travelers
Capital Trust II
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Preferred Securities of Travelers
Capital Trust III
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Preferred Securities of Travelers
Capital Trust IV
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Preferred Securities of Travelers
Capital Trust V
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The Travelers Companies, Inc.
Guarantee of Preferred Securities of Travelers Capital
Trust II, Travelers Capital Trust III, Travelers
Capital Trust IV and Travelers Trust V(3)
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(1)
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An indeterminate aggregate initial offering price or number of
the securities of each identified class is being registered as
may from time to time be offered at indeterminate prices.
Separate consideration may or may not be received for securities
that are issuable on exercise, conversion or exchange of other
securities or that are issued in units or represented by
depositary shares. In accordance with Rules 456(b) and
457(r), the registrants are deferring payment of all of the
registration fee, except for $118,048 that has already been paid
with respect to $1,283,125,250 aggregate initial offering price
of securities that were previously registered pursuant to
Registration Statement Nos.
333-92466
and
333-92466-01,
filed on July 16, 2002, and Registration Statement Nos.
333-98525
and
333-98525-01,
filed on August 22, 2002 by The St. Paul Companies, Inc.
and were not sold thereunder. Pursuant to Rule 457(p) under
the Securities Act, such unutilized filing fee may be applied to
the filing fee payable pursuant to this registration statement.
Any additional registration fees will be paid subsequently on a
pay-as-you-go basis.
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(2)
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Each depositary share will be issued under a deposit agreement
and will be evidenced by a depositary receipt. In the event The
Travelers Companies, Inc. elects to offer to the public
fractional interests in shares of the preferred stock registered
hereunder, depositary receipts will be distributed to those
persons purchasing such fractional interests and shares of
preferred stock will be issued to the depositary under the
deposit agreement. No separate consideration will be received
for the depositary shares.
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(3)
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The Travelers Companies, Inc. is also registering the guarantees
and other obligations that it may have with respect to preferred
securities to be issued by any of Travelers Capital
Trust II, Travelers Capital Trust III, Travelers
Capital Trust IV and Travelers Capital Trust V or with
respect to similar securities that may be issued by similar
entities formed in the future. No separate consideration will be
received for any guarantee.
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EXPLANATORY
NOTE
This Post-Effective Amendment No. 1 to the Registration
Statement is being filed to provide for the offer and sale from
time to time of junior subordinated debt securities and to file
as an exhibit to the Registration Statement the form of junior
subordinated indenture pursuant to which such securities would
be issued. This Post-Effective Amendment No. 1 is also
filed to reflect the change of our name from The St. Paul
Travelers Companies, Inc. to The Travelers
Companies, Inc, effective on February 26, 2007, and
the change of names of St. Paul Travelers Capital Trust II,
St. Paul Travelers Capital Trust III, St. Paul Travelers
Capital Trust IV and St. Paul Travelers Capital
Trust V to Travelers Capital Trust II,
Travelers Capital Trust III, Travelers
Capital Trust IV and Travelers Capital
Trust V, respectively. The Description of Debt
Securities section of the prospectus which forms a part of
the Registration Statement has been updated to include a
description of the junior subordinated debt securities and the
junior subordinated indenture. Other than certain updates
related to the passage of time, no other changes or additions
are being made hereby to the Prospectus.
PROSPECTUS
The
Travelers Companies, Inc.
Senior
Debt Securities
Subordinated Debt Securities
Junior Subordinated Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Warrants
Stock Purchase Contracts
and
Units
Travelers
Capital Trust II
Travelers Capital Trust III
Travelers Capital Trust IV
Travelers Capital Trust V
Preferred
Securities
guaranteed to the extent set forth herein
by The Travelers Companies, Inc.
We will provide you with more specific terms of these securities
in supplements to this prospectus. You should read this
prospectus and the applicable prospectus supplement carefully
before you invest.
We may offer these securities from time to time in amounts, at
prices and on other terms to be determined at the time of
offering. We may offer and sell these securities to or through
one or more underwriters, dealers and agents, or directly to
purchasers, on a continuous or delayed basis.
The Travelers Companies, Inc.s common stock is listed on
the New York Stock Exchange under the symbol TRV.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
Prospectus dated March 5, 2007.
Table of
Contents
Unless the context otherwise indicates, the terms
Travelers, we, us or
our means The Travelers Companies, Inc. and its
consolidated subsidiaries, and the term Trusts
means, collectively, Travelers Capital Trust II, Travelers
Capital Trust III, Travelers Capital Trust IV and
Travelers Capital Trust V.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission (the
SEC) utilizing a shelf registration or continuous
process. Under this shelf process, we may sell any combination
of the securities described in this prospectus in one or more
offerings.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement containing specific information
about the terms of the securities being offered. A prospectus
supplement may include a discussion of any risk factors or other
special considerations applicable to those securities or to us.
A prospectus supplement may also add, update or change
information in this prospectus. If there is any inconsistency
between the information in this prospectus and the applicable
prospectus supplement, you should rely on the information in the
prospectus supplement. You should read both this prospectus and
any prospectus supplement together with additional information
described under the heading Where You Can Find More
Information.
The registration statement containing this prospectus, including
exhibits to the registration statement, provides additional
information about us and the securities offered under this
prospectus. The registration statement can be read at the SEC
web site or at the SEC office mentioned under the heading
Where You Can Find More Information.
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When acquiring any securities discussed in this prospectus, you
should rely only on the information provided in this prospectus
and in the applicable prospectus supplement, including the
information incorporated by reference. Neither we, the Trusts
nor any underwriters or agents, have authorized anyone to
provide you with different information. We are not offering the
securities in any state where the offer is prohibited. You
should not assume that the information in this prospectus, any
prospectus supplement, or any document incorporated by
reference, is truthful or complete at any date other than the
date mentioned on the cover page of these documents.
We may sell securities to underwriters who will sell the
securities to the public on terms fixed at the time of sale. In
addition, the securities may be sold by us directly or through
dealers or agents designated from time to time. If we, directly
or through agents, solicit offers to purchase the securities, we
reserve the sole right to accept and, together with any agents,
to reject, in whole or in part, any of those offers.
Any prospectus supplement will contain the names of the
underwriters, dealers or agents, if any, together with the terms
of offering, the compensation of those underwriters and the net
proceeds to us. Any underwriters, dealers or agents
participating in the offering may be deemed
underwriters within the meaning of the Securities
Act of 1933, as amended (the Securities Act).
Unless otherwise stated, currency amounts in this prospectus and
any prospectus supplement are stated in United States dollars
($).
A SPECIAL
NOTE REGARDING FORWARD-LOOKING
STATEMENT DISCLOSURE AND CERTAIN RISKS
This prospectus may contain, and documents incorporated by
reference herein may contain, certain forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements, other than
statements of historical facts, may be forward-looking
statements. Specifically, we may make forward-looking statements
about our results of operations (including, among others,
premium volume, income from continuing operations, net and
operating income and return on equity), financial condition and
liquidity; the sufficiency of our asbestos and other reserves
(including, among others, asbestos claim payment patterns); the
cost and availability of reinsurance coverage; and strategic
initiatives. Such statements are subject to risks and
uncertainties, many of which are difficult to predict and
generally beyond our control, that could cause actual results to
differ materially from those expressed in, or implied or
projected by, the forward-looking information and statements.
Some of the factors that could cause actual results to differ
include, but are not limited to, the following: catastrophe
losses could materially reduce our profitability and adversely
impact our ratings, our ability to raise capital and the
availability and cost of reinsurance; if actual claims exceed
our loss reserves, or if changes in the estimated level of loss
reserves are necessary, our financial results could be
significantly and adversely affected; our business could be
harmed because of our potential exposure to asbestos and
environmental claims and related litigation; we are exposed to,
and may face adverse developments involving, mass tort claims
such as those relating to exposure to potentially harmful
products or substances; the effects of emerging claim and
coverage issues on our business are uncertain; reinsurance may
not protect us against losses; the insurance industry is the
subject of a number of investigations by state and federal
authorities in the United States, and we cannot predict the
outcome of these investigations or their impact on our business
or financial results; our businesses are heavily regulated and
changes in regulation may reduce our profitability and limit our
growth; a downgrade in our claims-paying and financial strength
ratings could significantly reduce our business volumes,
adversely impact our ability to access the capital markets and
increase our borrowing costs; our investment portfolio may
suffer reduced returns or losses which could reduce our
profitability; the intense competition that we face could harm
our ability to maintain or increase our profitability and
premium volume; the inability of our insurance subsidiaries to
pay dividends to us in sufficient amounts would harm our ability
to meet our obligations and to pay future dividends; assessments
and other surcharges for guaranty funds, second-injury funds,
catastrophe funds and other mandatory pooling arrangements may
reduce our profitability; loss or significant restriction of the
use of credit scoring in the pricing and underwriting of
personal insurance products could reduce our future
profitability; disruptions to our relationships with our
distributors, independent agents and brokers could adversely
affect us; if we experience difficulties
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with outsourcing relationships, technology
and/or
data
security, our ability to conduct our business might be
negatively impacted.
Our forward-looking statements speak only as of the date of this
prospectus or as of the date they are made, and we undertake no
obligation to update our forward-looking statements.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SECs web
site at http://www.sec.gov. You may also read and copy any
document we file with the SEC at the SECs Public Reference
Room at 100 F. Street, N.E., Washington, D.C. 20549. Please
call the SEC at
1-800-SEC-0330
for further information on the Public Reference Room. Our common
stock is traded on the New York Stock Exchange under the symbol
TRV. You may inspect the reports, proxy statements
and other information concerning us at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York
10005. You may find additional information about us at our web
site at
http://www.travelers.com.
The information on our web site is not part of this prospectus.
The SEC allows us to incorporate by reference the information we
file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference the documents listed below and any
future filings made by us with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the termination of the offering
under this prospectus:
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Annual Report on Form 10-K/A for the year ended
December 31, 2006;
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Current Reports on
Form 8-K
filed on February 13, 2007 and February 27, 2007;
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Definitive Proxy Statement on Form 14A for the 2006 Annual
Shareholders Meeting; and
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Form 8-A
filed on October 17, 1991, including any amendments or
supplements thereto.
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You may request a copy of these filings at no cost, by writing
or telephoning us at the following address:
The Travelers Companies, Inc.
Attn: Corporate Secretary
385 Washington Street
St. Paul, Minnesota 55102
Telephone No.:
(651) 310-7911
We have not included or incorporated by reference in this
prospectus any separate financial statements of the Trusts. We
do not believe that these financial statements would provide
holders of preferred securities with any important information
for the following reasons:
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we will own all of the voting securities of the Trusts;
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the Trusts do not and will not have any independent operations
other than to issue securities and to purchase and hold our
subordinated debt securities; and
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we are fully and unconditionally guaranteeing the obligations of
the Trusts as described in this prospectus.
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Although the Trusts would normally be required to file
information with the SEC on an ongoing basis, we expect the SEC
to exempt the Trusts from filing this information for as long as
we continue to file our information with the SEC.
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THE
TRAVELERS COMPANIES, INC.
The Travelers Companies, Inc. is a holding company principally
engaged, through its subsidiaries, in providing a wide range of
commercial and personal property and casualty insurance products
and services to businesses, government units, associations and
individuals. The company, known as The St. Paul Companies, Inc.
prior to its merger on April 1, 2004 with Travelers
Property Casualty Corp., is incorporated as a general business
corporation under the laws of the State of Minnesota and is one
of the oldest insurance organizations in the United States,
dating back to 1853. Upon completion of the merger with
Travelers Property Casualty Corp., the company was named The St.
Paul Travelers Companies, Inc. The companys name was
changed to The Travelers Companies, Inc. on February 26,
2007.
The principal executive offices of the company are located at
385 Washington Street, St. Paul, Minnesota 55102, and the
telephone number is
(651) 310-7911.
Unless the context otherwise indicates, the terms
we, us or our mean The
Travelers Companies, Inc. and its consolidated subsidiaries.
THE
TRUSTS
Each of Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V (each a Trust and collectively
the Trusts) is a statutory trust created under
Delaware law. Each of the Trusts exists for the exclusive
purposes of:
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issuing the preferred securities, which represent preferred
undivided beneficial ownership interests in such Trusts
assets;
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issuing the common securities, which represent common undivided
beneficial ownership interests in the Trusts assets, to us
in a total liquidation amount equal to at least 3% of the
Trusts total capital;
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using the proceeds from the issuances to purchase one or more
series of securities issued by us, including senior debt
securities, subordinated debt securities and warrants;
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maintaining the Trusts status as a grantor trust for
federal income tax purposes; and
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engaging in only those other activities necessary, advisable or
incidental to these purposes, such as registering the transfer
of preferred securities.
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Any senior debt securities, subordinated debt securities and
warrants we sell to a Trust will be the sole assets of such
Trust, and, accordingly, payments under the senior or
subordinated debt securities will be the sole revenues of such
Trust, and such Trusts ability to distribute shares of our
common stock or other securities upon conversion of the
preferred securities, if convertible, will depend solely on our
performance under the warrants sold by us to such Trust. We will
acquire and own all of the common securities of each of the
Trusts, which will have an aggregate liquidation amount equal to
at least 3% of the total capital of the applicable Trust. The
common securities will rank on a parity with, and payments will
be made on the common securities
pro rata
with, the
preferred securities, except that upon an event of default under
the applicable declaration of trust resulting from an event of
default under the senior or subordinated debt securities, our
rights as holder of the common securities to distributions and
payments upon liquidation or redemption will be subordinated to
the rights of the holders of the preferred securities.
Each Trust has a term of 49 years, but may dissolve earlier
as provided in each respective declaration of trust. The
Trusts business and affairs are conducted by the trustees.
The trustees for the Trusts are The Bank of New York, as
institutional trustee, The Bank of New York (Delaware), as the
Delaware trustee, and two regular trustees or
administrative trustees who are officers of The
Travelers Companies, Inc. The Bank of New York, as institutional
trustee, will act as sole indenture trustee under the
declarations of trust. The Bank of New York will also act as
guarantee trustee under the guarantee and as indenture trustee
under the subordinated debt indenture.
The duties and obligations of each trustee are governed by the
declarations of trust. As issuer of the senior or subordinated
debt securities to be purchased by the Trusts and as borrower
under the applicable indenture, we will pay all fees, expenses,
debts and obligations (other than the payment of distributions
and other payments on the preferred securities) related to the
Trusts and any offering of the Trusts preferred securities
and will pay, directly or
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indirectly, all ongoing costs, expenses and liabilities of the
Trust. The principal executive office of the Trusts is
c/o The
Travelers Companies, Inc., 385 Washington Street, St. Paul,
Minnesota 55102, and the telephone number is
(651) 310-7911.
USE OF
PROCEEDS
We intend to use the net proceeds from the sale of the
securities as set forth in the applicable prospectus supplement.
RATIOS OF
EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to fixed
charges and our ratio of earnings to combined fixed charges and
preferred dividend requirements for each of the periods
indicated:
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Year Ended December 31,
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2006
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2005
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2004
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2003
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2002
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Ratio of earnings to fixed charges
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15.24
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8.46
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4.11
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x
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11.89
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N/A(1
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Ratio of earnings to combined
fixed charges and preferred dividend requirements
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14.96
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x
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8.25
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x
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4.01
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x
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11.89
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x
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N/A(1
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(1)
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Income (loss) available for fixed charges in 2002 included a
$1.39 billion charge for strengthening asbestos reserves,
net of the benefit from an indemnification agreement with
Citigroup, Inc., a former affiliate. For the year ended
December 31, 2002, our earnings were not sufficient to
cover fixed charges by $260 million.
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For accounting purposes, the merger of St. Paul and Travelers
Property was accounted for as a reverse acquisition with
Travelers Property treated as the accounting acquirer.
Accordingly, this transaction was accounted for as a purchase
business combination, using Travelers Propertys historical
financial information and applying fair value estimates to the
acquired assets, liabilities and commitments of St. Paul as of
April 1, 2004. Data for the years 2002 through 2003 reflect
information for Travelers Property only. Data included for the
year ended December 31, 2004 reflect information for
Travelers Property only for the period January 1, 2004
through March 31, 2004, and information for Travelers for
the period April 1, 2004 through December 31, 2004.
Data for the years ended December 31, 2005 and
December 31, 2006 reflect information for Travelers.
The ratio of earnings to fixed charges is computed by dividing
income available for fixed charges by the fixed charges. For
purposes of this ratio, fixed charges consist of that portion of
rentals deemed representative of the appropriate interest factor.
DESCRIPTION
OF DEBT SECURITIES WE MAY OFFER
We may issue senior debt securities, subordinated debt
securities or junior subordinated debt securities. None of the
senior debt securities, the subordinated debt securities or the
junior subordinated debt securities will be secured by any of
our property or assets. Thus, by owning a debt security, you are
one of our unsecured creditors.
The senior debt securities will constitute part of our senior
debt, will be issued under a senior debt indenture described
below and will rank equally with all of our other unsecured and
unsubordinated debt.
The subordinated debt securities will constitute part of our
subordinated debt, will be issued under a subordinated debt
indenture described below and will be subordinate in right of
payment to all of our senior indebtedness, as
defined in the subordinated debt indenture. The junior
subordinated debt securities will constitute part of our junior
subordinated debt, will be issued under a junior subordinated
indenture described below and will be subordinate in right of
payment to all of our senior indebtedness, including
our subordinated debt, as defined in the junior subordinated
indenture. The prospectus supplement for any series of
subordinated debt securities or junior subordinated debt
securities will indicate the approximate amount of senior
indebtedness outstanding as of
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the end of the most recent fiscal quarter. None of the
indentures limit our ability to incur additional senior
indebtedness.
Debt securities in this prospectus refers to the
senior debt securities, the subordinated debt securities and the
junior subordinated debt securities.
The debt securities are each governed by a document called an
indenture the senior debt indenture, in the case of
the senior debt securities, the subordinated debt indenture, in
the case of the subordinated debt securities and the junior
subordinated debt indenture, in the case of the junior
subordinated debt securities. Each of the senior debt indenture
and the subordinated debt indenture is a contract between us and
The Bank of New York, which will act as trustee. The junior
subordinated debt indenture will be a contract between us and
The Bank of New York Trust Company, N.A., which will act as
trustee. The indentures are substantially similar, except for
(i) the covenant described below under
Restrictive Covenants Limitations
on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries, which is included only in the senior debt
indenture, (ii) the provisions relating to subordination,
which are included only in the subordinated debt indenture and
the junior subordinated debt indenture, (iii) the
definition of senior indebtedness in the subordinated debt
indenture and the junior subordinated debt indenture is
different in each indenture, and (iv) the events of default
contained in the junior subordinated indenture are limited to
payment defaults and certain events of bankruptcy.
Reference to the indenture or the trustee with respect to any
debt securities means the indenture under which those debt
securities are issued and the trustee under that indenture.
The trustee has two main roles:
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First
, the trustee can enforce your rights against us if
we default on our obligations under the terms of the applicable
indenture or the debt securities. There are some limitations on
the extent to which the trustee acts on your behalf, described
later under Remedies if an Event of Default
Occurs; and
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Second
, the trustee performs administrative duties for
us, such as sending you interest payments, transferring your
debt securities to a new buyer if you sell and sending you
notices.
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The indentures and their associated documents contain the full
legal text of the matters described in this section. The
indentures and the debt securities are governed by the laws of
the State of New York. A copy of the senior debt indenture,
dated as of March 12, 2002, the form of subordinated debt
indenture and the form of junior subordinated debt indenture
appear as exhibits to our registration statement. See
Where You Can Find More Information for information
on how to obtain a copy.
We may issue as many distinct series of debt securities under
any of the indentures as we wish. This section summarizes the
material terms of the debt securities that are common to all
series, although the prospectus supplement which describes the
terms of each series of debt securities may also describe
differences with the material terms summarized here.
Because this section is a summary, it does not describe every
aspect of the debt securities. This summary is subject to and
qualified in its entirety by reference to all the provisions of
the indentures, including definitions of some of the terms used
in the indentures. We describe the meaning for only the more
important terms. Whenever we refer to the defined terms of the
indentures in this prospectus or in the prospectus supplement,
those defined terms are incorporated by reference here or in the
prospectus supplement. You must look to the indentures for the
most complete description of what we describe in summary form in
this prospectus.
This summary also is subject to and qualified by reference to
the description of the particular terms of your series described
in the prospectus supplement. Those terms may vary from the
terms described in this prospectus. The prospectus supplement
relating to each series of debt securities will be attached to
the front of this prospectus.
There may also be a further prospectus supplement, known as a
pricing supplement, which contains the precise terms of debt
securities you are offered.
We may issue the debt securities as original issue discount
securities, which are securities that are offered and sold at a
substantial discount to their stated principal amount. The
prospectus supplement relating to original issue discount
securities will describe federal income tax consequences and
other special considerations applicable to them. The debt
securities may also be issued as indexed securities or
securities denominated in foreign currencies or
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currency units, as described in more detail in the prospectus
supplement relating to any of the particular debt securities.
The prospectus supplement relating to specific debt securities
will also describe any special considerations and any material
additional tax considerations applicable to such debt securities.
In addition, the specific financial, legal and other terms
particular to a series of debt securities are described in the
prospectus supplement and the pricing supplement relating to the
series. The prospectus supplement relating to a series of debt
securities will describe the following terms of the series:
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the title of the series of debt securities;
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whether it is a series of senior debt securities, a series of
subordinated debt securities or a series of junior subordinated
debt securities;
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any limit on the aggregate principal amount of the series of
debt securities;
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the person to whom interest on a debt security is payable, if
other than the holder on the regular record date;
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the date or dates on which the series of debt securities will
mature;
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the rate or rates, which may be fixed or variable, per annum at
which the series of debt securities will bear interest, if any,
and the date or dates from which that interest, if any, will
accrue;
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the place or places where the principal of (and premium, if any)
and interest on the debt securities are payable;
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the dates on which interest, if any, on the series of debt
securities will be payable, the regular record dates for the
interest payment dates and whether interest payments may be
deferred;
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any mandatory or optional sinking funds or analogous provisions
or provisions for redemption at our option or the option of the
holder;
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the date, if any, after which and the price or prices at which
the series of debt securities may, in accordance with any
optional or mandatory redemption provisions, be redeemed and the
other detailed terms and provisions of those optional or
mandatory redemption provisions, if any;
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if the debt securities may be converted into or exercised or
exchanged for our common stock or preferred stock or any other
of our securities, the terms on which conversion, exercise or
exchange may occur, including whether conversion, exercise or
exchange is mandatory, at the option of the holder or at our
option, the date on or the period during which conversion,
exercise or exchange may occur, the initial conversion, exercise
or exchange price or rate and the circumstances or manner in
which the amount of common stock or preferred stock or other
securities issuable upon conversion, exercise or exchange may be
adjusted;
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if other than denominations of $2,000 and any integral multiple
of $1,000 in excess of $2,000, the denominations in which the
series of debt securities will be issuable;
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if other than the principal amount thereof, the portion of the
principal amount of the series of debt securities which will be
payable upon the declaration of acceleration of the maturity of
such series of debt securities;
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the currency of payment of principal, premium, if any, and
interest on the series of debt securities;
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if the currency of payment for principal, premium, if any, and
interest on the series of debt securities is subject to our or a
holders election, the currency or currencies in which
payment can be made and the period within which, and the terms
and conditions upon which, the election can be made;
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any index, formula or other method used to determine the amount
of payment of principal or premium, if any, and interest on the
series of debt securities;
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the applicability of the provisions described under
Restrictive Covenants
Defeasance;
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any event of default under the series of debt securities if
different from those described under Default
and Related Matters What Is an Event of
Default?;
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if the series of debt securities will be issuable only in the
form of a global security, as described under
Legal Ownership Global
Securities, the depository or its nominee with respect to
the series of debt securities and the circumstances under which
the global security may be registered for transfer or exchange
in the name of a person other than the depository or its nominee;
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any proposed listing of the series of debt securities on any
securities exchange; and
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any other special feature of the series of debt securities.
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Those terms may vary from the terms described here. Accordingly,
this summary also is subject to and qualified by reference to
the description of the terms of the series described in the
prospectus supplement. The prospectus supplement relating to
each series of debt securities will be attached to the front of
this prospectus.
Legal
Ownership
Street
Name and Other Indirect Holders
Investors who hold debt securities in accounts at banks or
brokers will generally not be recognized by us as legal holders
of debt securities. This is called holding in street
name. Instead, we would recognize only the bank or broker,
or the financial institution the bank or broker uses to hold its
debt securities. These intermediary banks, brokers and other
financial institutions pass along principal, interest and other
payments on the debt securities, either because they agree to do
so in their customer agreements or because they are legally
required to do so. If you hold debt securities in street name,
you should check with your own institution to find out:
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how it handles securities payments and notices;
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whether it imposes fees or charges;
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how it would handle voting if ever required;
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whether and how you can instruct it to send you debt securities
registered in your own name so you can be a direct holder as
described below; and
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how it would pursue rights under the debt securities if there
were a default or other event triggering the need for holders to
act to protect their interests.
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Direct
Holders
Our obligations, as well as the obligations of the trustee and
those of any third parties employed by us or the trustee, run
only to persons or entities who are the direct holders of debt
securities (
i.e.
, those who are registered as holders of
debt securities). As noted above, we do not have obligations to
you if you hold in street name or through other indirect means,
either because you choose to hold debt securities in that manner
or because the debt securities are issued in the form of global
securities as described below. For example, once we make payment
to the registered holder, we have no further responsibility for
the payment even if that registered holder is legally required
to pass the payment along to you as a street name customer but
does not do so.
Global
Securities
What Is a Global Security?
A global security is a special
type of indirectly held security, as described above under
Street Name and Other Indirect Holders.
If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners can only be indirect
holders. We do this by requiring that the global security be
registered in the name of a financial institution we select and
by requiring that the debt securities included in the global
security not be transferred to the name of any other direct
holder unless the special circumstances described below occur.
The financial institution that acts as the sole direct holder of
the global security is called the depositary.
Any person wishing to own a debt security included in the global
security must do so indirectly by virtue of an account with a
broker, bank or other financial institution that in turn has an
account with the depositary. The
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prospectus supplement indicates whether your series of debt
securities will be issued only in the form of global securities.
Special Investor Considerations for Global
Securities.
As an indirect holder, an
investors rights relating to a global security will be
governed by the account rules of the investors financial
institution and of the depositary, as well as general laws
relating to securities transfers. We do not recognize this type
of investor as a registered holder of debt securities and
instead deal only with the depositary that holds the global
security.
If you are an investor in debt securities that are issued only
in the form of global securities, you should be aware that:
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you cannot get debt securities registered in your own name;
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you cannot receive physical certificates for your interest in
the debt securities;
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you will be a street name holder and must look to your own bank
or broker for payments on the debt securities and protection of
your legal rights relating to the debt securities. See
Street Name and Other Indirect Holders;
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you may not be able to sell interests in the debt securities to
some insurance companies and other institutions that are
required by law to own their securities in the form of physical
certificates;
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the depositarys policies will govern payments, transfers,
exchange and other matters relating to your interest in the
global security. We and the trustee have no responsibility for
any aspect of the depositarys actions or for its records
of ownership interests in the global security. We and the
trustee also do not supervise the depositary in any way; and
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the depositary will require that interests in a global security
be purchased or sold within its system using
same-day
funds for settlement.
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Special Situations When Global Security Will Be
Terminated.
In a few special situations described
later, the global security will terminate and interests in it
will be exchanged for physical certificates representing debt
securities. After that exchange, the choice of whether to hold
debt securities directly or in street name will be up to you.
You must consult your own bank or broker to find out how to have
your interests in debt securities transferred to your own name,
so that you will be a direct holder. The rights of street name
investors and direct holders in the debt securities have been
previously described in the subsections entitled,
Street Name and Other Indirect Holders
and Direct Holders.
The special situations for termination of a global security are:
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when the depositary notifies us that it is unwilling, unable or
no longer qualified to continue as depositary;
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when we notify the trustee that we wish to terminate the global
security; or
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when an event of default on the debt securities has occurred and
has not been cured.
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Defaults are discussed later under Default and
Related Matters.
The prospectus supplement may also list additional situations
for terminating a global security that would apply only to the
particular series of debt securities covered by the prospectus
supplement. When a global security terminates, the depositary
(and not we or the trustee) is responsible for deciding the
names of the institutions that will be the initial direct
holders.
In the remainder of this description you means
direct holders and not street name or other indirect holders of
debt securities. Indirect holders should read the previous
subsection entitled Street Name and Other
Indirect Holders.
Overview
of the Remainder of this Description
The remainder of this description summarizes:
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Additional Mechanics relevant to the debt securities under
normal circumstances, such as how you transfer ownership and
where we make payments;
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your rights under several
Special Situations
, such as if
we merge with another company or if we want to change a term of
the debt securities;
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Subordination Provisions in the subordinated debt indenture and
junior subordinated indenture that may prohibit us from making
payments on those securities;
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a
Restrictive Covenant
contained in the senior debt
indenture that restricts our ability to incur liens and other
encumbrances on the voting stock of some of our subsidiaries. A
particular series of debt securities may have additional
restrictive covenants;
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situations in which we may invoke the provisions relating to
Defeasance
;
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your rights if we
Default
or experience other financial
difficulties; and
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our
Relationship With the Trustee
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Additional
Mechanics
Form,
Exchange and Transfer
The debt securities will be issued:
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only in fully registered form;
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without interest coupons; and
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unless otherwise indicated in the prospectus supplement, in
denominations of $2,000 and multiples of $1,000 in excess of
$2,000.
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You may have your debt securities broken into more debt
securities of smaller denominations or combined into fewer debt
securities of larger denominations, as long as the total
principal amount is not changed. This is called an exchange.
You may exchange or transfer debt securities at the office of
the trustee. The trustee acts as our agent for registering debt
securities in the names of holders and transferring debt
securities. We may change this appointment to another entity or
perform the service ourselves. The entity performing the role of
maintaining the list of registered direct holders is called the
security registrar. It will also register transfers of the debt
securities.
You will not be required to pay a service charge to transfer or
exchange debt securities, but you may be required to pay for any
tax or other governmental charge associated with the exchange or
transfer. The transfer or exchange will only be made if the
security registrar is satisfied with your proof of ownership.
If we designate additional transfer agents, they will be named
in the prospectus supplement. We may cancel the designation of
any particular transfer agent. We may also approve a change in
the office through which any transfer agent acts.
If the debt securities are redeemable and we redeem less than
all of the debt securities of a particular series, we may block
the issuance, transfer or exchange of debt securities during the
period beginning at the opening of business 15 days before
the day we mail the notice of redemption and ending at the close
of business on the day of that mailing, in order to freeze the
list of holders to prepare the mailing. We may also refuse to
register transfers or exchanges of debt securities selected for
redemption, except that we will continue to permit transfers and
exchanges of the unredeemed portion of any debt security being
partially redeemed.
Payment
and Paying Agents
We will pay interest to you if you are a direct holder listed in
the trustees records at the close of business on a
particular day in advance of each due date for interest, even if
you no longer own the debt security on the interest due date.
That particular day, usually about two weeks in advance of the
interest due date, is called the regular record date and is
stated in the prospectus supplement. Holders buying and selling
debt securities must work out between them how to compensate for
the fact that we will pay all the interest for an interest
period to the one who is the registered holder on the regular
record date. The most common manner is to adjust the sales price
of the debt
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securities to pro rate interest fairly between buyer and seller.
This pro rated interest amount is called accrued interest.
We will pay interest, principal and any other money due on the
debt securities at the corporate trust office of the trustee in
New York City. You must make arrangements to have your payments
picked up at or wired from that office. We may also choose to
pay interest by mailing checks.
Street name and other indirect holders should consult their
banks or brokers for information on how they will receive
payments.
We may also arrange for additional payment offices, and may
cancel or change these offices, including our use of the
trustees corporate trust office. These offices are called
paying agents. We may also choose to act as our own paying
agent. We must notify you of changes in the paying agents for
any particular series of debt securities.
Notices
We and the trustee will send notices regarding the debt
securities only to direct holders, using their addresses as
listed in the trustees records.
Regardless of who acts as paying agent, all money paid by us to
a paying agent that remains unclaimed at the end of one year
after the amount is due to direct holders will be repaid to us.
After that one-year period, you may look only to us for payment
and not to the trustee, any other paying agent or anyone else.
Special
Situations
Mergers
and Similar Events
We are generally permitted to consolidate or merge with another
company or firm. We are also permitted to sell or lease
substantially all of our assets to another firm, or to buy or
lease substantially all of the assets of another firm. However,
we may not take any of these actions unless the following
conditions (among others) are met:
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Where we merge out of existence or sell or lease substantially
all our assets, the other firm may not be organized under a
foreign countrys laws; that is, it must be a corporation,
partnership or trust organized under the laws of a State of the
United States or the District of Columbia or under federal law,
and it must agree to be legally responsible for the debt
securities.
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The merger, sale of assets or other transaction must not cause a
default on the debt securities, and we must not already be in
default, unless the merger or other transaction would cure the
default. For purposes of this no-default test, a default would
include an event of default that has occurred and not been
cured. A default for this purpose would also include any event
that would be an event of default if the requirements for giving
us notice of our default or our default having to exist for a
specific period of time were disregarded.
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It is possible that the merger, sale of assets or other
transaction would cause some of our property to become subject
to a mortgage or other legal mechanism giving lenders
preferential rights in that property over other lenders,
including the direct holders of the senior debt securities, or
over our general creditors if we fail to pay them back. We have
promised in our senior debt indenture to limit these
preferential rights on voting stock of any designated
subsidiaries, called liens, as discussed under
Restrictive Covenants Limitation
on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries. If a merger or other transaction would
create any liens on the voting stock of our designated
subsidiaries, we must comply with that restrictive covenant. We
would do this either by deciding that the liens were permitted,
or by following the requirements of the restrictive covenant to
grant an equivalent or higher-ranking lien on the same voting
stock to the direct holders of the senior debt securities.
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Modification
and Waiver
There are four types of changes we can make to either indenture
and the debt securities issued under that indenture.
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Changes Requiring Your Approval.
First, there
are changes that cannot be made to your debt securities without
your specific approval. Following is a list of those types of
changes:
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change the payment due date of the principal or interest on a
debt security;
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reduce any amounts due on a debt security;
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reduce the amount of principal payable upon acceleration of the
maturity of a debt security (including the amount payable on an
original issue discount security) following a default;
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change the place or currency of payment on a debt security;
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impair your right to sue for payment of any amount due on your
debt security;
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impair any right that you may have to exchange or convert the
debt security for or into securities or other property;
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reduce the percentage of direct holders of debt securities whose
consent is needed to modify or amend the applicable indenture;
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reduce the percentage of direct holders of debt securities whose
consent is needed to waive our compliance with certain
provisions of the applicable indenture or to waive certain
defaults; and
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modify any other aspect of the provisions dealing with
modification and waiver of the applicable indenture.
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Changes Requiring a Majority Vote.
The second
type of change to a particular indenture and the debt securities
is the kind that requires a vote in favor by direct holders of
debt securities owning a majority of the principal amount of all
series affected thereby, voting together as a single class. Most
changes, including waivers, as described below, fall into this
category, except for changes noted above as requiring the
approval of the holders of each security affected thereby, and,
as noted below, changes not requiring approval.
Each indenture provides that a supplemental indenture which
changes or eliminates any covenant or other provision of the
applicable indenture which has expressly been included solely
for the benefit of one or more particular series of securities,
or which modifies the rights of the holders of securities of
such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under the applicable
indenture of the holders of securities of any other series.
Changes Not Requiring Approval.
The third type
of change does not require any vote by holders of debt
securities. This type is limited to clarifications and certain
other changes that would not adversely affect holders of the
debt securities.
Changes by Waiver Requiring a Majority
Vote.
Fourth, we need a vote by direct holders of
senior debt securities owning a majority of the principal amount
of the particular series affected to obtain a waiver of certain
of the restrictive covenants, including the one described later
under Restrictive Covenants
Limitation on Liens and Other Encumbrances on Voting Stock of
Designated Subsidiaries. We also need such a majority vote
to obtain a waiver of any past default, except a payment default
listed in the first category described later under
Default and Related Matters Events
of Default.
Modification of Subordination Provisions.
In
addition, we may not modify the subordination provisions of the
subordinated debt indenture or the junior subordinated indenture
in a manner that would adversely affect the outstanding
subordinated debt securities or junior subordinated debt
securities, as the case may be, of any one or more series in any
material respect, without the consent of the direct holders of a
majority in aggregate principal amount of all affected series,
voting together as one class.
Further Details Concerning Voting.
When taking
a vote, we will use the following rules to decide how much
principal amount to attribute to a debt security:
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for original issue discount securities, we will use the
principal amount that would be due and payable on the voting
date if the maturity of the debt securities were accelerated to
that date because of a default;
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for debt securities whose principal amount is not known (for
example, because it is based on an index) we will use a special
rule for that debt security described in the prospectus
supplement; or
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for debt securities denominated in one or more foreign
currencies or currency units, we will use the U.S. dollar
equivalent.
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Debt securities will not be considered outstanding, and
therefore will not be eligible to vote, if we have deposited or
set aside in trust for you money for their payment or
redemption. Debt securities will also not be eligible to vote if
they have been fully defeased as described under
Defeasance Full Defeasance.
We will generally be entitled to set any day as a record date
for the purpose of determining the direct holders of outstanding
debt securities that are entitled to vote or take other action
under the applicable indenture. In some circumstances, the
trustee will be entitled to set a record date for action by
direct holders. If we or the trustee set a record date for a
vote or other action to be taken by holders of a particular
series, that vote or action may be taken only by persons who are
direct holders of outstanding securities of that series on the
record date and must be taken within 90 days following the
record date.
Street name and other indirect holders should consult their
banks or brokers for information on how approval may be granted
or denied if we seek to change an indenture or the debt
securities or request a waiver.
Subordination
Provisions
Direct holders of subordinated debt securities or junior
subordinated debt securities should recognize that contractual
provisions in the subordinated debt indenture and junior
subordinated debt indenture may prohibit us from making payments
on those securities. Subordinated debt securities are
subordinate and junior in right of payment, to the extent and in
the manner stated in the subordinated debt indenture, to all of
our senior indebtedness, as defined in the subordinated debt
indenture, including all debt securities we have issued and will
issue under the senior debt indenture. Junior subordinated debt
securities are subordinate and junior in right of payment, to
the extent and in the manner stated in the junior subordinated
debt indenture, to all of our senior indebtedness, as defined in
the junior subordinated debt indenture, including all debt
securities we have issued and will issue under the senior debt
indenture and subordinated debt indenture.
Under the subordinated debt indenture, senior
indebtedness includes all of our obligations to pay
principal, premium, interest, penalties, fees and other charges:
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for borrowed money;
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in the form of or evidenced by other instruments, including
obligations incurred in connection with our purchase of
property, assets or businesses;
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under capital leases;
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under letters of credit, bankers acceptances or similar
facilities;
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issued or assumed in the form of a deferred purchase price of
property or services, such as master leases;
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under swaps and other hedging arrangements;
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pursuant to our guarantee of another entitys obligations
and all dividend obligations guaranteed by us; and
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to satisfy the expenses and fees of the subordinated debt
indenture trustee under the subordinated debt indenture.
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The following types of our indebtedness will not rank senior to
the subordinated debt securities:
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indebtedness we owe to a subsidiary of ours;
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indebtedness which, by its terms, expressly provides that it
does not rank senior to the subordinated debt securities;
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indebtedness incurred in the form of trade accounts payable or
accrued liabilities arising in the ordinary course of business;
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indebtedness we owe to any trust, other than the Trusts and St.
Paul Capital Trust I (a statutory trust created under
Delaware law by us), or a trustee of such trust, partnership or
other entity affiliated with us, that is our financing vehicle,
and which has issued equity securities or other securities that
are similar to the preferred securities; and
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indebtedness we may incur in violation of the subordinated debt
indenture.
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Subject to the qualifications described below, the term
senior indebtedness
is defined in the junior
subordinated indenture to include principal of, and interest and
premium (if any) on, and any other payment due pursuant to any
of the following, whether incurred prior to, on or after the
date of this prospectus:
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all of our obligations (other than obligations pursuant to the
junior subordinated indenture and the junior subordinated debt
securities) for money borrowed;
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all of our obligations evidenced by notes, debentures, bonds or
other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or
businesses and including all other debt securities issued by us
to any trust or a trustee of such trust, or to a partnership or
other affiliate that acts as a financing vehicle for us, in
connection with the issuance of securities by such vehicles
(including but not limited to the junior subordinated
debentures, series A, issued pursuant to the indenture
dated as of December 24, 1996, between USF&G
Corporation and The Bank of New York, as amended, the junior
subordinated debentures, series C, issued pursuant to the
indenture dated as of July 8, 1997, between USF&G
Corporation and The Bank of New York, as amended and the junior
subordinated deferrable interest debentures, issued pursuant to
the indenture dated as of December 23, 1997 between MMI
Companies, Inc. and The Bank of New York, as amended);
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all of our obligations under leases required or permitted to be
capitalized under generally accepted accounting principles;
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all of our reimbursement obligations with respect to letters of
credit, bankers acceptances or similar facilities issued
for our account;
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all of our obligations issued or assumed as the deferred
purchase price of property or services, including all
obligations under master lease transactions pursuant to which we
or any of our subsidiaries have agreed to be treated as owner of
the subject property for federal income tax purposes (but
excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business);
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all of our payment obligations under interest rate swap or
similar agreements or foreign currency hedge, exchange or
similar agreements at the time of determination, including any
such obligations we incurred solely to act as a hedge against
increases in interest rates that may occur under the terms of
other outstanding variable or floating rate indebtedness of ours;
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all obligations of the types referred to in the preceding bullet
points of another person and all dividends of another person the
payment of which, in either case, we have assumed or guaranteed
or for which we are responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or
otherwise;
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all compensation and reimbursement obligations of ours to the
trustee pursuant to the junior subordinated indenture; and
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all amendments, modifications, renewals, extensions,
refinancings, replacements and refundings of any of the above
types of indebtedness.
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The junior subordinated debt securities will rank senior to all
of our equity securities.
The senior indebtedness will continue to be senior indebtedness
and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any
term of the senior indebtedness or extension or renewal of the
senior indebtedness.
Notwithstanding anything to the contrary in the foregoing,
senior indebtedness will not include (1) indebtedness
incurred for the purchase of goods, materials or property, or
for services obtained in the ordinary course of business or for
other liabilities arising in the ordinary course of business,
(2) any indebtedness which by its terms
11
expressly provides that it is not superior in right of payment
to the junior subordinated debt securities, or (3) any of
our indebtedness owed to a person who is our subsidiary or our
employees.
Each of the subordinated debt indenture and junior subordinated
debt indenture provides that, unless all principal of and any
premium or interest on the senior indebtedness (as defined in
the applicable indenture) has been paid in full, no payment or
other distribution may be made in respect of any subordinated
debt securities or junior subordinated debt securities, as the
case may be, in the following circumstances:
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in the event of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization, assignment for
creditors or other similar proceedings or events involving us or
our assets; or
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(a) in the event and during the continuation of any default
in the payment of principal, premium, if any, or interest on any
senior indebtedness beyond any applicable grace period or
(b) in the event that any event of default with respect to
any senior indebtedness has occurred and is continuing,
permitting the direct holders of that senior indebtedness (or a
trustee) to accelerate the maturity of that senior indebtedness,
whether or not the maturity is in fact accelerated (unless, in
the case of (a) or (b), the payment default or event of
default has been cured or waived or ceased to exist and any
related acceleration has been rescinded) or (c) in the
event that any judicial proceeding is pending with respect to a
payment default or event of default described in (a) or (b).
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If the trustee under the subordinated debt indenture or junior
subordinated indenture, as the case may be, or any direct
holders of the subordinated debt securities or junior
subordinated debt securities, as the case may be, receive any
payment or distribution that is prohibited under the
subordination provisions, then the trustee or the direct holders
will have to repay that money to the direct holders of the
senior indebtedness.
Even if the subordination provisions prevent us from making any
payment when due on the subordinated debt securities or junior
subordinated debt securities, as the case may be, of any series,
we will be in default on our obligations under that series if we
do not make the payment when due. This means that the trustee
under the subordinated debt indenture and the direct holders of
that series can take action against us, but they will not
receive any money until the claims of the direct holders of
senior indebtedness have been fully satisfied.
Restrictive
Covenants
General
We have made certain promises in each indenture called
covenants where, among other things, we promise to
maintain our corporate existence and all licenses and material
permits necessary for our business. In addition, in the senior
debt indenture we have made the promise described in the next
paragraph. The subordinated debt indenture and junior
subordinated debt indenture not include the promise described in
the next paragraph.
Limitation
on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries
Some of our property may be subject to a mortgage or other legal
mechanism that gives our lenders preferential rights in that
property over other lenders, including the direct holders of the
senior debt securities, or over our general creditors if we fail
to pay them back. These preferential rights are called liens. In
the senior debt indenture, we promise not to create, issue,
assume, incur or guarantee any indebtedness for borrowed money
that is secured by a mortgage, pledge, lien, security interest
or other encumbrance on any voting stock of a designated
subsidiary, unless we also secure all the senior debt securities
that are deemed outstanding under the senior debt indenture
equally with, or prior to, the indebtedness being secured,
together with, at our election, any of our or any designated
subsidiarys other indebtedness. This promise does not
restrict our ability to sell or otherwise dispose of our
interests in any designated subsidiary.
As used here:
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voting stock means all classes of stock (including any interest
in such stock) outstanding of a designated subsidiary that are
normally entitled to vote in elections of directors;
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designated subsidiary means any of our subsidiaries that,
together with its subsidiaries, has assets exceeding 20% of our
consolidated assets. As of the date of this prospectus, St. Paul
Fire and Marine Insurance Company, Travelers Property Casualty
Corp. and its wholly-owned subsidiaries, Travelers Insurance
Group Holdings Inc., The Travelers Indemnity Company and
Travelers Casualty and Surety Company, are the only subsidiaries
satisfying this 20% test. For purposes of applying the 20% test,
the assets of a subsidiary and our consolidated assets are both
determined as of the last day of the most recent calendar
quarter ended at least 30 days prior to the date of the 20%
test and in accordance with generally accepted accounting
principles as in effect on the last day of such calendar
quarter; and
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subsidiary means a corporation, association, company or trust in
which we
and/or
one
or more of our other subsidiaries owns at least 50% of the
voting stock, which is a kind of stock that ordinarily permits
its owners to vote for election of directors.
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Defeasance
The following discussion of full defeasance and covenant
defeasance will be applicable to your series of debt securities
only if we choose to have them apply to that series. If we do so
choose, we will state that in the prospectus supplement.
Full Defeasance.
If there is a change in
federal tax law, as described below, we can legally release
ourselves from any payment or other obligations on the debt
securities, called full defeasance, if we put in place the
following arrangements for you to be repaid:
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we must deposit in trust for your benefit and the benefit of all
other direct holders of the debt securities a combination of
money and U.S. government or U.S. government agency
notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their
various due dates;
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there must be a change in current federal tax law or a
U.S. Internal Revenue Service ruling that lets us make the
above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit
and such defeasance had not occurred. (Under current federal tax
law, the deposit and our legal release from the debt securities
would be treated as though we took back your debt securities and
gave you your share of the cash and notes or bonds
deposited in trust. In that event, you could recognize gain or
loss on the debt securities you give back to us.);
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we must deliver to the trustee a legal opinion of our counsel
confirming the tax law change described above; and
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in the case of the subordinated debt securities and junior
subordinated debt securities, the following requirements must
also be met:
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no event or condition may exist that, under the provisions
described above under Subordination
Provisions, would prevent us from making payments of
principal, premium or interest on those subordinated debt
securities or junior subordinated debt securities, as the case
may be, on the date of the deposit referred to above or during
the 90 days after that date; and
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we must deliver to the trustee an opinion of counsel to the
effect that (a) the trust funds will not be subject to any
rights of direct holders of senior indebtedness and
(b) after the
90-day
period referred to above, the trust funds will not be subject to
any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors rights generally, except that if
a court were to rule under any of those laws in any case or
proceeding that the trust funds remained our property, then the
relevant trustee and the direct holders of the subordinated debt
securities or junior subordinated debt securities, as the case
may be, would be entitled to some enumerated rights as secured
creditors in the trust funds.
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If we accomplished full defeasance, as described above, you
would have to rely solely on the trust deposit for repayment on
the debt securities. In addition, in the case of subordinated
debt securities and junior subordinated debt securities, the
provisions described above under Subordination
Provisions will not apply. You could not look to us for
repayment in the unlikely event of any shortfall. Conversely,
the trust deposit would most likely be protected from claims of
our lenders and other creditors if we ever become bankrupt or
insolvent.
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Covenant Defeasance.
Under current federal tax
law, we can make the same type of deposit described above and be
released from some of the restrictive covenants in the debt
securities. This is called covenant defeasance. In that event,
you would lose the protection of those restrictive covenants but
would gain the protection of having money and securities set
aside in trust to repay the debt securities. In order to achieve
covenant defeasance, we must do the following:
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we must deposit in trust for your benefit and the benefit of all
other direct holders of the debt securities a combination of
money and U.S. government or U.S. government agency
notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their
various due dates; and
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we must deliver to the trustee a legal opinion of our counsel
confirming that under current federal income tax law we may make
the above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit
and such covenant defeasance had not occurred.
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If we accomplish covenant defeasance, the following provisions,
among others, of the indentures and the debt securities would no
longer apply:
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our promises regarding conduct of our business previously
described under Limitation on Liens and Other
Encumbrances on Voting Stock of Designated Subsidiaries,
and any other covenants applicable to the series of debt
securities and described in the prospectus supplement;
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the condition regarding the treatment of liens when we merge or
engage in similar transactions, as described under
Special Situations Mergers and
Similar Events; and
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the events of default relating to breach of covenants, described
under Default and Related Matters
Events of Default What Is an Event of Default?.
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In addition, in the case of subordinated debt securities and
junior subordinated debt securities, the provisions described
above under Subordination Provisions
will not apply if we accomplish covenant defeasance.
If we accomplish covenant defeasance, you could still look to us
for repayment of the debt securities if there were a shortfall
in the trust deposit. In fact, if one of the remaining events of
default occurs, such as our bankruptcy, and the debt securities
become immediately due and payable, there may be a shortfall in
the trust deposit. Depending on the event causing the default,
you may not be able to obtain payment of the shortfall.
Default
and Related Matters
Ranking
With Our Other Unsecured Creditors
The debt securities are not secured by any of our property or
assets. Accordingly, your ownership of debt securities means
that you are one of our unsecured creditors. The senior debt
securities are not subordinated to any of our debt obligations,
and therefore, they rank equally with all of our other unsecured
and unsubordinated indebtedness. The subordinated debt
securities and the junior subordinated debt securities are
subordinate and junior in right of payment to all of our senior
indebtedness, as defined in the subordinated debt indenture and
the junior subordinated debt indenture, as the case may be.
Events
of Default
You will have special rights if an event of default occurs and
is not cured, as described later in this subsection.
What Is an Event of Default?
The term event of
default generally means any of the following:
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we do not pay the principal or any premium on a debt security on
its due date;
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we do not pay interest on a debt security within 30 days of
its due date;
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we do not deposit money into a separate custodial account, known
as sinking fund, when such deposit is due, if we agree to
maintain any such sinking fund;
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we remain in breach of the restrictive covenant described
previously under Restrictive
Covenants Limitation on Liens and Other Encumbrances
on Voting Stock of Designated Subsidiaries or any other
term of the applicable indenture for 90 days after we
receive a notice of default stating we are in breach. The notice
must be sent by either the trustee or direct holders of at least
25% of the principal amount of debt securities of the affected
series;
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we file for bankruptcy or certain other events of bankruptcy,
insolvency or reorganization occur; or
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any other event of default described in the prospectus
supplement occurs.
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However, unless otherwise specified in the applicable prospectus
supplement, under the terms of the junior subordinated
indenture, a covenant default is not an event of default.
Remedies If an Event of Default Occurs.
If you
are the holder of a subordinated debt or junior subordinated
debt security, all remedies available upon the occurrence of an
event of default under the applicable indenture will be subject
to the restrictions on the subordinated debt securities and
junior subordinated debt securities, as the case may be,
described above under Subordination
Provisions. If an event of default has occurred and has
not been cured, the trustee or the direct holders of 25% in
principal amount of the debt securities of the affected series
may declare the entire principal amount (or, in the case of
original issue discount securities, the portion of the principal
amount that is specified in the terms of the affected debt
security) of all the debt securities of that series to be due
and immediately payable. This is called a declaration of
acceleration of maturity. However, a declaration of acceleration
of maturity may be canceled by the direct holders of at least a
majority in principal amount of the debt securities of the
affected series.
Reference is made to the prospectus supplement relating to any
series of debt securities which are original issue discount
securities for the particular provisions relating to
acceleration of the maturity of a portion of the principal
amount of original issue discount securities upon the occurrence
of an event of default and its continuation.
Except in cases of default, where the trustee has some special
duties, the trustee is not required to take any action under the
indentures at the request of any holders unless the direct
holders offer the trustee reasonable protection from expenses
and liability, called an indemnity. If reasonable indemnity is
provided, the direct holders of a majority in principal amount
of the outstanding debt securities of the relevant series may
direct the time, method and place of conducting any lawsuit or
other formal legal action seeking any remedy available to the
trustee. These majority direct holders may also direct the
trustee in performing any other action under the applicable
indenture with respect to the debt securities of that series.
Before you bypass the trustee and bring your own lawsuit or
other formal legal action or take other steps to enforce your
rights or protect your interests relating to the debt
securities, the following must occur:
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you must give the trustee written notice that an event of
default has occurred and remains uncured;
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the direct holders of 25% in principal amount of all outstanding
debt securities of the relevant series must make a written
request that the trustee take action because of the default, and
must offer reasonable indemnity to the trustee against the cost
and other liabilities of taking that action;
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the trustee must have not received from direct holders of a
majority in principal amount of the outstanding debt securities
of that series a direction inconsistent with the written
notice; and
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the trustee must have not taken action for 90 days after
receipt of the above notice and offer of indemnity.
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However, you are entitled at any time to bring a lawsuit for the
payment of money due on your debt security on or after its due
date.
Street name and other indirect holders should consult their
banks or brokers for information on how to give notice or
direction to or make a request of the trustee and to make or
cancel a declaration of acceleration.
We will furnish to the trustee every year a written statement of
certain of our officers certifying that to their knowledge we
are in compliance with the applicable indenture and the debt
securities issued under it, or else specifying any default.
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Our
Relationship With the Trustee
The Bank of New York is the trustee under the senior debt
indenture and, the subordinated debt indenture. The Bank of New
York Trust Company, N.A. will be the trustee under the junior
subordinated indenture. The Bank of New York is also a lender
under a revolving credit agreement among us and certain banks
named therein providing for aggregate borrowing by us of a
maximum of $1.0 billion. No borrowings under this facility
were outstanding at December 31, 2006. At December 31,
2006, The Bank of New York had issued $94.9 million in
letters of credit on our behalf. The Bank of New York is also
the trustee under other indentures pursuant to which we or our
subsidiaries have issued debt securities and they or their
affiliates have provided, and may in the future provide,
commercial and investment banking services to us from time to
time.
DESCRIPTION
OF PREFERRED STOCK WE MAY OFFER
We may issue preferred stock in one or more series, as described
below. The following briefly summarizes the provisions of our
amended and restated articles of incorporation that would be
important to holders of our preferred stock. The following
description may not be complete and is subject to, and qualified
in its entirety by reference to, the terms and provisions of our
amended and restated articles of incorporation which is an
exhibit to the registration statement which contains this
prospectus.
The description of most of the financial and other specific
terms of your series will be in the prospectus supplement
accompanying this prospectus. Those terms may vary from the
terms described here.
As you read this section, please remember that the specific
terms of your series of preferred stock as described in your
prospectus supplement will supplement and, if applicable, may
modify or replace the general terms described in this section.
If there are differences between your prospectus supplement and
this prospectus, your prospectus supplement will control. Thus,
the statements we make in this section may not apply to your
series of preferred stock.
Reference to a series of preferred stock means all of the shares
of preferred stock issued as part of the same series under a
certificate of designations filed as part of our amended and
restated articles of incorporation. Reference to your prospectus
supplement means the prospectus supplement describing the
specific terms of the preferred stock you purchase. The terms
used in your prospectus supplement will have the meanings
described in this prospectus, unless otherwise specified.
Our
Authorized Preferred Stock
Under our amended and restated articles of incorporation our
board of directors is authorized, without further action by our
shareholders, to establish from the 5,000,000 undesignated
shares authorized by our amended and restated articles of
incorporation one or more classes and series of shares, to
designate each such class and series, to fix the relative rights
and preferences of each such class and series and to issue such
shares. Such rights and preferences may be superior to common
stock as to dividends, distributions of assets (upon liquidation
or otherwise) and voting rights. Undesignated shares may be
convertible into shares of any other series or class of stock,
including common stock, if our board of directors so determines.
Our board of directors will fix the terms of the series of
preferred stock it designates by resolution adopted before we
issue any shares of the series of preferred stock.
The prospectus supplement relating to the particular series of
preferred stock will contain a description of the specific terms
of that series as fixed by our board of directors, including, as
applicable:
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the offering price at which we will issue the preferred stock;
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the title, designation of number of shares and stated value of
the preferred stock;
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the dividend rate or method of calculation, the payment dates
for dividends and the place or places where the dividends will
be paid, whether dividends will be cumulative or noncumulative,
and, if cumulative, the dates from which dividends will begin to
cumulate;
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any conversion or exchange rights;
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whether the preferred stock will be subject to redemption and
the redemption price and other terms and conditions relative to
the redemption rights;
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any liquidation rights;
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any sinking fund provisions;
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any voting rights; and
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any other rights, preferences, privileges, limitations and
restrictions that are not inconsistent with the terms of our
amended and restated articles of incorporation.
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When we issue and receive payment for shares of preferred stock,
the shares will be fully paid and nonassessable, which means
that its holders will have paid their purchase price in full and
that we may not ask them to surrender additional funds. Holders
of preferred stock will not have any preemptive or subscription
rights to acquire more of our stock. Unless otherwise specified
in the prospectus supplement relating to a particular series of
preferred stock, each series of preferred stock will rank on a
parity in all respects with each other series of preferred stock
and prior to our common stock as to dividends and any
distribution of our assets.
The rights of holders of the preferred stock offered may be
adversely affected by the rights of holders of any shares of
preferred stock that may be issued in the future. Our board of
directors may cause shares of preferred stock to be issued in
public or private transactions for any proper corporate purposes
and may include issuances to obtain additional financing in
connection with acquisitions, and issuances to officers,
directors and employees pursuant to benefit plans. Our board of
directors ability to issue shares of preferred stock may
discourage attempts by others to acquire control of us without
negotiation with our board of directors, as it may make it
difficult for a person to acquire us without negotiating with
our board of directors.
Redemption
If so specified in the applicable prospectus supplement, a
series of preferred stock may be redeemable at any time, in
whole or in part, at our option or the holders, and may be
mandatorily redeemed.
Any restriction on the repurchase or redemption by us of our
preferred stock while we are in arrears in the payment of
dividends will be described in the applicable prospectus
supplement.
Any partial redemptions of preferred stock will be made in a way
that our board of directors decides is equitable.
Unless we default in the payment of the redemption price,
dividends will cease to accrue after the redemption date on
shares of preferred stock called for redemption, and all rights
of holders of these shares will terminate except for the right
to receive the redemption price.
Dividends
Holders of each series of preferred stock will be entitled to
receive dividends when, as and if declared by our board of
directors from funds legally available for payment of dividends.
The rates and dates of payment of dividends will be set forth in
the applicable prospectus supplement relating to each series of
preferred stock. Dividends will be payable to holders of record
of preferred stock as they appear on our books on the record
dates fixed by the board of directors. Dividends on any series
of preferred stock may be cumulative or noncumulative, as set
forth in the applicable prospectus supplement.
We may not declare, pay or set apart funds for payment of
dividends on a particular series of preferred stock unless full
dividends on any other series of preferred stock that ranks
equally with or senior to the series of preferred stock have
been paid or sufficient funds have been set apart for payment
for either of the following:
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all prior dividend periods of the other series of preferred
stock that pay dividends on a cumulative basis; or
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the immediately preceding dividend period of the other series of
preferred stock that pay dividends on a noncumulative basis.
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Partial dividends declared on shares of any series of preferred
stock and other series of preferred stock ranking on an equal
basis as to dividends will be declared
pro rata.
A
pro
rata
declaration means that the ratio of dividends declared
per share to accrued dividends per share will be the same for
each series of preferred stock.
Conversion
or Exchange Rights
The prospectus supplement relating to any series of preferred
stock that is convertible, exercisable or exchangeable will
state the terms on which shares of that series are convertible
into or exercisable or exchangeable for shares of common stock,
another series of our preferred stock or any other securities
registered pursuant to the registration statement of which this
prospectus forms a part.
Liquidation
Preference
In the event of our voluntary or involuntary liquidation,
dissolution or
winding-up,
holders of each series of our preferred stock will have the
right to receive distributions upon liquidation in the amount
described in the applicable prospectus supplement relating to
each series of preferred stock, plus an amount equal to any
accrued and unpaid dividends. These distributions will be made
before any distribution is made on the common stock or on any
securities ranking junior to the preferred stock upon
liquidation, dissolution or
winding-up.
If the liquidation amounts payable relating to the preferred
stock of any series and any other securities ranking on a parity
regarding liquidation rights are not paid in full, the holders
of the preferred stock of that series and the other securities
will have the right to a ratable portion of our available
assets, up to the full liquidation preference of each security.
Holders of these series of preferred stock or other securities
will not be entitled to any other amounts from us after they
have received their full liquidation preference.
Voting
Rights
The holders of shares of preferred stock will have no voting
rights, except:
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as otherwise stated in the applicable prospectus supplement;
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as otherwise stated in the certificate of designations
establishing the series; or
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as required by applicable law.
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Transfer
Agent and Registrar
The transfer agent, registrar and dividend disbursement agent
for the preferred stock will be stated in the applicable
prospectus supplement. The registrar for shares of preferred
stock will send notices to shareholders of any meetings at which
holders of the preferred stock have the right to elect directors
or to vote on any other matter.
DESCRIPTION
OF DEPOSITARY SHARES WE MAY OFFER
The following briefly summarizes the provisions of the
depositary shares and depositary receipts that we may issue from
time to time and which would be important to holders of
depositary receipts, other than pricing and related terms which
will be disclosed in the applicable prospectus supplement. The
prospectus supplement will also state whether any of the
generalized provisions summarized below do not apply to the
depositary shares or depositary receipts being offered and
provide any additional provisions applicable to the depositary
shares or depositary receipts being offered. The following
description and any description in a prospectus supplement may
not be complete and is subject to, and qualified in its entirety
by reference to the terms and provisions of the form of deposit
agreement, which will be filed as an exhibit to the registration
statement which contains this prospectus.
Description
of Depositary Shares
We may offer depositary shares evidenced by depositary receipts.
Each depositary share represents a fraction or a multiple of a
share of the particular series of preferred stock issued and
deposited with a depositary. The fraction
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or the multiple of a share of preferred stock which each
depositary share represents will be set forth in the applicable
prospectus supplement.
We will deposit the shares of any series of preferred stock
represented by depositary shares according to the provisions of
a deposit agreement to be entered into between us and a bank or
trust company which we will select as our preferred stock
depositary. We will name the depositary in the applicable
prospectus supplement. Each holder of a depositary share will be
entitled to all the rights and preferences of the underlying
preferred stock in proportion to the applicable fraction or
multiple of a share of preferred stock represented by the
depositary share. These rights include dividend, voting,
redemption, conversion and liquidation rights. The depositary
will send the holders of depositary shares all reports and
communications that we deliver to the depositary and which we
are required to furnish to the holders of depositary shares.
Depositary
Receipts
The depositary shares will be evidenced by depositary receipts
issued pursuant to the deposit agreement. Depositary receipts
will be distributed to anyone who is buying the fractional
shares of preferred stock in accordance with the terms of the
applicable prospectus supplement.
Withdrawal
of Preferred Stock
Unless the related depositary shares have previously been called
for redemption, a holder of depositary shares may receive the
number of whole shares of the related series of preferred stock
and any money or other property represented by the holders
depositary receipts after surrendering the depositary receipts
at the corporate trust office of the depositary, paying any
taxes, charges and fees provided for in the deposit agreement
and complying with any other requirement of the deposit
agreement. Partial shares of preferred stock will not be issued.
If the surrendered depositary shares exceed the number of
depositary shares that represent the number of whole shares of
preferred stock the holder wishes to withdraw, then the
depositary will deliver to the holder at the same time a new
depositary receipt evidencing the excess number of depositary
shares. Once the holder has withdrawn the preferred stock, the
holder will not be entitled to re-deposit that preferred stock
under the deposit agreement or to receive depositary shares in
exchange for such preferred stock. We do not expect that there
will be any public trading market for withdrawn shares of
preferred stock.
Dividends
and Other Distributions
The depositary will distribute to record holders of depositary
shares any cash dividends or other cash distributions it
receives on preferred stock, after deducting its fees and
expenses. Each holder will receive these distributions in
proportion to the number of depositary shares owned by the
holder. The depositary will distribute only whole
U.S. dollars and cents. The depositary will add any
fractional cents not distributed to the next sum received for
distribution to record holders of depositary shares.
In the event of a non-cash distribution, the depositary will
distribute property to the record holders of depositary shares,
unless the depositary determines that it is not feasible to make
such a distribution. If this occurs, the depositary may, with
our approval, sell the property and distribute the net proceeds
from the sale to the holders.
The amounts distributed to holders of depositary shares will be
reduced by any amounts required to be withheld by the preferred
stock depositary or by us on account of taxes or other
governmental charges.
Redemption
of Depositary Shares
If the series of preferred stock represented by depositary
shares is subject to redemption, then we will give the necessary
proceeds to the depositary. The depositary will then redeem the
depositary shares using the funds they received from us for the
preferred stock. The redemption price per depositary share will
be equal to the redemption price payable per share for the
applicable series of the preferred stock and any other amounts
per share payable with respect to the preferred stock multiplied
by the fraction of a share of preferred stock represented by one
depositary share. Whenever we redeem shares of preferred stock
held by the depositary, the depositary will redeem the
depositary shares representing the shares of preferred stock on
the same day provided we have paid in full to the
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depositary the redemption price of the preferred stock to be
redeemed and any accrued and unpaid dividends. If fewer than all
the depositary shares of a series are to be redeemed, the
depositary shares will be selected by lot or ratably or by any
other equitable methods as the depositary will decide.
After the date fixed for redemption, the depositary shares
called for redemption will no longer be considered outstanding.
Therefore, all rights of holders of the depositary shares will
cease, except that the holders will still be entitled to receive
any cash payable upon the redemption and any money or other
property to which the holder was entitled at the time of
redemption. To receive this amount or other property, the
holders must surrender the depositary receipts evidencing their
depositary shares to the preferred stock depositary. Any funds
that we deposit with the preferred stock depositary for any
depositary shares that the holders fail to redeem will be
returned to us after a period of one year from the date we
deposit the funds.
Voting
the Preferred Stock
Upon receipt of notice of any meeting at which the holders of
preferred stock are entitled to vote, the depositary will notify
holders of depositary shares of the upcoming vote and arrange to
deliver our voting materials to the holders. The record date for
determining holders of depositary shares that are entitled to
vote will be the same as the record date for the preferred
stock. The materials the holders will receive will
(1) describe the matters to be voted on and
(2) explain how the holders, on a certain date, may
instruct the depositary to vote the shares of preferred stock
underlying the depositary shares. For instructions to be valid,
the depositary must receive them on or before the date
specified. To the extent possible, the depositary will vote the
shares as instructed by the holder. We agree to take all
reasonable actions that the depositary determines are necessary
to enable it to vote as a holder has instructed. If the
depositary does not receive specific instructions from the
holders of any depositary shares, it will vote all shares of
that series held by it proportionately with instructions
received.
Conversion
or Exchange
The depositary, with our approval or at our instruction, will
convert or exchange all depositary shares if the preferred stock
underlying the depositary shares is converted or exchanged. In
order for the depositary to do so, we will need to deposit the
other preferred stock, common stock or other securities into
which the preferred stock is to be converted or for which it
will be exchanged.
The exchange or conversion rate per depositary share will be
equal to:
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the exchange or conversion rate per share of preferred stock,
multiplied by the fraction or multiple of a share of preferred
stock represented by one depositary share;
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plus all money and any other property represented by one
depositary share; and
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including all amounts per depositary share paid by us for
dividends that have accrued on the preferred stock on the
exchange or conversion date and that have not been paid.
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The depositary shares, as such, cannot be converted or exchanged
into other preferred stock, common stock, securities of another
issuer or any other of our securities or property. Nevertheless,
if so specified in the applicable prospectus supplement, a
holder of depositary shares may be able to surrender the
depositary receipts to the depositary with written instructions
asking the depositary to instruct us to convert or exchange the
preferred stock represented by the depositary shares into other
shares of our preferred stock or common stock or to exchange the
preferred stock for any other securities registered pursuant to
the registration statement of which this prospectus forms a
part. If the depositary shares carry this right, we would agree
that, upon the payment of any applicable fees, we will cause the
conversion or exchange of the preferred stock using the same
procedures as we use for the delivery of preferred stock. If a
holder is only converting part of the depositary shares
represented by a depositary receipt, new depositary receipts
will be issued for any depositary shares that are not converted
or exchanged.
Amendment
and Termination of the Deposit Agreement
We may agree with the depositary to amend the deposit agreement
and the form of depositary receipt without consent of the holder
at any time. However, if the amendment adds or increases fees or
charges (other than any
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change in the fees of any depositary, registrar or transfer
agent) or prejudices an important right of holders, it will only
become effective with the approval of holders of at least a
majority of the affected depositary shares then outstanding. We
will make no amendment that impairs the right of any holder of
depositary shares, as described above under
Withdrawal of Preferred Stock, to
receive shares of preferred stock and any money or other
property represented by those depositary shares, except in order
to comply with mandatory provisions of applicable law. If an
amendment becomes effective, holders are deemed to agree to the
amendment and to be bound by the amended deposit agreement if
they continue to hold their depositary receipts.
The deposit agreement automatically terminates if:
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all outstanding depositary shares have been redeemed or
converted or exchanged for any other securities into which they
or the underlying preferred stock are convertible or
exchangeable;
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each share of preferred stock has been converted into or
exchanged for common stock; or
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a final distribution in respect of the preferred stock has been
made to the holders of depositary receipts in connection with
our liquidation, dissolution or
winding-up.
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We may also terminate the deposit agreement at any time we wish.
If we do so, the depositary will give notice of termination to
the record holders not less than 30 days before the
termination date. Once depositary receipts are surrendered to
the depositary, it will send to each holder the number of whole
or fractional shares of the series of preferred stock underlying
that holders depositary receipts.
Charges
of Depositary and Expenses
We will pay the fees, charges and expenses of the depositary
provided in the deposit agreement to be payable by us. Holders
of depositary receipts will pay any taxes and governmental
charges and any charges provided in the deposit agreement to be
payable by them. If the depositary incurs fees, charges or
expenses for which it is not otherwise liable at the election of
a holder of a depositary receipt or other person, that holder or
other person will be liable for those fees, charges and expenses.
Limitations
on Our Obligations and Liability to Holders of Depositary
Receipts
The deposit agreement expressly limits our obligations and the
obligations of the depositary. It also limits our liability and
the liability of the depositary as follows:
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we and the depositary are only liable to the holders of
depositary receipts for negligence or willful misconduct;
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we and the depositary have no obligation to become involved in
any legal or other proceeding related to the depositary receipts
or the deposit agreement on your behalf or on behalf of any
other party, unless you provide us with satisfactory
indemnity; and
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we and the depositary may rely upon any written advice of
counsel or accountants and on any documents we believe in good
faith to be genuine and to have been signed or presented by the
proper party.
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Resignation
and Removal of Depositary
The depositary may resign at any time by notifying us of its
election to do so. In addition, we may remove the depositary at
any time. Within 60 days after the delivery of the notice
of resignation or removal of the depositary, we will appoint a
successor depositary.
DESCRIPTION
OF OUR COMMON STOCK
The following briefly summarizes the provisions of our amended
and restated articles of incorporation and bylaws that would be
important to holders of common stock. The following description
may not be complete and is subject to, and qualified in its
entirety by reference to, the terms and provisions of our
amended and restated articles of incorporation and bylaws which
are exhibits to the registration statement which contains this
prospectus.
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Our
Common Stock
Our authorized capital stock includes 1,745,000,000 shares
of common stock. As of February 15, 2007, there were
675,597,123 shares of common stock outstanding, which were
held by 89,234 shareholders of record.
Each share of common stock is entitled to participate
pro
rata
in distributions upon liquidation, subject to the
rights of holders of preferred shares, and to one vote on all
matters submitted to a vote of shareholders, including the
election of directors. Holders of common stock have no
preemptive or similar equity preservation rights, and cumulative
voting of shares in the election of directors is prohibited.
The holders of common stock may receive cash dividends as
declared by our board of directors out of funds legally
available for that purpose, subject to the rights of any holders
of preferred shares. We are a holding company, and our primary
source for the payment of dividends is dividends from our
subsidiaries. Various state laws and regulations limit the
amount of dividends that may be paid to us by our insurance
subsidiaries.
The outstanding shares of common stock are, and the shares of
common stock offered by the registration statement when issued
will be, fully paid and nonassessable.
Our common stock is listed on the New York Stock Exchange under
the symbol TRV.
Transfer
Agent
The transfer agent and registrar for our common stock is Wells
Fargo Bank, N.A.
Limitation
of Liability and Indemnification Matters
We are subject to Minnesota Statutes, Chapter 302A.
Minnesota Statutes, Section 302A.521, provides that a
corporation shall indemnify any person made or threatened to be
made a party to a proceeding by reason of the former or present
official capacity (as defined in Section 302A.521 of the
Minnesota Statutes) of that person against judgments, penalties,
fines (including, without limitation, excise taxes assessed
against such person with respect to an employee benefit plan),
settlements and reasonable expenses (including attorneys
fees and disbursements), incurred by such person in connection
with the proceeding, if, with respect to the acts or omissions
of that person complained of in the proceeding, that person:
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has not been indemnified therefor by another organization or
employee benefit plan;
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acted in good faith;
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received no improper personal benefit and Section 302A.255
(with respect to director conflicts of interest), if applicable,
has been satisfied;
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in the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful; and
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reasonably believed that the conduct was in the best interests
of the corporation in the case of acts or omissions in that
persons official capacity for the corporation, or, in the
case of acts or omissions in that persons official
capacity for other affiliated organizations, reasonably believed
that the conduct was not opposed to the best interests of the
corporation.
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Our bylaws provide that we will indemnify and make permitted
advances to a person made or threatened to be made a party to a
proceeding by reason of his former or present official capacity
against judgments, penalties, fines (including, without
limitation, excise taxes assessed against the person with
respect to an employee benefit plan), settlements and reasonable
expenses (including, without limitation, attorneys fees
and disbursements) incurred by that person in connection with
the proceeding in the manner and to the fullest extent permitted
or required by Section 302A.521.
We have directors and officers liability insurance
policies, with coverage of up to $250 million, subject to
various deductibles and exclusions from coverage.
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DESCRIPTION
OF WARRANTS WE MAY OFFER
General
We may issue warrants to purchase senior debt securities,
subordinated debt securities, preferred stock, common stock or
any combination of these securities, and these warrants may be
issued by us independently or together with any underlying
securities and may be attached or separate from the underlying
securities. We will issue each series of warrants under a
separate warrant agreement to be entered into between us and a
warrant agent. The warrant agent will act solely as our agent in
connection with the warrants of such series and will not assume
any obligation or relationship of agency for or with holders or
beneficial owners of warrants.
The following outlines some of the general terms and provisions
of the warrants. Further terms of the warrants and the
applicable warrant agreement will be stated in the applicable
prospectus supplement. The following description and any
description of the warrants in a prospectus supplement may not
be complete and is subject to and qualified in its entirety by
reference to the terms and provisions of the warrant agreement,
a form of which will be filed as an exhibit to the registration
statement which contains this prospectus.
The applicable prospectus supplement will describe the terms of
any warrants that we may offer, including the following:
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the title of the warrants;
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the total number of warrants;
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the price or prices at which the warrants will be issued;
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the currency or currencies investors may use to pay for the
warrants;
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the designation and terms of the underlying securities
purchasable upon exercise of the warrants;
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the price at which and the currency or currencies, including
composite currencies, in which investors may purchase the
underlying securities purchasable upon exercise of the warrants;
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the date on which the right to exercise the warrants will
commence and the date on which the right will expire;
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whether the warrants will be issued in registered form or bearer
form;
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information with respect to book-entry procedures, if any;
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if applicable, the minimum or maximum amount of warrants which
may be exercised at any one time;
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if applicable, the designation and terms of the underlying
securities with which the warrants are issued and the number of
warrants issued with each underlying security;
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if applicable, the date on and after which the warrants and the
related underlying securities will be separately transferable;
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if applicable, a discussion of material United States federal
income tax considerations;
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the identity of the warrant agent;
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the procedures and conditions relating to the exercise of the
warrants; and
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any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the
warrants.
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Warrant certificates may be exchanged for new warrant
certificates of different denominations, and warrants may be
exercised at the warrant agents corporate trust office or
any other office indicated in the applicable prospectus
supplement. Prior to the exercise of their warrants, holders of
warrants exercisable for debt securities will not have any of
the rights of holders of the debt securities purchasable upon
such exercise and will not be entitled to payments of principal
(or premium, if any) or interest, if any, on the debt securities
purchasable upon such exercise. Prior to the exercise of their
warrants, holders of warrants exercisable for shares of
preferred stock or
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common stock will not have any rights of holders of the
preferred stock or common stock purchasable upon such exercise
and will not be entitled to dividend payments, if any, or voting
rights of the preferred stock or common stock purchasable upon
such exercise.
Exercise
of Warrants
A warrant will entitle the holder to purchase for cash an amount
of securities at an exercise price that will be stated in, or
that will be determinable as described in, the applicable
prospectus supplement. Warrants may be exercised at any time up
to the close of business on the expiration date set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become void.
Warrants may be exercised as set forth in the applicable
prospectus supplement. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the
corporate trust office of the warrant agent or any other office
indicated in the prospectus supplement, we will, as soon as
practicable, forward the securities purchasable upon such
exercise. If less than all of the warrants represented by such
warrant certificate are exercised, a new warrant certificate
will be issued for the remaining warrants.
Enforceability
of Rights; Governing Law
The holders of warrants, without the consent of the warrant
agent, may, on their own behalf and for their own benefit,
enforce, and may institute and maintain any suit, action or
proceeding against us to enforce their rights to exercise and
receive the securities purchasable upon exercise of their
warrants. Unless otherwise stated in the prospectus supplement,
each issue of warrants and the applicable warrant agreement will
be governed by the laws of the State of New York.
DESCRIPTION
OF STOCK PURCHASE CONTRACTS WE MAY OFFER
We may issue stock purchase contracts, representing contracts
obligating holders to purchase from or sell to us, and
obligating us to purchase from or sell to the holders, a
specified number of shares of our common stock or preferred
stock, as applicable, at a future date or dates. The price per
share of common stock or preferred stock, as applicable, may be
fixed at the time the stock purchase contracts are issued or may
be determined by reference to a specific formula contained in
the stock purchase contracts. We may issue stock purchase
contracts in such amounts and in as many distinct series as we
wish.
The applicable prospectus supplement may contain, where
applicable, the following information about the stock purchase
contracts issued under it:
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whether the stock purchase contracts obligate the holder to
purchase or sell, or both purchase and sell, our common stock or
preferred stock, as applicable, and the nature and amount of
each of those securities, or the method of determining those
amounts;
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whether the stock purchase contracts are to be prepaid or not;
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whether the stock purchase contracts are to be settled by
delivery, or by reference or linkage to the value, performance
or level of our common stock or preferred stock;
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any acceleration, cancellation, termination or other provisions
relating to the settlement of the stock purchase
contracts; and
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whether the stock purchase contracts will be issued in fully
registered or global form.
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The applicable prospectus supplement will describe the terms of
any stock purchase contracts. The preceding description and any
description of stock purchase contracts in the applicable
prospectus supplement does not purport to be complete and is
subject to and is qualified in its entirety by reference to the
stock purchase contract agreement and, if applicable, collateral
arrangements and depository arrangements relating to such stock
purchase contracts.
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DESCRIPTION
OF UNITS WE MAY OFFER
We may issue units comprised of one or more of the other
securities described in this prospectus in any combination. Each
unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder
of a unit will have the rights and obligations of a holder of
each included security. The unit agreement under which a unit is
issued may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any
time before a specified date.
The applicable prospectus supplement may describe:
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the designation and terms of the units and of the securities
comprising the units, including whether and under what
circumstances those securities may be held or transferred
separately;
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any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the
units; and
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whether the units will be issued in fully registered or global
form.
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The applicable prospectus supplement will describe the terms of
any units. The preceding description and any description of
units in the applicable prospectus supplement does not purport
to be complete and is subject to and is qualified in its
entirety by reference to the unit agreement and, if applicable,
collateral arrangements and depositary arrangements relating to
such units.
DESCRIPTION
OF PREFERRED SECURITIES THAT THE TRUSTS MAY OFFER
The following summary outlines the material terms and provisions
of the preferred securities that the Trusts may offer. The
particular terms of any preferred securities a Trust offers and
the extent if any to which these general terms and provisions
may or may not apply to the preferred securities will be
described in the applicable prospectus supplement.
Each of the Trusts will issue the preferred securities under a
declaration of trust which we will enter into at the time of any
offering of preferred securities by such Trust. The declarations
of trust for the Trusts are subject to and governed by the Trust
Indenture Act of 1939, as amended (the
Trust Indenture Act) and The Bank of New York
(Delaware) will act as Delaware trustee and The Bank of New York
will act as institutional trustee under the declarations of
trusts for the purposes of compliance with the provisions of the
Trust Indenture Act. The terms of the preferred securities will
be those contained in the applicable declaration of trust and
those made part of the declaration of trust by the Trust
Indenture Act and the Delaware Statutory Trust Act. The
following summary may not be complete and is subject to and
qualified in its entirety by reference to the declarations of
trust, which are filed as exhibits to the registration statement
which contains this prospectus, the Trust Indenture Act and the
Delaware Statutory Trust Act.
Terms
Each declaration of trust will provide that the applicable Trust
may issue, from time to time, only one series of preferred
securities and one series of common securities. The preferred
securities will be offered to investors and the common
securities will be held by us. The terms of the preferred
securities, as a general matter, will mirror the terms of the
senior or the subordinated debt securities that we will issue to
a Trust in exchange for the proceeds of the sales of the
preferred and common securities, and because the preferred
securities represent undivided interests in the related debt
securities, any conversion feature applicable to the preferred
securities will mirror the terms of the convertible debt
securities or warrants, if any, that we will have issued to such
Trust. If we fail to make a payment on the senior or the
subordinated debt securities, the Trust holding those debt
securities will not have sufficient funds to make related
payments, including cash distributions, on its preferred
securities. If the related debt securities, and, accordingly,
the preferred securities are convertible into or exchangeable
for shares of our common stock or other securities, in the event
that we fail to perform under any convertible debt securities or
warrants we issue to a Trust, such Trust will be unable to
distribute to the holders any of our shares of common stock or
other securities to be distributed to the holders of the
preferred securities upon their conversion.
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You should refer to the applicable prospectus supplement
relating to the preferred securities for specific terms of the
preferred securities, including, but not limited to:
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the distinctive designation of the preferred securities and
common securities;
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the total and per-security-liquidation amount of the preferred
securities;
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the annual distribution rate, or method of determining the rate
at which the Trust issuing the securities will pay
distributions, on the preferred securities and the date or dates
from which distributions will accrue;
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the date or dates on which the distributions will be payable and
any corresponding record dates;
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the right, if any, to defer distributions on the preferred
securities upon extension of the interest payment period of the
related debt securities;
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whether the preferred securities are to be issued in book-entry
form and represented by one or more global certificates and, if
so, the depositary for the global certificates and the specific
terms of the depositary arrangement;
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the amount or amounts which will be paid out of the assets of
the Trust issuing the securities to the holders of preferred
securities upon voluntary or involuntary dissolution,
winding-up
or termination of the Trust;
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any obligation of the Trust to purchase or redeem preferred
securities issued by it and the terms and conditions relating to
any redemption obligation;
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any voting rights of the preferred securities;
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any terms and conditions upon which the debt securities held by
the Trust issuing the securities may be distributed to holders
of preferred securities;
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if the related debt securities, and, accordingly, the preferred
securities may be converted into or exercised or exchanged for
our common stock or preferred stock or any other of our
securities, the terms on which conversion, exercise or exchange
is mandatory, at the option of the holder or at the option of
the Trust, the date on or the period during which conversion,
exercise or exchange may occur, the initial conversion, exercise
or exchange price or rate and the circumstances or manner in
which the amount of common stock or preferred stock or other
securities issuable upon conversion, exercise or exchange may be
adjusted;
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any securities exchange on which the preferred securities will
be listed; and
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any other relevant rights, preferences, privileges, limitations
or restrictions of the preferred securities not inconsistent
with the applicable declaration of trust or with applicable law.
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We will guarantee the common and preferred securities to the
extent described below under Description of
Trust Guarantees. Our guarantee, when taken together
with our obligations under the related debt securities and the
related indenture and any warrants and related warrant
agreement, and our obligations under the declarations of trust,
would provide a full, irrevocable and unconditional guarantee of
amounts due on any common and preferred securities and the
distribution of any securities to which the holders would be
entitled upon conversion of the common and preferred securities,
if the related debt securities, and, accordingly, the common and
preferred securities are convertible into or exchangeable for
shares of our common stock or other securities. Certain United
States federal income tax considerations applicable to any
offering of preferred securities will be described in the
applicable prospectus supplement.
Liquidation
Distribution Upon Dissolution
Unless otherwise specified in an applicable prospectus
supplement, each declaration of trust states that the applicable
Trust will be dissolved:
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on the expiration of the term of the Trust;
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upon bankruptcy, dissolution or liquidation of us or the holder
of the common securities of the Trust;
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upon our written direction to the institutional trustee to
dissolve the Trust and distribute the related debt securities
directly to the holders of the preferred securities and common
securities;
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upon the redemption by the Trust of all of the preferred and
common securities in accordance with their terms; or
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upon entry of a court order for the dissolution of the Trust.
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Unless otherwise specified in an applicable prospectus
supplement, in the event of a dissolution as described above
other than in connection with redemption, after a Trust
satisfies all liabilities to its creditors as provided by
applicable law, each holder of the preferred or common
securities issued by the Trust will be entitled to receive:
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the related debt securities in an aggregate principal amount
equal to the aggregate liquidation amount of the preferred or
common securities held by the holder; or
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if any distribution of the related debt securities is determined
by the institutional trustee not to be practical, cash equal to
the aggregate liquidation amount of the preferred or common
securities held by the holder, plus accumulated and unpaid
distributions to the date of payment, and.
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if we issued warrants to the Trust, a number of warrants equal
to the holders proportionate share to total number of warrants
held by the Trust.
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If a Trust cannot pay the full amount due on its preferred and
common securities because it has insufficient assets available
for payment, then the amounts payable by the Trust on its
preferred and common securities will be paid on a
pro rata
basis. However, if an event of default under the indenture
has occurred and is continuing with respect to any series of
related debt securities, the total amounts due on the preferred
securities will be paid before any distribution on the common
securities.
Events of
Default
The following will be events of default under each declaration
of trust:
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an event of default under the applicable debt indenture occurs
with respect to any related series of debt securities; or
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any other event of default specified in the applicable
prospectus supplement occurs.
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At any time after a declaration of acceleration has been made
with respect to a related series of debt securities and before a
judgment or decree for payment of the money due has been
obtained, the holders of a majority in liquidation amount of the
affected preferred securities may rescind any declaration of
acceleration with respect to the related debt securities and its
consequences:
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if we deposit with the trustee funds sufficient to pay all
overdue principal of and premium and interest on the related
debt securities and other amounts due to the indenture trustee
and the institutional trustee; and
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if all existing events of default with respect to the related
debt securities have been cured or waived except non-payment of
principal on the related debt securities that has become due
solely because of the acceleration.
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The holders of a majority in liquidation amount of the affected
preferred securities may waive any past default under the
indenture with respect to related debt securities, other than a
default in the payment of principal of, or any premium or
interest on, any related debt security or a default with respect
to a covenant or provision that cannot be amended or modified
without the consent of the holder of each affected outstanding
related debt security. In addition, the holders of at least a
majority in liquidation amount of the affected preferred
securities may waive any past default under the declarations of
trust.
The holders of a majority in liquidation amount of the affected
preferred securities shall have the right to direct the time,
method and place of conducting any proceedings for any remedy
available to the institutional trustee or to direct the exercise
of any trust or power conferred on the institutional trustee
under the declarations of trust.
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A holder of preferred securities may institute a legal
proceeding directly against us, without first instituting a
legal proceeding against the institutional trustee or anyone
else, for enforcement of payment to the holder of principal and
any premium or interest on the related series of debt securities
having a principal amount equal to the aggregate liquidation
amount of the preferred securities of the holder, if we fail to
pay principal and any premium or interest on the related series
of debt securities when payable.
We are required to furnish annually, to the institutional
trustee for the Trusts, officers certificates to the
effect that, to the best knowledge of the individuals providing
the certificates, we and the Trusts are not in default under the
applicable declaration of trust or, if there has been a default,
specifying the default and its status.
Consolidation,
Merger or Amalgamation of the Trusts
Each of the Trusts may not consolidate or merge with or into, or
be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to, any entity, except as
described below or as described in Liquidation
Distribution Upon Dissolution. Each Trust may, with the
consent of the administrative trustees but without the consent
of the holders of the outstanding preferred securities or the
other trustees of the Trust, consolidate or merge with or into,
or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to, a trust organized
under the laws of any State if:
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the successor entity either:
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expressly assumes all of the obligations of the Trust relating
to its preferred and common securities; or
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substitutes for the Trusts preferred securities other
securities having substantially the same terms as the preferred
securities, so long as the substituted successor securities rank
the same as the preferred securities for distributions and
payments upon liquidation, redemption and otherwise;
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we appoint a trustee of the successor entity who has
substantially the same powers and duties as the institutional
trustee of the Trust;
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the successor securities are listed or traded, or any
substituted successor securities will be listed upon notice of
issuance, on the same national securities exchange or other
organization on which the preferred securities are then listed
or traded, if any;
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the merger event does not cause the preferred securities or any
substituted successor securities to be downgraded by any
national rating agency;
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the merger event does not adversely affect the rights,
preferences and privileges of the holders of the preferred or
common securities or any substituted successor securities in any
material respect;
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the successor entity has a purpose substantially identical to
that of the Trust;
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prior to the merger event, we shall provide to the Trust an
opinion of counsel from a nationally recognized law firm stating
that:
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the merger event does not adversely affect the rights,
preferences and privileges of the holders of the Trusts
preferred or common securities in any material respect;
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following the merger event, neither the Trust nor the successor
entity will be required to register as an investment company
under the Investment Company Act of 1940, as amended (the
Investment Company Act); and
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following the merger event, the Trust or the successor entity
will continue to be classified as a grantor trust for United
States federal tax purposes; and
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we own, or our permitted transferee owns, all of the common
securities of the successor entity and we guarantee or our
permitted transferee guarantees the obligations of the successor
entity under the substituted successor securities at least to
the extent provided under the applicable preferred securities
guarantee.
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In addition, unless all of the holders of the preferred
securities approve otherwise, a Trust may not consolidate,
amalgamate or merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets
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substantially as an entirety to, any other entity, or permit any
other entity to consolidate, amalgamate, merge with or into or
replace it if the transaction would cause the Trust or the
successor entity to be taxable as a corporation or classified
other than as a grantor trust for United States federal income
tax purposes.
Voting
Rights
Unless otherwise specified in the applicable prospectus
supplement, the holders of the preferred securities will have no
voting rights except as discussed below and under
Amendment to the Trust Agreements
and Description of Trust Guarantees
Modification of the Trust Guarantees; Assignment and
as otherwise required by law.
If any proposed amendment to a declaration of trust provides
for, or the trustee of the Trust otherwise proposes to effect:
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any action that would adversely affect the powers, preferences
or special rights of the preferred securities in any material
respect, whether by way of amendment to the declaration of trust
or otherwise; or
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the dissolution,
winding-up
or termination of the Trust other than pursuant to the terms of
the declaration of trust,
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then the holders of the affected preferred securities as a class
will be entitled to vote on the amendment or proposal. In that
case, the amendment or proposal will be effective only if
approved by the holders of at least a majority in aggregate
liquidation amount of the affected preferred securities.
The holders of a majority in aggregate liquidation amount of the
preferred securities issued by a Trust have the right to direct
the time, method and place of conducting any proceeding for any
remedy available to the institutional trustee, or direct the
exercise of any trust or power conferred upon the institutional
trustee under the applicable declaration of trust, including the
right to direct the institutional trustee, as holder of the debt
securities and, if applicable, the warrants, to:
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direct the time, method and place of conducting any proceeding
for any remedy available to the indenture trustee for any
related debt securities or execute any trust or power conferred
on the indenture trustee with respect to the related debt
securities;
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if we issue warrants to the Trust, direct the time, method and
place of conducting any proceeding for any remedy available to
the institutional trustee as the registered holder of the
warrants;
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waive certain past defaults under the indenture with respect to
any related debt securities, or the warrant agreement with
respect to any warrants;
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cancel an acceleration of the maturity of the principal of any
related debt securities; or
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consent to any amendment, modification or termination of the
indenture or any related debt securities or the warrant
agreement or warrants where consent is required.
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In addition, before taking any of the foregoing actions, we will
provide to the institutional trustee an opinion of counsel
experienced in such matters to the effect that, as a result of
such actions, the trust will not be taxable as a corporation or
classified as other than a grantor trust for United States
federal income tax purposes.
The institutional trustee will notify all preferred securities
holders of a Trust of any notice of default received from the
indenture trustee with respect to the debt securities held by
the Trust.
Any required approval of the holders of preferred securities may
be given at a meeting of the holders of the preferred securities
convened for the purpose or pursuant to written consent. The
administrative trustees will cause a notice of any meeting at
which holders of securities are entitled to vote to be given to
each holder of record of the preferred securities at the
holders registered address at least 7 days and not
more than 60 days before the meeting.
No vote or consent of the holders of the preferred securities
will be required for a Trust to redeem and cancel its preferred
securities in accordance with its declaration of trust.
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Notwithstanding that holders of the preferred securities are
entitled to vote or consent under any of the circumstances
described above, any of the preferred securities that are owned
by us, or any affiliate of ours will, for purposes of any vote
or consent, be treated as if they were not outstanding.
Amendment
to the Trust Agreements
The declarations of trust may be amended from time to time by us
and the institutional trustee and the administrative trustees of
the Trust, without the consent of the holders of the preferred
securities, to:
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cure any ambiguity or correct or supplement any provision which
may be defective or inconsistent with any other provision;
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add to the covenants, restrictions or obligations of the
sponsor; or
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modify, eliminate or add to any provisions to the extent
necessary to ensure that the Trust will not be taxable as a
corporation or classified as other than a grantor trust for
United States federal income tax purposes, to ensure that the
debt securities held by the Trust are treated as indebtedness
for United States federal income tax purposes or to ensure that
the Trust will not be required to register as an investment
company under the Investment Company Act of 1940;
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provided, however, that, in each case, the amendment would not
adversely affect in any material respect the interests of the
holders of the preferred securities.
Other amendments to the declarations of trust may be made by us
and the trustees of the Trust upon approval of the holders of a
majority in aggregate liquidation amount of the outstanding
preferred securities of a Trust and receipt by the trustees of
an opinion of counsel to the effect that the amendment will not
cause the Trust to be taxable as a corporation or classified as
other than a grantor trust for United States federal income tax
purposes, affect the treatment of the debt securities held by
the Trust as indebtedness for United States federal income tax
purposes or affect the Trusts exemption from the
Investment Company Act.
Notwithstanding the foregoing, without the consent of each
affected holder of common or preferred securities of a Trust, a
declaration of trust may not be amended to:
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change the amount or timing of any distribution on the common or
preferred securities of the Trust or otherwise adversely affect
the amount of any distribution required to be made in respect of
the securities as of a specified date;
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change any of the conversion or redemption provisions; or
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restrict the right of a holder of any securities to institute
suit for the enforcement of any payment on or after the
distribution date.
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Removal
and Replacement of Trustees
Unless an event of default exists under the debt securities or,
if the preferred securities are convertible and there is a
separate warrant agreement, the warrant agreement, we may remove
the institutional trustee and the Delaware trustee at any time.
If an event of default exists, the institutional trustee and the
Delaware trustee may be removed only by the holders of a
majority in liquidation amount of the outstanding preferred
securities. In no event will the holders of the preferred
securities have the right to vote to appoint, remove or replace
the administrative trustees, because these voting rights are
vested exclusively in us as the holder of all the Trusts
common securities. No resignation or removal of the
institutional trustee or the Delaware trustee and no appointment
of a successor trustee shall be effective until the acceptance
of appointment by the successor trustee in accordance with the
applicable declaration of trust.
Merger or
Consolidation of Trustees
Any entity into which the institutional trustee or the Delaware
trustee may be merged or converted or with which it may be
consolidated, or any entity resulting from any merger,
conversion or consolidation to which the trustee shall be a
party, or any entity succeeding to all or substantially all of
the corporate trust business of the
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trustee, shall be the successor of the trustee under the
applicable declaration of trust; provided, however, that the
entity shall be otherwise qualified and eligible.
Information
Concerning the Institutional Trustee
For matters relating to compliance with the Trust Indenture Act,
the institutional trustee for the Trusts will have all of the
duties and responsibilities of an indenture trustee under the
Trust Indenture Act. Except if an event of default exists under
the declarations of trust, the institutional trustee will
undertake to perform only the duties specifically set forth in
declarations of trust. While such an event of default exists,
the institutional trustee must exercise the same degree of care
and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision,
the institutional trustee is not obligated to exercise any of
the powers vested in it by the applicable declaration of trust
at the request of any holder of preferred securities, unless it
is offered reasonable indemnity against the costs, expenses and
liabilities that it might incur. But the holders of preferred
securities will not be required to offer indemnity if the
holders, by exercising their voting rights, direct the
institutional trustee to take any action following a declaration
event of default.
The Bank of New York, which is the institutional trustee for the
Trusts and St. Paul Capital Trust I (a statutory trust
created under Delaware law by us), also serves as the senior
debt indenture trustee, the subordinated debt indenture trustee
and the guarantee trustee under the trust guarantee described
below. We and certain of our affiliates maintain banking
relationships with The Bank of New York, which are described
above under Description of Debt Securities We May
Offer Our Relationship With the Trustee.
Miscellaneous
The administrative trustees of the each of the Trusts are
authorized and directed to conduct the affairs of and to operate
the applicable Trust in such a way that:
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the Trust will not be taxable as a corporation or classified as
other than a grantor trust for United States federal income tax
purposes;
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the debt securities held by the Trust will be treated as
indebtedness of ours for United States federal income tax
purposes; and
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the Trust will not be deemed to be an investment company
required to be registered under the Investment Company Act.
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We and the trustees are authorized to take any action, so long
as it is consistent with applicable law, the certificate of
trust or the applicable declaration of trust, that we and the
trustees determine to be necessary or desirable for the above
purposes, as long as it does not materially and adversely affect
the holders of the preferred securities.
Registered holders of the preferred securities have no
preemptive or similar rights.
No Trust may, among other things, incur indebtedness or place a
lien on any of its assets.
Governing
Law
The declarations of trust and the preferred securities will be
governed by and construed in accordance with the laws of the
State of Delaware, without regard to the conflict of laws
provisions thereof.
DESCRIPTION
OF TRUST GUARANTEES
The following describes certain general terms and provisions of
the trust guarantees which we will execute and deliver for the
benefit of the holders from time to time of preferred
securities. The trust guarantees will be separately qualified as
an indenture under the Trust Indenture Act, and The Bank of New
York will act as indenture trustee under the trust guarantees
for the purposes of compliance with the provisions of the Trust
Indenture Act. The terms of the trust guarantees will be those
contained in the trust guarantees and those made part of the
trust guarantees by the Trust Indenture Act. The following
summary may not be complete and is subject to and qualified in
its entirety
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by reference to the form of trust guarantees, which is filed as
an exhibit to the registration statement which contains this
prospectus, and the Trust Indenture Act. The trust guarantees
will be held by the guarantee trustee of each Trust for the
benefit of the holders of the preferred securities.
General
We will irrevocably and unconditionally agree to pay or make the
following payments or distributions with respect to common and
preferred securities, in full, to the holders of the common and
preferred securities, as and when they become due regardless of
any defense, right of set-off or counterclaim that a Trust may
have except for the defense of payment:
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any accumulated and unpaid distributions which are required to
be paid on the common and preferred securities, to the extent
the Trust does not make such payments or distributions but has
sufficient funds available to do so;
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the redemption price and all accumulated and unpaid
distributions to the date of redemption with respect to any
preferred securities called for redemption, to the extent the
Trust does not make such payments or distributions but has
sufficient funds available to do so; and
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upon a voluntary or involuntary dissolution,
winding-up
or termination of the Trust (other than in connection with the
distribution of related debt securities to the holders of
preferred securities or the redemption of all of the preferred
securities), the lesser of:
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the total liquidation amount and all accumulated and unpaid
distributions on the common and preferred securities to the date
of payment, to the extent the Trust does not make such payments
or distributions but has sufficient funds available to do
so; and
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the amount of assets of the Trust remaining available for
distribution to holders of such common and preferred securities
in liquidation of the Trust.
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Our obligation to make a payment under the trust guarantee may
be satisfied by our direct payment of the required amounts to
the holders of common and preferred securities to which the
trust guarantee relates or by causing a Trust to pay the amounts
to the holders. Payments under the trust guarantee will be made
on the common and preferred securities on a pro rata basis.
However, if an event of default under the applicable indenture
has occurred and is continuing with respect to any series of
related debt securities, the total amounts due on the preferred
securities will be paid before any payment on the common
securities.
Modification
of the Trust Guarantees; Assignment
Except with respect to any changes which do not adversely affect
the rights of holders of preferred securities in any material
respect (in which case no vote will be required), each trust
guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the
outstanding common and preferred securities to which the trust
guarantee relates. The manner of obtaining the approval of
holders of the preferred securities will be described in an
accompanying prospectus supplement. All guarantees and
agreements contained in each trust guarantee will bind our
successors, assigns, receivers, trustees and representatives and
will be for the benefit of the holders of the outstanding common
and preferred securities to which each trust guarantee relates.
Termination
Each trust guarantee will terminate when any of the following
has occurred:
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all common and preferred securities to which the trust guarantee
relates have been paid in full or redeemed in full by us, the
applicable Trust or both;
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the debt securities held by the applicable Trust have been
distributed to the holders of the common and preferred
securities; or
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the amounts payable in accordance with the applicable
declaration of trust upon liquidation of the Trust have been
paid in full.
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Each trust guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of
common and preferred securities to which each trust guarantee
relates must restore payment of any amounts paid on the common
and preferred securities or under each trust guarantee.
Events of
Default
There will be an event of default under the trust guarantees if
we fail to perform any of our payment or other obligations under
the trust guarantees. However, other than with respect to a
default in payment of any guarantee payment, we must have
received notice of default and not have cured the default within
90 days after receipt of the notice. We, as guarantor, will
be required to file annually with the guarantee trustee a
certificate regarding our compliance with the applicable
conditions and covenants under each of our trust guarantees.
Each trust guarantee will constitute a guarantee of payment and
not of collection. The holders of a majority in liquidation
amount of the common and preferred securities to which a trust
guarantee relates have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the guarantee trustee in respect of such trust guarantee or to
direct the exercise of any trust or power conferred upon the
guarantee trustee under such trust guarantee. If the guarantee
trustee fails to enforce the applicable trust guarantee, any
holder of common or preferred securities to which the trust
guarantee relates may institute a legal proceeding directly
against us to enforce the holders rights under the trust
guarantee, without first instituting a legal proceeding against
the trust, the guarantee trustee or any one else. If we do not
make a guarantee payment, a holder of common or preferred
securities may directly institute a proceeding against us for
enforcement of the trust guarantee for such payment.
Status of
the Trust Guarantees
The applicable prospectus supplement relating to the preferred
securities will indicate whether the applicable trust guarantee
is our senior or subordinated obligation. If such trust
guarantee is our senior obligation it will be our general
unsecured obligation and will rank equal to our other senior and
unsecured obligations.
If such trust guarantee is our subordinated obligation, it will
be our general unsecured obligation and will rank as follows:
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subordinate and junior in right of payment to all of our senior
indebtedness, as defined in the subordinated debt indenture;
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on parity with our most senior preferred or preference stock
currently outstanding or issued in the future, with any
guarantees of other preferred securities we or our affiliates
may issue and with other issues of subordinated debt
securities; and
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senior to our common stock.
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The terms of the preferred securities provide that each holder
of preferred securities by acceptance of the preferred
securities agrees to any subordination provisions and other
terms of the applicable trust guarantee relating to applicable
subordination.
Information
Concerning the Guarantee Trustee
The guarantee trustee, except if we default under the trust
guarantee, will undertake to perform only such duties as are
specifically set forth in the applicable trust guarantee and, in
case a default with respect to such trust guarantee has
occurred, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or
her own affairs. Subject to this provision, the guarantee
trustee will not be obligated to exercise any of the powers
vested in it by the applicable trust guarantee at the request of
any holder of the common or preferred securities unless it is
offered reasonable indemnity against the costs, expenses and
liabilities that it may incur.
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Governing
Law
Each trust guarantee will be governed by and construed in
accordance with the laws of the State of New York.
Effect of
Obligations Under the Debt Securities and the
Trust Guarantees
As long as we may make payments of interest and any other
payments when they are due on the debt securities held by a
Trust, those payments will be sufficient to cover distributions
and any other payments due on the preferred securities issued by
the Trust because of the following factors:
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the total principal amount of the debt securities held by the
Trust will be equal to the total stated liquidation amount of
the preferred securities and common securities issued by the
Trust;
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the interest rate and the interest payment dates and other
payment dates on the debt securities held by the Trust will
match the distribution rate and distribution payment dates and
other payment dates for the preferred securities and common
securities issued by the Trust;
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we will pay, as borrower, and the Trust will not be obligated to
pay, directly or indirectly, all costs, expenses, debt, and
obligations of the Trust (other than obligations under the trust
securities); and
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the applicable declaration of trust will further provide that
the Trust is not authorized to engage in any activity that is
not consistent with its limited purposes.
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We will irrevocably guarantee payments of distributions and
other amounts due on the preferred securities to the extent the
Trust has funds available to pay such amounts as and to the
extent set forth under Description of
Trust Guarantees. Taken together, our obligations
under the debt securities, the applicable debt indenture, the
applicable declaration of trust and the trust guarantees will
provide a full, irrevocable and unconditional guarantee of a
Trusts payments of distributions and other amounts due on
the preferred securities. No single document standing alone or
operating in conjunction with fewer than all of the other
documents constitutes this trust guarantee. Only the combined
operation of these documents effectively provides a full,
irrevocable and unconditional guarantee of a Trusts
obligations under the preferred securities.
If and to the extent that we do not make the required payments
on the debt securities, a Trust will not have sufficient funds
to make its related payments, including distributions on the
preferred securities. Our trust guarantee will not cover any
payments when a Trust does not have sufficient funds available
to make those payments. Your remedy, as a holder of preferred
securities, is to institute a direct action against us. Our
obligations under each trust guarantee will be subordinate to
all of our senior indebtedness.
MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Simpson Thacher & Bartlett LLP, our
special United States tax counsel, the following discussion is a
summary of the material United States federal income tax
consequences of the ownership of the debt securities, preferred
securities and common and preferred stock as of the date hereof.
Except where noted, this summary deals only with debt
securities, preferred securities and common and preferred stock
that are held as capital assets, and does not represent a
detailed description of the United States federal income tax
consequences applicable to you if you are subject to special
treatment under the United States federal income tax laws,
including if you are:
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a dealer in securities or currencies;
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a financial institution;
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a regulated investment company;
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a real estate investment trust;
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a tax-exempt organization;
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an insurance company;
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a person holding the debt securities, preferred securities,
common stock or preferred stock as part of a hedging,
integrated, conversion or constructive sale transaction or a
straddle;
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a trader in securities that has elected the
mark-to-market
method of accounting for your securities;
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a person liable for alternative minimum tax;
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a partnership or other pass-through entity for United States
federal income tax purposes;
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a person whose functional currency is not the
U.S. dollar;
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a controlled foreign corporation;
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a passive foreign investment company; or
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a United States expatriate.
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This summary is based upon provisions of the Internal Revenue
Code of 1986, as amended (the Code), and
regulations, rulings and judicial decisions as of the date
hereof. Those authorities may be changed, perhaps retroactively,
so as to result in United States federal income tax consequences
different from those summarized below.
The discussion below assumes that all the debt securities issued
under this prospectus will be classified for United States
federal income tax purposes as our indebtedness and you should
note that in the event of an alternative characterization, the
tax consequences would differ from those discussed below.
Accordingly, if we intend to treat a debt security as other than
debt for United States federal income tax purposes, we will
disclose the relevant tax considerations in the applicable
prospectus supplement. We will summarize any special United
States federal tax considerations relevant to a particular issue
of the debt securities, preferred securities or common or
preferred stock in the applicable prospectus supplement. We will
also summarize material federal income tax consequences, if any,
applicable to any offering of warrants, stock purchase
contracts, units or depositary shares in the applicable
prospectus supplement.
For purposes of this summary, a United States Holder
means a beneficial owner of the debt securities, preferred
securities or common or preferred stock that is for United
States federal income tax purposes:
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an individual citizen or resident of the United States;
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a corporation (or any other entity treated as a corporation for
United States federal income tax purposes) created or organized
in or under the laws of the United States, any state thereof or
the District of Columbia;
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an estate the income of which is subject to United States
federal income taxation regardless of its source; or
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a trust if it (1) is subject to the primary supervision of
a court within the United States and one or more United States
persons have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as a
United States person.
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A
Non-United
States Holder means a beneficial owner of the debt
securities, preferred securities or common or preferred stock
who is neither a United States Holder nor a partnership for
United States federal income tax purposes.
If a partnership holds the debt securities, preferred securities
or common or preferred stock, the tax treatment of a partner
will generally depend upon the status of the partner and the
activities of the partnership. If you are a partner of a
partnership holding the debt securities, preferred securities or
common or preferred stock, you should consult your tax advisors.
This summary does not represent a detailed description of the
United States federal income tax consequences to you in light of
your particular circumstances and does not address the effects
of any state, local or
non-United States
tax laws.
If you are considering the purchase of debt
securities, preferred securities or
35
common or preferred stock, you should consult your own tax
advisors concerning the particular United States federal income
tax consequences to you, as well as the consequences to you
arising under the laws of any other taxing jurisdiction.
Debt
Securities
Consequences
to United States Holders
The following is a summary of the material United States federal
income tax consequences that will apply to you if you are a
United States Holder of debt securities.
Payments
of Interest
Except as set forth below, interest on a debt security will
generally be taxable to you as ordinary income at the time it is
paid or accrued in accordance with your method of accounting for
tax purposes.
Original
Issue Discount
If you own debt securities issued with original issue discount
(OID), you will be subject to special tax accounting
rules, as described in greater detail below. In that case, you
should be aware that you generally must include OID in gross
income in advance of the receipt of cash attributable to that
income. However, you generally will not be required to include
separately in income cash payments received on the debt
securities, even if denominated as interest, to the extent those
payments do not constitute qualified stated
interest, as defined below. Notice will be given in the
applicable prospectus supplement when we determine that a
particular debt security will be an original issue discount debt
security.
Additional rules applicable to debt securities with OID that are
denominated in or determined by reference to a currency other
than the U.S. dollar are described under
Foreign Currency Debt Securities below.
A debt security with an issue price that is less
than the stated redemption price at maturity (the sum of all
payments to be made on the debt security other than
qualified stated interest) generally will be issued
with OID if that difference is at least 0.25% of the stated
redemption price at maturity multiplied by the number of
complete years to maturity. The issue price of each
debt security in a particular offering will be the first price
at which a substantial amount of that particular offering is
sold to the public. The term qualified stated
interest means stated interest that is unconditionally
payable in cash or in property, other than debt instruments of
the issuer, and meets all of the following conditions:
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it is payable at least once per year;
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it is payable over the entire term of the debt security; and
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it is payable at a single fixed rate or, subject to certain
conditions, based on one or more interest indices.
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We will give you notice in the applicable prospectus supplement
when we determine that a particular debt security will bear
interest that is not qualified stated interest.
If you own a debt security issued with
de minimis
OID,
which is discount that is not OID because it is less than 0.25%
of the stated redemption price at maturity multiplied by the
number of complete years to maturity, you generally must include
the
de minimis
OID in income at the time principal
payments on the debt securities are made in proportion to the
amount paid. Any amount of
de minimis
OID that you have
included in income will be treated as capital gain.
Certain of the debt securities may contain provisions permitting
them to be redeemed prior to their stated maturity at our option
and/or
at
your option. Original issue discount debt securities containing
those features may be subject to rules that differ from the
general rules discussed herein. If you are considering the
purchase of original issue discount debt securities with those
features, you should carefully examine the applicable prospectus
supplement and should consult your own tax advisors with respect
to those features since the tax consequences to you with respect
to OID will depend, in part, on the particular terms and
features of the debt securities.
36
If you own original issue discount debt securities with a
maturity upon issuance of more than one year, you generally must
include OID in income in advance of the receipt of some or all
of the related cash payments using the constant yield
method described in the following paragraphs.
The amount of OID that you must include in income if you are the
initial United States Holder of an original issue discount debt
security is the sum of the daily portions of OID
with respect to the debt security for each day during the
taxable year or portion of the taxable year in which you held
that debt security (accrued OID). The daily portion
is determined by allocating to each day in any accrual
period a pro rata portion of the OID allocable to that
accrual period. The accrual period for an original
issue discount debt security may be of any length and may vary
in length over the term of the debt security, provided that each
accrual period is no longer than one year and each scheduled
payment of principal or interest occurs on the first day or the
final day of an accrual period. The amount of OID allocable to
any accrual period is an amount equal to the excess, if any, of:
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the debt securitys adjusted issue price at the
beginning of the accrual period multiplied by its yield to
maturity, determined on the basis of compounding at the close of
each accrual period and properly adjusted for the length of the
accrual period; over
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the aggregate of all qualified stated interest allocable to the
accrual period.
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OID allocable to a final accrual period is the difference
between the amount payable at maturity, other than a payment of
qualified stated interest, and the adjusted issue price at the
beginning of the final accrual period. Special rules will apply
for calculating OID for an initial short accrual period. The
adjusted issue price of a debt security at the
beginning of any accrual period is equal to its issue price
increased by the accrued OID for each prior accrual period,
determined without regard to the amortization of any acquisition
or bond premium, as described below, and reduced by any payments
made on the debt security (other than qualified stated interest)
on or before the first day of the accrual period. Under these
rules, you will generally have to include in income increasingly
greater amounts of OID in successive accrual periods. We are
required to provide information returns stating the amount of
OID accrued on debt securities held of record by persons other
than corporations and other exempt holders.
Variable rate debt securities are subject to special OID rules.
In the case of an original issue discount debt security that is
a variable rate debt security, both the yield to
maturity and qualified stated interest will be
determined solely for purposes of calculating the accrual of OID
as though the debt security will bear interest in all periods at
a fixed rate generally equal to the rate that would be
applicable to interest payments on the debt security on its date
of issue or, in the case of certain variable rate debt
securities, the rate that reflects the yield to maturity that is
reasonably expected for the debt security. Additional rules may
apply if either:
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the interest on a variable rate debt security is based on more
than one interest index; or
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the principal amount of the debt security is indexed in any
manner.
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The discussion above generally does not address debt securities
providing for contingent payments. You should carefully examine
the applicable prospectus supplement regarding the United States
federal income tax consequences of the holding and disposition
of any debt securities providing for contingent payments.
You may elect to treat all interest on any debt security as OID
and calculate the amount includible in gross income under the
constant yield method described above. For purposes of this
election, interest includes stated interest, acquisition
discount, OID, de minimis OID, market discount,
de minimis
market discount and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium. You should
consult with your own tax advisors about this election.
Short-Term
Debt Securities
In the case of debt securities having a term of one year or
less, all payments, including all stated interest, will be
included in the stated redemption price at maturity and will not
be qualified stated interest. As a result, you will generally be
taxed on the discount instead of stated interest. The discount
will be equal to the excess of the stated redemption price at
maturity over the issue price of a short-term debt security,
unless you elect to compute this discount using tax basis
instead of issue price. In general, individuals and certain
other cash method United States Holders of short-term debt
securities are not required to include accrued discount in their
income currently unless
37
they elect to do so, but may be required to include stated
interest in income as the income is received. United States
Holders that report income for United States federal income tax
purposes on the accrual method and certain other United States
Holders are required to accrue discount on short-term debt
securities (as ordinary income) on a straight-line basis, unless
an election is made to accrue the discount according to a
constant yield method based on daily compounding. If you are not
required, and do not elect, to include discount in income
currently, any gain you realize on the sale, exchange or
retirement of a short-term debt security will generally be
ordinary income to you to the extent of the discount accrued by
you through the date of sale, exchange or retirement. In
addition, if you do not elect to currently include accrued
discount in income you may be required to defer deductions for a
portion of your interest expense with respect to any
indebtedness attributable to the short-term debt securities.
Market
Discount
If you purchase a debt security for an amount that is less than
its stated redemption price at maturity (or, in the case of an
original issue discount debt security, its adjusted issue
price), the amount of the difference will be treated as
market discount for United States federal income tax
purposes, unless that difference is less than a specified
de
minimis
amount. Under the market discount rules, you will be
required to treat any principal payment on, or any gain on the
sale, exchange, retirement or other disposition of, a debt
security as ordinary income to the extent of the market discount
that you have not previously included in income and are treated
as having accrued on the debt security at the time of its
payment or disposition.
In addition, you may be required to defer, until the maturity of
the debt security or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest
expense on any indebtedness attributable to the debt security.
You may elect, on a debt
security-by-debt
security basis, to deduct the deferred interest expense in a tax
year prior to the year of disposition. You should consult your
own tax advisors before making this election.
Any market discount will be considered to accrue ratably during
the period from the date of acquisition to the maturity date of
the debt security, unless you elect to accrue on a constant
interest method. You may elect to include market discount in
income currently as it accrues, on either a ratable or constant
interest method, in which case the rule described above
regarding deferral of interest deductions will not apply.
Acquisition
Premium, Amortizable Bond Premium
If you purchase an original issue discount debt security for an
amount that is greater than its adjusted issue price but equal
to or less than the sum of all amounts payable on the debt
security after the purchase date other than payments of
qualified stated interest, you will be considered to have
purchased that debt security at an acquisition
premium. Under the acquisition premium rules, the amount
of OID that you must include in gross income with respect to the
debt security for any taxable year will be reduced by the
portion of the acquisition premium properly allocable to that
year.
If you purchase a debt security (including an original issue
discount debt security) for an amount in excess of the sum of
all amounts payable on the debt security after the purchase date
other than qualified stated interest, you will be considered to
have purchased the debt security at a premium and,
if it is an original issue discount debt security, you will not
be required to include any OID in income. You generally may
elect to amortize the premium over the remaining term of the
debt security on a constant yield method as an offset to
interest when includible in income under your regular accounting
method. Special rules limit the amortization of premium in the
case of convertible debt instruments. If you do not elect to
amortize bond premium, that premium will decrease the gain or
increase the loss you would otherwise recognize on disposition
of the debt security.
Sale,
Exchange and Retirement of Debt Securities
Your tax basis in a debt security will, in general, be your cost
for that debt security, increased by OID, market discount or any
discount with respect to a short-term debt security that you
previously included in income, and reduced by any amortized
premium and any cash payments on the debt security other than
qualified stated interest. Upon the sale, exchange, retirement
or other disposition of a debt security, you will recognize gain
or loss equal to the difference between the amount you realize
upon the sale, exchange, retirement or other disposition (less
an amount equal to any accrued qualified stated interest that
you did not previously include in income, which will be
38
taxable as interest income) and the adjusted tax basis of the
debt security. Except as described above with respect to certain
short-term debt securities or with respect to market discount,
with respect to gain or loss attributable to changes in exchange
rates as discussed below with respect to foreign currency debt
securities, and with respect to contingent payment debt
instruments which this summary generally does not discuss, that
gain or loss will be capital gain or loss. Capital gains of
individuals derived in respect of capital assets held for more
than one year are eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
Foreign
Currency Debt Securities
Payments of Interest.
If you receive interest
payments made in a foreign currency and you use the cash basis
method of accounting, you will be required to include in income
the U.S. dollar value of the amount received, determined by
translating the foreign currency received at the spot
rate for such foreign currency on the date such payment is
received regardless of whether the payment is in fact converted
into U.S. dollars. You will not recognize exchange gain or
loss with respect to the receipt of such payment.
If you use the accrual method of accounting, you may determine
the amount of income recognized with respect to such interest in
accordance with either of two methods. Under the first method,
you will be required to include in income for each taxable year
the U.S. dollar value of the interest that has accrued
during such year, determined by translating such interest at the
average rate of exchange for the period or periods during which
such interest accrued. Under the second method, you may elect to
translate interest income at the spot rate on:
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the last day of the accrual period;
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the last day of the taxable year if the accrual period straddles
your taxable year; or
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the date the interest payment is received if such date is within
five days of the end of the accrual period.
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Upon receipt of an interest payment on such debt security
(including, upon the sale of a debt security, the receipt of
proceeds which include amounts attributable to accrued interest
previously included in income), you will recognize ordinary gain
or loss in an amount equal to the difference between the
U.S. dollar value of such payment (determined by
translating the foreign currency received at the spot rate for
such foreign currency on the date such payment is received) and
the U.S. dollar value of the interest income you previously
included in income with respect to such payment.
Original Issue Discount.
OID on a debt
security that is also a foreign currency debt security will be
determined for any accrual period in the applicable foreign
currency and then translated into U.S. dollars, in the same
manner as interest income accrued by a holder on the accrual
basis, as described above. You will recognize exchange gain or
loss when OID is paid (including, upon the sale of a debt
security, the receipt of proceeds that include amounts
attributable to OID previously included in income) to the extent
of the difference between the U.S. dollar value of the
accrued OID (determined in the same manner as for accrued
interest) and the U.S. dollar value of such payment
(determined by translating the foreign currency received at the
spot rate for such foreign currency on the date such payment is
received). For these purposes, all receipts on a debt security
will be viewed:
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first, as the receipt of any stated interest payments called for
under the terms of the debt security;
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second, as receipts of previously accrued OID (to the extent
thereof), with payments considered made for the earliest accrual
periods first; and
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third, as the receipt of principal.
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Market Discount and Bond Premium.
The
amount of market discount on foreign currency debt securities
includible in income will generally be determined by translating
the market discount determined in the foreign currency into
U.S. dollars at the spot rate on the date the foreign
currency debt security is retired or otherwise disposed of. If
you have elected to accrue market discount currently, then the
amount which accrues is determined in the foreign currency and
then translated into U.S. dollars on the basis of the
average exchange rate in effect during such accrual period. You
will recognize exchange gain or loss with respect to market
discount which is accrued currently using the approach
applicable to the accrual of interest income as described above.
39
Bond premium on a foreign currency debt security will be
computed in the applicable foreign currency. If you have elected
to amortize the premium, the amortizable bond premium will
reduce interest income in the applicable foreign currency. At
the time bond premium is amortized, exchange gain or loss, which
is generally ordinary gain or loss, will be realized based on
the difference between spot rates at such time and the time of
acquisition of the foreign currency debt security.
If you elect not to amortize bond premium, you must translate
the bond premium computed in the foreign currency into
U.S. dollars at the spot rate on the maturity date and such
bond premium will constitute a capital loss which may be offset
or eliminated by exchange gain.
Sale, Exchange and Retirement of Foreign Currency Debt
Securities.
Upon the sale, exchange,
retirement or other taxable disposition of a foreign currency
debt security, you will recognize gain or loss equal to the
difference between the amount realized upon the sale, exchange,
retirement or other disposition (less an amount equal to any
accrued and unpaid interest not previously included in income,
which will be treated as a payment of interest for federal
income tax purposes) and your adjusted tax basis in the foreign
currency debt security. Your initial tax basis in a foreign
currency debt security generally will be your U.S. dollar
cost. If you purchased a foreign currency debt security with
foreign currency, your cost generally will be the
U.S. dollar value of the foreign currency amount paid for
such foreign currency debt security determined at the time of
such purchase. If your foreign currency debt security is sold,
exchanged or retired for an amount denominated in foreign
currency, then your amount realized generally will be based on
the spot rate of the foreign currency on the date of sale,
exchange or retirement. If you are a cash method taxpayer and
the foreign currency debt securities are traded on an
established securities market, foreign currency paid or received
is translated into U.S. dollars at the spot rate on the
settlement date of the purchase or sale. An accrual method
taxpayer may elect the same treatment with respect to the
purchase and sale of foreign currency debt securities traded on
an established securities market, provided that the election is
applied consistently.
Subject to the foreign currency rules discussed below, such gain
or loss will be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange,
retirement or other disposition, the foreign currency debt
security has been held for more than one year. Capital gains of
individuals derived with respect to capital assets held for more
than one year are eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations. Gain
or loss realized by you on the sale, exchange or retirement of a
foreign currency debt security would generally be treated as
U.S. source gain or loss.
A portion of your gain or loss with respect to the principal
amount of a foreign currency debt security may be treated as
exchange gain or loss. Exchange gain or loss will be treated as
ordinary income or loss and generally will be U.S. source
gain or loss. For these purposes, the principal amount of the
foreign currency debt security is your purchase price for the
foreign currency debt security calculated in the foreign
currency on the date of purchase, and the amount of exchange
gain or loss recognized is equal to the difference between
(i) the U.S. dollar value of the principal amount
determined on the date of the sale, exchange, retirement or
other disposition of the foreign currency debt security and
(ii) the U.S. dollar value of the principal amount
determined on the date you purchased the foreign currency debt
security. The amount of exchange gain or loss will be limited to
the amount of overall gain or loss realized on the disposition
of the foreign currency debt security.
Exchange Gain or Loss with Respect to Foreign
Currency.
Your tax basis in the foreign
currency received as interest on a foreign currency debt
security will be the U.S. dollar value thereof at the spot
rate in effect on the date the foreign currency is received.
Your tax basis in foreign currency received on the sale,
exchange or retirement of a foreign currency debt security will
be equal to the U.S. dollar value of the foreign currency,
determined at the time of the sale, exchange or retirement. As
discussed above, if the foreign currency debt securities are
traded on an established securities market, a cash basis United
States Holder (or, upon election, an accrual basis United States
Holder) will determine the U.S. dollar value of the foreign
currency by translating the foreign currency received at the
spot rate of exchange on the settlement date of the sale,
exchange or retirement. Accordingly, your basis in the foreign
currency received would be equal to the spot rate of exchange on
the settlement date.
Any gain or loss recognized by you on a sale, exchange or other
disposition of the foreign currency will be ordinary income or
loss and generally will be United States source gain or loss.
40
Reportable Transactions.
Treasury
regulations issued under the Code meant to require the reporting
of certain tax shelter transactions could be interpreted to
cover transactions generally not regarded as tax shelters,
including certain foreign currency transactions. Under the
Treasury regulations, certain transactions are required to be
reported to the Internal Revenue Service (IRS),
including, in certain circumstances, a sale, exchange,
retirement or other taxable disposition of a foreign currency
debt security or foreign currency received in respect of a
foreign currency debt security to the extent that such sale,
exchange, retirement or other taxable disposition results in a
tax loss in excess of a threshold amount. If you are considering
the purchase of a foreign currency debt security, you should
consult with your own tax advisors to determine the tax return
obligations, if any, with respect to an investment in the debt
securities, including any requirement to file IRS Form 8886
(Reportable Transaction Disclosure Statement).
Consequences
to
Non-United
States Holders
The following is a summary of the material United States federal
income and estate tax consequences that will apply to you if you
are a
Non-United
States Holder of debt securities.
United
States Federal Withholding Tax
The 30% United States federal withholding tax will not apply to
any payment of interest on the debt securities (including OID)
under the portfolio interest rule, provided that:
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interest paid on the debt securities is not effectively
connected with your conduct of a trade or business in the United
States;
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you do not actually (or constructively) own 10% or more of the
total combined voting power of all classes of our voting stock
within the meaning of the Code and applicable United States
Treasury regulations;
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you are not a controlled foreign corporation that is related to
us through stock ownership;
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you are not a bank whose receipt of interest on the debt
securities is described in Section 881(c)(3)(A) of the Code;
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the interest is not considered contingent interest under
Section 871(h)(4)(A) of the Code and the United States
Treasury regulations thereunder; and
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either (a) you provide your name and address on an IRS Form
W-8BEN
(or
other applicable form), and certify, under penalties of perjury,
that you are not a United States person as defined under the
Code or (b) you hold your debt securities through certain
foreign intermediaries and satisfy the certification
requirements of applicable United States Treasury regulations.
Special certification rules apply to
Non-United
States Holders that are pass-through entities rather than
corporations or individuals.
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If you cannot satisfy the requirements described above, payments
of interest, including OID, made to you will be subject to the
30% United States federal withholding tax, unless you provide us
with a properly executed:
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IRS
Form W-8BEN
(or other applicable form) claiming an exemption from or
reduction in withholding under the benefit of an applicable
income tax treaty; or
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IRS
Form W-8ECI
(or other applicable form) stating that interest paid on the
debt securities is not subject to withholding tax because it is
effectively connected with your conduct of a trade or business
in the United States (as discussed below under United
States Federal Income Tax).
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The 30% United States federal withholding tax generally will not
apply to any payment of principal or gain that you realize on
the sale, exchange, retirement or other disposition of a debt
security.
United
States Federal Income Tax
If you are engaged in a trade or business in the United States
and interest, including OID, on the debt securities is
effectively connected with the conduct of that trade or business
(and, if required by an applicable income tax treaty, is
attributable to a United States permanent establishment), then
you will be subject to United States federal
41
income tax on that interest on a net income basis (although you
will be exempt from the 30% United States federal withholding
tax, provided the certification requirements discussed above in
United States Federal Withholding Tax are satisfied)
in the same manner as if you were a United States person as
defined under the Code.
In addition, if you are a foreign corporation, you may be
subject to a branch profits tax equal to 30% (or lower
applicable income tax treaty rate) of such interest, subject to
adjustments.
Any gain realized on the disposition of a debt security
generally will not be subject to United States federal income
tax unless:
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the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a United States
permanent establishment); or
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you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met.
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United
States Federal Estate Tax
Your estate will not be subject to United States federal estate
tax on debt securities beneficially owned by you at the time of
your death, provided that any payment to you on the debt
securities, including OID, would be eligible for exemption from
the 30% United States federal withholding tax under the
portfolio interest rule described above under
United States Federal Withholding Tax,
without regard to the statement requirement described in the
sixth bullet point of that section.
Information
Reporting and Backup Withholding
Consequences
to United States Holders
In general, information reporting requirements will apply to
certain payments of principal, interest (including OID) and
premium paid on debt securities and to the proceeds of sale of a
debt security paid to you (unless you are an exempt recipient
such as a corporation). A backup withholding tax may apply to
such payments if you fail to provide a taxpayer identification
number or a certification of exempt status, or if you fail to
report in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Consequences
to
Non-United
States Holders
Generally, we must report to the IRS and to you the amount of
interest (including OID) on the debt securities paid to you and
the amount of tax, if any, withheld with respect to those
payments. Copies of the information returns reporting such
interest payments and any withholding may also be made available
to the tax authorities in the country in which you reside under
the provisions of an applicable income tax treaty.
In general, you will not be subject to backup withholding with
respect to payments on the debt securities that we make to you
provided that we do not have actual knowledge or reason to know
that you are a United States person as defined under the Code,
and we have received from you the statement described above in
the sixth bullet point under Debt Securities
Consequences to
Non-United
States Holders United States Federal Withholding
Tax.
In addition, no information reporting or backup withholding will
be required regarding the proceeds of the sale of a debt
security made within the United States or conducted through
certain United States-related financial intermediaries, if the
payor receives the statement described above and does not have
actual knowledge or reason to know that you are a United States
person as defined under the Code, or you otherwise establish an
exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
42
Preferred
Securities
Classification
of the Trust
We intend to take the position that each Trust will be
classified as a grantor trust for United States federal income
tax purposes and not as an association taxable as a corporation.
As a result, for United States federal income tax purposes, you
generally will be treated as owning an undivided beneficial
ownership interest in the related debt securities held by the
Trust. Thus, you will be required to include in your gross
income your pro rata share of the interest income or OID that is
paid or accrued on the related debt securities. See
Consequences to United States Holders Interest
Income and Original Issue Discount.
Classification
of the Debt Securities
We intend to take the position that the debt securities will be
classified as our indebtedness for all United States tax
purposes. We, the Trust and you (by your acceptance of a
beneficial ownership interest in a preferred security) will
agree to treat the debt securities as indebtedness for all
United States tax purposes. The remainder of this discussion
assumes that the debt securities will be classified as our
indebtedness.
Consequences
to United States Holders
Interest
Income and Original Issue Discount
We anticipate that the debt securities will not be issued with
an issue price that is less than their stated redemption price
at maturity. In this case, subject to the discussion below, the
debt securities will not be subject to the special OID rules, at
least upon initial issuance, so that you will generally be taxed
on the stated interest on the debt securities as ordinary income
at the time it is paid or accrued in accordance with your
regular method of tax accounting.
If, however, we exercise our right to defer payments of interest
on the debt securities, the debt securities will become OID
instruments at such time. In such case, you will be subject to
the special OID rules described below. Once the debt securities
become OID instruments, they will be taxed as OID instruments
for as long as they remain outstanding.
Under the OID economic accrual rules, the following occurs:
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regardless of your method of accounting, you would accrue an
amount of interest income each year that approximates the stated
interest payments called for under the terms of the debt
securities using the
constant-yield-to-maturity
method of accrual described in Section 1272 of the Code;
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the actual cash payments of interest you receive on the debt
securities would not be reported separately as taxable income;
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any amount of OID included in your gross income (whether or not
during a deferral period) with respect to the preferred
securities will increase your tax basis in such preferred
securities; and
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the amount of distributions that you receive in respect of such
accrued OID will reduce your tax basis in such preferred
securities.
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The Treasury regulations dealing with OID and the deferral of
interest payments have not yet been addressed in any rulings or
other interpretations by the IRS. It is possible that the IRS
could assert that the debt securities were issued initially with
OID merely because of our right to defer interest payments. If
the IRS were successful in this regard, you would be subject to
the special OID rules described above, regardless of whether we
exercise our option to defer payments of interest on such debt
securities.
Because the debt securities are treated as debt for tax
purposes, any income you recognize with respect to the preferred
securities will not be eligible for the corporate
dividends-received deduction or taxation for individuals at
long-term capital gain rates as qualified dividend income.
43
Distribution
of Debt Securities or Cash upon Liquidation of the
Trust
As described under the caption Description of Preferred
Securities that the Trusts May Offer Liquidation
Distribution Upon Dissolution in this prospectus, the debt
securities held by the Trust may be distributed to you in
exchange for your preferred securities if the Trust is dissolved
before the maturity of the debt securities. Under current law,
except as described below, this type of distribution from a
grantor trust would not be taxable. Upon such a distribution,
you will receive your pro rata share of the debt securities
previously held indirectly through the Trust. Your holding
period and aggregate tax basis in the debt securities will equal
the holding period and aggregate tax basis that you had in your
preferred securities before the distribution.
We may also have the option to redeem the debt securities and
distribute the resulting cash in liquidation of the Trust. This
redemption would be taxable as described below in
Sales of Preferred Securities or Redemption of
Debt Securities.
If you receive debt securities in exchange for your preferred
securities, you would accrue interest in respect of the debt
securities received from the Trust in the manner described above
under Interest Income and Original Issue
Discount.
Sales of
Preferred Securities or Redemption of Debt Securities
If you sell your preferred securities or receive cash upon
redemption of the debt securities, you will recognize gain or
loss equal to the difference between:
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your amount realized on the sale or redemption of the preferred
securities or debt securities (less an amount equal to any
accrued but unpaid qualified stated interest that you did not
previously include in income, which will be taxable as
such); and
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your adjusted tax basis in your preferred securities or debt
securities sold or redeemed.
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Your gain or loss will be a capital gain or loss, provided that
you hold the preferred securities or debt securities as a
capital asset. The gain or loss will generally be a long-term
capital gain or loss if you have held your preferred securities
or debt securities for more than one year. Long-term capital
gains of individuals derived with respect to capital assets held
for more than one year are subject to reduced rates of taxation.
The deductibility of capital losses is subject to limitations.
Consequences
to
Non-United
States Holders
The following discussion only applies to you if you are a
Non-United
States Holder. As discussed above, the preferred securities will
be treated by the parties as evidence of indirect undivided
beneficial ownership interests in the debt securities. See above
under Classification of the Trust in
this section.
United
States Federal Withholding Tax
Under the portfolio interest exception, the 30%
United States federal withholding tax will not apply to any
payment by us or any paying agent of interest (including OID) on
the preferred securities (or the debt securities), provided that:
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interest paid on the preferred securities (or the debt
securities) is not effectively connected with your conduct of a
trade or business in the United States;
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you do not actually (or constructively) own 10% or more of the
total combined voting power of all classes of our voting stock
within the meaning of the Code and applicable United States
Treasury regulations;
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you are not a controlled foreign corporation that is related to
us through stock ownership;
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you are not a bank whose receipt of interest on the preferred
securities (or the debt securities) is described in
Section 881(c)(3)(A) of the Code; and
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either (a) you provide your name and address on an IRS Form
W-8BEN
(or
other applicable form), and certify, under penalties of perjury,
that you are not a United States person as defined under the
Code or (b) if
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you hold your preferred securities (or debt securities) through
certain foreign intermediaries, you satisfy the certification
requirements of applicable United States Treasury regulations.
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Special certification rules apply to certain
Non-United
States Holders that are pass-through entities rather than
corporations or individuals. If you cannot satisfy the
requirements described above, payments of interest (including
OID) made to you will be subject to the 30% United States
federal withholding tax, unless you provide us or our paying
agent, as the case may be, with a properly executed
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IRS
Form W-8BEN
(or other applicable form) claiming an exemption from or
reduction in withholding under the benefit of an applicable
income tax treaty; or
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IRS
Form W-8ECI
(or other applicable form) stating that interest paid on the
preferred securities (or debt securities) is not subject to
withholding tax because it is effectively connected with your
conduct of a trade or business in the United States (as
discussed below under United States Federal Income
Tax).
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Except as discussed below, the 30% United States federal
withholding tax generally will not apply to any payment of
principal or gain that you realize on the sale, exchange,
retirement or other disposition of the preferred securities (or
debt securities).
United
States Federal Income Tax
If you are engaged in a trade or business in the United States
and interest on the preferred securities (or the debt
securities) is effectively connected with the conduct of that
trade or business (and, if required by an applicable income tax
treaty, is attributable to a United States permanent
establishment), then you will be subject to United States
federal income tax on that interest on a net income basis in the
same manner as if you were a United States person as defined
under the Code. However, you will not be subject to the
withholding described above, as long as you provide a properly
executed IRS
Form W-8ECI
as described above. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to
30% (or lower applicable income tax treaty rate) of your
earnings and profits for the taxable year, subject to
adjustments, that are effectively connected with the conduct by
you of a trade or business in the United States. For this
purpose, interest on preferred securities (or debt securities)
will be included in earnings and profits.
You will generally not be subject to United States federal
income tax on any gain you realize upon the disposition of a
preferred security (or a debt security) unless:
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the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a United States
permanent establishment); or
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you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met.
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United
States Federal Estate Tax
Your estate will not be subject to United States federal estate
tax on the preferred securities (or the debt securities)
beneficially owned by you at the time of your death, provided
that any payment to you on the preferred securities (or the debt
securities) would be eligible for exemption from the 30% United
States federal withholding tax under the portfolio
interest exception described above without regard to the
statement requirement described above.
Information
Reporting and Backup Withholding
Consequences
to United States Holders
In general, information reporting requirements will apply to
certain payments of principal, interest (including OID) and
premium paid on the preferred securities (or debt securities)
and to the proceeds of sale of preferred securities (or debt
securities) paid to you (unless you are an exempt recipient such
as a corporation). A backup withholding tax may apply to such
payments if you fail to provide a taxpayer identification
number, a certification of exempt status, or if you fail to
report in full dividend and interest income.
45
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Consequences
to
Non-United
States Holders
Generally, we must report to the IRS and to you the amount of
interest including OID paid to you and the amount of tax, if
any, withheld with respect to those payments. Copies of the
information returns reporting such interest payments and any
withholding may also be made available to the tax authorities in
the country in which you reside under the provisions of an
applicable income tax treaty.
In general, you will not be subject to backup withholding with
respect to payments that we make to you provided that we do not
have actual knowledge or reason to know that you are a United
States person as defined under the Code, and you have provided
the statement described above in the fifth bullet point under
Consequences to
Non-United
States Holders United States Federal Withholding
Tax.
You will be subject to information reporting and, depending on
the circumstances, backup withholding with respect to the
proceeds of the sale of preferred securities (or debt
securities) made within the United States or conducted through
certain United States-related financial intermediaries, unless
the payor receives the statement described above and does not
have actual knowledge or reason to know that you are a United
States person as defined under the Code, or you otherwise
establish an exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Tax
Shelter Regulations
Under issued Treasury regulations, taxpayers engaging in certain
transactions, including loss transactions above a threshold, may
be required to include tax shelter disclosure information with
their annual United States federal income tax return. The IRS
has provided an exception from this disclosure requirement for
losses arising from cash investments, but this exception does
not apply to investments in flow-through entities. Holders
should consult their tax advisors about whether the limitation
applicable to flow-through entities would apply to their
investment in a Trust.
Common
and Preferred Stock
Consequences
to United States Holders
The United States federal income tax consequences of the
purchase, ownership or disposition of our stock depend on a
number of factors including:
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the terms of the stock;
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any put or call option or redemption provisions with respect to
the stock;
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any conversion or exchange feature with respect to the
stock; and
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the price at which the stock is sold.
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United States Holders should carefully examine the applicable
prospectus supplement regarding the material United States
federal income tax consequences, if any, of the holding and
disposition of stock with such provisions or features.
Consequences
to
Non-United
States Holders
The following is a summary of the material United States federal
income tax consequences that will apply to you if you are a
Non-United
States Holder of common or preferred stock.
46
Dividends
Dividends paid to you generally will be subject to withholding
of United States federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty.
However, dividends that are effectively connected with your
conduct of a trade or business within the United States (and, if
required by an applicable income tax treaty, are attributable to
a United States permanent establishment) are not subject to the
withholding tax, provided certain certification and disclosure
requirements are satisfied. Instead, such dividends are subject
to United States federal income tax on a net income basis in the
same manner as if you were a United States person as defined
under the Code. If you are a foreign corporation, any such
effectively connected dividends received by you may be subject
to an additional branch profits tax at a 30% rate or
such lower rate as may be specified by an applicable income tax
treaty.
A
Non-United
States Holder of our common or preferred stock who wishes to
claim the benefit of an applicable treaty rate and avoid backup
withholding, as discussed below, for dividends will be required
(a) to complete IRS
Form W-8BEN
(or other applicable form) and certify under penalties of
perjury that such holder is not a United States person as
defined under the Code and is eligible for treaty benefits or
(b) if our common stock is held through certain foreign
intermediaries, to satisfy the relevant certification
requirements of applicable United States Treasury regulations.
Special certification and other requirements apply to certain
Non-United
States Holders that are pass-through entities rather than
corporations or individuals.
If you are eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty you may obtain
a refund of any excess amounts withheld by filing an appropriate
claim for refund with the IRS.
Gain on
Disposition of Common Stock and Preferred Stock
Any gain realized on the disposition of our common or preferred
stock generally will not be subject to United States federal
income tax unless:
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the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a United States
permanent establishment);
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you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met; or
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we are or have been a United States real property holding
corporation for United States federal income tax purposes.
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If you are an individual
Non-United
States Holder described in the first bullet point immediately
above, you will be subject to tax on the net gain derived from
the sale under regular graduated United States federal income
tax rates. If you are an individual
Non-United
States Holder described in the second bullet point immediately
above, you will be subject to a flat 30% tax on the gain derived
from the sale, which may be offset by United States source
capital losses, even though you are not considered a resident of
the United States. If you are a
Non-United
States Holder that is a foreign corporation and you are
described in the first bullet point immediately above, you will
be subject to tax on your net gain in the same manner as if you
were a United States person as defined under the Code and, in
addition, you may be subject to the branch profits tax equal to
30% of your effectively connected earnings and profits or at
such lower rate as may be specified by an applicable income tax
treaty.
We believe we are not and do not anticipate becoming a
United States real property holding corporation for
United States federal income tax purposes.
Federal
Estate Tax
If you are an individual, common or preferred stock held by you
at the time of your death will be included in you gross estate
for United States federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.
Information
Reporting and Backup Withholding
We must report annually to the IRS and you the amount of
dividends paid to you and the tax withheld with respect to such
dividends, regardless of whether withholding was required.
Copies of the information returns
47
reporting such dividends and withholding may also be made
available to the tax authorities in the country in which you
reside under the provisions of an applicable income tax treaty.
You will be subject to backup withholding for dividends paid to
you unless you certify under penalties of perjury that you are a
Non-United
States Holder (and we do not have actual knowledge or reason to
know that you are a United States person as defined under the
Code), or you otherwise establish an exemption.
Information reporting and, depending on the circumstances,
backup withholding will apply to the proceeds of a sale of our
common or preferred stock within the United States or conducted
through certain United States-related financial intermediaries,
unless you certify under penalties of perjury that you are a
Non-United
States Holder (and the payor does not have actual knowledge or
reason to know that you are a United States person as defined
under the Code), or you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules may be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Other
Securities
If you are considering the purchase of warrants, stock purchase
contracts, depositary shares or units, you should carefully
examine the applicable prospectus supplement regarding the
special United States federal income tax consequences, if any,
of the holding and disposition of such securities including any
tax considerations relating to the specific terms of such
securities.
ERISA
MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, the offered securities may, subject to certain legal
restrictions, be held by (i) pension, profit sharing and
other employee benefit plans which are subject to Title I
of the Employee Retirement Security Act of 1974, as amended
(which we refer to as ERISA), (ii) plans,
accounts and other arrangements that are subject to
Section 4975 of the Internal Revenue Code of 1986, as
amended (which we refer to as the Code) or
provisions under federal, state, local,
non-U.S. or
other laws or regulations that are similar to any of the
provisions of Title I of ERISA or Section 4975 of the
Code (which we refer to as Similar Laws) and
(iii) entities whose underlying assets are considered to
include plan assets of any such plans, accounts or
arrangements. A fiduciary of any such plan, account or
arrangement must determine that the purchase and holding of an
interest in the offered securities is consistent with its
fiduciary duties and will not constitute or result in a
non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code, or a violation under any
applicable Similar Laws.
VALIDITY
OF SECURITIES
Unless otherwise indicated in the applicable prospectus
supplement, certain matters of Delaware law relating to the
Trust and its preferred securities will be passed upon for the
Trust and us by Richards, Layton & Finger, P.A.,
Wilmington, Delaware. Unless otherwise indicated in the
applicable prospectus supplement, the validity of the securities
will be passed upon for us by Bruce A. Backberg, Esq., our
Senior Vice President, and by Simpson Thacher &
Bartlett LLP, New York, New York. As of February 23, 2007,
Mr. Backberg owned, directly and indirectly,
8,000 shares of our common stock, 10,069 restricted shares
of our common stock, 587 shares of our Series B
Convertible Preferred Stock (each of which is convertible into
eight shares of our common stock) and currently exercisable
options to purchase 111,462 additional shares of our common
stock.
EXPERTS
The consolidated financial statements and all related financial
statement schedules of The Travelers Companies, Inc. as of
December 31, 2006 and 2005, and for each of the years in
the three-year period ended December 31, 2006, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2006
have been incorporated by reference in the registration
statement in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing.
48
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other
Expenses of Issuance and Distribution*
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SEC registration fee
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$
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**
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Accounting fees and expenses
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125,000
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Legal fees and expenses
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250,000
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Printing expenses
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100,000
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Trustee fees and expenses
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20,000
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Rating agency fees
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***
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NASD fees and expenses
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25,000
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Miscellaneous
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25,000
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Total
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$
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545,000
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*
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All fees and expenses other than the SEC registration fee are
estimated. The Travelers Companies, Inc. will pay all expenses.
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**
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Payable in accordance with Rules 456(b) and 457(r).
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***
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Rating agency fees are calculated in part based on the amount of
securities offered and accordingly cannot be estimated at this
time.
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Item 15.
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Indemnification
of Directors and Officers
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Travelers is subject to Minnesota Statutes, Chapter 302A.
Minnesota Statutes, Section 302A.521, provides that a
corporation shall indemnify any person made or threatened to be
made a party to a proceeding by reason of the former or present
official capacity (as defined in Section 302A.521) of such
person against judgments, penalties, fines (including, without
limitation, excise taxes assessed against such person with
respect to an employee benefit plan), settlements and reasonable
expenses (including attorneys fees and disbursements),
incurred by such person in connection with the proceeding, if,
with respect to the acts or omissions of such person complained
of in the proceeding, such person (1) has not been
indemnified therefor by another organization or employee benefit
plan; (2) acted in good faith; (3) received no
improper personal benefit and Section 302A.255 (with
respect to director conflicts of interest), if applicable, has
been satisfied; (4) in the case of a criminal proceeding,
had no reasonable cause to believe the conduct was unlawful; and
(5) reasonably believed that the conduct was in the best
interests of the corporation in the case of acts or omissions in
such persons official capacity for the corporation, or, in
the case of acts or omissions in such persons official
capacity for other affiliated organizations, reasonably believed
that the conduct was not opposed to the best interests of the
corporation.
The bylaws of Travelers provide that it will indemnify and make
permitted advances to a person made or threatened to be made a
party to a proceeding by reason of his former or present
official capacity against judgments, penalties, fines
(including, without limitation, excise taxes assessed against
the person with respect to an employee benefit plan),
settlements and reasonable expenses (including, without
limitation, attorneys fees and disbursements) incurred by
him in connection with the proceeding in the manner and to the
fullest extent permitted or required by Section 302A.521.
Travelers has directors and officers liability
insurance policies, with coverage of up to $250 million,
subject to various deductibles and exclusions from coverage.
Travelers, as depositor, has agreed in the declarations of trust
to (i) reimburse the trustees of the Trust for all
reasonable expenses (including reasonable fees and expenses of
counsel and other experts) and (ii) indemnify, defend and
hold harmless the trustees and any of the officers, directors,
employees and agents of the trustees (the Indemnified
Persons) from and against any and all losses, damages,
liabilities, claims, actions, suits, costs, expenses,
disbursements (including the reasonable fees and expenses of
counsel), taxes and penalties of any kind and nature whatsoever
(collectively, Expenses), to the extent that such
Expenses arise out of, or are imposed upon,
II-1
or asserted at any time against, such Indemnified Persons with
respect to the performance of the declarations of trust, the
creation, operation, administration or termination of a trust or
the transactions contemplated thereby; provided, however, that
Travelers shall not be required to indemnify any Indemnified
Person for any Expenses which are a result of the willful
misconduct, bad faith or negligence of such Indemnified Person.
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1
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.1
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Form of Underwriting Agreement for
senior debt securities, subordinated debt securities, junior
subordinated debt securities and warrants.*
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1
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.2
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Form of Underwriting Agreement for
preferred stock and depositary shares.*
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1
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.3
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Form of Underwriting Agreement for
common stock.*
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1
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.4
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Form of Underwriting Agreement for
convertible debt securities.*
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1
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.5
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Form of Underwriting Agreement for
preferred securities of St. Paul Travelers Capital
Trust II, St. Paul Travelers Capital Trust III, St.
Paul Travelers Capital Trust IV and St. Paul Travelers
Capital Trust V.*
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1
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.6
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Form of Underwriting Agreement for
stock purchase contracts.*
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1
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.7
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Form of Underwriting Agreement for
units.*
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3
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.1
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Amended and Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.1 to
our Current Report on
Form 8-K
filed on February 27, 2007).
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3
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.2
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Amended and Restated Bylaws
(incorporated by reference to Exhibit 3.2 to our Current
Report on
Form 8-K
filed on February 27, 2007).
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4
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.1
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|
Indenture for senior debt
securities (incorporated by reference to Exhibit 4.1 of our
Current Report on
Form 8-K
filed March 13, 2002).
|
|
4
|
.2
|
|
Form of Indenture for subordinated
debt securities (previously filed as Exhibit 4.2 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.3
|
|
Form of Deposit Agreement.*
|
|
4
|
.4
|
|
Form of Depositary Receipt
(included in Exhibit 4.3).
|
|
4
|
.5
|
|
Form of Senior Debt Security
(included in Exhibit 4.1).
|
|
4
|
.6
|
|
Form of Subordinated Debt Security
(included in Exhibit 4.2).
|
|
4
|
.7
|
|
Form of Preferred Security
(included in Exhibit 4.23).
|
|
4
|
.8
|
|
Form of Common Security (included
in Exhibit 4.23).
|
|
4
|
.9
|
|
Form of Warrant Agreement,
including the form of the Warrant Certificate.*
|
|
4
|
.10
|
|
Form of Stock Purchase Contract
Agreement, including the form of the Security Certificate.*
|
|
4
|
.11
|
|
Form of Unit Agreement, including
the form of the Unit Certificate.*
|
|
4
|
.12
|
|
Form of Pledge Agreement.*
|
|
4
|
.13
|
|
Certificate of Trust of St. Paul
Travelers Capital Trust II.(1)
|
|
4
|
.14
|
|
Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust II
(previously filed as Exhibit 4.14 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.15
|
|
Certificate of Trust of St. Paul
Travelers Capital Trust III (previously filed as Exhibit
4.15 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.16
|
|
Certificate of Trust of St. Paul
Travelers Capital Trust IV (previously filed as Exhibit
4.16 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.17
|
|
Certificate of Trust of St. Paul
Travelers Capital Trust V (previously filed as Exhibit 4.17 to
the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.18
|
|
Declaration of Trust of St. Paul
Travelers Capital Trust II.(1)
|
|
4
|
.19
|
|
Amendment No. 1 to
Declaration of Trust of St. Paul Travelers Capital Trust II
(previously filed as Exhibit 4.19 to the Registrants
Registration Statement on
Form S-3
(File No.
333-130323),
filed with the SEC on December 14, 2005).
|
II-2
|
|
|
|
|
|
4
|
.20
|
|
Declaration of Trust of St. Paul
Travelers Capital Trust III (previously filed as Exhibit
4.20 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.21
|
|
Declaration of Trust of St. Paul
Travelers Capital Trust IV (previously filed as Exhibit
4.21 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.22
|
|
Declaration of Trust of St. Paul
Travelers Capital Trust V (previously filed as Exhibit 4.22 to
the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.23
|
|
Form of Amended and Restated
Declaration of Trust for St. Paul Travelers Capital
Trust II, St. Paul Travelers Capital Trust III, St.
Paul Travelers Capital Trust IV and St. Paul Travelers
Capital Trust V (previously filed as Exhibit 4.23 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.24
|
|
Form of Preferred Securities
Guarantee Agreement (previously filed as Exhibit 4.24 to
the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.25
|
|
Form of Common Securities
Guarantee Agreement (previously filed as Exhibit 4.25 to
the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.26
|
|
Form of Specimen Certificate of
Common Stock (previously filed as Exhibit 4.26 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
4
|
.27
|
|
Form of Specimen Certificate of
Preferred Stock and Form of Certificate of Designations for
Preferred Stock.*
|
|
4
|
.28
|
|
Form of Indenture for junior
subordinated debt securities.
|
|
4
|
.29
|
|
Form of Note for junior
subordinated debt securities (included in Exhibit 4.28).
|
|
4
|
.30
|
|
Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust II
dated as of February 27, 2007.
|
|
4
|
.31
|
|
Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital
Trust III dated as of February 27, 2007.
|
|
4
|
.32
|
|
Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust IV
dated as of February 27, 2007.
|
|
4
|
.33
|
|
Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust V dated
as of February 27, 2007.
|
|
5
|
.1
|
|
Opinion of Bruce A.
Backberg, Esq. (previously filed as Exhibit 5.1 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
5
|
.2
|
|
Opinion of Richards,
Layton & Finger, P.A. (previously filed as
Exhibit 5.2 to the Registrants Registration Statement
on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
5
|
.3
|
|
Opinion of Simpson
Thacher & Bartlett LLP. (previously filed as
Exhibit 5.3 to the Registrants Registration Statement
on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
5
|
.4
|
|
Opinion of Simpson
Thacher & Bartlett LLP relating to junior subordinated
debt securities.
|
|
12
|
|
|
Computation of ratios of earnings
to fixed charges and of earnings to combined fixed charges and
preferred stock dividends.(2)
|
|
23
|
.1
|
|
Consent of KPMG LLP.
|
|
23
|
.2
|
|
Consent of Bruce A.
Backberg, Esq. (included in Exhibit 5.1)
|
|
23
|
.3
|
|
Consent of Richards,
Layton & Finger, P.A. (included in Exhibit 5.2)
|
|
23
|
.4
|
|
Consent of Simpson
Thacher & Bartlett LLP (included in Exhibit 5.3)
|
|
23
|
.5
|
|
Consent of Simpson
Thacher & Bartlett LLP (included in Exhibit 5.4).
|
|
24
|
|
|
Powers of Attorney (previously
filed as Exhibit 24 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
II-3
|
|
|
|
|
|
25
|
.1
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee under the Senior Debt
Indenture for the Senior Debt Securities (previously filed as
Exhibit 25.1 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.2
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee under the Subordinated Debt
Indenture for the Subordinated Debt Securities (previously filed
as Exhibit 25.2 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.3
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust II (previously filed as
Exhibit 25.3 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.4
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust III (previously filed
as Exhibit 25.4 to the Registrants Registration Statement
on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.5
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust IV (previously filed as
Exhibit 25.5 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.6
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust V (previously filed as
Exhibit 25.6 to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.7
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital Trust II
(previously filed as Exhibit 25.7 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.8
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital
Trust III (previously filed as Exhibit 25.8 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.9
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital Trust IV
(previously filed as Exhibit 25.9 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.10
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital Trust V
(previously filed as Exhibit 25.10 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
|
|
25
|
.11
|
|
Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The Bank
of New York Trust Company, N.A. to act as trustee under the
Junior Subordinated Debt Indenture for the Junior Subordinated
Debt Securities.
|
|
|
|
*
|
|
To be filed by amendment or as an exhibit to a document to be
incorporated by reference herein in connection with an offering
of the offered securities.
|
|
(1)
|
|
Incorporated by reference to the Registration Statement on
Form S-3
(Registration Nos.
333-73848,
333-73848-01
and
333-44122)
filed with the SEC on November 21, 2001.
|
II-4
|
|
|
(2)
|
|
Incorporated by reference to Exhibit 12.1 to The Travelers
Companies, Inc. Annual Report on
Form 10-K/A
for the fiscal year ended December 31, 2006.
|
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the Calculation of Registration Fee
table in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however
, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to
the SEC by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) each prospectus filed by a registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(ii) each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be
deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first
used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the
registration statement relating to the securities in the
registration statement to which the prospectus relates, and the
offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
Provided
,
however
, that no statement made in a registration
statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed
incorporated by reference into
II-5
the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective
date.
(5) Each of the undersigned registrants hereby undertakes
that, for the purpose of determining liability of a registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, each undersigned registrant
undertakes that in a primary offering of securities of an
undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of an
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of an undersigned registrant or used or
referred to by an undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
an undersigned registrant or its securities provided by or on
behalf of an undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by an undersigned registrant to the purchaser.
(b) Each of the undersigned registrants hereby undertakes
that, for purposes of determining any liability under the
Securities Act of 1933, each filing of registrants annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to
Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(c) Each of the undersigned registrants hereby undertakes
to file an application for the purpose of determining the
eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the
Trust Indenture Act.
(d) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of each registrant pursuant to
the provisions described under Item 15 above, or otherwise,
each registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such
liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person of
a registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, that
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 5th day of
March, 2007.
THE TRAVELERS COMPANIES, INC.
|
|
|
|
By:
|
/s/
BRUCE
A. BACKBERG
|
Name: Bruce A. Backberg, Esq.
|
|
|
|
Title:
|
Senior Vice President
|
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on March 5,
2007, by the following persons in the capacities indicated:
|
|
|
|
|
Signature
|
|
Title
|
|
/s/
JAY
S. FISHMAN
(Jay
S. Fishman)
|
|
Chief Executive Officer and
Chairman of the Board of Directors (Principal Executive Officer)
|
|
|
|
/s/
JAY
S. BENET
(Jay
S. Benet)
|
|
Chief Financial Officer (Principal
Financial Officer)
|
|
|
|
/s/
DOUGLAS
K. RUSSELL
(Douglas
K. Russell)
|
|
Senior Vice President,
Corporate Controller and Treasurer
(Principal Accounting Officer)
|
|
|
|
*
(John
H. Dasburg)
|
|
Member of the Board of Directors
|
|
|
|
*
(Leslie
B. Disharoon)
|
|
Member of the Board of Directors
|
|
|
|
*
(Janet
M. Dolan)
|
|
Member of the Board of Directors
|
|
|
|
*
(Kenneth
M. Duberstein)
|
|
Member of the Board of Directors
|
|
|
|
*
(Lawrence
G. Graev)
|
|
Member of the Board of Directors
|
|
|
|
*
(Thomas
R. Hodgson)
|
|
Member of the Board of Directors
|
|
|
|
*
(Robert
I. Lipp)
|
|
Member of the Board of Directors
|
II-7
|
|
|
|
|
Signature
|
|
Title
|
|
*
(Blythe
J. McGarvie)
|
|
Member of the Board of Directors
|
|
|
|
*
(Glen
D. Nelson, M.D.)
|
|
Member of the Board of Directors
|
|
|
|
*
(Laurie
J. Thomsen)
|
|
Member of the Board of Directors
|
|
|
|
*By:
/s/ BRUCE
A. BACKBERG
Bruce
A.
Backberg
Attorney-in-fact
|
|
|
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 5th day of
March, 2007.
TRAVELERS CAPITAL TRUST II
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
|
as Sponsor
|
|
|
|
By:
|
/s/
BRUCE
A. BACKBERG
|
Name: Bruce A. Backberg, Esq.
|
|
|
|
Title:
|
Senior Vice President
|
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 5th day of
March, 2007.
TRAVELERS CAPITAL TRUST III
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
|
as Sponsor
|
|
|
|
By:
|
/s/
BRUCE
A. BACKBERG
|
Name: Bruce A. Backberg, Esq.
|
|
|
|
Title:
|
Senior Vice President
|
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 5th day of
March, 2007.
TRAVELERS CAPITAL TRUST IV
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
|
as Sponsor
|
|
|
|
By:
|
/s/
BRUCE
A. BACKBERG
|
Name: Bruce A. Backberg, Esq.
|
|
|
|
Title:
|
Senior Vice President
|
II-9
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 5th day of
March, 2007.
TRAVELERS CAPITAL TRUST V
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By:
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THE TRAVELERS COMPANIES, INC.,
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as Sponsor
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By:
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/s/
BRUCE
A. BACKBERG
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Name: Bruce A. Backberg, Esq.
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Title:
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Senior Vice President
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II-10
EXHIBIT INDEX
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1
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.1
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Form of Underwriting Agreement for
senior debt securities, subordinated debt securities, junior
subordinated debt securities and warrants.*
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1
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.2
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Form of Underwriting Agreement for
preferred stock and depositary shares.*
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1
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.3
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Form of Underwriting Agreement for
common stock.*
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1
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.4
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Form of Underwriting Agreement for
convertible debt securities.*
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1
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.5
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Form of Underwriting Agreement for
preferred securities of St. Paul Travelers Capital
Trust II, St. Paul Travelers Capital Trust III, St.
Paul Travelers Capital Trust IV and St. Paul Travelers
Capital Trust V.*
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1
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.6
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Form of Underwriting Agreement for
stock purchase contracts.*
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1
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.7
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Form of Underwriting Agreement for
units.*
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3
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.1
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Amended and Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.1 to
our Current Report on
Form 8-K
filed on February 27, 2007).
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3
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.2
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Amended and Restated Bylaws
(incorporated by reference to Exhibit 3.2 to our Current
Report on
Form 8-K
filed on February 27, 2007).
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3
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.1
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Amended and Restated Articles of
Incorporation (incorporated by reference to Exhibit 3.1 to
our Current Report on
Form 8-K
filed on April 1, 2004).
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3
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.2
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Bylaws (incorporated by reference
to Exhibit 3.2 to our Current Report on
Form 8-K
filed on May 5, 2005).
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4
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.1
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Indenture for senior debt
securities (incorporated by reference to Exhibit 4.1 of our
Current Report on
Form 8-K
filed March 13, 2002).
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4
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.2
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Form of Indenture for subordinated
debt securities (previously filed as Exhibit 4.2 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.3
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Form of Deposit Agreement.*
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4
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.4
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Form of Depositary Receipt
(included in Exhibit 4.3).
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4
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.5
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Form of Senior Debt Security
(included in Exhibit 4.1).
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4
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.6
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Form of Subordinated Debt Security
(included in Exhibit 4.2).
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4
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.7
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Form of Preferred Security
(included in Exhibit 4.23).
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4
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.8
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Form of Common Security (included
in Exhibit 4.23).
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4
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.9
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Form of Warrant Agreement,
including the form of the Warrant Certificate.*
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4
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.10
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Form of Stock Purchase Contract
Agreement, including the form of the Security Certificate.*
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4
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.11
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Form of Unit Agreement, including
the form of the Unit Certificate.*
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4
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.12
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Form of Pledge Agreement.*
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4
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.13
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Certificate of Trust of St. Paul
Travelers Capital Trust II.(1)
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4
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.14
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Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust II
(previously filed as Exhibit 4.14 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.15
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Certificate of Trust of St. Paul
Travelers Capital Trust III (previously filed as
Exhibit 4.15 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.16
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Certificate of Trust of St. Paul
Travelers Capital Trust IV (previously filed as
Exhibit 4.16 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.17
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Certificate of Trust of St. Paul
Travelers Capital Trust V (previously filed as Exhibit 4.17
to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.18
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Declaration of Trust of St. Paul
Travelers Capital Trust II.(1)
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4
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.19
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Amendment No. 1 to
Declaration of Trust of St. Paul Travelers Capital Trust II
(previously filed as Exhibit 4.19 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.20
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Declaration of Trust of St. Paul
Travelers Capital Trust III (previously filed as
Exhibit 4.20 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.21
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Declaration of Trust of St. Paul
Travelers Capital Trust IV (previously filed as
Exhibit 4.21 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.22
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Declaration of Trust of St. Paul
Travelers Capital Trust V (previously filed as Exhibit 4.22
to the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.23
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Form of Amended and Restated
Declaration of Trust for St. Paul Travelers Capital
Trust II, St. Paul Travelers Capital Trust III, St.
Paul Travelers Capital Trust IV and St. Paul Travelers
Capital Trust V (previously filed as Exhibit 4.23 to the
Registrants Registration Statement on
Form S-3
(File No.
333-130323),
filed with the SEC on December 14, 2005).
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4
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.24
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Form of Preferred Securities
Guarantee Agreement (previously filed as Exhibit 4.24 to
the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.25
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Form of Common Securities
Guarantee Agreement (previously filed as Exhibit 4.25 to
the Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.26
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Form of Specimen Certificate of
Common Stock (previously filed as Exhibit 4.26 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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4
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.27
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Form of Specimen Certificate of
Preferred Stock and Form of Certificate of Designations for
Preferred Stock.*
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4
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.28
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Form of Indenture for junior
subordinated debt securities.
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4
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.29
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Form of Note for junior
subordinated debt securities (included in Exhibit 4.28).
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4
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.30
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Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust II
dated as of February 27, 2007.
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4
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.31
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Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital
Trust III dated as of February 27, 2007.
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4
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.32
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Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust IV
dated as of February 27, 2007.
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4
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.33
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Certificate of Amendment to
Certificate of Trust of St. Paul Travelers Capital Trust V dated
as of February 27, 2007.
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5
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.1
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Opinion of Bruce A.
Backberg, Esq. (previously filed as Exhibit 5.1 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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5
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.2
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Opinion of Richards,
Layton & Finger, P.A. (previously filed as
Exhibit 5.2 to the Registrants Registration Statement
on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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5
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.3
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Opinion of Simpson
Thacher & Bartlett LLP. (previously filed as
Exhibit 5.3 to the Registrants Registration Statement
on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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5
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.4
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Opinion of Simpson
Thacher & Bartlett LLP relating to junior subordinated
debt securities.
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12
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Computation of ratios of earnings
to fixed charges and of earnings to combined fixed charges and
preferred stock dividends.(2)
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23
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.1
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Consent of KPMG LLP.
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23
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.2
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Consent of Bruce A.
Backberg, Esq. (included in Exhibit 5.1)
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23
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.3
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Consent of Richards,
Layton & Finger, P.A. (included in Exhibit 5.2)
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23
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.4
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Consent of Simpson
Thacher & Bartlett LLP (included in Exhibit 5.3)
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23
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.5
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Consent of Simpson
Thacher & Bartlett LLP (included in Exhibit 5.4).
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24
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Powers of Attorney (previously
filed as Exhibit 24 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.1
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee under the Senior Debt
Indenture for the Senior Debt Securities (previously filed as
Exhibit 25.1 to the Registrants Registration
Statement on
Form S-3
(File No.
333-130323),
filed with the SEC on December 14, 2005).
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25
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.2
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee under the Subordinated Debt
Indenture for the Subordinated Debt Securities (previously filed
as Exhibit 25.2 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.3
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust II (previously filed as
Exhibit 25.3 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.4
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust III (previously filed
as Exhibit 25.4 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.5
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust IV (previously filed as
Exhibit 25.5 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.6
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
of St. Paul Travelers Capital Trust V (previously filed as
Exhibit 25.6 to the Registrants Registration
Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.7
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital Trust II
(previously filed as Exhibit 25.7 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.8
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital
Trust III (previously filed as Exhibit 25.8 to the
Registrants Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.9
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital Trust IV
(previously filed as Exhibit 25.9 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.10
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of JPMorgan
Chase Bank, N.A. to act as trustee for the Preferred Securities
Guarantee Agreement for the benefit of the holders of the
Preferred Securities of St. Paul Travelers Capital Trust V
(previously filed as Exhibit 25.10 to the Registrants
Registration Statement on
Form S-3
(File
No. 333-130323),
filed with the SEC on December 14, 2005).
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25
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.11
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Statement of Eligibility and
Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The Bank
of New York Trust Company, N.A. to act as trustee under the
Junior Subordinated Debt Indenture for the Junior Subordinated
Debt Securities.
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*
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To be filed by amendment or as an exhibit to a document to be
incorporated by reference herein in connection with an offering
of the offered securities.
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(1)
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Incorporated by reference to the Registration Statement on
Form S-3
(Registration Nos.
333-73848,
333-73848-01
and
333-44122)
filed with the SEC on November 21, 2001.
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(2)
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Incorporated by reference to Exhibit 12.1 to The Travelers
Companies, Inc. Annual Report on
Form 10-K/A
for the fiscal year ended December 31, 2006.
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Exhibit 4.28
THE TRAVELERS COMPANIES, INC.
TO
THE BANK OF NEW YORK TRUST COMPANY, N.A.
Trustee
INDENTURE
Dated as of [ ], 2007
JUNIOR SUBORDINATED DEBT SECURITIES
The Travelers Companies, Inc.
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of [ ], 2007
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Trust Indenture
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Indenture
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Act Section
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Section
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ss.310
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(a)(1)
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609
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(a)(2)
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609
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(a)(3)
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Not Applicable
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(a)(4)
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Not Applicable
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(b)
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608
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610
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ss.311
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(a)
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613(a)
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(b)
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613(b)
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(b)(2)
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703(a)(2)
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703(b)
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ss.312
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(a)
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701
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702(a)
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(b)
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702(b)
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(c)
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702(a)
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ss.313
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(a)
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703(a)
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(b)
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703(b)
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(c)
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703(a), 703(b)
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(d)
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703(c)
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ss.314
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(a)
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704
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(b)
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Not Applicable
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(c)(1)
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102
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(c)(2)
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102
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(c)(3)
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Not Applicable
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(d)
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Not Applicable
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(e)
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102
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ss.315
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(a)
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601(a)
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(b)
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602
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703(a)(6)
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(c)
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601(b)
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(d)
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601(c)
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(d)(1)
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601(a)(1)
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(d)(2)
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601(c)(2)
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(d)(3)
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601(c)(3)
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(e)
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514
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ss.316
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(a)
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101
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(a)(1)(A)
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502
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512
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(a)(1)(B)
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513
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(a)(2)
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Not Applicable
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(b)
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508
|
|
ss.317
|
(a)(1)
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503
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(a)(2)
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504
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(b)
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1003
|
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ss.318
|
(a)
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107
|
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.
i
TABLE OF CONTENTS
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Page
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ARTICLE ONE
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DEFINITIONS AND OTHER PROVISIONS
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OF GENERAL APPLICATION
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Section 101.
|
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Definitions
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1
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Section 102.
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Compliance Certificates and Opinions
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6
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Section 103.
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Form of Documents Delivered to Trustee
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7
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Section 104.
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Acts of Holders
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7
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Section 105.
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Notices, Etc,
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8
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Section 106.
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Notice to Holders; Waiver
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8
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Section 107.
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Conflict with Trust Indenture Act
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8
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Section 108.
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Effect of Headings and Table of Contents
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8
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Section 109.
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Successors and Assigns
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8
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Section 110.
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Separability Clause
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9
|
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Section 111.
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Benefits of Indenture
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9
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Section 112.
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Governing Law
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9
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Section 113.
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Legal Holidays
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9
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Section 114.
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Waiver of Jury Trial
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9
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Section 115.
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Force Majeure
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9
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ARTICLE TWO
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SECURITY FORMS
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Section 201.
|
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Forms Generally
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9
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Section 202.
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Form of Face of Security
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10
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Section 203.
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Form of Reverse of Security
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11
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Section 204.
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Form of Legend for Global Securities
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12
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|
Section 205.
|
|
Form of Trustees Certificate of Authentication
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13
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ARTICLE THREE
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THE SECURITIES
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Section 301.
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Amount Unlimited; Issuable in Series
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13
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Section 302.
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Denominations
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15
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Section 303.
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Execution, Authentication, Delivery and Dating
|
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15
|
|
Section 304.
|
|
Temporary Securities
|
|
|
16
|
|
Section 305.
|
|
Registration, Registration of Transfer and Exchange
|
|
|
16
|
|
Section 306.
|
|
Mutilated, Destroyed, Lost and Stolen Securities
|
|
|
17
|
|
Section 307.
|
|
Payment of Interest; Interest Rights Preserved
|
|
|
18
|
|
Section 308.
|
|
Persons Deemed Owners
|
|
|
18
|
|
Section 309.
|
|
Cancellation
|
|
|
18
|
|
Section 310.
|
|
Computation of Interest
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
ARTICLE FOUR
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|
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|
|
|
|
SATISFACTION AND DISCHARGE
|
|
|
|
|
|
|
|
|
|
|
|
Section 401.
|
|
Satisfaction and Discharge of Indenture
|
|
|
19
|
|
ii
|
|
|
|
|
|
|
|
|
|
|
Page
|
Section 402.
|
|
Application of Trust Money
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
ARTICLE FIVE
|
|
|
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|
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|
|
REMEDIES
|
|
|
|
|
|
|
|
|
|
|
|
Section 501.
|
|
Events of Default
|
|
|
20
|
|
Section 502.
|
|
Acceleration of Maturity; Rescission and Annulment
|
|
|
21
|
|
Section 503.
|
|
Collection of Indebtedness and Suits for Enforcement by Trustee
|
|
|
22
|
|
Section 504.
|
|
Trustee May File Proofs of Claim
|
|
|
22
|
|
Section 505.
|
|
Trustee May Enforce Claims Without Possession of Securities
|
|
|
23
|
|
Section 506.
|
|
Application of Money Collected
|
|
|
23
|
|
Section 507.
|
|
Limitation on Suits
|
|
|
23
|
|
Section 508.
|
|
Unconditional Right of Holders to Receive Principal, Premium and Interest
|
|
|
24
|
|
Section 509.
|
|
Restoration of Rights and Remedies
|
|
|
24
|
|
Section 510.
|
|
Rights and Remedies Cumulative
|
|
|
24
|
|
Section 511.
|
|
Delay or Omission Not Waiver
|
|
|
24
|
|
Section 512.
|
|
Control by Holders
|
|
|
24
|
|
Section 513.
|
|
Waiver of Past Defaults
|
|
|
25
|
|
Section 514.
|
|
Undertaking for Costs
|
|
|
25
|
|
Section 515.
|
|
Waiver of Stay or Extension Laws
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
ARTICLE SIX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE TRUSTEE
|
|
|
|
|
|
|
|
|
|
|
|
Section 601.
|
|
Certain Duties and Responsibilities
|
|
|
26
|
|
Section 602.
|
|
Notice of Defaults
|
|
|
26
|
|
Section 603.
|
|
Certain Rights of Trustee
|
|
|
27
|
|
Section 604.
|
|
Not Responsible for Recitals or Issuance of Securities
|
|
|
28
|
|
Section 605.
|
|
May Hold Securities
|
|
|
28
|
|
Section 606.
|
|
Money Held in Trust
|
|
|
28
|
|
Section 607.
|
|
Compensation and Reimbursement
|
|
|
28
|
|
Section 608.
|
|
Disqualification; Conflicting Interests
|
|
|
28
|
|
Section 609.
|
|
Corporate Trustee Required; Eligibility
|
|
|
29
|
|
Section 610.
|
|
Resignation and Removal; Appointment of Successor
|
|
|
29
|
|
Section 611.
|
|
Acceptance of Appointment by Successor
|
|
|
30
|
|
Section 612.
|
|
Merger, Conversion, Consolidation or Succession to Business
|
|
|
31
|
|
Section 613.
|
|
Preferential Collection of Claims Against Company
|
|
|
31
|
|
Section 614.
|
|
Appointment of Authenticating Agent
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
ARTICLE SEVEN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
|
|
|
|
|
|
|
|
|
|
|
|
Section 701.
|
|
Company to Furnish Trustee Names and Addresses of Holders
|
|
|
32
|
|
Section 702.
|
|
Preservation of Information; Communications to Holders
|
|
|
32
|
|
Section 703.
|
|
Reports by Trustee
|
|
|
33
|
|
Section 704.
|
|
Reports by Company
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
ARTICLE EIGHT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
|
|
|
|
|
|
|
|
|
|
|
|
Section 801.
|
|
Company May Consolidate, Etc,
|
|
|
34
|
|
Section 802.
|
|
Successor Person Substituted
|
|
|
34
|
|
iii
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
ARTICLE NINE
|
|
|
|
|
|
|
|
SUPPLEMENTAL INDENTURES
|
|
|
|
|
|
Section 901.
|
|
Supplemental Indentures Without Consent of Holders
|
|
|
35
|
|
Section 902.
|
|
Supplemental Indentures with Consent of Holders
|
|
|
35
|
|
Section 903.
|
|
Execution of Supplemental Indentures
|
|
|
36
|
|
Section 904.
|
|
Effect of Supplemental Indentures
|
|
|
36
|
|
Section 905.
|
|
Conformity with Trust Indenture Act
|
|
|
37
|
|
Section 906.
|
|
Reference in Securities to Supplemental Indentures
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
ARTICLE TEN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COVENANTS
|
|
|
|
|
|
|
|
|
|
|
|
Section 1001.
|
|
Payment of Principal, Premium and Interest
|
|
|
37
|
|
Section 1002.
|
|
Maintenance of Office or Agency
|
|
|
37
|
|
Section 1003.
|
|
Money for Securities Payments to Be Held in Trust
|
|
|
37
|
|
Section 1004.
|
|
Corporate Existence
|
|
|
38
|
|
Section 1005.
|
|
Statement by Officers as to Default
|
|
|
38
|
|
Section 1006.
|
|
Waiver of Certain Covenants
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
ARTICLE ELEVEN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBORDINATION OF SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
Section 1101.
|
|
Securities Subordinate to Senior Indebtedness
|
|
|
39
|
|
Section 1102.
|
|
Payment Over of Proceeds Upon Dissolution, Etc
|
|
|
39
|
|
Section 1103.
|
|
No Payment When Senior Indebtedness in Default
|
|
|
40
|
|
Section 1104.
|
|
Payment Permitted If No Default
|
|
|
41
|
|
Section 1105.
|
|
Subrogation to Rights of Holders of Senior Indebtedness
|
|
|
41
|
|
Section 1106.
|
|
Provisions Solely to Define Relative Rights
|
|
|
41
|
|
Section 1107.
|
|
Trustee to Effectuate Subordination
|
|
|
42
|
|
Section 1108.
|
|
No Waiver of Subordination Provisions
|
|
|
42
|
|
Section 1109.
|
|
Notice to Trustee
|
|
|
42
|
|
Section 1110.
|
|
Reliance on Judicial Order or Certificate of Liquidating Agent
|
|
|
43
|
|
Section 1111.
|
|
Trustee Not Fiduciary for Holders of Senior Indebtedness
|
|
|
43
|
|
Section 1112.
|
|
Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustees Rights
|
|
|
43
|
|
Section 1113.
|
|
Article Applicable to Paying Agents
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
ARTICLE TWELVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEMPTION OF SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
Section 1201.
|
|
Applicability of Article
|
|
|
44
|
|
Section 1202.
|
|
Election to Redeem; Notice to Trustee
|
|
|
44
|
|
Section 1203.
|
|
Selection by Trustee of Securities to Be Redeemed
|
|
|
44
|
|
Section 1204.
|
|
Notice of Redemption
|
|
|
44
|
|
Section 1205.
|
|
Deposit of Redemption Price
|
|
|
45
|
|
Section 1206.
|
|
Securities Payable on Redemption Date
|
|
|
45
|
|
Section 1207.
|
|
Securities Redeemed in Part
|
|
|
45
|
|
iv
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
ARTICLE THIRTEEN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SINKING FUNDS
|
|
|
|
|
|
|
|
|
|
|
|
Section 1301.
|
|
Applicability of Article
|
|
|
45
|
|
Section 1302.
|
|
Satisfaction of Sinking Fund Payments with Securities
|
|
|
45
|
|
Section 1303.
|
|
Redemption of Securities for Sinking Fund
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
ARTICLE FOURTEEN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFEASANCE AND COVENANT DEFEASANCE
|
|
|
|
|
|
|
|
|
|
|
|
Section 1401.
|
|
Applicability of Article; Companys Option to Effect Defeasance or Covenant Defeasance
|
|
|
46
|
|
Section 1402.
|
|
Defeasance and Discharge
|
|
|
46
|
|
Section 1403.
|
|
Covenant Defeasance
|
|
|
47
|
|
Section 1404.
|
|
Conditions to Defeasance or Covenant Defeasance
|
|
|
47
|
|
Section 1405.
|
|
Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous
Provisions
|
|
|
48
|
|
Section 1406.
|
|
Reinstatement
|
|
|
2
|
|
NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the
Indenture.
v
INDENTURE, dated as of [ ], 2007, between The Travelers Companies, Inc., a corporation duly
organized and existing under the laws of the State of Minnesota (herein called the Company),
having its principal office at 385 Washington Street, St. Paul, Minnesota 55102, and The Bank of
New York Trust Company, N.A., a national banking association, duly organized and existing under the
laws of the United States of America, as Trustee (herein called the Trustee).
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured and junior subordinated debentures, notes or other
evidences of indebtedness (herein called the Securities), to be issued in one or more series as
in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article
and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles, and, except as otherwise herein
expressly provided, the term generally accepted accounting principles with respect to any
computation required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
(4) the words herein, hereof and hereunder and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
Act, when used with respect to any Holder, has the meaning specified in Section 104.
Affiliate of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, control when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms controlling and
controlled have meanings correlative to the foregoing.
1
Authenticating Agent means any Authenticating Agent appointed pursuant to Section 614 to
authenticate Securities.
Board of Directors means either the board of directors of the Company or any duly authorized
committee of that board.
Board Resolution means a copy of a resolution certified by the Corporate Secretary or an
Assistant Corporate Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and delivered to the Trustee.
Business Day, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law to close.
Capital Lease Obligation of any Person means the obligation to pay rent or make other
payments under a lease of (or other Indebtedness arrangements conveying the right to use) real or
personal property of such Person which is required to be classified and accounted for as a capital
lease or a liability on the balance sheet of such Person in accordance with generally accepted
accounting principles. The Stated Maturity of such obligation shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon which such lease may
be terminated by the lessee without payment of a penalty.
Commission means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
Company means the Person named as the Company in the first paragraph of this instrument
until a successor corporation shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Company shall mean such successor corporation.
Company Request or Company Order means a written request or order signed in the name of
the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
Corporate Trust Office means the corporate trust office of the Trustee, at which this
Indenture is principally administered. At the date hereof, such office is located at 222 Berkeley
Street, 2
nd
Floor, Boston, Massachusetts 02116-3748, Attention: Corporate Trust
Services.
corporation includes corporations, associations, companies and business trusts.
Defaulted Interest has the meaning specified in Section 307.
Depository means, with respect to the Securities of any series issuable or issued in whole
or in part in the form of one or more Global Securities, the clearing agency registered under the
Exchange Act specified for that purpose as contemplated by Section 301.
Event of Default has the meaning specified in Section 501.
Exchange Act means the Securities Exchange Act of 1934 as it may be amended and any
successor act thereto.
Global Security means a security bearing the legend specified in Section 204 evidencing all
or part of a series of Securities, authenticated and delivered to the Depository for such series or
its nominee, and registered in the name of such Depository or nominee.
2
Guarantee by any Person means any obligation, contingent or otherwise, of such Person
guaranteeing any Indebtedness of any other Person (the primary obligor) in any manner, whether
directly or indirectly, and including, without limitation, any obligation of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for the payment of such
Indebtedness, (ii) to purchase property, securities or services for the purpose of assuring the
holder of such Indebtedness of the payment of such Indebtedness or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness (and Guaranteed, Guaranteeing and
Guarantor shall have meanings correlative to the foregoing); provided, however, that the
Guarantee by any Person shall not include endorsements by such Person for collection or deposit, in
either case, in the ordinary course of business.
Holder means a Person in whose name a Security is registered in the Security Register.
Incur means, with respect to any Indebtedness or other obligation of any Person, to create,
issue, incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable
in respect of such Indebtedness or other obligation or the recording, as required pursuant to
generally accepted accounting principles or otherwise, of any such Indebtedness or other obligation
as a liability on the balance sheet of such Person (and Incurrence, Incurred, Incurrable and
Incurring shall have meanings correlative to the foregoing); provided, however, that a change in
generally accepted accounting principles that results in an obligation of such Person that exists
at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness.
Indebtedness means (without duplication), with respect to any Person, whether recourse is to
all or a portion of the assets of such Person, (i) all Indebtedness described in clauses (i)-(viii)
of the definition of Senior Indebtedness (all references to the Company in such definition being
deemed to refer to such Person) and (ii) the maximum fixed redemption or repurchase price of
Redeemable Interests of such Person at the time of determination.
Indenture means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 301.
interest, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
Interest Payment Date, when used with respect to any security, means the Stated Maturity of
an installment of interest on such Security.
Maturity, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
Officers Certificate means a certificate signed by the Chairman of the Board, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers
Certificate given pursuant to Section 1006 shall be the principal executive, financial or
accounting officer of the Company.
Opinion of Counsel means a written opinion of counsel, who may be counsel for the Company.
Original Issue Discount Security means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.
Outstanding, when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
3
(ii) Securities for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu
of which other Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose
hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable
as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section
502, (ii) the principal amount of a Security denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the amount determined as provided
in (i) above) of such Security, and (iii) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to
the satisfaction of the Trustee the pledgees right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
Paying Agent means any Person authorized by the Company to pay the principal of (and
premium, if any) or interest on any Securities on behalf of the Company.
Payment Blockage Period has the meaning specified in Section 1103.
Person means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, limited liability company, unincorporated organization or government or
any agency or political subdivision thereof.
Place of Payment, when used with respect to the Securities of any series, means the place or
places where the principal of (and premium, if any) and interest on the Securities of that series
are payable as specified as contemplated by Section 301.
Predecessor Security of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Security.
Proceeding has the meaning specified in Section 1102.
Redemption Date, when used with respect to any Security to be redeemed, means the date fixed
for such redemption by or pursuant to this Indenture.
Redemption Price, when used with respect to any Security to be redeemed, means the price at
which it is to be redeemed pursuant to this Indenture.
Regular Record Date for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 301.
Responsible Officer, when used with respect to the Trustee, means any officer of the Trustee
with direct
4
responsibility for the administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
Securities has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.
Securities Payment has the meaning specified in Section 1102.
Security Register and Security Registrar have the respective meanings specified in Section
305.
Senior Indebtedness means the principal of, premium, if any, interest on and any other
payment due pursuant to any of the following, whether Incurred on or prior to the date hereof or
hereafter Incurred:
(i) all obligations of the Company for money borrowed;
(ii) all obligations of the Company evidenced by notes, debentures, bonds or other similar
instruments, including obligations Incurred in connection with the acquisition of property,
assets or businesses and including all other debt securities of the Company issued by the
Company to any trust or a trustee of such trust, or to a partnership or other Affiliate of the
Company that acts as a financing vehicle for the Company, in connection with the issuance of
securities by such vehicles and which include as of the date of this Indenture the following
series of debt securities: (1) Junior Subordinated Debentures, Series A, issued pursuant to that
certain indenture dated as of December 24, 1996, between USF&G Corporation and The Bank of New
York, as amended (2) Junior Subordinated Debentures, Series C, issued pursuant to that certain
indenture dated as of July 8, 1997, between USF&G Corporation and The Bank of New York, as
amended, and (3) Junior Subordinated Deferrable Interest Debentures, issued pursuant to the
certain indenture dated as of December 23, 1997 between MMI Companies, Inc. and The Bank of New
York, as amended;
(iii) all Capital Lease Obligations of the Company;
(iv) all reimbursement obligations of the Company with respect to letters of credit,
bankers acceptances or similar facilities issued for the account of the Company;
(v) all obligations of the Company issued or assumed as the deferred purchase price of
property or services, including all obligations under master lease transactions pursuant to
which the Company or any of its subsidiaries have agreed to be treated as owner of the subject
property for federal income tax purposes (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business);
(vi) all payment obligations of the Company under interest rate swap or similar agreements
or foreign currency hedge, exchange or similar agreements at the time of determination,
including any such obligations Incurred by the Company solely to act as a hedge against
increases in interest rates that may occur under the terms of other outstanding variable or
floating rate Indebtedness of the Company;
(vii) all obligations of the type referred to in clauses (i) through (vi) above of another
Person and all dividends of another Person the payment of which, in either case, the Company has
assumed or Guaranteed or for which the Company is responsible or liable, directly or indirectly,
jointly or severally, as obligor, Guarantor or otherwise;
(viii) all compensation and reimbursement obligations of the Company pursuant to Section
607; and
(ix) all amendments, modifications, renewals, extensions, refinancings, replacements and
refundings by the Company of any such Indebtedness referred to in clauses (i) through (viii)
above (and of any such amended, modified, renewed, extended, refinanced, refunded or replaced
Indebtedness);
subject to, if provided in the supplemental indenture under which a series of Securities is issued
or in the form of Security for such series, any modifications to this definition of Senior
Indebtedness, including additional obligations
5
that the Company may determine to include within this definition and obligations that may be
excluded from this definition, pursuant to Section 301 hereof; and
provided
, however, that the following shall not constitute Senior Indebtedness: (A) any
Indebtedness owed to a Person when such Person is a Subsidiary or employee of the Company, (B)
Indebtedness incurred for the purchase of goods, materials or property, or for services obtained in
the ordinary course of business or for other liabilities arising in the ordinary course of
business, or (C) any Indebtedness which by the terms of the instrument creating or evidencing the
same expressly provides that it is not superior in right of payment to the Securities.
For purposes of this definition, Indebtedness includes any obligation to pay principal, premium
(if any), interest, penalties, reimbursement or indemnity amounts, fees and expenses (including
interest accruing on or after the filing of any petition in bankruptcy or for reorganization
relating to the Company whether or not a claim for post-petition interest is allowed in such
proceeding). Any Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions of Article Eleven irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
Senior Nonmonetary Default has the meaning specified in Section 1103.
Senior Payment Default has the meaning specified in Section 1103.
Special Record Date for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.
Stated Maturity, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.
Subsidiary means a corporation more than 50% of the outstanding voting stock of which is
owned, directly or indirectly, by the Company (or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries). For the purposes of this definition, voting stock
means stock which ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of any contingency.
Trustee means the Person named as the Trustee in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, Trustee as used with respect to
the Securities of any series shall mean the Trustee with respect to Securities of that series.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended, as in force at the
date as of which this instrument was executed, except as provided in Section 905; provided,
however, that in the event the Trust Indenture Act of 1939 is further amended after such date,
Trust Indenture Act means, to the extent required by such amendment, the Trust Indenture Act of
1939 as amended.
U.S. Government Obligations has the meaning specified in Section 1404.
Vice President, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
vice president.
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any application or request by the
Company to the Trustee to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel such action is authorized or
permitted by this Indenture and that all such conditions precedent, if any, have been complied
6
with, except that in the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include
(1) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of any officer of the Company may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an officer or officers of
the Company stating that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.
Section 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the Act of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to
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him the execution thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute sufficient proof of
his authority. The fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such Security.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, Attention: Corporate Trust Services, or
(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its successors and
assigns, whether so
expressed or not.
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Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of Senior Indebtedness
and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in accordance with the
laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue
with respect to such payment for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
Section 114. Waiver of Jury Trial
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 115. Force Majeure
In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of
God, and interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth in this Article, or
in such other form as shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange or depository
therefor or as may, consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board
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Resolution, a copy of an appropriate record of such action shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The Trustees certificates of authentication shall be in substantially the form set forth in
this Article.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]
The Travelers Companies, Inc.
The Travelers Companies, Inc., a corporation duly organized and existing under the laws of the
State of Minnesota (herein called 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
Dollars on
[If the Security is to bear
interest prior to Maturity, insert terms established pursuant to Section 301 of the Indenture]. [If
the Security is not to bear interest prior to Maturity, insert The principal of this Security
shall not bear interest except in the case of a default in payment of principal upon acceleration,
upon redemption or at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of
% per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due until they are paid or
made available for payment. Interest on any overdue principal or premium shall be payable on
demand. [Any such interest on overdue principal or premium which is not paid on demand shall bear
interest at the rate of
% per annum (to the extent that the payment of such interest on
interest shall be legally enforceable), from the date of such demand until the amount so demanded
is paid or made available for payment. Interest on any overdue interest shall be payable on
demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert any such
interest on this Security will be made at the office or agency of the Company maintained for that
purpose in
, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts [if applicable, insert ;
provided, however, that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall appear in the Security
Register].
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.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.
Dated:
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THE TRAVELERS COMPANIES, INC.
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By
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Attest:
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company (herein called
the Securities), issued and to be issued in one or more series under an Indenture, dated as of
, 2007 herein called the Indenture, which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York Trust Company, N.A., as Trustee
(herein called the Trustee, which term includes any successor trustee under the Indenture), and
reference is hereby made to the Indenture for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof [if applicable, insert
, limited in aggregate principal amount to $
].
[If applicable, insert The Securities of this series are subject to redemption upon not more
than 60 or less than 30 days notice by mail, [if applicable, insert (1) on
in any
year commencing with the year
and ending with the year
through operation of the
sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)]
at any time [on or after
, 20
], as a whole or in part, at the election of the Company,
at the following Redemption Prices [insert terms established pursuant to Section 301 of the
Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
, redeem any
Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of,
or in anticipation of, any refunding operation by the application, directly or indirectly, of
moneys borrowed having an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than
% per annum.]
[The sinking fund for this series provides for the redemption on
in each year
beginning with the year
and ending with the year
of [not less than] $
[(mandatory sinking fund) and not more than $
] aggregate principal amount of Securities
of this series. [Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking
fund payments otherwise required to be made in the inverse order in which they become due.]
In the event of redemption of this Security in part only, a new Security or Securities of this
series and of a like tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions
as may be necessary or appropriate to 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, 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 created, incurred, assumed or guaranteed, and waives reliance by each such
Holder upon said provisions.
[If the Security is not an Original Issue Discount Security, 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 payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security, If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of
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interest on any overdue principal, premium and overdue interest (in each case to the extent
that the payment of such interest shall be legally enforceable), all of the Companys obligations
in respect of the payment of the principal of and premium and interest, if any, on the Securities
of this series shall terminate.]
[The Indenture contains provisions for defeasance at any time of [the entire indebtedness of
this Security or] [certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth therein.]
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 majority of the Holders of the principal amount of the Securities
at the time Outstanding of each series to be affected. The Indenture also contains provisions
permitting the 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 of and any premium, and interest on this 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 Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in
denominations of $........ and any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
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 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 the 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.
All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder shall bear a legend in substantially
the following form:
This Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee thereof. This Security
may not be exchanged in whole or in part for a Security registered, and no transfer of this
Security in whole or in part may be registered in the name of
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any person other than such Depository or a nominee thereof, except in the limited
circumstances described in the Indenture.
Section 205. Form of Trustees Certificate of Authentication
The Trustees certificates of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
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THE BANK OF NEW YORK
TRUST COMPANY, N.A.
as Trustee
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By
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Authorized Signatory
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ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided,
in an Officers Certificate, or established in one or more indentures supplemental hereto, prior to
the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of
the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of the series which may
be authenticated and delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to Section 304, 305, 306, 906 or 1207 and except for any Securities
which, pursuant to Section 303, are deemed never to have been authenticated and delivered
hereunder);
(3) the Person to whom any interest on a Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the series is payable;
(5) the rate or rates at which the Securities of the series shall bear interest, if any,
the date or dates from which such interest shall accrue, the Interest Payment Dates on which
such interest shall be payable and the Regular Record Date for the interest payable on any
Interest Payment Date;
(6) the place or places where the principal of (and premium, if any) and interest on
Securities of the series shall be payable;
(7) any provisions relating to the deferral of interest payments on the Securities of the
series at the option of the Company or otherwise, including the duration of any such deferral or
extension period and the maximum period during which interest payments may be deferred or
extended;
(8) the period or periods within which, the price or prices at which, and the terms and
conditions upon which,
Securities of the series may be redeemed, in whole or in part, at the option of the
Company;
13
(9) the obligation, if any, of the Company to redeem or purchase Securities of the series
pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which and the terms and conditions
upon which, Securities of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
(10) any modifications, including additions to or exclusions from, the definition of Senior
Indebtedness or Events of Default applicable to the Securities of any series;
(10) any provisions necessary to permit or facilitate the issuance, payment or conversion
of any Securities of the series that may be converted into securities or other property other
than Securities of the same series (including shares of the Companys common or preferred stock
or other Securities of the Company) and of like tenor, whether in addition to, or in lieu of,
any payment of principal or other amount and whether at the option of the Company or otherwise;
(11) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which Securities of the series shall be issuable;
(12) the currency or currencies, including composite currencies, in which payment of the
principal of and any premium and interest on the Securities of the series shall be payable if
other than the currency of the United States of America;
(13) if the principal of or any premium or interest on any Securities of the series is to
be payable, at the election of the Company or the Holder thereof, in one or more currencies,
composite currencies or currency units other than that or those in which such Securities are
stated to be payable, the currency, currencies, composite currency, composite currencies or
currency units in which the principal of or any premium or interest on such Securities as to
which such election is made shall be payable, the periods within which and the terms and
conditions upon which such election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(14) if the amount of payments of principal of and any premium or interest on the
Securities of the series may be determined with reference to an index, a formula or any other
method, the manner in which such amounts shall be determined;
(15) whether the Securities of the series shall be issued in whole or in part in the form
of one or more Global Securities and, in such case, the Depository with respect to such Global
Security or Securities and the circumstances under which any such Global Security may be
exchanged for Securities registered in the name of, and any transfer of such Global Security may
be registered in the name of, a Person other than such Depository or its nominee, if other than
as set forth in Section 305;
(16) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502:
(17) the application, if any, of Sections 1302 or 1303 to the Securities of any series;
(18) any proposed listing on any national or foreign securities exchange of the Securities
of the series; and
(19) any other terms of the series (which terms shall not be inconsistent with the
provisions of this Indenture).
All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 303) set forth in the Officers Certificate or in any such indenture
supplemental hereto.
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If any of the terms of the series are established by action taken pursuant to a Board
Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in
Article Eleven.
Section 302. Denominations.
The Securities of each series shall be issuable in registered form without coupons in such
denominations as shall be specified as contemplated by Section 301. In the absence of any such
provisions with respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the Board, its
President or one of its Vice Presidents. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver
such Securities. If the form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating
such Securities, and accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to Board Resolution
as permitted by Section 201, that such form has been established in conformity with the
provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant to Board
Resolution as permitted by Section 301, that such terms have been established in conformity with
the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting the enforcement of creditors
rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustees own rights, duties or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not be necessary to
deliver the Officers Certificate otherwise required pursuant to Section 301 or the Company Order
and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the
time of authentication of each Security of such series if such documents are delivered at or prior
to the time of authentication upon original issuance of the first Security of such series to be
issued.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall deliver such Security to
the Trustee for cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Company in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series and of a like tenor of authorized
denominations. Until so exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of such series.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency of the Company in a Place
of Payment being herein sometimes collectively referred to as the Security Register) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby appointed
Security Registrar for the purpose of registering Securities and transfers of Securities as
herein provided.
Upon surrender for registration of transfer of any Security of any series at the office or
agency in a Place of Payment for that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new
Securities of the same series, of any authorized denominations and of a like aggregate principal
amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for other Securities of
the same series of any authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form
16
satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1207 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities of that series selected for redemption
under Section 1203 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, no Global Security shall be registered for transfer or
exchange, or authenticated or delivered, pursuant to this Section 305 or Sections 304, 306, 906 or
1207 in the name of a Person other than the Depository for such Security or its nominee until (i)
the Depository with respect to a Global Security notifies the Company that it is unwilling or
unable to continue as Depository for such Global Security or the Depository ceases to be a clearing
agency registered under the Exchange Act, (ii) the Company executes and delivers to the Trustee a
Company Order that such Global Security shall be so transferable and exchangeable or (iii) there
shall have occurred and be continuing an Event of Default with respect to the Securities of such
series. Upon the occurrence in respect of any Global Security of any series of any one or more of
the conditions specified in clauses (i), (ii) or (iii) of the preceding sentence or such other
conditions as may be specified as contemplated by Section 301 for such series, such Global Security
may be registered for transfer or exchange for Securities registered in the names of, or
authenticated and delivered to, such Persons as the Depository with respect to such series shall
direct.
Except as provided in the preceding paragraph, any Security authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Global Security, whether
pursuant to this Section, Section 304, 306, 906 or 1207 or otherwise, shall also be a Global
Security and bear the legend specified in Section 205.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange thereof or a new Security of the same series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been acquired by a protected
purchaser, the Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series
and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies
with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
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Section 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called Defaulted Interest) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date and, in the name and
at the expense of the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities of any series
in any other lawful manner not inconsistent with the requirements of any securities exchange on
which such Securities may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 307) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall
18
be promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which
the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of in accordance with its normal
procedures unless otherwise directed by a Company Order.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been replaced or paid as provided in Section
306 and (ii) Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay
and discharge the entire Indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating
Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
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Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
Event of Default, wherever used herein with respect to Securities of any series, means any
one of the following events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Eleven, or 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):
(1) default in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any, on) any Security of
that series at its Maturity; or
(3) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or
order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company 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 for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
(4) the commencement by the Company of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company 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, or the taking of
corporate action by the Company in furtherance of any such action; or
(5) any other Event of Default provided with respect to Securities of that series.
Upon receipt by the Trustee of
any written notice of an Event of Default pursuant to this Section 501 (a Notice of Default) with respect
to Securities of a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such series entitled to
join in such Notice of Default, which record date shall be at the close of business on the day the
Trustee receives such Notice of Default. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such Notice of Default, whether or not
such Holders remain Holders after such record date; provided, however, that unless Holders of at
least 25% in
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principal amount of the Outstanding Securities of such series, or their proxies, shall have
joined in such Notice of Default prior to the date which is the ninetieth day after such record
date, such Notice of Default shall automatically and without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, (i) after expiration of such 90-day period, a new Notice of Default
identical to a Notice of Default which has been canceled pursuant to the proviso to the preceding
sentence or (ii) during any such 90-day period, an additional notice of default with respect to any
new or different fact or circumstance permitting the giving of a Notice of Default with respect to
Securities of such series, in either of which events a new record date shall be established
pursuant to the provisions of this Section 501.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs
and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series may declare the principal amount (or,
if any of the Securities of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of all of the
Securities of that series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have
become due otherwise than by such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest
at the rate or rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal and interest of Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived as provided in Section
513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
Upon receipt by the Trustee of written notice declaring such an acceleration, or rescission
and annulment thereof, with respect to Securities of a series all or part of which is represented
by a Global Security, a record date shall be established for determining Holders of Outstanding
Securities of such series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether
or not such Holders remain Holders after such record date; provided, however, that unless such
declaration of acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice prior to the day which
is the ninetieth day after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without further action by any
Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder,
21
or a proxy of a Holder, of Securities of any series from giving, (i) after expiration of such
90-day period, a new written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has been canceled pursuant
to the proviso to the preceding sentence or (ii) during any such 90-day period an additional
written notice of declaration of acceleration with respect to any other Event of Default with
respect to Securities of such series, or an additional written notice of rescission or annulment of
any declaration of acceleration with respect to any other Event of Default with respect to
Securities of such series, in either of which events a new record date shall be established
pursuant to the provisions of this Section 502.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal (and premium, if
any) and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or
rates prescribed therefor in such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and premium, if any) and
interest owing and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607, including the
reasonable fees and expenses of its counsel; and
SECOND: Subject to Article Eleven, to the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of
that series shall have made written request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 90 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee
during such 90-day period by the Holders of a majority in principal amount of the Outstanding
Securities of that series;
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it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and
to institute suit for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture,
and
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing the time, method or place of
conducting any such proceeding or exercising any such trust or power, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date shall be
established for determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the Trustee receives
such notice. The Holders on such record date, or their duly designated proxies, and only such
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Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, however, that unless the Holders of a majority in principal
amount of the Outstanding Securities of such series shall have joined in such notice prior to the
day which is the ninetieth day after such record date, such notice shall automatically and without
further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, (i) after expiration of such 90-day period,
a new notice identical to a notice which has been cancelled pursuant to the proviso to the
preceding sentence or (ii) during any such 90-day period, a new direction contrary to or different
from such direction, in either of which events a new record date shall be established pursuant to
the provisions of this Section 512.
Section 513. Waiver of Past Defaults.
Subject to Section 502, the Holders of a majority in principal amount of the Outstanding
Securities of any series may, by notice to the Trustee, waive an existing or past default with
respect to the Securities of such series and its consequences, except a default
(1) in the payment of principal of (or premium, if any) or interest on any Security of such
series, or in the deposit of any sinking fund payment when and as due, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be
modified or amended without the consent of the Holder of each Outstanding Security of such
series affected.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to waive any past default hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any default hereunder, whether or not such Holders remain Holders after such
record date; provided, however, that unless such majority in principal amount shall have waived
such default prior to the date which is the ninetieth day after such record date, any such waiver
previously given shall automatically and without further action by any Holder be cancelled and of
no further effect.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit instituted by the Company,
to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder for the enforcement of the payment of the principal
of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on or after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will
not hinder, delay or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default known to the Trustee,
(1) the Trustee undertakes to perform such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture.
(b) In case an Event of Default known to the Trustee has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that
(1) this Subsection shall not be construed to limit the effect of Subsection (a) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of the Holders of a majority in principal
amount of the outstanding Securities of any series, determined as provided in Section 512,
relating to the time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture
with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this Indenture or any
supplemental indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section and Section 603.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder known to the Trustee with respect
to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of
such series, as their names and addresses appear in the Security Register, notice of such default
hereunder known to the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal of (or premium, if
any) or interest on any Security of such series or in the payment of any sinking fund installment
with respect to Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that the withholding of
such notice is in the interest of the Holders of Securities of such series; and provided, further,
that in the case of any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term default means any event which
is, or after notice
or lapse of time or both would become, an Event of Default with respect to Securities of such
series.
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Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, 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 or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order or as otherwise expressly provided herein and
any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon an Officers Certificate;
(d) the Trustee may consult with counsel of its own choosing and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested
in it by this Indenture at the request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper
or document, but the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;
(h) the 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 Indenture; and
(i) the Trustee shall not be charged with knowledge of any default or Event of Default with
respect to the Securities unless either (1) a Responsible Officer shall have actual knowledge of
such default or Event of Default or (2) written notice of such default or Event of Default shall
have been given to the Trustee at the Corporate Trust Office by the Company or by any Holder of
the Securities; and
(j) the grant to the Trustee of any permissive right or power hereunder or in any
supplemental indenture shall not be construed to ignore a duty to set; and
(k) in no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action.
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Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustees certificates of
authentication, shall be taken as the statements of the Company, and the Trustee or any
Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar
or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder (including the reasonable
compensation and the expenses and disbursements of its counsel), including the costs and
expenses of defending itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an Event of Default
specified in Section 501(5) or 501(6), the expenses (including the reasonable charges and expenses
of its counsel) and the compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency, reorganization, or
other similar law.
To secure the Companys payment obligations in this Section 607, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the Trustee, in its capacity
as Trustee, except money or property held in trust to pay principal of, premium, if any, and
interest on particular Securities.
The provisions of this Section 607 shall survive the resignation or removal of the Trustee and
the termination of this Indenture.
The Trustee shall be entitled to exercise or enforce its rights to payment under this Section 607 whether or not an Event of Default may exist.
Section 608. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be subject to the
provisions of Section 310(b) of the Trust Indenture Act during the period of time provided for
therein. In determining whether the Trustee has a
28
conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded this Indenture with respect to Securities of
any particular series of Securities other than that series.
Nothing herein shall prevent the Trustee from filing with the Securities and Exchange
Commission the application referred to in the second to last paragraph of Section 3(b) of the Trust
Indenture Act.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of one or more series by
giving written notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Securities of any series by Act
of the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for at least six months,
or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after
written request thereof or by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect
to all securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Securities of any particular
series)
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and shall comply with the applicable requirements of Section 611. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any Series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any
Series shall have been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the Trustee with
respect to the Securities of any series and each appointment of a successor Trustee with respect to
the Securities of any series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) and (b) of this Section, as the case
may be.
(d) No successor Trustee shall accept its appointment unless at the time of such acceptance
such successor
Trustee shall be qualified and eligible under this Article.
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Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In
case any Securities shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the same effect as if
such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act with respect to each
series of Securities for which it is Trustee.
Section 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Company may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the Trustee or the
Trustees certificate of authentication, such reference shall be deemed to include authentication
and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall at all times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized under such laws to act
as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate
agency or corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Company may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Trustee. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Company may
appoint a successor Authenticating Agent and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
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The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition to the Trustees certificate of
authentication, an alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
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THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
as Trustee
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By
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As Authenticating Agent
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By
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Authorized Signatory
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ARTICLE SEVEN
Holders Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than June 30 and December 31 in each year, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the Holders as of the
preceding June 15 or December 15, as the case may be, and
(b) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its capacity as
Security Registrar; provided that the Company shall not be obligated to provide such a list of
Holders at any time that such list would not differ from the last such list provided by the Company
to the Trustee under this Section 701.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the
names and addresses of Holders contained in the most recent list furnished to the Trustee as
provided in Section 701 and the names and addresses of Holders received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as applicants) apply in writing to the
Trustee, and furnish the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with the other Holders with respect to their
rights under this Indenture or under the Securities and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at the time by the Trustee
in accordance with Section 702(a), or
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(ii) inform such applicants as to the approximate number of Holders whose names and
addresses appear in the information preserved at the time by the Trustee in accordance with
Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such information, the
Trustee shall, upon the written request of such applicants, mail to each Holder whose name and
address appear in the information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the Commission, together with a
copy of the material to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interest of the Holders or would be in
violation of applicable law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of
an order sustaining one or more of such objections, the Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such Holders with
reasonable promptness after the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company
and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall
be held accountable by reason of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 702(b).
Section 703. Reports by Trustee.
(a) Within 60 days of each May 15, beginning with the May 15 immediately following the date of
this Indenture the Trustee shall transmit to Holders such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust Indenture Act in the manner
provided pursuant thereto.
(b) A copy of each such report shall, at time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which the Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is
not required to file information, documents or reports pursuant to either of said Sections, then
it shall file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13 of the Exchange
Act in respect of a security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations; and
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(3) transmit by mail to all Holders, as their names and addresses appear in the Security
Register, within 30 days after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section as may be required by rules and regulations prescribed from time to
time by the Commission.
The filing of such reports with the Trustee shall not impose upon the Trustee an obligation
to review, and notwithstanding any term hereof to the contrary shall not be construed to charge
the Trustee with notice or knowledge of, the contents of such reports. Such filings shall be
solely for the convenience of the Holders, in order to make such reports accessible to the
Holders.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, and the Company shall
not permit any Person to consolidate with or merge into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America, any State thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest on all the Securities and the performance of every covenant
of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or a Subsidiary as a result of such transaction as having
been incurred by the Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such conveyance, transfer or
lease, properties or assets of the Company would become subject to a mortgage, pledge, lien,
security interest or other encumbrance which would not be permitted by this Indenture, the
Company or such successor corporation or Person, as the case may be, shall take such steps as
shall be necessary effectively to secure the Securities equally and ratably with (or prior to)
all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section 802. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the Company into any other Person or
any conveyance, transfer or lease of the properties and assets of the Company substantially as an
entirety in accordance with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be relieved
of all obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the assumption by any
such successor of the covenants of the Company herein and in the Securities; or
(2) to add to or modify the covenants of the Company for the benefit of the Holders of all
or any series of Securities (and if such covenants are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of Default are to be for
the benefit of less than all series of Securities, stating that such Events of Default are being
included solely for the benefit of such series) or modify any existing Events of Default in a
manner that is not adverse to Holders of Securities or such series, as the case may be; or
(4) to add to or change any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the issuance of Securities in bearer form, registerable or not
registerable as to principal, and with or without interest coupons, or to permit or facility the
issuance of Securities in uncertificated form; or
(5) to change or eliminate any of the provisions of this Indenture, provided that any such
change or elimination shall become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture which is entitled to the
benefit of such provision; or
(6) to establish the form or terms of Securities of any series as permitted by Sections 201
and 301; or
(7) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 611(b); or
(8) to add to or change any of the provisions of this Indenture with respect to any
Securities that by their terms may be converted into securities or other property other than
Securities of the same series and of like tenor, in order to permit or facilitate the issuance,
payment or conversion of such Securities; or
(9) to qualify or maintain qualification of this Indenture under the Trust Indenture Act;
or
(10) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein or in any supplemental indenture, or
to make any other provisions with respect to matters or questions arising under this Indenture,
provided such action shall not adversely affect the interests of the Holders of Securities of
any series in any material respect; or
(11) to make any changes to the Indenture in order to conform the Indenture to the final
prospectus supplement provided to investors in connection with the offering of any series of
Securities.
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Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of a majority in principal amount of the Outstanding
Securities affected by such supplemental indenture voting together as a single class, by Act of
said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place
of Payment where, or the coin or currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series,
the consent of whose Holders is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided for in this Indenture,
or
(3) modify any of the provisions of this Section, Section 513 or Section 1006, except to
increase any such percentage or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to the Trustee and concomitant changes
in this Section and Section 1006, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to consent to any indenture supplemental hereto. If a record date
is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, however, that unless such consent shall have become
effective by virtue of the requisite percentage having been obtained prior to the date which is the
ninetieth day after such record date, any such consent previously given shall, automatically and
without further action by any Holder, be cancelled and of no further effect.
It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, in addition to the documents required by Section 102, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental indenture which
affects the Trustees own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in
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accordance therewith, and such supplemental indenture shall form a part of this Indenture for
all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities
of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of (and premium, if any) and interest on the Securities of
that series in accordance with the terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities of any series for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities of that series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so to act.
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Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, on or before
each due date of the principal of (and premium, if any) or interest on any Securities of that
series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and premium, if any) or
interest on Securities of that series in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment of principal (and premium, if any) or
interest on the Securities of that series; and
(3) at any time during the continuance of any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on any Security of any
series and remaining unclaimed for one year after such principal (and premium, if any) or interest
has become due and payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and all licenses and permits
material to the normal conduct of its business; provided, however, that the Company shall not be
required to preserve any such right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.
Section 1005. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company ending after the date hereof, an Officers Certificate, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of Sections 1001 to 1006, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Section 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term, provision or
condition set forth in Sections 1002 to 1005, inclusive, if before the time for such compliance the
Holders of a majority in principal amount of the Outstanding Securities shall, by Act of such
Holders, waive compliance in such instance with such term, provision or condition. In the event
that there shall be included in this Indenture any covenant, other than a
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covenant to pay principal, premium (if any) and interest, solely for the benefit of one or
more, but less than all, series of Securities, then, unless otherwise expressly provided with
respect to such covenant, the Company may similarly omit in any particular instance to comply with
any term, provision or condition of such covenant if before the time of such compliance the holders
of a majority in principal amount of all Outstanding Securities entitled to the benefit of such
covenant, by Act of such Holders, acting together as a single class, waive compliance in such
instance with such term, provision or condition. No such waiver contemplated by this Section 1006
shall extend to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall remain in full
force and effect.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to waive any such term, provision or condition. If a record date
is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to waive any such term, provision or condition hereunder, whether or not such
Holders remain Holders after such record date; provided, however, that unless the Holders of at
least a majority in principal amount of (i) the Outstanding Securities or (ii) the Outstanding
Securities of such series, as the case may be, shall have waived such term, provision or condition
prior to the date which is 90 days after such record date, any such waiver previously given shall
automatically and without further action by any Holder be cancelled and of no further effect.
ARTICLE ELEVEN
Subordination of Securities
Section 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this
Article (subject to Article Four), the payment of the principal of and interest on each and all of
the Securities are hereby expressly made subordinate and subject in right of payment to the prior
payment in full in cash of all Senior Indebtedness.
This Article Eleven shall constitute a continuing offer to all persons who become holders of,
or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness and such holders are made obligees hereunder and any one or more of
them may enforce such provisions. Holders of Senior Indebtedness need not prove reliance on the
subordination provisions hereof.
Section 1102. Payment Over of Proceeds Upon Dissolution, Etc.
Upon any payment or distribution of assets of the Company to creditors upon (a) any insolvency
or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets or liabilities of the Company, then and in any such
event specified in (a), (b) or (c) above (each such event, if any, herein sometimes referred to as
a Proceeding);
(1) the holders of Senior Indebtedness shall be entitled to receive payment in full in cash
of all amounts due on or to become due on or in respect of all Senior Indebtedness, before the
Holders of the Securities are entitled to receive any payment or distribution of any kind or
character whether in cash, property or securities (including any payment or distribution which
may be payable or deliverable to Holders of the Securities made in respect of any other
Indebtedness of the Company subordinated to the payment of the Securities, such payment or
distribution being hereinafter referred to as a Junior Subordinated Payment), on account of
the principal of or interest on the Securities or on account of any purchase, redemption or
other acquisition of Securities by the Company, any Subsidiary of the Company, the Trustee or
any Paying Agent (all such payments, distributions, purchases, redemptions and acquisitions,
whether or not in connection with a Proceeding, herein referred to, individually and
collectively, as a Securities Payment); and
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(2) any payment or distribution of assets of the Company of any kind or character, whether
in cash, property or securities, by set-off or otherwise, to which the Holders of the Securities
or the Trustee would be entitled but for the provisions of this Article (including, without
limitation, any Junior Subordinated Payment) shall be paid by the liquidating trustee or agent
or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness held
or represented by each, to the extent necessary to make payment in full in cash of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment to the holders of
such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or
the Holder of any Security shall have received in connection with any Proceeding any Securities
Payment before all Senior Indebtedness is paid in full or payment thereof provided for in cash,
then and in such event such Securities Payment shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full in cash after giving effect to any concurrent payment to or for the holders of Senior
Indebtedness.
For purposes of this Article only, the words any payment or distribution of any kind or
character, whether in cash, property or securities shall not be deemed to include a payment or
distribution of stock or securities of the Company provided for by a plan of reorganization or
readjustment authorized by an order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or of any other corporation provided
for by such plan of reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Indebtedness to substantially the same extent, or
to a greater extent than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer of all or
substantially all of its properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article Eight shall not be deemed a Proceeding for the purposes of this
Section if the Person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer such properties and assets as an entirety, as the
case may be, shall, as a part of such consolidation, merger, conveyance or transfer, comply with
the conditions set forth in Article Eight.
Section 1103. No Payment When Senior Indebtedness in Default.
In the event that any Senior Payment Default (as defined below) shall have occurred, then no
Securities Payment shall be made, nor shall any property of the Company or any Subsidiary of the
Company be applied to the purchase, acquisition, retirement or redemption of the Securities, unless
and until such Senior Payment Default shall have been cured or waived in writing or shall have
ceased to exist or all amounts then due and payable in respect of such Senior Indebtedness
(including amounts that have become and remain due by acceleration) shall have been paid in full in
cash. Senior Payment Default means any default in the payment of principal of (or premium, if
any) or interest on any Senior Indebtedness when due, whether at the Stated Maturity of any such
payment or by declaration of acceleration, call for redemption, mandatory payment or prepayment or
otherwise.
In the event that any Senior Nonmonetary Default (as defined below) shall have occurred and be
continuing, then, upon the receipt by the Company and the Trustee of written notice of such Senior
Nonmonetary Default from the holder of such Senior Indebtedness (or the agent, trustee or
representative thereof), no Securities Payment shall be made, nor shall any property of the Company
or any Subsidiary of the Company be applied to the purchase, acquisition, retirement or redemption
of the Securities, during the period (the Payment Blockage Period) commencing on the date of such
receipt of such written notice and ending (subject to any blockage of payments that may then or
thereafter be in effect as the result of any Senior Payment Default) on the earlier of (i) the date
on which the Senior Indebtedness to which such Senior Nonmonetary Default relates is discharged or
such Senior Nonmonetary Default shall have been cured or waived in writing or shall have ceased to
exist and any acceleration of Senior Indebtedness to which such Senior Nonmonetary Default relates
shall have been rescinded or annulled or (ii) the 179th day after the date of such receipt of such
written notice. No more than one Payment Blockage Period
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may be commenced with respect to the Securities during any period of 360 consecutive days and
there shall be a period of at least 181 consecutive days in each period of 360 consecutive days
when no Payment Blockage Period is in effect. Following the commencement of any Payment Blockage
Period, the holders of any Senior Indebtedness will be precluded from commencing a subsequent
Payment Blockage Period until the conditions set forth in the preceding sentence are satisfied. For
all purposes of this paragraph, no Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any Payment Blockage Period with respect to the Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis for the commencement of a
subsequent Payment Blockage Period by holders of Senior Indebtedness or their representatives
unless such Senior Nonmonetary Default shall have been cured for a period of not less than 90
consecutive days. Senior Nonmonetary Default means the occurrence or existence and continuance of
any default (other than a Senior Payment Default) or any event which, after notice or lapse of time
(or both), would become an Event of Default (other than a Senior Payment Default), under the terms
of any instrument or agreement pursuant to which any Senior Indebtedness is outstanding, permitting
(after notice or lapse of time or both) one or more holders of such Senior Indebtedness (or a
trustee or agent on behalf of the holders thereof) to declare such Senior Indebtedness due and
payable prior to the date on which it would otherwise become due and payable.
In the event that, notwithstanding the foregoing, the Company shall make any payment to the
Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and
if such fact shall, at or prior to the time of such payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any Securities Payment with respect to which
Section 1102 hereof would be applicable.
Section 1104. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities
shall prevent the Company, at any time except during the pendency of any Proceeding referred to in
Section 1102 hereof or under the conditions described in Section 1103 hereof, from making
Securities Payments.
Section 1105. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness, the Holders of the
Securities shall be subrogated (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is subordinated to indebtedness of the Company to substantially
the same extent as the Securities are subordinated and is entitled to like rights of subrogation)
to the rights of the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the principal of and
interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the Securities, be deemed to
be a payment or distribution by the Company to or on account of the Senior Indebtedness.
Section 1106. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders on the one hand and the holders of Senior Indebtedness on the other
hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute
and unconditional (and which, subject to the rights under this Article of the holders of Senior
Indebtedness, is intended to rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities the principal of and interest on the Securities as and when
the same shall become due and payable in accordance with their terms; or (b) affect the relative
rights against the Company of the Holders of the Securities and creditors of the Company other than
the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under this Indenture,
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subject to the rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the Trustee or such
Holder.
Section 1107. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any and all such
purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of
the Company whether in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the Indebtedness of the Company owing to such Holder in
the form required in such proceedings and the causing of such claim to be approved. If the Trustee
does not file a proper claim at least 30 days before the expiration of the time to file such claim,
then the holders of the Senior Indebtedness and their agents, trustees or other representatives are
authorized to do so (but shall in no event be liable for any failure to do so) for and on behalf of
the Holders of the Securities.
Section 1108. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do
any one or more of the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) permit the Company to borrow, repay and then reborrow any
or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness; (iv) release any Person
liable in any manner for the collection of Senior Indebtedness; (v) exercise or refrain from
exercising any rights against the Company and any other Person; and (vi) apply any sums received by
them to Senior Indebtedness.
Section 1109. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof from the Company, any
holder of Senior Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of Section 601 hereof,
shall be entitled in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at least three Business
Days prior to the date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on any Security), then,
anything herein contained to the contrary notwithstanding, but without limiting the rights and
remedies of the holders of Senior Indebtedness or any trustee, fiduciary or agent therefor, the
Trustee shall have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any notice to the contrary
which may be received by it within two Business Days prior to such date. Any notice required or
permitted to be given to the Trustee by a holder of Senior Indebtedness or by any agent, trustee or
representative thereof shall be in writing and shall be sufficient for every purpose hereunder if
in writing and either (i) sent via facsimile to the Trustee, the receipt of which shall be
confirmed via telephone, or (ii) mailed, first class postage prepaid, or sent by overnight carrier,
to the Trustee addressed to its Corporate Trust
42
Office or to any other address furnished in writing to such holder of Senior Indebtedness for
such purpose by the Trustee.
Subject to the provisions of Section 601 hereof, the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor to establish that such notice has been
given by a holder of Senior Indebtedness or a trustee, fiduciary or agent therefor). In the event
that the Trustee determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Notwithstanding anything else contained herein, no notice, request or other communication to
or with the Trustee shall be deemed given unless received by a Responsible Officer at the Corporate
Trust Office.
Section 1110. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 601 hereof, and the Holders of the Securities shall
be entitled to rely upon any order or decree entered by any court of competent jurisdiction in
which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, provided that the foregoing shall apply only if such court has been
apprised of the provisions of this Article.
Section 1111. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Company or to any other Person cash, property
or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
Section 1112. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustees Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 607 hereof.
Section 1113. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term Trustee as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however, that Section 1111
hereof shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts
as Paying Agent.
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ARTICLE TWELVE
Redemption of Securities
Section 1201. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.
Section 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the Securities of any
series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be redeemed. In the
case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish
the Trustee with an Officers Certificate evidencing compliance with such restriction.
Section 1203. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the particular Securities to
be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for Securities of that series
or any integral multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to
be redeemed only in part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1204. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the outstanding Securities of any series are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and payable upon each
such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on
and after said date,
(5) the place or places where such Securities are to be surrendered for payment of the
Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
44
Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Companys request, by the Trustee in the name and at the expense of
the Company.
Section 1205. Deposit of Redemption Price.
On or prior to 10:00 a.m., New York City time, on any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to
pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
Section 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.
Section 1207. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE THIRTEEN
Sinking Funds
Section 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section 301 for Securities
of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a mandatory sinking fund payment, and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an optional sinking fund payment. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 1302.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
Section 1302. Satisfaction of Sinking Fund Payments with Securities.
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The Company (1) may deliver Outstanding Securities of a series (other than any previously
called for redemption) and (2) may apply as a credit Securities of a series which have been
redeemed either at the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 1303. Redemption of Securities for Sinking Fund.
Not less than 90 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers Certificate specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1302
and will also deliver to the Trustee any Securities to be so delivered. Not less than 60 days
before each such sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 1203 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company in the manner
provided in Section 1204. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1206 and 1207.
ARTICLE FOURTEEN
Defeasance and Covenant Defeasance
Section 1401. Applicability of Article; Companys Option to Effect Defeasance or Covenant
Defeasance.
If pursuant to Section 301 provision is made for either or both of (a) defeasance of the
Securities of a series under Section 1402 or (b) covenant defeasance of the Securities of a series
under Section 1403, then the provisions of such Section or Sections, as the case may be, together
with the other provisions of this Article Fourteen, shall be applicable to the Securities of such
series, and the Company may at its option by Board Resolution, at any time, with respect to the
Securities of such series, elect to have either Section 1402 (if applicable) or Section 1403 (if
applicable) be applied to the Outstanding Securities of such series upon compliance with the
conditions set forth below in this Article Fourteen.
Section 1402. Defeasance and Discharge.
Upon the Companys exercise of the above option applicable to this Section, the Company shall
be deemed to have been discharged from its obligations with respect to the Outstanding Securities
of such series, and the provisions of Article Eleven shall cease to be effective, on and after the
date the conditions precedent set forth below are satisfied (hereinafter, defeasance). For this
purpose, such defeasance means that the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Outstanding Securities of such series to
receive, solely from the trust fund described in Section 1404 as more fully set forth in such
Section, payments of the principal of (and premium, if any) and interest on such Securities when
such payments are due, (B) the Companys obligations with respect to such Securities under Sections
304, 305, 306, 1002 and 1003 and such obligations as shall be ancillary thereto, (C) the rights,
powers, trusts, duties, immunities and other provisions in respect of the Trustee hereunder and (D)
this Article Fourteen. Subject to compliance with this Article Fourteen, the Company may exercise
its option under this Section 1402 notwithstanding the prior exercise of its option under Section
1403 with respect to the Securities of such series. Following a defeasance, payment of the
Securities of such series may not be accelerated because of an Event of
Default.
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Section 1403. Covenant Defeasance.
Upon the Companys exercise of the above option applicable to this Section, the Company shall
be released from its obligations under (i) the occurrence of an event specified in Section 501(4)
shall not be deemed an Event of Default,(ii) the provisions of Article Eleven shall cease to be
effective and (iii) any other section, clause or provision applicable to such Securities that are
determined pursuant to Section 301 to be subject to this provision with respect to the Outstanding
Securities of such series on and after the date the conditions precedent set forth below are
satisfied (hereinafter, covenant defeasance). For this purpose, such covenant defeasance means
that, with respect to the Outstanding Securities of such series, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation set forth in any
such Section, Clause or Article whether directly or indirectly by reason of any reference elsewhere
herein to any such Section, Clause or Article or by reason of any reference in any such Section,
Clause or Article to any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby. Following a covenant defeasance, payment
of the Securities of such series may not be accelerated because of or by reference to the Sections
specified above in this Section 1403.
Section 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to application of either Section 1402 or
Section 1403 to the Outstanding Securities of such series:
(1) the Company shall irrevocably have deposited or caused to be deposited with the Trustee
(or another trustee satisfying the requirements of Section 609 who shall agree to comply with
the provisions of this Article Fourteen applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day before the due date
of any payment, money in an amount, or (C) a combination thereof, sufficient, without
reinvestment, in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (i)
the principal of (and premium, if any) and interest on the Outstanding Securities of such series
to maturity or redemption, as the case may be, and (ii) any mandatory sinking fund payments or
analogous payments applicable to the Outstanding Securities of such series on the due dates
thereof. Before such a deposit the Company may make arrangements satisfactory to the Trustee for
the redemption of Securities at a future date or dates in accordance with Article Eleven, which
shall be given effect in applying the foregoing. For this purpose, U.S. Government Obligations
means securities that are (x) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of such depository
receipt, provided that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) No Event of Default or event which with notice or lapse of time or both would become an
Event of Default with respect to the Securities of such series shall have occurred and be
continuing (A) on the date of such deposit or (B) insofar as subsections 501(5) and (6) are
concerned, at any time during the period ending on the 121st day after the date of such deposit
or, if longer, ending on the day following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it being understood that the condition in
this clause (B) is a condition subsequent and shall not be deemed satisfied until the expiration
of such period).
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(3) Such defeasance or covenant defeasance shall not (A) cause the Trustee for the
Securities of such series to have a conflicting interest as defined in Section 608 or for
purposes of the Trust Indenture Act with respect to any securities of the Company or (B) result
in the trust arising from such deposit to constitute, unless it is qualified as, a regulated
investment company under the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound.
(5) In the case of an election under Section 1402, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture
there has been a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same time as would have been the case if such defeasance
had not occurred.
(6) In the case of an election under Section 1403, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of
such series will not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such covenant defeasance
had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in compliance with any
additional terms, conditions or limitations which may be imposed on the Company in connection
therewith pursuant to Section 301.
(8) No event or condition shall exist that, pursuant to the provisions of Article Eleven,
would prevent the Company from making payments of the principal of (and any premium) or interest
on the Securities of such series on the date of such deposit or at any time on or prior to the
90th day after the date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).
(9) The Company shall have delivered to the Trustee an Opinion of Counsel substantially to
the effect that (i) the trust funds deposited pursuant to this Section will not be subject to
any rights of holders of Senior Indebtedness, including those arising under Article Eleven, and
(ii) after the 90th day following the deposit, the trust funds will not be subject to the effect
of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors
rights generally, except that if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, no opinion is given as to the
effect of such laws on the trust funds except the following: (A) assuming such trust funds
remained in the possession of the trustee with whom such funds were deposited prior to such
court ruling to the extent not paid to Holders of such Securities, such trustee would hold, for
the benefit of such Holders, a valid and perfected security interest in such trust funds that is
not avoidable in bankruptcy or otherwise, (B) such Holders would be entitled to receive adequate
protection of their interests in such trust funds if such trust funds were used and (C) no
property, rights in property or other interests granted to such trustee for the Trustee or such
Holders in exchange for or with respect to any such funds would be subject to any prior rights
of holders of Senior Indebtedness, including those arising under Article Eleven.
(10) The Company shall have delivered to the Trustee an Officers Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for relating to either
the defeasance under Section 1402 or the covenant defeasance under Section 1403 (as the case may
be) have been complied with.
Section 1405. Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government
Obligations
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(including the proceeds thereof) deposited with the Trustee (or other qualifying trustee
collectively, for purposes of this Section 1405, the Trustee) pursuant to Section 1404 in respect
of the Outstanding Securities of such series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (but not including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law. Money and U.S. Government
Obligations (including the proceeds thereof) so held in trust shall not be subject to the
provisions of Article Eleven, provided that the applicable conditions of Section 1404 have been
satisfied.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the money or U.S. Government Obligations deposited pursuant to Section 1404
or the principal and interest received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon Company Request any money or U.S. Government Obligations held by it
as provided in Section 1404 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to effect an equivalent
defeasance or covenant defeasance.
Section 1406. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance with Section
1402 or 1403 by reason of any order or judgment or any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Companys obligations under the
Securities of such series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Fourteen until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 1402 or 1403; provided, however, that if the
Company makes any payment of principal of (and premium, if any) any such Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or the Paying Agent.
This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.
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THE TRAVELERS COMPANIES, INC.
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By
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Name:
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Title:
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THE BANK OF NEW YORK TRUST COMPANY,
N.A., as Trustee
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By
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Name:
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Title:
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STATE OF MINNESOTA
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ss.:
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COUNTY OF RAMSEY
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On the ___th day of ___, 2007, before me personally came [ ], to me known, who, being
by me duly sworn, did depose and say that he is a [ ] of The Travelers Companies, Inc., one of
the corporations described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate seal; that it was
so affixed by authority of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
[NOTARIAL SEAL]
Notary Public
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STATE OF NEW YORK
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COUNTY OF NEW YORK
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)
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On the ___th day of ___, 2007, before me personally came [ ], to me known, who, being
by me duly sworn, did depose and say that she is a [ ] of The Bank of New York Trust
Company,N.A. one of the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said corporation, and that
she signed her name thereto by like authority.
[NOTARIAL SEAL]
Notary Public