-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ue91h8ZN6SsxjBVCyKr+SV2Sg1DgYKrBrZswRiXbHn+bF+fYw+Nl9ZRufC7fStoW eJBduHCGI9dzs3suHlRDAA== 0000950131-97-000597.txt : 19970225 0000950131-97-000597.hdr.sgml : 19970225 ACCESSION NUMBER: 0000950131-97-000597 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 26 FILED AS OF DATE: 19970206 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AON CORP CENTRAL INDEX KEY: 0000315293 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] IRS NUMBER: 363051915 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-21237 FILM NUMBER: 97518853 BUSINESS ADDRESS: STREET 1: 123 N WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3127013000 FORMER COMPANY: FORMER CONFORMED NAME: COMBINED INTERNATIONAL CORP DATE OF NAME CHANGE: 19870504 S-4 1 FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 6, 1997 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- AON CORPORATION AON CAPITAL A (EXACT NAME OF REGISTRANT AS SPECIFIED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) IN ITS TRUST AGREEMENT) DELAWARE DELAWARE (STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION) 6399 6719 (PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER) 36-3051915 APPLIED FOR (I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.) 123 N. WACKER DRIVE C/O AON CORPORATION CHICAGO, ILLINOIS 60606 123 N. WACKER DRIVE (312) 701-3000 CHICAGO, ILLINOIS 60606 (ADDRESS, INCLUDING ZIP CODE, AND (312) 701-3000 TELEPHONE NUMBER, INCLUDING AREA CODE, (ADDRESS, INCLUDING ZIP CODE, AND OF REGISTRANT'S PRINCIPAL EXECUTIVE TELEPHONE NUMBER, INCLUDING AREA CODE, OFFICES) OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) RAYMOND I. SKILLING 123 N. WACKER DRIVE CHICAGO, ILLINOIS 60606 (312) 701-3000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE OF EACH REGISTRANT) COPY TO: JIM L. KAPUT SIDLEY & AUSTIN ONE FIRST NATIONAL PLAZA CHICAGO, ILLINOIS 60603 (312) 853-7000 ---------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box. [_] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM MAXIMUM TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE - --------------------------------------------------------------------------------- Capital Securities of Aon Capital A......... $800,000,000 100% $800,000,000 $242,425 - --------------------------------------------------------------------------------- Junior Subordinated Deferrable Interest Debentures of Aon Corporation(2)........ -- -- -- N/A - --------------------------------------------------------------------------------- Aon Corporation Guarantee with respect to Capital Securities(3)......... -- -- -- N/A - --------------------------------------------------------------------------------- Total(4)............... $800,000,000(5) 100% $800,000,000(5) $242,425
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (1) Estimated solely for the purpose of computing the registration fee. (2) The Junior Subordinated Deferrable Interest Debentures issued by Aon Corporation on January 13, 1997 were originally purchased by Aon Capital A with the proceeds of the sale of the Capital Securities issued by Aon Capital A on January 13, 1997. No separate consideration will be received for the Junior Subordinated Deferrable Interest Debentures of Aon Corporation covered hereby (the "Junior Subordinated Debentures") distributed upon any liquidation of Aon Capital A. (3) No separate consideration will be received for the Aon Corporation Guarantee. (4) This Registration Statement is deemed to cover the Junior Subordinated Debentures, the rights of holders of Junior Subordinated Debentures under the Indenture related thereto, the rights of holders of Capital Securities of Aon Capital A under a Trust Agreement, the rights of holders of the Capital Securities under the Guarantee, the Expense Agreement entered into by Aon Corporation and certain backup undertakings as described herein. (5) Such amount represents the initial public offering price of the Aon Capital A Capital Securities to be exchanged hereunder and the principal amount of Junior Subordinated Debentures that may be distributed to holders of Capital Securities upon any liquidation of Aon Capital A. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997 PROSPECTUS AON CAPITAL A OFFER TO EXCHANGE ITS 8.205% CAPITAL SECURITIES WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 8.205% CAPITAL SECURITIES (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY AON CORPORATION THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED. Aon Capital A, a trust created under the laws of the State of Delaware (the "Trust"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus (as the same may be amended or supplemented from time to time, the "Prospectus") and in the accompanying Letter of Transmittal (which together constitute the "Exchange Offer"), to exchange up to $800,000,000 aggregate Liquidation Amount of its 8.205% Capital Securities (the "New Capital Securities") which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement (as defined under "Available Information") of which this Prospectus constitutes a part, for a like aggregate Liquidation Amount of its outstanding 8.205% Capital Securities (the "Old Capital Securities"), of which $800,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the Exchange Offer, Aon Corporation, a Delaware corporation (the "Company" or "Aon"), will exchange its guarantee of the payment of Distributions and payments on liquidation or redemption of the Old Capital Securities (the "Old Guarantee") for a like guarantee of the New Capital Securities (the "New Guarantee") and all of its 8.205% Junior Subordinated Deferrable Interest Debentures (the "Old Junior Subordinated Debentures"), of which $824,000,000 aggregate principal amount is outstanding, for a like aggregate principal amount of its 8.205% Junior Subordinated Deferrable Interest Debentures (the "New Junior Subordinated Debentures"), which New Guarantee and New Junior Subordinated Debentures also have been registered under the Securities Act. The Old Capital Securities, the Old Guarantee and the Old Junior Subordinated Debentures are collectively referred to herein as the "Old Securities" and the New Capital Securities, the New Guarantee and the New Junior Subordinated Debentures are collectively referred to herein as the "New Securities." The forms and terms of the New Securities are identical in all material respects to the respective forms and terms of the Old Securities, except that (i) the New Securities have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the Old Securities, (ii) the New Capital Securities will not provide for any increase in the Distribution rate thereon and (iii) the New Junior Subordinated Debentures will not provide for any increase in the interest rate thereon. See "Description of Securities" and "Description of Old Securities." The New Capital Securities are being offered for exchange, and the New Guarantee and New Junior Subordinated Debentures will be exchanged, in order to satisfy certain obligations of the Company and the Trust under three Registration Rights Agreements, each dated as of January 13, 1997 (collectively, the "Registration Rights Agreement"), among the Company, the Trust and the Initial Purchasers (as defined herein). In the event that the Exchange Offer is consummated, any Old Capital Securities that remain outstanding and the New Capital Securities issued in the Exchange Offer will vote together as a single class for purposes of determining whether holders of the requisite percentage in outstanding Liquidation Amount thereof have taken certain actions or exercised certain rights under the Amended and Restated Trust Agreement of the Trust. In the event the Exchange Offer is consummated, (i) the New Guarantee will apply to any Old Capital Securities that remain outstanding and to any New Capital Securities issued in the Exchange Offer, (ii) the Old Junior Subordinated Debentures will be retired and canceled and (iii) the New Junior Subordinated Debentures will be issued to The Bank of New York, as Property Trustee under the Trust. ----------- SEE "RISK FACTORS" COMMENCING ON PAGE 17 FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER OLD CAPITAL SECURITIES IN THE EXCHANGE OFFER. ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA- TION TO THE CONTRARY IS A CRIMINAL OFFENSE. ----------- The date of this Prospectus is , 1997. Old Capital Securities may be tendered for exchange on or prior to 5:00 p.m., New York City time, on , 1997 (such time on such date being hereinafter called the "Expiration Date"), unless the Exchange Offer is extended by the Company and the Trust (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). Tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date. The Exchange Offer is not conditioned upon any minimum Liquidation Amount of Old Capital Securities being tendered for exchange. However, the Exchange Offer is subject to certain conditions which may be waived by the Company and the Trust in their sole discretion and to the terms and provisions of the Registration Rights Agreement. Old Capital Securities may be tendered for exchange in whole or in part having a Liquidation Amount of not less than $100,000 (100 Old Capital Securities) or any integral multiple of $1,000 Liquidation Amount (1 Old Capital Security) in excess thereof. The Company has agreed to pay all expenses of the Exchange Offer. See "The Exchange Offer--Fees and Expenses." Each New Capital Security will accumulate Distributions from the most recent Distribution Date (as defined in "Description of Securities--Description of Capital Securities-- Distributions") on the Old Capital Securities surrendered in exchange for such New Capital Securities or, if no Distributions have been paid or provided for on such Old Capital Securities, from January 1, 1997. As a result, holders of Old Capital Securities that are accepted for exchange will not receive accumulated Distributions on such Old Capital Securities for any period from and after the most recent Distribution Date on such Old Capital Securities or, if no Distributions have been paid or provided for on such Old Capital Securities, from and after January 1, 1997, and such holders will be deemed to have waived the right to receive any Distributions on such Old Capital Securities. This Prospectus, together with the Letter of Transmittal, is being sent to all registered holders of Old Capital Securities as of , 1997. Neither the Company nor the Trust will receive any cash or other proceeds from the issuance of the New Capital Securities offered hereby. No dealer- manager is being used in connection with this Exchange Offer. See "Use of Proceeds From Sale of Old Capital Securities" and "Plan of Distribution." As the context may require, unless expressly stated otherwise, (i) "Capital Securities" means the Old Capital Securities and, in the event the Exchange Offer is consummated, the New Capital Securities, (ii) "Junior Subordinated Debentures" means the Old Junior Subordinated Debentures and, in the event the Exchange Offer is consummated, the New Junior Subordinated Debentures, (iii) "Guarantee" means the Old Guarantee and, in the event the Exchange Offer is consummated, the New Guarantee and (iv) "Securities" means the Old Securities and, in the event the Exchange Offer is consummated, the New Securities. In addition, as used herein, (i) the "Indenture" means the Junior Subordinated Indenture dated as of January 13, 1997, as amended and supplemented from time to time, between the Company and The Bank of New York, as trustee (the "Debenture Trustee"), (ii) the "Trust Agreement" means the Amended and Restated Trust Agreement dated as of January 13, 1997 relating to the Trust among the Company, as Depositor, The Bank of New York, as Property Trustee (the "Property Trustee"), The Bank of New York (Delaware), as Delaware Trustee (the "Delaware Trustee"), the Administrative Trustees named therein (the "Administrative Trustees" and, collectively with the Property Trustee and Delaware Trustee, the "Issuer Trustees") and the holders, from time to time, of the Capital Securities, (iii) the "Guarantee Agreement" means the Capital Securities Guarantee Agreement dated as of January 13, 1997 (the "Old Guarantee Agreement") between the Company and The Bank of New York, as trustee (the "Guarantee Trustee"), and, in the event the Exchange Offer is consummated, the Capital Securities Guarantee Agreement to be entered into between the Company and the Guarantee Trustee (the "New Guarantee Agreement") relating to the Old Guarantee and the New Guarantee, respectively, and (iv) the "Expense Agreement" means the Agreement as to Expenses and Liabilities dated as of January 13, 1997 between the Company and the Trust. The Capital Securities represent undivided beneficial interests in the assets of the Trust. The Company is the owner of all of the beneficial interests represented by common securities of the Trust (the "Common Securities" and, collectively with the Capital Securities, the "Trust Securities"). The Bank of New York is the Property Trustee. The Trust exists for the purpose of issuing the Trust Securities and investing the proceeds thereof in the Junior Subordinated Debentures. The Junior Subordinated Debentures mature on January 1, 2027 2 (the "Stated Maturity"). The Capital Securities have a preference under certain circumstances with respect to cash distributions and amounts payable on liquidation, redemption or otherwise over the Common Securities. See "Description of Securities--Description of Capital Securities--Subordination of Common Securities." Holders of Capital Securities are entitled to receive preferential cumulative cash distributions and the holder of the Common Securities is entitled to receive cumulative cash distributions arising from the payment of interest on the Junior Subordinated Debentures accumulating from January 1, 1997 and payable semi-annually in arrears on the 1st day of January and July of each year, commencing July 1, 1997, at the annual rate of 8.205% of the Liquidation Amount of $1,000 per Capital Security and at the annual rate of 8.205% of the Liquidation Amount of $1,000 per Common Security ("Distributions"). The Company has the right to defer payments of interest on the Junior Subordinated Debentures at any time or from time to time for a period not exceeding 10 consecutive semi-annual periods with respect to each deferral period (each, an "Extension Period"), provided that no Extension Period may extend beyond the Stated Maturity or any earlier prepayment date. At any time following the termination of any Extension Period and the payment of all amounts then due, the Company may elect to begin a new Extension Period, subject to the foregoing requirements. If interest payments on the Junior Subordinated Debentures are so deferred, Distributions on the Capital Securities and on the Common Securities will also be deferred and the Company will not be permitted, subject to certain exceptions described herein, to declare or pay any cash distributions with respect to the Company's capital stock (which includes common and preferred stock) or to make any payment with respect to debt securities of the Company that rank on a parity with or junior to the Junior Subordinated Debentures. During an Extension Period, interest on the Junior Subordinated Debentures will continue to accrue (and the amount of Distributions to which holders of the Capital Securities are entitled will accumulate) at the rate of 8.205% per annum, compounded semi-annually, and holders of Capital Securities will be required to accrue interest income for United States federal income tax purposes. See "Description of Securities-- Description of Junior Subordinated Debentures--Option to Defer Interest Payments" and "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." The Company has, through the Guarantee, the Guarantee Agreement, the Trust Agreement, the Junior Subordinated Debentures, the Indenture and the Expense Agreement, taken together, fully, irrevocably and unconditionally guaranteed on a subordinated basis all of the Trust's obligations under the Capital Securities. See "Relationship Among the Capital Securities, the Junior Subordinated Debentures and the Guarantee--Full and Unconditional Guarantee." The Guarantee of the Company guarantees the payment of Distributions and payments on liquidation or redemption of the Capital Securities, but only in each case to the extent of funds held by the Trust, as described herein. See "Description of Securities--Description of Guarantee." If the Company does not make interest payments on the Junior Subordinated Debentures held by the Trust, the Trust will have insufficient funds to pay Distributions on the Capital Securities. The Guarantee does not cover payment of Distributions when the Trust does not have sufficient funds to pay such Distributions. In the event of a Debenture Event of Default (as defined in "Description of Securities--Description of Junior Subordinated Debentures--Debenture Events of Default") under the Indenture, a holder of Capital Securities may institute a legal proceeding directly against the Company to enforce payment of such Distributions to such holder. See "Description of Securities--Description of Junior Subordinated Debentures--Enforcement of Certain Rights By Holders of Capital Securities." The obligations of the Company under the Guarantee and the Junior Subordinated Debentures are unsecured and are subordinate and junior in right of payment to all Senior Indebtedness (as defined in "Description of Securities--Description of Junior Subordinated Debentures-- Subordination") of the Company. Senior Indebtedness of the Company includes existing and future senior debt, senior subordinated debt and subordinated debt of the Company. As of September 30, 1996, there was approximately $583 million of Senior Indebtedness of the Company outstanding. The Capital Securities are subject to mandatory redemption in whole but not in part (i) at the Stated Maturity upon repayment of the Junior Subordinated Debentures at a redemption price equal to the principal amount of, plus accrued interest on, the Junior Subordinated Debentures (the "Maturity Redemption Price") and (ii) contemporaneously with the optional prepayment by the Company of the Junior Subordinated Debentures upon the occurrence and continuation of a Tax Event or an Investment Company Event (each as 3 defined in "Risk Factors--Tax Event or Investment Company Event Redemption") at a redemption price equal to the Event Prepayment Price (as defined below) (the "Event Redemption Price"). The Maturity Redemption Price and the Event Redemption Price may be referred to herein as the "Redemption Price." See "Description of Securities--Description of Capital Securities--Redemption." The Junior Subordinated Debentures are prepayable prior to the Stated Maturity at the option of the Company at any time, in whole but not in part, upon the occurrence and continuation of a Tax Event or an Investment Company Event at the Event Prepayment Price equal to the greater of (a) 100% of the principal amount thereof or (b) as determined by the Quotation Agent (as defined in "Description of Securities--Description of Junior Subordinated Debentures--Tax Event or Investment Company Event Prepayment"), the sum of the present value of 100% of the principal amount that would be payable on January 1, 2027, together with the present values of scheduled payments of interest from the prepayment date to January 1, 2027, in each case, discounted to the prepayment date on a semi-annual basis (assuming a 360-day year consisting of twelve 30- day months) at the Adjusted Treasury Rate (as defined in "Description of Securities--Description of Junior Subordinated Debentures--Tax Event or Investment Company Event Prepayment"), plus, in each case, accrued interest thereon to but excluding the date of prepayment. The Event Prepayment Price may also be referred to herein as the "Prepayment Price." See "Description of Securities--Description of Junior Subordinated Debentures" and "--Tax Event or Investment Company Event Prepayment." The Company has the right to terminate the Trust at any time and, after satisfaction of liabilities to creditors of the Trust as required by applicable laws, cause the Junior Subordinated Debentures to be distributed to the holders of the Capital Securities in liquidation of the Trust subject to the Company having received an opinion of counsel to the effect that such distribution will not be a taxable event to holders of Capital Securities. See "Description of Securities--Capital Securities--Liquidation of the Trust and Distribution of Junior Subordinated Debentures" and "Certain Federal Income Tax Consequences--Distribution of Junior Subordinated Debentures to Holders of Capital Securities." Prior to the Exchange Offer, there has been only a limited secondary market and no public market for the Old Capital Securities. The New Capital Securities will be a new issue of securities for which there currently is no market. Although Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co., the initial purchasers of the Old Capital Securities (the "Initial Purchasers"), have advised the Company and the Trust that they currently intend to make a market in the New Capital Securities, the Initial Purchasers are not obligated to do so, and any market-making activity with respect to the New Capital Securities may be interrupted or discontinued at any time without notice. Accordingly, no assurance can be given that an active public or other market will develop for the New Capital Securities or as to the liquidity of or the trading market for the New Capital Securities. The Company and the Trust currently do not intend to apply for listing of the New Capital Securities on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. Any Old Capital Securities not tendered and accepted in the Exchange Offer will remain outstanding and will be entitled to the same rights and will be subject to the same limitations applicable thereto under the Trust Agreement (except for those rights which terminate upon consummation of the Exchange Offer). Following consummation of the Exchange Offer, the holders of any Old Capital Securities that remain outstanding will continue to be subject to all of the existing restrictions upon transfer thereof and neither the Company nor the Trust will have any further obligation to such holders (other than under certain limited circumstances) to provide for registration under the Securities Act of the Old Capital Securities held by them. To the extent that Old Capital Securities are tendered and accepted in the Exchange Offer, a holder's ability to sell untendered Old Capital Securities could be adversely affected. See "Risk Factors--Consequences of a Failure to Exchange Old Capital Securities." THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. 4 ---------------- FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA (THE "NORTH CAROLINA INSURANCE COMMISSIONER") NOR HAS THE NORTH CAROLINA INSURANCE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ---------------- THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 NEW CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF NEW CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH NEW CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH NEW CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH NEW CAPITAL SECURITIES. 5 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the Commission located at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material may also be accessed electronically by means of the Commission's home page on the Internet at http://www.sec.gov. In addition, such reports, proxy statements and other information can be inspected at the offices of the New York Stock Exchange on which certain of the Company's securities are listed. No separate financial statements of the Trust have been included herein. The Company and the Trust do not consider that such financial statements would be material to holders of the Capital Securities because the Trust is a newly formed special purpose entity, has no operating history or independent operations and is not engaged in and does not propose to engage in any activity other than holding as trust assets the Junior Subordinated Debentures and issuing the Trust Securities. See "Aon Capital A" and "Description of Securities." In addition, the Company does not expect that the Trust will file reports under the Exchange Act with the Commission. This Prospectus constitutes a part of a registration statement on Form S-4 (the "Registration Statement") filed by the Company and the Trust with the Commission under the Securities Act. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, and reference is hereby made to the Registration Statement and to the exhibits relating thereto for further information with respect to the Company and the New Securities. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company hereby incorporates by reference in this Prospectus the following reports filed with the Commission pursuant to Section 13 of the Exchange Act: (a) the Company's Annual Report on Form 10-K for the year ended December 31, 1995; (b) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996; and (c) the Company's Current Report on Form 8-K dated January 15, 1997. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the New Securities offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM AON CORPORATION, 123 NORTH WACKER DRIVE, CHICAGO, ILLINOIS 60606, TELEPHONE: (312) 701-3000, ATTENTION: TREASURER. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY , 1997. 6 Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. As used herein, the terms "Prospectus" and "herein" mean this Prospectus, including the documents incorporated or deemed to be incorporated herein by reference, as the same may be amended, supplemented or otherwise modified from time to time. Statements contained in this Prospectus as to the contents of any contract or other document referred to herein do not purport to be complete, and where reference is made to the particular provisions of such contract or other document, such provisions are qualified in all respects by reference to all of the provisions of such contract or other document. 7 SUMMARY The following summary is qualified in its entirety by the more detailed information appearing elsewhere in this Prospectus or incorporated by reference herein. AON CAPITAL A The Trust is a statutory business trust, created under Delaware law pursuant to the filing of a certificate of trust with the Delaware Secretary of State, which is governed by the Trust Agreement. The Trust's business and affairs are conducted by the Issuer Trustees: The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, and three individual Administrative Trustees who are employees or officers of or affiliated with the Company. The Trust exists for the exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using the proceeds from the sale of the Common Securities and Old Capital Securities to acquire the Old Junior Subordinated Debentures, (iii) exchanging the Old Junior Subordinated Debentures for New Junior Subordinated Debentures in the Exchange Offer pursuant to the Indenture and (iv) engaging in only those other activities necessary, convenient or incidental thereto (such as registering the transfer of Capital Securities). Accordingly, the Junior Subordinated Debentures will be the sole assets of the Trust, and payments by the Company under the Junior Subordinated Debentures and the Expense Agreement will be the sole revenues of the Trust. All of the Common Securities are owned by the Company. The principal executive office of the Trust is c/o Aon Corporation, 123 N. Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-3000. AON CORPORATION Aon Corporation (the "Company") is an insurance services holding company that comprises a family of insurance brokerage, consulting and consumer insurance companies. Through its insurance brokerage operations, the Company offers commercial insurance brokerage, alternative risk solutions, risk management, employee benefit and human resources consulting and managing general underwriting services. In addition, the Company's insurance underwriting businesses provide a variety of insurance products, including accident and health coverage, traditional life insurance, extended warranties and credit insurance. The Company's revenues were $3.5 billion in 1995 and $2.8 billion for the nine-month period ended September 30, 1996. Based on 1995 insurance brokerage and consulting revenues and without giving effect to the acquisition of Alexander & Alexander Services Inc. ("A&A"), management believes that the Company is the second largest insurance brokerage company in the world. The principal executive offices of the Company are located at 123 N. Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701- 3000. ACQUISITION OF ALEXANDER & ALEXANDER On January 15, 1997, Subsidiary Corporation, Inc. ("Purchaser"), a wholly owned subsidiary of the Company, consummated its cash tender offer (the "Offer") for all the outstanding shares of Common Stock, par value $1.00 per share (the "Common Stock"), and associated preferred stock purchase rights (collectively, the "Shares"), of A&A at a price of $17.50 net cash per Share. Pursuant to the Offer, Purchaser acquired approximately 44,293,552 Shares, or 97% of the outstanding Shares. All Shares validly tendered and not withdrawn before expiration of the Offer at 12:00 midnight, New York City time, on January 14, 1997, were accepted for payment, including approximately 1,846,882 Shares tendered pursuant to guaranteed delivery 8 procedures. The Offer was made pursuant to the Agreement and Plan of Merger, dated December 11, 1996, as amended (the "Merger Agreement"), among the Company, Purchaser and A&A. On December 11, 1996, the Company and American International Group, Inc. ("AIG") entered into the Stock Purchase and Sale Agreement ("Stock Purchase and Sale Agreement"). Pursuant to the Stock Purchase and Sale Agreement, the Company agreed to buy and AIG agreed to sell for $317.5 million, plus accrued dividends, all outstanding shares of 8% Series B Cumulative Convertible Preferred Stock, par value $1.00 per share (the "Series B Preferred Stock"), of A&A. On January 17, 1997, the Company purchased all 4,846,232 shares of Series B Preferred Stock. Each share of Series B Preferred Stock is currently convertible into approximately 2.94 shares of Class D Common Stock of A&A, which Class D Common Stock is exchangeable for Common Stock on a share-for- share basis. The Merger Agreement provides for the Offer to be followed by a merger of Purchaser into A&A, pursuant to which all remaining Shares (other than stock of A&A owned by A&A, the Company or any of their respective subsidiaries and stock as to which appraisal rights are available and properly exercised under Maryland law) will be converted into a right to receive $17.50 cash per Share (the "Merger"). A special meeting of A&A's stockholders will be held on or about February 20, 1997 to vote upon the Merger. Pursuant to the provisions of A&A's Charter and applicable Maryland corporation law, the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Common Stock, Class A Common Stock, par value $.00001 per share, of A&A (the "Class A Stock"), Class C Common Stock, par value $1.00 per share (the "Class C Stock" and, together with the Common Stock and the Class A Stock, the "Common Capital Stock"), of A&A and the Series B Preferred Stock, voting together as a single class, is required for approval of the Merger. Because the Company and Purchaser own all of the Series B Preferred Stock and 97% of the outstanding shares of Common Capital Stock, the Company and Purchaser have the ability to approve the Merger without the vote of any other stockholder. The Merger Agreement obligates the Company to cause all the capital stock of A&A owned by the Company and its subsidiaries to be voted in favor of the Merger. The Merger will be effected promptly after stockholder approval of the Merger. Purchaser's payment of approximately $775 million for the aggregate purchase price of the Shares purchased by Purchaser in the Offer was funded with capital contributions to Purchaser by the Company. The Company derived the funds necessary for such capital contribution and the funds necessary to purchase the Series B Preferred Stock from cash on hand, the proceeds from the sale of commercial paper and fixed maturities and the proceeds of the sale of the Old Capital Securities. See "Pro Forma Consolidated Financial Information." A&A is an insurance holding company which, through its subsidiaries, provides professional risk management consulting, insurance brokerage and human resource management consulting on a global basis. A&A's revenues were $1.3 billion in 1995 and $1.0 billion for the nine-month period ended September 30, 1996. Based on 1995 revenues, management of the Company believes that A&A is the fourth largest brokerage company in the world. Since 1994, A&A has engaged in a significant restructuring of its operations and, for the nine months ended September 30, 1996, A&A reported net income of $47.7 million, a 41.7% decrease from its net income of $81.9 million for the same period in the previous year. THE EXCHANGE OFFER The Exchange Offer.......... Up to $800,000,000 aggregate Liquidation Amount of New Capital Securities are being offered in exchange for a like aggregate Liquidation Amount of Old Capital Securities. Old Capital Securities may be tendered for exchange in whole or in part having a Liquidation Amount of not less than $100,000 (100 Old Capital Securities) or any in- tegral multiple of $1,000 Liquidation Amount (1 Old Capital 9 Security) in excess thereof. The Company and the Trust are making the Exchange Offer in order to satisfy their obligations under the Registration Rights Agreement relating to the Old Securities. For a description of the procedures for tendering Old Capital Securities, see "The Exchange Offer-- Procedures for Tendering Old Capital Securities." Expiration Date............. 5:00 p.m., New York City time, on , 1997 (such time on such date being hereinafter called the "Expiration Date") unless the Exchange Offer is extended by the Company and the Trust (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). See "The Exchange Offer--Expiration Date; Extensions; Amendments." Conditions to the Exchange The Exchange Offer is subject to certain condi- Offer...................... tions which may be waived by the Company and the Trust in their sole discretion and to the terms and conditions of the Registration Rights Agree- ment. The Exchange Offer is not conditioned upon any minimum Liquidation Amount of Old Capital Se- curities being tendered for exchange. See "The Exchange Offer--Conditions to the Exchange Of- fer." The Company and the Trust expressly reserve the right in their sole and absolute discretion, sub- ject to applicable law, at any time and from time to time, (i) to delay the acceptance of the Old Capital Securities for exchange, (ii) to termi- nate the Exchange Offer (whether or not any Old Capital Securities have been accepted for ex- change) if the Company or the Trust determines, in its sole and absolute discretion, that any of the conditions referred to under "The Exchange Offer--Conditions to the Exchange Offer" have oc- curred or exist or have not been satisfied, (iii) to extend the Expiration Date and retain all Old Capital Securities tendered pursuant to the Ex- change Offer, subject, however, to the right of holders of Old Capital Securities to withdraw their tendered Old Capital Securities, and (iv) to waive any condition or otherwise amend the terms of the Exchange Offer in any respect. See "The Exchange Offer--Expiration Date; Extensions; Amendments." Procedures for Tendering Old Capital Securities..... Brokers, dealers, commercial banks, trust compa- nies and other nominees who hold Old Capital Se- curities through The Depository Trust Company ("DTC") may effect tenders by book-entry transfer in accordance with DTC's Automated Tender Offer Program ("ATOP"). Holders of such Old Capital Se- curities registered in the name of a broker, dealer, commercial bank, trust company or other nominee are urged to contact such person promptly if they wish to tender Old Capital Securities. In order for Old Capital Securities to be tendered by a means other than by book-entry transfer, a Letter of Transmittal must be completed and signed in accordance with the instructions con- tained therein. The Letter of Transmittal and any other documents required by the Letter of Trans- mittal must be de- 10 livered to the Exchange Agent by mail, facsimile, hand delivery or overnight carrier and either such Old Capital Securities must be delivered to the Exchange Agent or specified procedures for guaranteed delivery must be complied with. See "The Exchange Offer--Procedures for Tendering Old Capital Securities." Letters of Transmittal, certificates for Old Cap- ital Securities and any other documents required by the Letter of Transmittal should not be deliv- ered to the Company or the Trust. Such documents should only be delivered to the Exchange Agent. Questions regarding how to tender and requests for information should be directed to the Ex- change Agent. See "The Exchange Offer--Exchange Agent." Withdrawal Rights........... Tenders of Old Capital Securities may be with- drawn at any time on or prior to the Expiration Date by delivering a written notice of such with- drawal to the Exchange Agent in conformity with certain procedures set forth below under "The Ex- change Offer--Withdrawal Rights." Resales of New Capital Based on certain interpretations by the staff of Securities................. the Division of Corporation Finance of the Secu- rities and Exchange Commission (the "Commis- sion"), and subject to the two immediately fol- lowing sentences, the Company and the Trust believe that New Capital Securities issued pursu- ant to the Exchange Offer in exchange for Old Capital Securities may be offered for resale, re- sold and otherwise transferred by a holder thereof (other than a holder who is a broker- dealer) without further compliance with the reg- istration and prospectus delivery requirements of the Securities Act, provided that such New Capi- tal Securities are acquired in the ordinary course of such holder's business and that such holder is not participating, and has no arrange- ment or understanding with any person to partici- pate, in a distribution (within the meaning of the Securities Act) of such New Capital Securi- ties. However, any holder of Old Capital Securi- ties who is an "affiliate" of the Company or the Trust or who intends to participate in the Ex- change Offer for the purpose of distributing the New Capital Securities, or any broker-dealer who purchased the Old Capital Securities from the Trust to resell pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other avail- able exemption under the Securities Act, (a) will not be able to rely on the interpretations of the staff of the Division of Corporation Finance of the Commission set forth in the above-mentioned interpretive letters, (b) will not be permitted or entitled to tender such Old Capital Securities in the Exchange Offer and (c) must comply with the registration and prospectus delivery require- ments of the Securities Act in connection with any sale or other transfer of such Old Capital Securities unless such sale is made pursuant to an exemption from such requirements. In addition, if any broker-dealer holds Old Capital Securities acquired for its own account as a result of mar- ket-making or other trading activities and ex- changes such Old Capital Securities for New Capi- tal Securities, then such broker-dealer must deliver a prospectus meeting the requirements of the 11 Securities Act in connection with any resales of such New Capital Securities. See "The Exchange Offer--Resales of the New Capital Securities." The Company and the Trust believe that broker- dealers who acquired Old Capital Securities for their own accounts as a result of market-making activities or other trading activities ("Partici- pating Broker-Dealers") may fulfill their pro- spectus delivery requirements with respect to the New Capital Securities received upon exchange of such Old Capital Securities (other than Old Capi- tal Securities which represent an unsold allot- ment from the original sale of the Old Capital Securities) with this Prospectus, as it may be amended or supplemented from time to time. This Prospectus may be used by a Participating Broker- Dealer during the 90-day period referred to below in connection with resales of New Capital Securi- ties received in exchange for Old Capital Securi- ties where such Old Capital Securities were ac- quired by such Participating Broker-Dealer for its own account as a result of market-making or other trading activities. Subject to certain pro- visions set forth in the Registration Rights Agreement and to the limitations described under "The Exchange Offer--Resale of New Capital Secu- rities," the Company and the Trust have agreed that this Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of such New Capital Securities for a pe- riod ending 90 days after the Expiration Date or, if earlier, when all such New Capital Securities have been disposed of by such Participating Bro- ker-Dealer. See "Plan of Distribution" and "The Exchange Offer--Resales of New Capital Securi- ties." In that regard, each Participating Broker-Dealer who surrenders Old Capital Securities pursuant to the Exchange Offer will be deemed to have agreed, by execution of the Letter of Transmittal or de- livery of an Agent's Message (as defined under "The Exchange Offer--Acceptance For Exchange and Issuance of New Capital Securities") in lieu thereof, that, upon receipt of notice from the Company or the Trust of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by refer- ence in this Prospectus untrue in any material respect or which causes this Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference herein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the Registration Rights Agreement, such Par- ticipating Broker-Dealer will suspend the sale of New Capital Securities (or the New Guarantee or the New Junior Subordinated Debentures, as appli- cable) pursuant to this Prospectus until the Com- pany or the Trust has amended or supplemented this Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to such Participating Broker-Dealer or the Company or the Trust has given notice that the sale of the New Capital Se- curities (or 12 the New Guarantee or the New Junior Subordinated Debentures, as applicable) may be resumed, as the case may be. See "The Exchange Offer--Resales of New Capital Securities." Exchange Agent.............. The exchange agent with respect to the Exchange Offer is The Bank of New York (the "Exchange Agent"). The addresses and telephone and facsim- ile numbers of the Exchange Agent are set forth in "The Exchange Offer--Exchange Agent" and in the Letter of Transmittal. Use of Proceeds............. Neither the Company nor the Trust will receive any cash or other proceeds from the issuance of the New Capital Securities offered hereby. See "Use of Proceeds From Sale of Old Capital Securi- ties." Certain United States Federal Income Tax Considerations; ERISA Considerations............. Holders of Old Capital Securities should review the information set forth under "Certain United States Federal Income Tax Considerations" and "ERISA Considerations" prior to tendering Old Capital Securities in the Exchange Offer. THE CAPITAL SECURITIES Securities Offered.......... Up to $800,000,000 aggregate Liquidation Amount of the Trust's 8.205% Capital Securities which have been registered under the Securities Act (Liquidation Amount $1,000 per Capital Security). The New Capital Securities will be issued and the Old Capital Securities were issued under the Trust Agreement. The New Capital Securities and any Old Capital Securities that remain outstand- ing after consummation of the Exchange Offer will constitute a single series of Capital Securities under the Trust Agreement and, accordingly, will vote together as a single class for purposes of determining whether holders of the requisite per- centage in outstanding Liquidation Amount thereof have taken certain actions or exercised certain rights under the Trust Agreement. See "Descrip- tion of Securities--Description of Capital Secu- rities--General." The forms and terms of the New Securities are identical in all material respects to the respective forms and terms of the Old Se- curities, except that (i) the New Securities have been registered under the Securities Act and therefore are not subject to certain restrictions on transfer applicable to the Old Securities, (ii) the New Capital Securities will not provide for any increase in the Distribution rate thereon and (iii) the New Junior Subordinated Debentures will not provide for any increase in the interest rate thereon. Accordingly, as the context may re- quire, unless expressly stated otherwise, (i) "Capital Securities" means the Old Capital Secu- rities and, in the event the Exchange Offer is consummated, the New Capital Securities, (ii) "Junior Subordinated Debentures" means the Old Junior Subordinated Debentures and, in the event the Exchange Offer is consummated, the New Junior Subordinated Debentures, (iii) "Guarantee" means the Old Guarantee 13 and, in the event the Exchange Offer is consum- mated, the New Guarantee and (iv) "Securities" means the Old Securities and, in the event the Exchange Offer is consummated, the New Securi- ties. See "The Exchange Offer--Purpose of the Ex- change Offer," "Description of Securities" and "Description of Old Securities." Distribution Dates.......... January 1 and July 1 of each year, commencing July 1, 1997. Extension Periods........... Distributions on Capital Securities will be de- ferred for the duration of any Extension Period elected by the Company with respect to the pay- ment of interest on the Junior Subordinated De- bentures. No Extension Period will exceed 10 con- secutive semi-annual periods or extend beyond the Stated Maturity or any earlier prepayment date. See "Description of Securities--Description of Junior Subordinated Debentures--Option to Defer Interest Payments" and "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." Ranking..................... The Capital Securities rank on a parity, and pay- ments thereon will be made pro rata, with the Common Securities except as described under "De- scription of Securities--Description of Capital Securities--Subordination of Common Securities." The Junior Subordinated Debentures rank on a par- ity with all other junior subordinated debentures which may be issued by the Company with substan- tially similar subordination terms ("Other Deben- tures") and which may be issued and sold (if at all) to other trusts to be established by the Company (if any) ("Other Trusts"), and are unsecured and subordinate and junior in right of payment to all Senior Indebtedness to the extent and in the manner set forth in the Indenture. Se- nior Indebtedness of the Company includes exist- ing and future senior debt, senior subordinated debt and subordinated debt of the Company. As of September 30, 1996, there was approximately $583 million of Senior Indebtedness of the Company outstanding. See "Description of Securities--De- scription of Junior Subordinated Debentures." The Guarantee ranks on a parity with all other guar- antees (if any), which may be issued by the Com- pany with respect to capital securities (if any), to be issued by Other Trusts ("Other Guarantees") and will constitute an unsecured obligation of the Company and will rank subordinate and junior in right of payment to all liabilities of the Company to the extent and in the manner set forth in the Guarantee Agreement. See "Description of Securities--Description of Guarantee." Redemption.................. The Capital Securities are subject to mandatory redemption in whole but not in part (i) at the Stated Maturity upon repayment of the Junior Sub- ordinated Debentures and (ii) contemporaneously with the optional prepayment by the Company of the Junior Subordinated Debentures upon the oc- currence and continuation of a Tax Event or an Investment Company Event, in each case at the ap- plicable Redemption Price. See "Description of Securities--Description of Capital Securities-- Redemption." 14 Rating...................... The Capital Securities have not been rated by Standard & Poor's Ratings Services ("S&P") or by Moody's Investors Services, Inc. ("Moody's"). On February 4, 1997, S&P announced that the pre- ferred stock of the Company was downgraded from "AA-" to "A" and that the Company was removed from CreditWatch (where it had been placed fol- lowing the Company's announcement that it had en- tered into the Merger Agreement with A&A). The preferred stock of the Company is currently rated "a3" by Moody's (which is currently reviewing for downgrade its ratings on the securities of the Company). Transfer Restrictions....... The New Capital Securities will be issued, and may be transferred, only in blocks having a Liq- uidation Amount of not less than $100,000 (100 New Capital Securities). See "Description of Se- curities--Description of Capital Securities--Re- strictions on Transfer." Any transfer, sale or other disposition of Capital Securities in a block having a Liquidation Amount of less than $100,000 shall be deemed to be void and of no le- gal effect whatsoever. Absence of Market for the Capital Securities......... The New Capital Securities will be a new issue of securities for which there currently is no mar- ket. Although the Initial Purchasers have advised the Company and the Trust that they currently in- tend to make a market in the New Capital Securi- ties, the Initial Purchasers are not obligated to do so, and any market-making activity with re- spect to the New Capital Securities may be inter- rupted or discontinued at any time without no- tice. Accordingly, no assurance can be given that an active public or other market will develop for the New Capital Securities or as to the liquidity of or the trading market for the New Capital Se- curities. The Company and the Trust currently do not intend to apply for listing of the New Capi- tal Securities on any securities exchange or for quotation through the National Association of Se- curities Dealers Automated Quotation System. For additional information regarding the New Securities, see "Description of Securities" and "Certain Federal Income Tax Consequences." RISK FACTORS Holders tendering Old Capital Securities in the Exchange Offer should carefully consider the matters set forth under "Risk Factors" beginning on page 17. 15 SELECTED FINANCIAL DATA AON CORPORATION CONSOLIDATED SELECTED HISTORICAL FINANCIAL DATA The following table sets forth selected historical financial data for Aon for each of the five years in the period ended December 31, 1995 and for the nine- month periods ended September 30, 1995 and 1996. The data for each of the five years in the period ended December 31, 1995 have been derived from the audited financial statements and the notes thereto, and should be read in conjunction with, the audited consolidated financial statements and other financial information contained in Aon's Annual Report on Form 10-K for the year ended December 31, 1995, incorporated by reference herein. The data for the nine- month periods ended September 30, 1995 and 1996 have been derived from the unaudited consolidated interim financial statements, including the notes thereto, contained in Aon's Quarterly Report on Form 10-Q for the period ended September 30, 1996, incorporated by reference herein. Such unaudited consolidated interim financial statements reflect all adjustments (consisting only of normally recurring accruals) which management of the Company considers necessary to present fairly the financial information for such periods. See "Available Information" and "Incorporation of Certain Documents By Reference."
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, ----------------- --------------------------------------- 1996 1995 1995 1994 1993 1992 1991 -------- -------- ------- ------- ------- ------- ------- (MILLIONS EXCEPT PER SHARE DATA) INCOME STATEMENT DATA* Brokerage commissions and fees............... $ 1,368 $ 1,226 $ 1,651 $ 1,389 $ 1,190 $ 714 $ 391 Premiums earned......... 1,141 1,059 1,427 1,322 1,278 1,275 1,214 Net investment income... 270 245 329 257 227 223 215 Realized investment gains.................. 3 9 13 19 30 24 27 Other income............ 37 32 46 54 46 42 78 -------- -------- ------- ------- ------- ------- ------- Total revenue......... $ 2,819 $ 2,571 $ 3,466 $ 3,041 $ 2,771 $ 2,278 $ 1,925 ======== ======== ======= ======= ======= ======= ======= Income from continuing operations............. $ 246 $ 239 $ 304 $ 269 $ 228 $ 134 $ 185 Income from discontinued operations............. 43 71 99 91 96 72 57 -------- -------- ------- ------- ------- ------- ------- Net income.............. $ 289 $ 310 $ 403 $ 360 $ 324 $ 127 $ 242 ======== ======== ======= ======= ======= ======= ======= BALANCE SHEET DATA Total assets............ $ 12,227 $ 19,640 $19,736 $17,922 $16,279 $14,290 $11,633 ======== ======== ======= ======= ======= ======= ======= Liabilities and Stock- holders' Equity Policy liabilities............ $ 3,795 $ 9,544 $ 9,556 $ 9,310 $ 8,776 $ 7,759 $ 7,342 Notes payable.......... 523 553 554 561 594 556 501 General liabilities.... 5,141 6,921 6,902 5,744 4,621 3,871 2,015 -------- -------- ------- ------- ------- ------- ------- Total liabilities..... 9,459 17,018 17,012 15,615 13,991 12,186 9,858 Redeemable preferred stock................. 50 50 50 50 -- -- -- Stockholders' equity... 2,718 2,572 2,674 2,257 2,288 2,104 1,775 -------- -------- ------- ------- ------- ------- ------- Total liabilities and stockholders' equity... $ 12,227 $ 19,640 $19,736 $17,922 $16,279 $14,290 $11,633 ======== ======== ======= ======= ======= ======= ======= PER SHARE DATA Income from continuing operations............. $ 2.11 $ 2.03 $ 2.57 $ 2.28 $ 1.91 $ 1.24 $ 1.89 Net income.............. 2.50 2.68 3.48 3.14 2.81 1.17 2.47 Stockholders' equity.... 23.29 21.89 22.77 18.30 18.95 17.48 17.39 Dividends paid on Common Stock.................. 1.06 1.00 1.34 1.26 1.18 1.11 1.05
- -------- * Certain prior period amounts have been reclassified to conform to the current presentation. 16 RISK FACTORS Holders tendering Old Capital Securities in the Exchange Offer should carefully review the information contained elsewhere in this Prospectus and should particularly consider the matters set forth below. The forms and terms of the New Securities are identical in all material respects to the respective forms and terms of the Old Securities, except that (i) the New Securities have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the Old Securities, (ii) the New Capital Securities will not provide for any increase in the Distribution rate thereon and (iii) the New Junior Subordinated Debentures will not provide for any increase in the interest rate thereon. Accordingly, as the context may require, unless expressly stated otherwise, (i) "Capital Securities" means the Old Capital Securities and, in the event the Exchange Offer is consummated, the New Capital Securities, (ii) "Junior Subordinated Debentures" means the Old Junior Subordinated Debentures and, in the event the Exchange Offer is consummated, the New Junior Subordinated Debentures, (iii) "Guarantee" means the Old Guarantee and, in the event the Exchange Offer is consummated, the New Guarantee and (iv) "Securities" means the Old Securities and, in the event the Exchange Offer is consummated, the New Securities. RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES The obligations of the Company under the Junior Subordinated Debentures are unsecured and rank subordinate and junior in right of payment to all Senior Indebtedness of the Company. The obligations of the Company under the Guarantee are unsecured and rank subordinate and junior in right of payment to all liabilities of the Company, including obligations under the Junior Subordinated Debentures, other than any liabilities which expressly by their terms are made pari passu with or subordinate to the obligations of the Company under the Guarantee. At September 30, 1996, the aggregate outstanding Senior Indebtedness of the Company was approximately $583 million. None of the Indenture, the Guarantee or the Trust Agreement places any limitation on the amount of secured or unsecured debt, including Senior Indebtedness, that may be incurred by the Company. See "Description of Securities--Description of Guarantee--Status of the Guarantee" and "Description of Securities-- Description of Junior Subordinated Debentures--Subordination." Since the Company is a holding company, the right of the Company to participate in any distribution of assets of any subsidiary upon such subsidiary's liquidation or reorganization or otherwise (and thus the ability of holders of Capital Securities to benefit indirectly from such distribution) is subject to the prior claims of creditors of that subsidiary, except to the extent that the Company may itself be a creditor of that subsidiary. Claims on the Company's subsidiaries by creditors other than the Company include long-term debt and certain other short-term borrowings. Accordingly, the Junior Subordinated Debentures and the Company's obligations under the Guarantee will be effectively subordinated to all existing and future liabilities of the Company's subsidiaries, and holders of Junior Subordinated Debentures and claimants under the Guarantee should look only to the assets of the Company for payments on the Junior Subordinated Debentures or the Guarantee. The ability of the Trust to pay amounts due on the Capital Securities is solely dependent upon the Company making payments on the Junior Subordinated Debentures as and when required. OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES So long as no Debenture Event of Default has occurred or is continuing, the Company has the right under the Indenture to defer the payment of interest on the Junior Subordinated Debentures at any time or from time to time for a period not exceeding 10 consecutive semi-annual periods, during which Extension Period the Company has the right to make partial payments of interest on any Interest Payment Date. No Extension Period may extend beyond the Stated Maturity or any earlier prepayment date. As a consequence of any such deferral, semi-annual Distributions on the Capital Securities by the Trust will be deferred during any Extension Period. Distributions to which holders of the Capital Securities are entitled will accumulate additional Distributions thereon ("Additional Distributions") at the rate of 8.205% per annum, compounded semi-annually from the relevant payment date for such Distributions, but not exceeding the interest rate then accruing on the Junior Subordinated Debentures. 17 During any such Extension Period, the Company may not, and may not permit any subsidiary of the Company to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock (which includes common and preferred stock) or (ii) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company (including Other Debentures) that rank on a parity with or junior to the Junior Subordinated Debentures or make any guarantee payments with respect to any guarantee by the Company of the debt securities of any subsidiary of the Company (including Other Guarantees) if such guarantee ranks on a parity with or junior to the Junior Subordinated Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a stockholders' rights plan, or the issuance of capital stock under any such plan, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under the Guarantee and (d) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans for its directors, officers, employees, consultants or advisers). Prior to the termination of any such Extension Period, the Company may further extend such Extension Period, provided that such extension does not cause such Extension Period to exceed 10 consecutive semi-annual periods or to extend beyond the Stated Maturity or any earlier prepayment date. At any time following the termination of any Extension Period and the payment of all amounts then due, the Company may elect to begin a new Extension Period, subject to the foregoing requirements. There is no limitation on the number of times that the Company may elect to begin an Extension Period. See "Description of Securities--Description of Capital Securities--Distributions" and "Description of Securities--Description of Junior Subordinated Debentures--Option to Defer Interest Payments." Should an Extension Period occur, a holder of Capital Securities will continue to accrue income for United States federal income tax purposes (in the form of original issue discount) in respect of its pro rata share of the Junior Subordinated Debentures held by the Trust. As a result, a holder of Capital Securities will include such income in gross income for United States federal income tax purposes in advance of the receipt of cash, and will not receive the cash related to such income from the Trust if the holder disposes of the Capital Securities prior to the record date for the payment of Distributions. See "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount" and "--Sales or Redemptions of Capital Securities." The Company has no present intention of exercising its right to defer payments of interest. However, should the Company elect to exercise such right in the future, the market price of the Capital Securities is likely to be affected. A holder that disposes of any Capital Securities during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Capital Securities. In addition, as a result of the existence of the Company's right to defer interest payments, the market price of the Capital Securities (which represent undivided beneficial interests in the assets of the Trust) may be more volatile than the market prices of other securities on which original issue discount accrues that are not subject to such deferrals. TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION Upon the occurrence and continuation of a Tax Event or an Investment Company Event, the Company has the right to prepay the Junior Subordinated Debentures in whole (but not in part) within 90 days of the occurrence of such Tax Event or Investment Company Event and therefore cause a mandatory redemption of all Capital Securities at the Event Redemption Price. See "Description of Securities--Description of Capital Securities--Redemption." A "Tax Event" means the receipt by the Company and the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after January 13, 1997, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days after the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Junior Subordinated Debentures, (ii) interest 18 payable by the Company on the Junior Subordinated Debentures is not, or within 90 days after the date of such opinion, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or will be within 90 days after the date of such opinion, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. See "--Possible Tax Law Changes Affecting the Capital Securities" for a discussion of certain legislative proposals that, if adopted, could give rise to a Tax Event, which may permit the Company to cause a redemption of all Capital Securities prior to January 1, 2027. An "Investment Company Event" means the receipt by the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be considered an investment company that is required to be registered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective on or after January 13, 1997. EXCHANGE OF JUNIOR SUBORDINATED DEBENTURES FOR CAPITAL SECURITIES The Company has the right to terminate the Trust at any time and, after satisfaction of liabilities to creditors as required by applicable law, cause the Junior Subordinated Debentures to be distributed to the holders of the Capital Securities in liquidation of the Trust. The exercise of such right is subject to the Company having received an opinion of counsel to the effect that such distribution will not be a taxable event to holders of Capital Securities for United States federal income tax purposes. See "Description of Securities--Description of Capital Securities--Liquidation of the Trust and Distribution of Junior Subordinated Debentures." RIGHTS UNDER THE GUARANTEE The Bank of New York acts as the Guarantee Trustee and will hold the New Guarantee for the benefit of the holders of all Capital Securities. The Bank of New York also acts as Debenture Trustee for the Junior Subordinated Debentures and as Property Trustee under the Trust Agreement and its affiliate The Bank of New York (Delaware) acts as Delaware Trustee under the Trust Agreement. The Guarantee guarantees to the holders of the Capital Securities the following payments, to the extent not paid by or on behalf of the Trust: (i) any accumulated and unpaid Distributions required to be paid on the Capital Securities, to the extent the Trust has funds on hand available therefor at such time, (ii) the applicable Redemption Price with respect to Capital Securities called for redemption, to the extent the Trust has funds on hand available therefor at such time and (iii) upon a voluntary or involuntary termination, dissolution, winding-up or liquidation of the Trust (unless the Junior Subordinated Debentures are distributed to holders of the Capital Securities), the lesser of (a) the aggregate of the Liquidation Amount and accumulated and unpaid Distributions on the Capital Securities to the date of payment, to the extent the Trust has funds on hand available therefor at such time, and (b) the amount of assets of the Trust remaining available for distribution to holders of the Capital Securities in liquidation of the Trust. The holders of not less than a majority in aggregate Liquidation Amount of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of the Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Guarantee Agreement. Any holder of Capital Securities may institute a legal proceeding directly against the Company to enforce its rights under the Guarantee, without first instituting a proceeding against the Trust, the Guarantee Trustee or any other person or entity. If the Company were to default on its obligation to pay amounts payable under the Junior Subordinated Debentures, the Trust would lack funds for the payment of Distributions or amounts payable on redemption of the Capital Securities or otherwise, and, in such event, holders of the Capital Securities would not be able to rely upon the Guarantee for payment of such amounts. Instead, in the event a Debenture Event of Default shall have occurred and be continuing and such event is attributable to the failure of the Company to pay interest on or principal of the Junior Subordinated 19 Debentures on the payment date on which such payment is due and payable, then a holder of Capital Securities may institute a suit directly against the Company for enforcement of payment to such holder of the principal of or interest on such Junior Subordinated Debentures having a principal amount equal to the aggregate Liquidation Amount of the Capital Securities of such holder (a "Direct Action"). Notwithstanding any payments made to a holder of Capital Securities by the Company in connection with a Direct Action, the Company shall remain obligated to pay the principal of and interest on the Junior Subordinated Debentures, and the Company shall be subrogated to the rights of the holder of such Capital Securities with respect to payments on the Capital Securities to the extent of any payments made by the Company to such holder in any Direct Action. Except as described herein, holders of Capital Securities will not be able to exercise directly any other remedy available to the holders of the Junior Subordinated Debentures or assert directly any other rights in respect of the Junior Subordinated Debentures. See "Description of Securities--Description of Junior Subordinated Debentures--Enforcement of Certain Rights by Holders of Capital Securities," "Description of Securities--Description of Junior Subordinated Debentures-- Debenture Events of Default" and "Description of Securities--Description of Guarantee." The Trust Agreement provides that each holder of Capital Securities by acceptance thereof agrees to the provisions of the Guarantee Agreement and the Indenture. LIMITED VOTING RIGHTS Holders of Capital Securities will generally have limited voting rights relating only to the modification of the Capital Securities and the exercise of the Trust's rights as holder of Junior Subordinated Debentures. Holders of Capital Securities will have limited authority to vote to remove or replace the Issuer Trustees. The Property Trustee, the Administrative Trustees and the Company may amend the Trust Agreement without the consent of holders of Capital Securities to ensure that the Trust will be classified for United States federal income tax purposes as a grantor trust provided that such action does not adversely affect the interests of such holders. See "Description of Securities--Description of Capital Securities--Voting Rights; Amendment of the Trust Agreement" and "Description of Securities--Description of Capital Securities--Removal of Issuer Trustees; Appointment of Successors." CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES The Old Capital Securities have not been registered under the Securities Act or any state securities laws and therefore may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, or pursuant to an exemption therefrom or in a transaction not subject thereto, and in each case in compliance with certain other conditions and restrictions. Old Capital Securities which remain outstanding after consummation of the Exchange Offer will continue to bear a legend reflecting such restrictions on transfer. In addition, upon consummation of the Exchange Offer, holders of Old Capital Securities which remain outstanding will not be entitled to any rights to have such Old Capital Securities registered under the Securities Act or to any similar rights under the Registration Rights Agreement (subject to certain limited exceptions). The Company and the Trust do not intend to register under the Securities Act any Old Capital Securities which remain outstanding after consummation of the Exchange Offer (subject to such limited exceptions, if applicable). To the extent that Old Capital Securities are tendered and accepted in the Exchange Offer, a holder's ability to sell untendered Old Capital Securities could be adversely affected. In addition, although the Old Capital Securities have been designated for trading in the Private Offerings, Resale and Trading through Automatic Linkages ("PORTAL") market, to the extent that Old Capital Securities are tendered and accepted in connection with the Exchange Offer, any trading market for Old Capital Securities which remain outstanding after the Exchange Offer could be adversely affected. The New Capital Securities and any Old Capital Securities which remain outstanding after consummation of the Exchange Offer will constitute a single series of Capital Securities under the Trust Agreement and, accordingly, will vote together as a single class for purposes of determining whether holders of the requisite percentage in outstanding Liquidation Amount thereof have taken certain actions or exercised certain rights under the Trust Agreement. 20 The Old Capital Securities provide that, if the Exchange Offer is not consummated by August 11, 1997, the Distribution rate borne by the Old Capital Securities will increase by 0.25% per annum commencing on August 12, 1997, until the Exchange Offer is consummated. See "Description of Old Capital Securities." Following consummation of the Exchange Offer, neither the Old Capital Securities nor the New Capital Securities will be entitled to any increase in the Distribution rate thereon. ABSENCE OF PUBLIC MARKET The Old Capital Securities were issued to, and the Company believes are currently owned by, a relatively small number of beneficial owners. The Old Capital Securities have not been registered under the Securities Act and will continue to be subject to restrictions on transferability to the extent that they are not exchanged for New Capital Securities. Although the New Capital Securities will generally be permitted to be resold or otherwise transferred by the holders (who are not affiliates of the Company or the Trust) without compliance with the registration requirements under the Securities Act, they will constitute a new issue of securities with no established trading market. Capital Securities may be transferred by the holders thereof only in blocks having a Liquidation Amount of not less than $100,000 (100 Capital Securities). The Company and the Trust have been advised by the Initial Purchasers that the Initial Purchasers currently intend to make a market in the New Capital Securities. However, the Initial Purchasers are not obligated to do so and any market-making activity with respect to the New Capital Securities may be interrupted or discontinued at any time without notice. In addition, such market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limited during the Exchange Offer. Accordingly, no assurance can be given that an active public or other market will develop for the New Capital Securities or the Old Capital Securities or as to the liquidity of or the trading market for the New Capital Securities or the Old Capital Securities. If an active public market does not develop, the market price and liquidity of the New Capital Securities may be adversely affected. If a public trading market develops for the New Capital Securities, future trading prices of such securities will depend on many factors, including, among other things, prevailing interest rates, results of operations and the market for similar securities. Depending on prevailing interest rates, the market for similar securities and other factors, including the financial condition of the Company, the New Capital Securities may trade at a discount. Notwithstanding the registration of the New Capital Securities in the Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the Securities Act) of the Company or the Trust may publicly offer for sale or resell the New Capital Securities only in compliance with the provisions of Rule 144 under the Securities Act. Each broker-dealer that receives New Capital Securities for its own account in exchange for Old Capital Securities, where such Old Capital Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such New Capital Securities. See "Plan of Distribution." EXCHANGE OFFER PROCEDURES Subject to the conditions set forth under "The Exchange Offer--Conditions to the Exchange Offer," delivery of New Capital Securities in exchange for Old Capital Securities tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (i) certificates for Old Capital Securities or a book-entry confirmation of a book-entry transfer of Old Capital Securities into the Exchange Agent's account at DTC, including an Agent's Message (as defined under "The Exchange Offer--Acceptance for Exchange and Issuance of New Capital Securities") if the tendering holder does not deliver a Letter of Transmittal, (ii) a completed and signed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. Therefore, holders of Old Capital Securities desiring to tender such Old Capital Securities in exchange for New Capital Securities should allow sufficient time to ensure timely delivery. Neither the Company nor the Trust is under a duty to give notification of defects or irregularities with respect to the tenders of Old Capital Securities for exchange. 21 POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") proposed by the Clinton administration was released. The Bill would, among other things, generally deny interest deductions for United States federal income tax purposes for interest on an instrument issued by a corporation that has a maximum term of more than 20 years and that is not shown as indebtedness on the separate balance sheet of the issuer or, where the instrument is issued to a related party (other than a corporation), where the holder or some other related party issues a related instrument that is not shown as indebtedness on the issuer's consolidated balance sheet. The above-mentioned provision of the Bill was proposed to be effective generally for instruments issued on or after December 7, 1995. If such provision were to apply to the Junior Subordinated Debentures, the Company would be unable to deduct interest on the Junior Subordinated Debentures for United States federal income tax purposes. However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways and Means Committees issued a joint statement to the effect that it was their intention that the effective date of the President's legislative proposals, if adopted, will be no earlier than the date of appropriate Congressional action. The proposals were not enacted in the recently concluded session of Congress and, under current law, the Company believes it will be able to deduct interest on the Junior Subordinated Debentures. There can be no assurance, however, that final legislation similar to the Bill or future legislative proposals, future regulations or official administrative pronouncements or future judicial decisions will not affect the ability of the Company to deduct interest on the Junior Subordinated Debentures. Such a change could give rise to a Tax Event, which may permit the Company to cause a redemption of the Capital Securities. See "Description of Securities--Description of Capital Securities--Redemption" and "Certain Federal Income Tax Consequences--Possible Tax Law Changes." USE OF PROCEEDS FROM THE SALE OF THE OLD CAPITAL SECURITIES Neither the Company nor the Trust will receive any cash or other proceeds from the issuance of the New Capital Securities offered hereby. In consideration for issuing the New Capital Securities in exchange for Old Capital Securities as described in this Prospectus, the Trust will receive Old Capital Securities in like Liquidation Amount. The Old Capital Securities surrendered in exchange for the New Capital Securities will be retired and cancelled. The proceeds to the Trust from the offering of the Old Capital Securities was approximately $800,000,000. All of the proceeds from the sale of Old Capital Securities were invested by the Trust in Old Junior Subordinated Debentures. The net proceeds from the sale of the Old Junior Subordinated Debentures were used by the Company to finance, in part, the acquisition of Common Stock of A&A and the purchase by the Company of the Series B Preferred Stock. See "Acquisition of Alexander & Alexander." The Company paid or reimbursed the Trust for the expenses associated with the offering of the Old Capital Securities and the compensation to the Initial Purchasers. AON CAPITAL A Aon Capital A is a statutory business trust, created under Delaware law pursuant to the filing of a certificate of trust with the Delaware Secretary of State, which is governed by the Trust Agreement. The Trust exists for the exclusive purposes of (i) issuing and selling the Trust Securities, (ii) using the proceeds from the sale of Common Securities and the Old Capital Securities to acquire the Old Junior Subordinated Debentures, (iii) exchanging the Old Junior Subordinated Debentures for New Junior Subordinated Debentures in the Exchange Offer pursuant to the Indenture and (iv) engaging in only those other activities necessary, convenient or incidental thereto (such as registering the transfer of Capital Securities). Accordingly, the Junior Subordinated Debentures will be the sole assets of the Trust and payments by the Company under the Junior Subordinated Debentures and the Expense Agreement will be the sole revenues of the Trust. All of the Common Securities are owned by the Company. The Common Securities rank on a parity, and payments are made thereon pro rata, 22 with the Capital Securities except that upon the occurrence and continuance of an event of default under the Trust Agreement resulting from a Debenture Event of Default, the rights of the Company as holder of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption or otherwise will be subordinated to the rights of the holders of the Capital Securities. See "Description of Securities--Description of Capital Securities--Subordination of Common Securities." The Company owns Common Securities in an aggregate liquidation amount equal to 3% of the outstanding Capital Securities. The Trust has a term of approximately 31 years, but may terminate earlier as provided in the Trust Agreement. The Trust's business and affairs are conducted by its trustees, each appointed by the Company as holder of the Common Securities. Under the Trust Agreement, the trustees for the Trust are The Bank of New York, as the Property Trustee, The Bank of New York (Delaware), as the Delaware Trustee, and three individual Administrative Trustees who are employees or officers of or affiliated with the Company (collectively, the "Issuer Trustees"). The Bank of New York also acts as trustee under the Indenture and the Old Guarantee Agreement and will act as trustee under the New Guarantee Agreement. See "Description of Securities-- Description of Guarantee" and "Description of Securities--Description of Junior Subordinated Debentures." The duties and obligations of each Issuer Trustee are governed by the Trust Agreement. The Company will pay all fees and expenses related to the Trust, the offering of the Old Capital Securities and this Exchange Offer and will pay, directly or indirectly, all ongoing costs, expenses and liabilities of the Trust. Pursuant to the Expense Agreement, the Company has irrevocably and unconditionally guaranteed to each person or entity to whom the Trust becomes indebted or liable, the full payment of any costs, expenses or liabilities of the Trust, other than obligations of the Trust to pay to the holders of any Capital Securities or other similar interests in the Trust of the amounts due such holders pursuant to the terms of the Capital Securities or such other similar interests, as the case may be. The principal executive office of the Trust is c/o Aon Corporation, 123 N. Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-3000. AON CORPORATION The Company is an insurance services holding company that comprises a family of insurance brokerage, consulting and consumer insurance companies. Through its insurance brokerage operations, the Company offers commercial insurance brokerage, alternative risk solutions, risk management, employee benefit and human resources consulting and managing general underwriting services. In addition, the Company's insurance underwriting businesses provide a variety of insurance products, including accident and health coverage, traditional life insurance, extended warranties and credit insurance. The Company's revenues were $3.5 billion in 1995 and $2.8 billion for the nine-month period ended September 30, 1996. Based on 1995 insurance brokerage and consulting revenues and without giving effect to the acquisition of A&A, management believes that the Company is the second largest insurance brokerage company in the world. The principal executive offices of the Company are located at 123 N. Wacker Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701- 3000. ACQUISITION OF ALEXANDER & ALEXANDER On January 15, 1997, Purchaser, a wholly owned subsidiary of the Company, consummated the Offer for all the outstanding Shares of A&A at a price of $17.50 net cash per Share. Pursuant to the Offer, Purchaser acquired approximately 44,293,552 Shares, or 97% of the outstanding Shares. All Shares validly tendered and not withdrawn before expiration of the Offer at 12:00 midnight, New York City time, on January 14, 1997, were accepted for payment, including approximately 1,846,882 Shares tendered pursuant to guaranteed delivery procedures. The Offer was made pursuant to the Merger Agreement among the Company, Purchaser and A&A. 23 On December 11, 1996, the Company and AIG entered into the Stock Purchase and Sale Agreement. Pursuant to the Stock Purchase and Sale Agreement, the Company agreed to buy and AIG agreed to sell for $317.5 million, plus accrued dividends, all outstanding shares of 8% Series B Preferred Stock, par value $1.00 of A&A. On January 17, 1997, the Company purchased all 4,846,232 shares of Series B Preferred Stock. Each share of Series B Preferred Stock is currently convertible into approximately 2.94 shares of Class D Common Stock, which Class D Common Stock is exchangeable for Common Stock on a share-for- share basis. The Merger Agreement provides for the Offer to be followed by a merger of Purchaser into A&A pursuant to which all remaining Shares (other than stock of A&A owned by A&A, the Company or any of their respective subsidiaries and stock as to which appraisal rights are available and properly exercised under Maryland law) will be converted into a right to receive $17.50 cash per Share. A special meeting of A&A's stockholders will be held on or about February 20, 1997 to vote upon the Merger. Pursuant to the provisions of A&A's Charter and applicable Maryland corporation law, the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Common Stock, Class A Common Stock, Class C Common Stock and the Series B Preferred Stock, voting together as a single class, is required for approval of the Merger. Because the Company and Purchaser own all of the Series B Preferred Stock and 97% of the outstanding shares of Common Capital Stock, the Company and Purchaser have the ability to approve the Merger without the vote of any other stockholder. The Merger Agreement obligates the Company to cause all the capital stock of A&A owned by the Company and its subsidiaries to be voted in favor of the Merger. The Merger will be effected promptly after stockholder approval of the Merger. Purchaser's payment of approximately $775 million for the aggregate purchase price of the Shares purchased by Purchaser in the Offer was funded with capital contributions to Purchaser by the Company. The Company derived the funds necessary for such capital contribution and the funds necessary to purchase the Series B Preferred Stock from cash on hand, the proceeds from the sale of commercial paper and fixed maturities and the proceeds of the sale of the Old Capital Securities. See "Pro Forma Consolidated Financial Information." A&A is an insurance holding company which, through its subsidiaries, provides professional risk management consulting, insurance brokerage and human resource management consulting on a global basis. A&A's revenues were $1.3 billion in 1995 and $1.0 billion for the nine-month period ended September 30, 1996. Based on 1995 revenues, management of the Company believes that A&A is the fourth largest brokerage company in the world. Since 1994, A&A has engaged in a significant restructuring of its operations and, for the nine months ended September 30, 1996, A&A reported net income of $47.7 million, a 41.7% decrease from its net income of $81.9 million for the same period in the previous year. 24 PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The following unaudited pro forma consolidated financial information for the Company is based on historical financial statements of the Company and of A&A which are incorporated by reference into this Prospectus. The unaudited pro forma condensed consolidated statement of financial position at September 30, 1996 has been prepared as if the acquisition of A&A and the issuance of the Capital Securities and other financing had been consummated on September 30, 1996, and the unaudited pro forma condensed consolidated statements of income for the year ended December 31, 1995 and the nine months ended September 30, 1996 have been prepared as if the acquisition of A&A and the issuance of the Capital Securities and other financing had been consummated on January 1, 1995. Unaudited pro forma financial data do not purport to be indicative of either the future results of operations or the results of operations that would have occurred if these transactions had been consummated on the indicated dates. The pro forma adjustments are based upon available information and certain assumptions that the Company believes to be reasonable. 25 AON CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF SEPTEMBER 30, 1996 (IN MILLIONS)
HISTORICAL --------------------- ALEXANDER AON & PRO FORMA PRO FORMA CORPORATION ALEXANDER ADJUSTMENTS CONSOLIDATED(1) ----------- --------- ----------- --------------- ASSETS Fixed maturities avail- able for sale........... $ 2,707.4 $ -- $(200.0)(1) $ 2,507.4 Equity securities........ 821.3 -- -- 821.3 Short-term investments... 1,174.2 286.1 -- 1,460.3 Other investments........ 219.6 21.4 -- 241.0 Cash..................... 226.4 758.2 (100.0)(1) 884.6 Brokerage and other re- ceivables............... 3,920.2 1,200.7 -- 5,120.9 Intangible assets includ- ing goodwill............ 1,393.4 221.2 850.5 (2) 2,465.1 Assets held under special contracts............... 305.9 -- -- 305.9 Other assets............. 1,458.6 434.4 -- 1,893.0 --------- -------- ------- --------- Total Assets......... $12,227.0 $2,922.0 $ 550.5 $15,699.5 ========= ======== ======= ========= LIABILITIES AND STOCKHOLD- ERS' EQUITY Total policy liabilities. $ 3,795.2 $ -- $ -- $ 3,795.2 Insurance premiums pay- able.................... 3,394.1 1,775.9 -- 5,170.0 Short term borrowings.... 59.6 21.5 153.0 (1) 234.1 Notes payable and debt guarantee of employee stock ownership plan.... 522.9 142.4 -- 665.3 Liabilities held under special contracts....... 305.9 -- -- 305.9 Other liabilities........ 1,381.2 519.7 60.0 (2) 1,960.9 --------- -------- ------- --------- Total Liabilities.... 9,458.9 2,459.5 213.0 12,131.4 --------- -------- ------- --------- Redeemable Preferred Stock. 50.0 -- -- 50.0 Company-obligated Mandatorily Redeemable Preferred Capital Securi- ties of Subsidiary........ -- -- 800.0 (1) 800.0 STOCKHOLDERS' EQUITY Preferred stock 8% cumulative perpetual preferred stock....... 5.5 -- -- 5.5 6.25% cumulative convertible exchangeable preferred stock................. 2.1 -- -- 2.1 Series A Preferred Stock................. -- 2.3 (2.3)(3) -- Series B Preferred Stock................. -- 4.8 (4.8)(4) -- Common stock............. 111.5 43.4 (43.4) 111.5 Paid-in additional capi- tal..................... 454.1 666.7 (666.7) 454.1 Retained earnings and other less treasury stock................... 2,144.9 (254.7) 254.7 2,144.9 --------- -------- ------- --------- Total Stockholders' Equity.............. 2,718.1 462.5 (462.5)(2) 2,718.1 --------- -------- ------- --------- Total Liabilities and Stockholders' Equi- ty.................. $12,227.0 $2,922.0 $ 550.5 $15,699.5 ========= ======== ======= =========
See accompanying notes. 26 AON CORPORATION NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF SEPTEMBER 30, 1996 1. Reflects the acquisition of A&A at a price of $1,253 million and funding sources for the acquisition as follows (in millions): Sale of fixed maturities........................................ $ 200.0 Issuance of commercial paper.................................... 153.0 Issuance of Capital Securities.................................. 800.0 A&A cash used to finance transaction............................ 100.0 -------- Purchase Price................................................ $1,253.0 ========
The effect of Aon's acquisition of the Bain Hogg Group plc ("Bain Hogg") on October 18, 1996 is not included. The purchase price was $260 million. Bain Hogg's total assets as of September 30, 1996 were approximately $1.0 billion. 2. Assumes that Aon's purchase price allocation resulted in additional goodwill of $850.5 million which was calculated as follows (in millions): Purchase price.................................................. $1,253.0 A&A stockholders' equity........................................ (462.5) Purchase related liabilities net of tax......................... 60.0 -------- Goodwill........................................................ $ 850.5 ========
3. Assumes that all of the Series A Preferred Stock was converted to cash at a cost of $121 million to Aon. 4. Reflects the purchase by Aon of all of the Series B Preferred Stock for $318 million. 27 AON CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1995 (MILLIONS EXCEPT PER SHARE DATA)
HISTORICAL ----------------------- ALEXANDER AON & PRO FORMA PRO FORMA CORPORATION ALEXANDER ADJUSTMENTS CONSOLIDATED(1) ----------- --------- ----------- --------------- REVENUE Brokerage commissions and fees.............. $1,651.3(2) $1,219.5 $ -- $2,870.8 Premiums earned........ 1,426.5 -- -- 1,426.5 Net investment income.. 329.4 82.1 (20.3)(3) 391.2 Realized investment gains................. 13.1 -- -- 13.1 Other income........... 45.4(2) 32.7 -- 78.1 -------- -------- ------ -------- Total Revenue........ 3,465.7 1,334.3 (20.3) 4,779.7 -------- -------- ------ -------- BENEFITS AND EXPENSES Commissions and general expenses.............. 1,982.3 1,147.4 -- 3,129.7 Benefits to policyhold- ers................... 698.5 -- -- 698.5 Interest expense....... 37.3 18.6 8.2 (4) 64.1 Amortization of de- ferred policy acquisi- tion costs............ 207.5 -- -- 207.5 Amortization of intan- gible assets.......... 82.1 12.3 34.1 (5) 128.5 -------- -------- ------ -------- Total Benefits and Expenses............ 3,007.7 1,178.3 42.3 4,228.3 -------- -------- ------ -------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX AND MINORITY INTER- EST..................... 458.0 156.0 (62.6) 551.4 Provision for income tax (benefit)......... 154.3 60.9 (10.6)(6) 204.6 -------- -------- ------ -------- INCOME FROM CONTINUING OPERATIONS BEFORE MINOR- ITY INTEREST............ 303.7 95.1 (52.0) 346.8 Minority interest, in- cluding subsidiary dis- tributions.............. -- (5.7) (41.3)(7) (47.0) -------- -------- ------ -------- INCOME FROM CONTINUING OPERATIONS............... 303.7 89.4(8) (93.3) 299.8 Preferred stock divi- dends................... (24.7) (25.4) 25.4 (9) (24.7) -------- -------- ------ -------- INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS.. $ 279.0 $ 64.0 $(67.9) $ 275.1 ======== ======== ====== ======== Income from continuing operations per share attributable to common stockholders............ $ 2.57 $ 2.53 Average common and common equivalent shares outstanding............. 108.7 108.7
See accompanying notes. 28 AON CORPORATION NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1995 1. Reflects the acquisition of A&A at a price of $1,253 million and funding sources for the acquisition as follows (in millions): Sale of fixed maturities........................................ $ 200.0 Issuance of commercial paper.................................... 153.0 Issuance of Capital Securities.................................. 800.0 A&A cash used to finance transaction............................ 100.0 -------- Purchase Price.................................................. $1,253.0 ========
The effect of Aon's acquisition of Bain Hogg on October 18, 1996 is not included. The purchase price was $260 million. Bain Hogg's revenue and pretax income for the year ended December 31, 1995 were $333 million and $33 million, respectively. The unaudited pro forma condensed consolidated statement of income does not include the potential effect of one-time restructuring charges which management of Aon expects to be incurred in the next twelve months in the range of $100 to $150 million related to the A&A and Bain Hogg acquisitions. This statement also does not include any anticipated cost savings that may be realized as a result of the restructuring. Management of Aon estimates cost savings related to the A&A and Bain Hogg acquisitions should be in excess of $100 million annually. 2. Certain historical amounts have been reclassified to conform to the presentation for the nine months ended September 30, 1996. 3. Reflects foregone investment income on cash of $100 million at an assumed rate of 5.35% held by A&A and on fixed maturities of $200 million at an assumed rate of 7.5% held by Aon. 4. Reflects interest expense on $153 million of commercial paper at an assumed rate of 5.35%. 5. Assumes Aon amortizes intangible assets over a 25 year period. 6. Assumes an effective tax rate of 37% on the pro forma adjustments excluding amortization of intangible assets. 7. Reflects Distributions on the Capital Securities of $65.6 million net of a tax benefit of $24.3 million. 8. Includes non-recurring revenues of $30.4 million ($20.1 million after tax) related to A&A's sale of certain operations and non-recurring restructuring and special charges of $17.6 million. 9. Reflects elimination of the dividends on the Series A Preferred Stock and the Series B Preferred Stock. 29 AON CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1996 (MILLIONS EXCEPT PER SHARE DATA)
HISTORICAL --------------------- ALEXANDER AON & PRO FORMA PRO FORMA CORPORATION ALEXANDER ADJUSTMENTS CONSOLIDATED(1) ----------- --------- ----------- --------------- REVENUE Brokerage commissions and fees............... $1,368.0 $920.6 $ -- $2,288.6 Premiums earned......... 1,141.4 -- -- 1,141.4 Net investment income... 269.7 57.4 (15.2)(2) 311.9 Realized investment in- come................... 3.1 -- -- 3.1 Other income............ 36.6 0.6 -- 37.2 -------- ------ ------ -------- Total Revenue......... 2,818.8 978.6 (15.2) 3,782.2 -------- ------ ------ -------- BENEFITS AND EXPENSES Commissions and general expenses............... 1,621.4 867.4 -- 2,488.8 Benefits to policyhold- ers.................... 582.1 -- -- 582.1 Interest expense........ 28.4 11.8 6.1 (3) 46.3 Amortization of deferred policy acquisition costs.................. 156.4 -- -- 156.4 Amortization of intangi- ble assets............. 55.6 11.7 25.5 (4) 92.8 -------- ------ ------ -------- Total Benefits and Ex- penses............... 2,443.9 890.9 31.6 3,366.4 -------- ------ ------ -------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX AND MINORITY INTEREST................. 374.9 87.7 (46.8) 415.8 Provision for income tax (benefit).............. 129.3 35.0 (7.9)(5) 156.4 -------- ------ ------ -------- INCOME FROM CONTINUING OP- ERATIONS BEFORE MINORITY INTEREST................. 245.6 52.7 (38.9) 259.4 Minority interest, includ- ing subsidiary distribu- tions.................... -- (5.0) (31.0)(6) (36.0) -------- ------ ------ -------- INCOME FROM CONTINUING OP- ERATIONS................. 245.6 47.7 (69.9) 223.4 Preferred stock dividends. (15.2) (19.9) 19.9 (7) (15.2) -------- ------ ------ -------- INCOME FROM CONTINUING OP- ERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS...... $ 230.4 $ 27.8 $(50.0) $ 208.2 ======== ====== ====== ======== Income from continuing op- erations per share at- tributable to common stockholders............. $ 2.11 $ 1.90 Average common and common equivalent shares outstanding.............. 109.7 109.7
See accompanying notes. 30 AON CORPORATION NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1996 1. Reflects the acquisition of A&A at a price of $1,253 million and funding sources for the acquisition as follows (in millions): Sale of fixed maturities........................................ $ 200.0 Issuance of commercial paper.................................... 153.0 Issuance of Capital Securities.................................. 800.0 A&A cash used to finance transaction............................ 100.0 -------- Purchase Price................................................ $1,253.0 ========
The effect of Aon's acquisition of Bain Hogg on October 18, 1996 is not included. The purchase price was $260 million. Bain Hogg's revenue and pretax income for the nine months ended September 30, 1996 were $245 million and $16 million, respectively. The unaudited pro forma condensed consolidated statement of income does not include the potential effect of one-time restructuring charges which management of Aon expects to be incurred in the next twelve months in the range of $100 to $150 million related to the A&A and Bain Hogg acquisitions. This statement also does not include any anticipated cost savings that may be realized as a result of restructuring. Management of Aon estimates cost savings related to the A&A and Bain Hogg acquisitions should be in excess of $100 million annually. 2. Reflects foregone investment income on cash of $100 million held by A&A at an assumed rate of 5.35% and on fixed maturities of $200 million held by Aon at an assumed rate of 7.5%. 3. Reflects interest expense on $153 million of commercial paper at an assumed rate of 5.35%. 4. Assumes that Aon amortizes intangible assets over a 25 year period. 5. Assumes an effective tax rate of 37% on the pro forma adjustments excluding amortization of intangible assets. 6. Reflects Distributions on the Capital Securities of $49.2 million net of a tax benefit of $18.2 million. 7. Reflects elimination of the dividends on the Series A Preferred Stock and the Series B Preferred Stock. 31 RATIOS OF EARNINGS TO FIXED CHARGES The following table sets forth Aon's historical ratios of Earnings to Fixed Charges for the periods indicated.
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, ------------------ ------------------------ 1996 1995 1995 1994 1993 1992 1991 -------- -------- ---- ---- ---- ---- ---- Ratios of Earnings to Fixed Charges.......... 7.6 6.7 6.6 5.9 5.4 3.6 4.8
The following table sets forth Aon's pro forma ratios of Earnings to Fixed Charges for the periods indicated.
NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ Pro Forma Ratios of Earnings to Fixed Charges (1)... 4.1 3.7 Supplemental Pro Forma Ratios of Earnings to Fixed Charges (2)........................................ 3.5 3.4
- -------- (1) Gives effect to the increase in Fixed Charges as a result of the issuance of the Capital Securities. (2) Gives effect to the increase in Fixed Charges as a result of the issuance of the Capital Securities and the acquisition of A&A as reflected in the pro forma condensed consolidated statements of income. The supplemental pro forma ratios exclude any restructuring charges that may be incurred and any cost savings Aon may realize. See "Pro Forma Consolidated Financial Information." For purposes of computing the foregoing ratios: (i) Earnings consist of income from continuing operations before provision for income taxes and excluding cumulative effects of accounting changes plus Fixed Charges; and (ii) Fixed Charges consist of interest on indebtedness, the portion of rental payments on operating leases estimated to represent an interest component and interest related to the Company's guarantees of the debt of its Employee Stock Ownership Plan. 32 ACCOUNTING TREATMENT FOR THE TRUST For financial reporting purposes, the Trust is treated as a subsidiary of the Company and, accordingly, the accounts of the Trust are included in the consolidated financial statements of the Company. The Capital Securities will be presented as a separate line item in the consolidated balance sheet of the Company and appropriate disclosures about the Capital Securities, the Guarantee and the Junior Subordinated Debentures will be included in the notes to the consolidated financial statements. For financial reporting purposes, the Company will record Distributions payable on the Capital Securities as a charge in the consolidated statement of income. THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER In connection with the sale of the Old Capital Securities, the Company and the Trust entered into the Registration Rights Agreement with the Initial Purchasers, pursuant to which the Company and the Trust agreed to file and to use their reasonable best efforts to cause to become effective with the Commission a registration statement with respect to the exchange of the Old Capital Securities for capital securities with terms identical in all material respects to the terms of the Old Capital Securities. A copy of the Registration Rights Agreement has been filed as an Exhibit to the Registration Statement of which this Prospectus is a part. The Exchange Offer is being made to satisfy the contractual obligations of the Company and the Trust under the Registration Rights Agreement. The forms and terms of the New Capital Securities are identical in all material respect to the forms and terms of the Old Capital Securities, except that the New Capital Securities have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the Old Capital Securities and will not provide for any increase in the Distribution rate thereon. In that regard, the Old Capital Securities provide, among other things, that, if the Exchange Offer is not consummated by August 11, 1997, the Distribution rate borne by the Old Capital Securities commencing on August 12, 1997, will increase by 0.25% per annum until the Exchange Offer is consummated. Upon consummation of the Exchange Offer, holders of Old Capital Securities will not be entitled to any increase in the Distribution rate thereon or any further registration rights under the Registration Rights Agreement, except under limited circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old Capital Securities" and "Description of Old Capital Securities." The Exchange Offer is not being made to, nor will the Trust or the Company accept tenders for exchange from, holders of Old Capital Securities in any jurisdiction in which the Exchange Offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. Unless the context requires otherwise, the term "holder" with respect to the Exchange Offer means any person in whose name the Old Capital Securities are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder, or any person who beneficially owns Old Capital Securities which are held of record by DTC who desires to deliver such Old Capital Securities by book-entry transfer into the Exchange Agent's account at DTC, or any person who beneficially owns Old Capital Securities which are held of record by a nominee other than DTC (or its nominee). Pursuant to the Exchange Offer, the Company will exchange as soon as practicable after the date hereof, the Old Guarantee for the New Guarantee and all of the Old Junior Subordinated Debentures, of which $824,000,000 aggregate principal amount is outstanding, for a like aggregate principal amount of the New Junior Subordinated Debentures. The New Guarantee and New Junior Subordinated Debentures have been registered under the Securities Act. TERMS OF THE EXCHANGE The Trust hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal, to exchange up to $800,000,000 aggregate Liquidation Amount of New 33 Capital Securities for a like aggregate Liquidation Amount of Old Capital Securities properly tendered on or prior to the Expiration Date and not properly withdrawn in accordance with the procedures described below. The Trust will issue, promptly after the Expiration Date, an aggregate Liquidation Amount of up to $800,000,000 of New Capital Securities in exchange for a like aggregate Liquidation Amount of outstanding Old Capital Securities tendered and accepted in connection with the Exchange Offer. Holders may tender their Old Capital Securities for exchange in whole or in part having a Liquidation Amount of not less than $100,000 (100 Old Capital Securities) or any integral multiple of $1,000 (1 Old Capital Security) in excess thereof. The Exchange Offer is not conditioned upon any minimum Liquidation Amount of Old Capital Securities being tendered. As of the date of this Prospectus, $800,000,000 aggregate Liquidation Amount of Old Capital Securities is outstanding. Holders of Old Capital Securities do not have any appraisal or dissenters' rights in connection with the Exchange Offer. Old Capital Securities which are not tendered for or are tendered but not accepted in connection with the Exchange Offer will remain outstanding and remain entitled to the benefits of the Trust Agreement, but will not be entitled to any further registration rights under the Registration Rights Agreement, except under limited circumstances. See "Risk Factors--Consequences of a Failure to Exchange Old Capital Securities" and "Description of Old Securities." If any tendered Old Capital Securities are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted Old Capital Securities will be returned, without expense, to the tendering holder thereof promptly after the Expiration Date. Holders who tender Old Capital Securities in connection with the Exchange Offer will not be required to pay brokerage commissions or fees or transfer taxes with respect to the exchange of Old Capital Securities in connection with the Exchange Offer, except under those circumstances described in the Letter of Transmittal. The Company will pay all charges and expenses, other than certain applicable taxes described below, in connection with the Exchange Offer. See "--Fees and Expenses." NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE TRUSTEES OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL SECURITIES TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" means 5:00 p.m., New York City time, on , 1997 unless the Exchange Offer is extended by the Company and the Trust (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). The Company and the Trust expressly reserve the right in their sole and absolute discretion, subject to applicable law, at any time and from time to time, (i) to delay the acceptance of the Old Capital Securities for exchange, (ii) to terminate the Exchange Offer (whether or not any Old Capital Securities have been accepted for exchange) if the Company or the Trust determines, in its sole and absolute discretion, that any of the conditions referred to under "--Conditions to the Exchange Offer" have occurred or exist or have not been satisfied, (iii) to extend the Expiration Date and retain all Old Capital Securities tendered pursuant to the Exchange Offer, subject, however, to the right of holders of Old Capital Securities to withdraw their tendered Old Capital Securities as described under "--Withdrawal Rights," and (iv) to waive any condition or otherwise 34 amend the terms of the Exchange Offer in any respect. If the Exchange Offer is amended in a manner determined by the Company and the Trust to constitute a material change, or if the Company and the Trust waive a material condition of the Exchange Offer, the Company and the Trust will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders of the Old Capital Securities, and the Company and the Trust will extend the Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act. Any such delay in acceptance, extension, termination or amendment will be followed promptly by oral or written notice thereof to the Exchange Agent and by making a public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Company and the Trust may choose to make any public announcement and subject to applicable law, the Company and the Trust shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to an appropriate news agency. ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES Upon the terms and subject to the conditions of the Exchange Offer, the Trust will exchange New Capital Securities for Old Capital Securities validly tendered and not withdrawn (pursuant to the withdrawal rights described under "--Withdrawal Rights") promptly after the Expiration Date. Subject to the conditions set forth under "--Conditions to the Exchange Offer," delivery of New Capital Securities in exchange for Old Capital Securities tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (i) certificates for Old Capital Securities or a book-entry confirmation of a book-entry transfer of Old Capital Securities into the Exchange Agent's account at DTC, including an Agent's Message if the tendering holder does not deliver a Letter of Transmittal, (ii) a completed and signed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. Accordingly, the delivery of New Capital Securities might not be made to all tendering holders at the same time, and will depend upon when certificates for Old Capital Securities, book-entry confirmations with respect to Old Capital Securities and other required documents are received by the Exchange Agent. The term "book-entry confirmation" means a timely confirmation of a book- entry transfer of Old Capital Securities into the Exchange Agent's account at DTC. See "--Procedures for Tendering Old Capital Securities--Book-Entry Transfer." The term "Agent's Message" means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Trust and the Company may enforce such Letter of Transmittal against such participant. Subject to the terms and conditions of the Exchange Offer, the Company and the Trust will be deemed to have accepted for exchange, and thereby exchanged, Old Capital Securities validly tendered and not withdrawn as, if and when the Trust gives oral or written notice to the Exchange Agent of the Company's and the Trust's acceptance of such Old Capital Securities for exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent for the Company and the Trust for the purpose of receiving tenders of Old Capital Securities, Letters of Transmittal and related documents, and as agent for tendering holders for the purpose of receiving Old Capital Securities, Letters of Transmittal and related documents and transmitting New Capital Securities which will not be held in global form by DTC or a nominee of DTC to validly tendering holders. Such exchange will be made promptly after the Expiration Date. If for any reason whatsoever, acceptance for exchange or the exchange of any Old Capital Securities tendered pursuant to the Exchange Offer is delayed (whether before or after the Company's and the Trust's acceptance for exchange of Old Capital Securities) or the Company and the Trust extend the Exchange Offer or are unable to accept for exchange or exchange Old Capital Securities 35 tendered pursuant to the Exchange Offer, then, without prejudice to the Company's and the Trust's rights set forth herein, the Exchange Agent may, nevertheless, on behalf of the Company and the Trust and subject to Rule 14e- 1(c) under the Exchange Act, retain tendered Old Capital Securities and such Old Capital Securities may not be withdrawn except to the extent tendering holders are entitled to withdrawal rights as described under "--Withdrawal Rights." Pursuant to an Agent's Message or a Letter of Transmittal, a holder of Old Capital Securities will represent, warrant and agree in the Letter of Transmittal that it has full power and authority to tender, exchange, sell, assign and transfer Old Capital Securities, that the Trust will acquire good, marketable and unencumbered title to the tendered Old Capital Securities, free and clear of all liens, restrictions, charges and encumbrances, and the Old Capital Securities tendered for exchange are not subject to any adverse claims or proxies. The holder also will warrant and agree that it will, upon request, execute and deliver any additional documents deemed by the Trust or the Exchange Agent to be necessary or desirable to complete the exchange, sale, assignment, and transfer of the Old Capital Securities tendered pursuant to the Exchange Offer. PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES Valid Tender. Except as set forth below, in order for Old Capital Securities to be validly tendered by book-entry transfer, an Agent's Message or a completed and signed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and in either case any other documents required by the Letter of Transmittal, must be delivered to the Exchange Agent by mail, facsimile, hand delivery or overnight carrier at one of the Exchange Agent's addresses set forth under "--Exchange Agent" on or prior to the Expiration Date and either (i) such Old Capital Securities must be tendered pursuant to the procedures for book-entry transfer set forth below or (ii) the guaranteed delivery procedures set forth below must be complied with. Except as set forth below, in order for Old Capital Securities to be validly tendered by a means other than by book-entry transfer, a completed and signed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal, must be delivered to the Exchange Agent by mail, facsimile, hand delivery or overnight carrier at one of the Exchange Agent's addresses set forth under "-- Exchange Agent" on or prior to the Expiration Date and either (i) such Old Capital Securities must be delivered to the Exchange Agent on or prior to the Expiration Date or (ii) the guaranteed delivery procedures set forth below must be complied with. If less than all Old Capital Securities are tendered, a tendering holder should fill in the amount of Old Capital Securities being tendered in the appropriate box on the Letter of Transmittal. The entire amount of Old Capital Securities delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS TO BE BY MAIL, THE USE OF REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Book-Entry Transfer. The Exchange Agent and DTC have confirmed that any Participant (as defined in "Description of Securities--Description of Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer--Depositary Procedures") in DTC's book-entry transfer facility system may utilize DTC's ATOP procedures to tender Old Capital Securities. The Exchange Agent will establish an account with respect to the Old Capital Securities at DTC for purposes of the Exchange Offer within two business days after the date of this Prospectus. Any Participant may make a book-entry delivery of the Old Capital Securities by causing DTC to transfer such Old Capital Securities into the Exchange Agent's account at DTC in accordance with DTC's ATOP procedures for transfer. However, although delivery of Old Capital Securities may be effected through book-entry 36 transfer into the Exchange Agent's account at DTC, an Agent's Message or a completed and signed Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other documents required by the Letter of Transmittal, must in any case be delivered to and received by the Exchange Agent at one of its addresses set forth under "--Exchange Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure set forth below must be complied with. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. Signature Guarantees. Certificates for Old Capital Securities need not be endorsed and signature guarantees on a Letter of Transmittal are unnecessary unless (a) a certificate for the Old Capital Securities is registered in a name other than that of the person surrendering the certificate or (b) such registered holder completes the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" in the Letter of Transmittal. In the case of (a) or (b) above, such certificates for Old Capital Securities must be duly endorsed or accompanied by a properly executed bond power, with the endorsement or signature on the bond power and on the Letter of Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association (an "Eligible Institution"), unless surrendered on behalf of such Eligible Institution. See Instructions 4 and 7 to the Letter of Transmittal. Guaranteed Delivery. If a holder desires to tender Old Capital Securities pursuant to the Exchange Offer and the certificates for such Old Capital Securities are not immediately available or time will not permit all required documents to reach the Exchange Agent on or before the Expiration Date, or the procedures for book-entry transfer cannot be completed on a timely basis, such Old Capital Securities may nevertheless be tendered, provided that all of the following guaranteed delivery procedures are complied with: (i) such tenders are made by or through an Eligible Institution; (ii) a completed and signed Notice of Guaranteed Delivery, substantially in the form accompanying the Letter of Transmittal, is delivered to the Exchange Agent, as provided below, on or prior to Expiration Date; and (iii) the certificates (or a book-entry confirmation) representing all tendered Old Capital Securities, in proper form for transfer, together with a completed and signed Letter of Transmittal (or facsimile thereof) or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal, with any required signature guarantees and any other documents required by the Letter of Transmittal, are received by the Exchange Agent within five New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand, or transmitted by facsimile or mail to the Exchange Agent and must include a guarantee by an Eligible Institution in the form set forth in such notice. The Company's and the Trust's acceptance for exchange of Old Capital Securities tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering holder, the Company and the Trust upon the terms and subject to the conditions of the Exchange Offer. Determination of Validity. All questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tendered Old Capital Securities will be determined by the Company and the Trust, in their sole discretion, whose determination shall be final and binding on all parties. The Company and the Trust reserve the absolute right, in their sole and absolute discretion, to reject any and all tenders determined by them not to be in proper form or the acceptance of which, or exchange for, may, in the view of counsel to the Company and the Trust, be unlawful. The Company and the Trust also reserve the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer as set forth under "--Conditions to the Exchange Offer" or any condition, defect or irregularity in any tender of Old Capital Securities of any particular holder whether or not similar conditions, defects or irregularities are waived in the case of other holders. 37 The Company's and the Trust's interpretation of the terms and conditions of the Exchange Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding on all parties. No tender of Old Capital Securities will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Neither the Company, the Trust, any affiliates or assigns of the Company or the Trust, the Exchange Agent nor any other person shall be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. If any Letter of Transmittal, endorsement, bond power, power of attorney or any other document required by the Letter of Transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and, unless waived by the Company and the Trust, proper evidence satisfactory to the Company and the Trust, in their sole discretion, of such person's authority to so act must be submitted. A beneficial owner of Old Capital Securities that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian is urged to contact such entity promptly if such beneficial holder wishes to participate in the Exchange Offer. RESALES OF NEW CAPITAL SECURITIES The Trust is making the Exchange Offer for the Capital Securities in reliance on the position of the staff of the Division of Corporation Finance of the Commission as set forth in certain interpretive letters addressed to third parties in other transactions. However, neither the Company nor the Trust sought its own interpretive letter and there can be no assurance that the staff of the Division of Corporation Finance of the Commission would make a similar determination with respect to the Exchange Offer as it has in such interpretive letters to third parties. Based on these interpretations by the staff of the Division of Corporation Finance, and subject to the two immediately following sentences, the Company and the Trust believe that New Capital Securities issued pursuant to this Exchange Offer in exchange for Old Capital Securities may be offered for resale, resold and otherwise transferred by a holder thereof (other than a holder who is a broker-dealer) without further compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such New Capital Securities are acquired in the ordinary course of such holder's business and that such holder is not participating, and has no arrangement or understanding with any person to participate, in a distribution (within the meaning of the Securities Act) of such New Capital Securities. However, any holder of Old Capital Securities who is an "affiliate" of the Company or the Trust or who intends to participate in the Exchange Offer for the purpose of distributing New Capital Securities, or any broker-dealer who purchased Old Capital Securities from the Trust to resell pursuant to Rule 144A or any other available exemption under the Securities Act, (a) will not be able to rely on the interpretations of the staff of the Division of Corporation Finance of the Commission set forth in the above-mentioned interpretive letters, (b) will not be permitted or entitled to tender such Old Capital Securities in the Exchange Offer and (c) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or other transfer of such Old Capital Securities unless such sale is made pursuant to an exemption from such requirements. In addition, as described below, if any broker-dealer holds Old Capital Securities acquired for its own account as a result of market-making or other trading activities and exchanges such Old Capital Securities for New Capital Securities, then such broker-dealer must deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of such New Capital Securities. Each holder of Old Capital Securities who wishes to exchange Old Capital Securities for New Capital Securities in the Exchange Offer will be required to represent that (i) it is not an "affiliate" of the Company or the Trust, (ii) any New Capital Securities to be received by it are being acquired in the ordinary course of its business, (iii) it has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such New Capital Securities, and (iv) if such holder is not a broker-dealer, such holder is not engaged in, and does not intend to engage in, a distribution (within the meaning of the Securities Act) of such New Capital Securities. The Letter of Transmittal contains the foregoing representations. 38 In addition, the Company and the Trust may require a holder, as a condition to such holder's eligibility to participate in the Exchange Offer, to furnish to the Company and the Trust (or an agent thereof) in writing information as to the number of "beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder holds the Capital Securities to be exchanged in the Exchange Offer. Each broker-dealer that receives New Capital Securities for its own account pursuant to the Exchange Offer must acknowledge that it acquired the Old Capital Securities for its own account as the result of market-making activities or other trading activities and must agree that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Capital Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Based on the position taken by the staff of the Division of Corporation Finance of the Commission in the interpretive letters referred to above, the Company and the Trust believe that broker- dealers who acquired Old Capital Securities for their own accounts as a result of market-making activities or other trading activities ("Participating Broker- Dealers") may fulfill their prospectus delivery requirements with respect to the New Capital Securities received upon exchange of such Old Capital Securities (other than Old Capital Securities which represent an unsold allotment from the original sale of the Old Capital Securities) with a prospectus meeting the requirements of the Securities Act, which may be the prospectus prepared for an exchange offer so long as it contains a description of the plan of distribution with respect to the resale of such New Capital Securities. Accordingly, this Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer during the 90- day period referred to below in connection with resales of New Capital Securities received in exchange for Old Capital Securities where such Old Capital Securities were acquired by such Participating Broker-Dealer for its own account as a result of market-making or other trading activities. Subject to certain provisions set forth in the Registration Rights Agreement and to the limitations described herein, the Company and the Trust have agreed that this Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of such New Capital Securities for a period ending 90 days after the Expiration Date or, if earlier, when all such New Capital Securities have been disposed of by such Participating Broker-Dealer. See "Plan of Distribution." Any person, including any Participating Broker-Dealer, who is an "affiliate" of the Company or the Trust may not rely on such interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. In that regard, each Participating Broker-Dealer who surrenders Old Capital Securities pursuant to the Exchange Offer will be deemed to have agreed, by execution of the Letter of Transmittal or delivery of any Agent's Message in lieu thereof, that, upon receipt of notice from the Company or the Trust of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in this Prospectus untrue in any material respect or which causes this Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference herein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the Registration Rights Agreement, such Participating Broker-Dealer will suspend the sale of New Capital Securities (or the New Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to this Prospectus until the Company or the Trust has amended or supplemented this Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to such Participating Broker-Dealer or the Company or the Trust has given notice that the sale of the New Capital Securities (or the New Guarantee or the New Junior Subordinated Debentures, as applicable) may be resumed, as the case may be. WITHDRAWAL RIGHTS As set forth below, tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective a written or facsimile transmission of such notice of withdrawal must be received by the Exchange Agent at one of its addresses set forth under "--Exchange Agent" on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered 39 the Old Capital Securities to be withdrawn, the aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and (if certificates for such Old Capital Securities have been tendered) the name of the registered holder of the Old Capital Securities as set forth on the certificate for the Old Capital Securities, if different from that of the person who tendered such Old Capital Securities. If certificates for the Old Capital Securities have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such certificates for the Old Capital Securities, the tendering holder must submit the serial numbers shown on the particular certificates for the Old Capital Securities to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Capital Securities tendered for the account of an Eligible Institution. If Old Capital Securities have been tendered pursuant to the procedures for book- entry transfer set forth in "--Procedures for Tendering Old Capital Securities," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Capital Securities. Withdrawals of tenders of Old Capital Securities may not be rescinded. Old Capital Securities properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described above under "--Procedures for Tendering Old Capital Securities." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company and the Trust, in their sole discretion, whose determination shall be final and binding on all parties. Neither the Company, the Trust, any affiliates or assigns of the Company or the Trust, the Exchange Agent nor any other person shall be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Old Capital Securities which have been tendered but which are withdrawn will be returned to the holder thereof promptly after withdrawal. DISTRIBUTIONS ON NEW CAPITAL SECURITIES Each New Capital Security will accumulate Distributions from the most recent Distribution Date on the Old Capital Securities surrendered in exchange for such New Capital Securities or, if no Distributions have been paid or provided for on such Old Capital Securities, from January 1, 1997. As a result, holders of Old Capital Securities that are accepted for exchange will not receive accumulated Distributions on such Old Capital Securities for any period from and after the most recent Distribution Date on such Old Capital Securities or, if no Distributions have been paid or provided for on such Old Capital Securities, from and after January 1, 1997, and such holders will be deemed to have waived the right to receive any Distributions on such Old Capital Securities. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provisions of the Exchange Offer, or any extension of the Exchange Offer, the Company and the Trust will not be required to accept any Old Capital Securities for exchange or to exchange any New Capital Securities for any Old Capital Securities, and, as described below, may terminate the Exchange Offer (whether or not any Old Capital Securities have been accepted for exchange) or may waive any conditions to or amend the Exchange Offer, if any of the following conditions have occurred or exists or have not been satisfied: (a) there shall occur a change in the current interpretation by the staff of the Commission which permits the New Capital Securities issued pursuant to the Exchange Offer in exchange for Old Capital Securities to be offered for resale, resold and otherwise transferred by holders thereof (other than broker-dealers and any such holder which is an "affiliate" of the Company or the Trust within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such New Capital Securities are acquired in the ordinary course of such holders' business and such holders have no arrangement or understanding with any person to participate in the distribution of such New Capital Securities; (b) any action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency or body with respect to the Exchange Offer which, in the Company's and the Trust's judgment, would reasonably be expected to impair the ability of the Company or the Trust to proceed with the Exchange Offer; 40 (c) any law, statute, rule or regulation shall have been adopted or enacted which, in the Company's and the Trust's judgment, would reasonably be expected to impair the ability of the Company or the Trust to proceed with the Exchange Offer; (d) trading on the New York Stock Exchange or generally in the United States over-the-counter market shall have been suspended by order of the Commission or any other governmental authority which, in the Company's and the Trust's judgment, would reasonably be expected to impair the ability of the Company or the Trust to proceed with the Exchange Offer; (e) a stop order shall have been issued by the Commission or any state securities authority suspending the effectiveness of the Registration Statement or proceedings shall have been initiated or, to the knowledge of the Company or the Trust, threatened for that purpose, or any governmental approval has not been obtained, which approval the Company and the Trust shall, in their sole discretion, deem necessary for the consummation of the Exchange Offer as contemplated hereby; or (f) any change, or any development involving a prospective change, in the business or financial affairs of the Company or any of its subsidiaries has occurred which, in the sole judgment of the Company and the Trust, might materially impair the ability of the Company or the Trust to proceed with the Exchange Offer. If the Company and the Trust determine in their sole and absolute discretion that any of the foregoing events or conditions has occurred or exists or has not been satisfied, the Company and the Trust may, subject to applicable law, terminate the Exchange Offer (whether or not any Old Capital Securities have theretofore been accepted for exchange) or may waive any such condition or otherwise amend the terms of the Exchange Offer in any respect. If such waiver or amendment constitutes a material change to the Exchange Offer, the Company and the Trust will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered holders of the Old Capital Securities, and the Company and the Trust will extend the Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act. EXCHANGE AGENT The Bank of New York has been appointed as Exchange Agent for the Exchange Offer. Delivery of a Letter of Transmittal and any other documents required by the Letter of Transmittal, questions, requests for assistance, and requests for additional copies of this Prospectus or of a Letter of Transmittal should be directed to the Exchange Agent as follows: By Registered or By Facsimile: By Hand/Overnight Certified Mail: Carrier: The Bank of New York The Bank of New York Attn: Enrique Lopez The Bank of New York 101 Barclay Street--7E (212) 571-3080 101 Barclay Street New York, New York 10286 Corporate Trust Services Window Attn: Reorganization (For Eligible Section Institutions Only) Ground Level Confirm by Telephone New York, New York 10286 (212) 815-6333 Attn: Reorganization Section For Information Call: (212) 815-6333 Delivery to other than the above addresses or facsimile number will not constitute a valid delivery. FEES AND EXPENSES The Company has agreed to pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. The Company will also pay 41 brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Prospectus and related documents to the beneficial owners of Old Capital Securities, and in handling or tendering for their customers. Holders who tender their Old Capital Securities for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Capital Securities are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Capital Securities tendered, or if a transfer tax is imposed for any reason other than the exchange of Old Capital Securities in connection with the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. Neither the Company nor the Trust will make any payment to brokers, dealers or others soliciting acceptances of the Exchange Offer. DESCRIPTION OF SECURITIES DESCRIPTION OF CAPITAL SECURITIES Pursuant to the terms of the Trust Agreement, the Trust has issued Old Capital Securities and Common Securities and, in the event the Exchange Offer is consummated, will issue New Capital Securities. New Capital Securities will represent undivided beneficial interests in the assets of the Trust and the holders thereof will be entitled to a preference in certain circumstances with respect to Distributions and amounts payable on redemption of the Trust Securities or liquidation of the Trust over the Common Securities. See "-- Subordination of Common Securities." The Trust Agreement has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The forms and terms of the New Capital Securities are identical in all material respects to the forms and terms of the Old Capital Securities, except that the New Capital Securities have been registered under the Securities Act and therefore are not subject to certain restrictions on transfer applicable to the Old Capital Securities and will not provide for any increase in the Distribution rate thereon. Accordingly, as the context may require, unless expressly stated otherwise, "Capital Securities" means the Old Capital Securities and, in the event the Exchange Offer is consummated, the New Capital Securities. This summary of certain provisions of the Capital Securities, the Common Securities and the Trust Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Trust Agreement, including the definitions therein of certain terms. GENERAL The Capital Securities (including the Old Capital Securities and the New Capital Securities) are limited to $800,000,000 aggregate Liquidation Amount at any one time outstanding. The Capital Securities rank on a parity, and payments are made thereon pro rata, with the Common Securities except as described under "--Subordination of Common Securities." The New Capital Securities and any Old Capital Securities that remain outstanding after consummation of the Exchange Offer will constitute a single series of Capital Securities under the Trust Agreement and, accordingly, will vote together as a single class for purposes of determining whether holders of the requisite percentage in outstanding Liquidation Amount thereof have taken certain actions or exercised certain rights under the Trust Agreement. Legal title to the Old Junior Subordinated Debentures is (and legal title to the New Junior Subordinated Debentures will be) held by the Property Trustee in trust for the benefit of the holders of Capital Securities and Common Securities. The New Guarantee to be executed by the Company for the benefit of the holders of Capital Securities will be a guarantee on a subordinated basis but will not guarantee payment of Distributions or amounts payable on redemption of Capital Securities or on liquidation of the Trust when the Trust does not have funds on hand available to make such payments. See "Description of Guarantee." 42 DISTRIBUTIONS Distributions on the Capital Securities are cumulative, accumulate from January 1, 1997 and are payable semi-annually in arrears at the annual rate of 8.205% of the Liquidation Amount on January 1 and July 1 of each year, commencing July 1, 1997, to the holders of the Capital Securities on the relevant record dates. The record dates are the immediately preceding December 15 and June 15, respectively. The amount of Distributions payable for any period is computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which Distributions are payable on the Capital Securities is not a Business Day (as defined below), payment of the Distribution payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect to any such delay), in each case with the same force and effect as if made on such date (each date on which Distributions are payable in accordance with the foregoing, a "Distribution Date"). A "Business Day" means any day which is not a Saturday or Sunday and which is neither a legal holiday nor a day on which banking institutions in The City of New York are authorized or required by law or executive order to close or a day on which the principal corporate trust office of the Property Trustee or the Debenture Trustee is closed for business. So long as no Debenture Event of Default has occurred and is continuing, the Company has the right under the Indenture to defer the payment of interest on the Junior Subordinated Debentures at any time or from time to time for a period not exceeding 10 consecutive semi-annual periods, during which Extension Period the Company has the right to make partial payments of interest on any Interest Payment Date. No Extension Period may extend beyond the Stated Maturity or any earlier prepayment date. As a consequence of any such deferral, semi-annual Distributions on the Capital Securities by the Trust will be deferred during any such Extension Period. Distributions to which holders of the Capital Securities are entitled will accumulate Additional Distributions at the rate of 8.205% per annum, compounded semi- annually from the relevant payment date for such Distributions, but not exceeding the interest rate then accruing on the Junior Subordinated Debentures. The term "Distributions" as used herein shall include any such Additional Distributions and Additional Tax Sums, if applicable. During any such Extension Period, the Company may not, and may not permit any subsidiary of the Company to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock (which includes common and preferred stock) or (ii) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company (including Other Debentures) that rank on a parity with or junior to the Junior Subordinated Debentures or make any guarantee payments with respect to any guarantee by the Company of the debt securities of any subsidiary of the Company (including Other Guarantees) if such guarantee ranks on a parity with or junior to the Junior Subordinated Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a stockholders' rights plan, or the issuance of capital stock under any such plan, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under the Guarantee and (d) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans for its directors, officers, employees, consultants or advisers). Prior to the termination of any such Extension Period, the Company may further extend such Extension Period, provided that such extension does not cause such Extension Period to exceed 10 consecutive semi-annual periods or to extend beyond the Stated Maturity or any earlier prepayment date. At any time following the termination of any such Extension Period and the payment of all amounts then due, the Company may elect to begin a new Extension Period, subject to the foregoing requirements. The Company must give the Property Trustee and the Debenture Trustee notice of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date the Distributions on the Capital Securities would have been payable but for the election to begin or extend such Extension Period or (ii) the date the Administrative Trustees are required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of Capital Securities of the record date or the date such Distributions are payable, but in any event not fewer than five Business Days prior to such record date. There is no limitation on the number of times that 43 the Company may elect to begin an Extension Period. See "Description of Junior Subordinated Debentures--Option to Defer Interest Payments" and "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." The revenue of the Trust available for distribution to holders of the Capital Securities will be limited to payments under the Junior Subordinated Debentures. See "Description of Junior Subordinated Debentures--General." If the Company does not make interest payments on the Junior Subordinated Debentures, the Property Trustee will not have funds available to pay Distributions on the Capital Securities. The payment of Distributions (if and to the extent the Trust has funds legally available for the payment of such Distributions and cash sufficient to make such payments) is guaranteed by the Company on a subordinated basis as set forth under "Description of Guarantee." REDEMPTION Upon the repayment in full at the Stated Maturity or prepayment in whole (but not in part) of the Junior Subordinated Debentures, the proceeds from such repayment or prepayment shall be applied by the Property Trustee to redeem the Trust Securities, upon not less than 15 nor more than 60 days' notice of a date of redemption (the "Redemption Date"), at the applicable Redemption Price, which shall be equal to (i) in the case of the repayment in full of the Junior Subordinated Debentures at the Stated Maturity, the Maturity Redemption Price (equal to the principal of, and accrued interest on, the Junior Subordinated Debentures) or (ii) in the case of the optional prepayment by the Company in whole but not in part of the Junior Subordinated Debentures upon the occurrence and continuation of a Tax Event or an Investment Company Event at the Event Redemption Price (which is equal to the Event Prepayment Price in respect of the Junior Subordinated Debentures) (see "Description of Junior Subordinated Debentures--Tax Event or Investment Company Event Prepayment"). LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES The Company has the right to terminate the Trust at any time and, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Securities in liquidation of the Trust. Such right is subject to the Company's having received an opinion of counsel to the effect that such distribution will not be a taxable event to holders of Capital Securities for United States federal income tax purposes. Under current United States federal income tax law and interpretations and assuming, as expected, the Trust is treated as a grantor trust, a distribution of the Junior Subordinated Debentures will not be a taxable event to holders of the Capital Securities. Should there be a change in law, a change in legal interpretation, a Tax Event or other circumstances, however, the distribution could be a taxable event to holders of the Capital Securities. See "Certain Federal Income Tax Consequences--Distribution of Junior Subordinated Debentures to Holders of Capital Securities." The Trust shall automatically terminate upon the first to occur of: (i) certain events of bankruptcy, a receivership of the Company or dissolution or liquidation of the Company; (ii) the dissolution or liquidation of the Company; (iii) distribution of a Like Amount (as defined below) of the Junior Subordinated Debentures to the holders of the Trust Securities if the Company, as Depositor, has given written direction to the Property Trustee to terminate the Trust (which direction is optional and wholly within the discretion of the Company, as Depositor, subject to the requirement that the Company receive an opinion of counsel to the effect that such distribution will not be a taxable event to holders of Capital Securities for United States federal income tax purposes); (iv) redemption of all of the Trust Securities in connection with the repayment of all Junior Subordinated Debentures as described above under "--Redemption"; (v) the entry of an order for the dissolution of the Trust by a court of competent jurisdiction and (vi) the expiration of the term of the Trust on January 1, 2028. 44 If a termination occurs as described in clause (i), (ii), (iii) or (v) above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as the Issuer Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to the holders of the Trust Securities a Like Amount of the Junior Subordinated Debentures, unless such distribution is determined by the Property Trustee not to be practicable, in which event such holders will be entitled to receive out of the liquidation of the assets of the Trust available for distribution to holders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the aggregate of the Liquidation Amount plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Trust Securities shall be paid on a pro rata basis. The holder(s) of the Common Securities will be entitled to receive Liquidation Distributions upon any such liquidation pro rata with the holders of the Capital Securities, except that if a Debenture Event of Default has occurred and is continuing, the Capital Securities shall have a priority over the Common Securities. See "--Subordination of Common Securities." "Like Amount" means Junior Subordinated Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities of the holder to whom such Junior Subordinated Debentures are distributed. If there is no early termination of the Trust, the Capital Securities will remain outstanding until the repayment of the Junior Subordinated Debentures at the Stated Maturity. After the liquidation date for any distribution of Junior Subordinated Debentures to holders of the Trust Securities, (i) the Capital Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee, as the record holder of the Capital Securities, will receive a registered global certificate or certificates representing the Junior Subordinated Debentures to be delivered upon such distribution and (iii) any certificates representing Capital Securities not held by DTC or its nominee will be deemed to represent Junior Subordinated Debentures having a principal amount equal to the Liquidation Amount of such Capital Securities and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions on such Capital Securities until such certificates are presented to the Administrative Trustees or their agent for cancellation, whereupon the Company will issue to such holder, and the Debenture Trustee will authenticate, a certificate representing such Junior Subordinated Debentures. REDEMPTION PROCEDURES Trust Securities shall be redeemed, if at all, at the applicable Redemption Price with the proceeds from the contemporaneous repayment or prepayment of the Junior Subordinated Debentures. Redemptions of the Trust Securities shall be made and the applicable Redemption Price shall be payable on the Redemption Date only to the extent that the Trust has funds on hand available for the payment of such applicable Redemption Price. See "--Subordination of Common Securities." If the Property Trustee gives a notice of redemption in respect of any Capital Securities, then, by 10:00 a.m., New York City time, on the Redemption Date, the Company shall deposit sufficient funds with the Property Trustee to pay the applicable Redemption Price. If such deposit has been made, then by 12:00 noon, New York City time, on the Redemption Date, to the extent funds are available, with respect to the Capital Securities held in global form, the Property Trustee will irrevocably deposit with DTC funds sufficient to pay the applicable Redemption Price and will give DTC irrevocable instructions and authority to pay the applicable Redemption Price to the holders of the Capital Securities. See "--Form, Denomination, Book-Entry Procedures and Transfer" and "--Payment and Paying Agency." With respect to the Capital Securities held in certificated form, the Property Trustee, to the extent funds are available, will irrevocably deposit with the paying agent for the Capital Securities funds sufficient to pay the applicable Redemption Price and will give such paying agent irrevocable instructions and authority to pay the applicable Redemption Price to the holders thereof upon surrender of their certificates evidencing the Capital Securities. See "--Payment and Paying Agency." 45 Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Capital Securities called for redemption shall be payable to the holders of such Capital Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of the holders of the Capital Securities will cease, except the right of the holders of the Capital Securities to receive the applicable Redemption Price and any Distribution payable on or prior to the Redemption Date, but without interest, and the Capital Securities will cease to be outstanding. In the event that any Redemption Date of Capital Securities is not a Business Day, then payment of the applicable Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay). In the event that payment of the applicable Redemption Price is improperly withheld or refused and not paid either by the Trust or by the Company pursuant to the Guarantee as described under "Description of Guarantee," Distributions on Capital Securities will continue to accumulate at the then applicable rate, from the Redemption Date originally established by the Trust to but excluding the date such applicable Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the applicable Redemption Price. Subject to applicable law (including, without limitation, United States federal securities law), the Company or its subsidiaries may at any time and from time to time purchase outstanding Capital Securities by tender, in the open market or by private agreement. Payment of the applicable Redemption Price on, and any distribution of Junior Subordinated Debentures to holders of, the Trust Securities shall be made to the applicable recordholders thereof as they appear on the register therefor on the relevant record date, which shall be a date not more than 45 days nor less than 15 days prior to the Redemption Date or liquidation date, as applicable. Notice of any redemption will be mailed at least 15 days but not more than 60 days before the Redemption Date to each holder of Trust Securities at its registered address. Unless the Company defaults in payment of the applicable Prepayment Price on, or in the repayment of, the Junior Subordinated Debentures, on and after the Redemption Date Distributions will cease to accumulate on the Trust Securities called for redemption. SUBORDINATION OF COMMON SECURITIES Payment of Distributions on, and the Redemption Price of, the Capital Securities and Common Securities, as applicable, shall be made pro rata based on the Liquidation Amounts of the Capital Securities and Common Securities; provided, however, that if on any Distribution Date or Redemption Date a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution on, or applicable Redemption Price of, any of the Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of the Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all of the outstanding Capital Securities for all Distribution periods terminating on or prior thereto, or in the case of payment of the applicable Redemption Price the full amount of such Redemption Price on all outstanding Capital Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions on, or Redemption Price of, the Capital Securities then due and payable. In the case of any Event of Default under the Trust Agreement resulting from a Debenture Event of Default, the Company as holder of the Common Securities will be deemed to have waived any right to act with respect to any such Event of Default until the effect of all such Events of Default has been cured, waived or otherwise eliminated. Until any such Events of Default have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the holders of the Capital Securities and not on behalf of the Company as holder of the Common Securities, and only the holders of the Capital Securities will have the right to direct the Property Trustee to act on their behalf. 46 EVENTS OF DEFAULT; NOTICE Any one of the following events constitutes an Event of Default under the Trust Agreement (an "Event of Default") (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) the occurrence of a Debenture Event of Default (see "Description of Junior Subordinated Debentures--Debenture Events of Default"); or (ii) default by the Property Trustee in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (iii) default by the Property Trustee in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or (iv) default in the performance, or breach, in any material respect, of any covenant or warranty of the Issuer Trustees in the Trust Agreement (other than a covenant or warranty a default in the performance of which or the breach of which is addressed in clause (ii) or (iii) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the defaulting Issuer Trustee or Trustees by the holders of at least 25% in aggregate Liquidation Amount of the outstanding Capital Securities, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under the Trust Agreement; or (v) the occurrence of certain events of bankruptcy or insolvency with respect to the Property Trustee and the failure to appoint a successor Property Trustee within 60 days thereof. Within 90 days after the occurrence of any Event of Default actually known to the Property Trustee, the Property Trustee shall transmit notice of such Event of Default to the holders of the Capital Securities, the Administrative Trustees and the Company, as Depositor, unless such Event of Default shall have been cured or waived. The Company, as Depositor, and the Administrative Trustees are required to file annually with the Property Trustee a certificate as to whether or not they are in compliance with all the conditions and covenants applicable to them under the Trust Agreement. If a Debenture Event of Default has occurred and is continuing, the Capital Securities shall have a preference over the Common Securities with respect to payments of Distributions or upon termination of the Trust as described above. See "--Liquidation of the Trust and Distribution of Junior Subordinated Debentures" and "--Subordination of Common Securities." REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS The holders of a majority in Liquidation Amount of Capital Securities may remove the Property Trustee or the Delaware Trustee if a Debenture Event of Default has occurred and is continuing. If the Property Trustee or the Delaware Trustee is removed at a time when a Debenture Event of Default has occurred and is continuing, the holders of a majority in Liquidation Amount of Capital Securities may appoint a successor Property Trustee or Delaware Trustee. If no Debenture Event of Default has occurred and is continuing at such time, the Company, as holder of the Common Securities, may appoint a successor Property Trustee or Delaware Trustee. If an Administrative Trustee is removed, the Company, as holder of the Common Securities, shall promptly appoint a successor. In no event will the holders of Capital Securities have the right to vote to remove the Administrative Trustees, which voting rights are vested exclusively in the Company, as holder of the Common Securities. If a successor has not been so appointed, any holder of Capital Securities or Common Securities (who has been a holder for at least six months), or a resigning Trustee, in the case of the failure to appoint its successor, may petition a court of competent jurisdiction to appoint a successor. Any Delaware Trustee must meet the applicable requirements of Delaware law. Any Property Trustee must be a national or state-chartered bank and at the time of appointment have securities rated in one of the three highest rating categories by a nationally recognized statistical rating organization and have capital and surplus of at least $50,000,000. Each Administrative Trustee shall be a current officer of the Company. No resignation or removal of an Issuer Trustee and no appointment of 47 a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the Trust Agreement. MERGER OR CONSOLIDATION OF ISSUER TRUSTEES Any entity into which the Property Trustee or the Delaware Trustee may be merged or converted or with which it may be consolidated, or any entity resulting from any merger, conversion or consolidation to which such Issuer Trustee shall be a party, or any entity succeeding to all or substantially all the corporate trust business of such Issuer Trustee, shall be the successor of such Issuer Trustee under the Trust Agreement, provided such entity shall be otherwise qualified and eligible. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST The Trust may not merge with or into, consolidate, amalgamate or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other entity, except as described below or pursuant to a liquidation as described above in "--Liquidation of the Trust and Distribution of Junior Subordinated Debentures." The Trust may, at the request of the Company, as Depositor, and with the consent of the Administrative Trustees, but without the consent of the holders of the Capital Securities, the Property Trustee or the Delaware Trustee, merge with or into, consolidate, amalgamate or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided, however, that (i) such successor entity either (a) expressly assumes all of the obligations of the Trust with respect to the Capital Securities or (b) substitutes for the Capital Securities other securities having substantially the same terms as the Capital Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Capital Securities rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) the Company expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of the Junior Subordinated Debentures, (iii) the Successor Securities are listed or traded, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Capital Securities are then listed, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Capital Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the Capital Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Company has received an opinion from independent counsel to the Trust experienced in such matters to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the Capital Securities (including any Successor Securities) in any material respect, and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and (viii) the Company or any permitted successor or assignee owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of holders of 100% in Liquidation Amount of the Capital Securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT Except as provided below and under "Description of Guarantee--Amendments and Assignment" and as otherwise required by law and the Trust Agreement, the holders of the Capital Securities have no voting rights. 48 The Trust Agreement may be amended from time to time by the Company, the Property Trustee, the Delaware Trustee and the Administrative Trustees, without the consent of the holders of the Trust Securities, (i) to cure any ambiguity to correct or supplement any provisions in the Trust Agreement that may be inconsistent with any other provision or to make any other provision with respect to matters or questions arising under the Trust Agreement, which shall not be inconsistent with the other provisions of the Trust Agreement, (ii) to modify, eliminate or add to any provisions of the Trust Agreement to such extent as shall be necessary to ensure that the Trust will be classified for United States federal income tax purposes as a grantor trust at all times that any Trust Securities are outstanding or to ensure that the Trust will not be required to register as an "investment company" under the Investment Company Act or (iii) to provide the Property Trustee with the authority to execute on behalf of the Administrative Trustees Capital Securities certificates in certificated, fully registered form; provided, however, that in the case of clauses (i) and (ii), such action shall not adversely affect in any material respect the interests of any holder of Trust Securities or the Property Trustee or the Delaware Trustee, and any amendments of the Trust Agreement shall become effective when notice thereof is given to the holders of the Trust Securities. The Trust Agreement may be amended by the Issuer Trustees and the Company with (i) the consent of holders representing not less than a majority (based upon Liquidation Amounts) of the outstanding Trust Securities and (ii) receipt by the Issuer Trustees of an opinion of counsel to the effect that such amendment or the exercise of any power granted to the Issuer Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States federal income tax purposes or the Trust's exemption from status as an "investment company" under the Investment Company Act. The Trust Agreement may not be amended without the consent of each holder of Trust Securities to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a holder of Trust Securities to institute suit for the enforcement of any such payment on or after such date. So long as any Junior Subordinated Debentures are held by the Property Trustee, the Issuer Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee or executing any trust or power conferred on the Debenture Trustee with respect to the Junior Subordinated Debentures, (ii) waive any past default that is waivable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior Subordinated Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture or the Junior Subordinated Debentures, where the consent of the holders of the Junior Subordinated Debentures shall be required, without, in each case, obtaining the prior approval of the holders of at least a majority in Liquidation Amount of all outstanding Capital Securities; provided, however, that where a consent under the Indenture would require the consent of each holder of Junior Subordinated Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each holder of the Capital Securities. The Issuer Trustees shall not revoke any action previously authorized or approved by a vote of the holders of the Capital Securities, except by a subsequent vote of such holders. The Property Trustee shall notify each holder of Capital Securities of any notice of default with respect to the Junior Subordinated Debentures unless such default shall have been cured or waived. In addition to obtaining the foregoing approvals of such holders of the Capital Securities, prior to taking any of the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel experienced in such matters to the effect that such action will not cause the Trust to be classified as an association taxable as a corporation for United States federal income tax purposes. Any required approval of holders of Trust Securities may be given at a meeting of such holders convened for such purpose. Any action that may be taken by holders of Trust Securities at a meeting may be taken without a meeting if holders of Trust Securities holding more than a majority of outstanding Trust Securities (based upon their Liquidation Amount) shall consent to the action in writing. The Property Trustee will cause a notice of any meeting at which holders of Trust Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be given to each holder of record of Trust Securities in the manner set forth in the Trust Agreement. No vote or consent of the holders of Capital Securities is required for the Trust to redeem and cancel the Capital Securities in accordance with the Trust Agreement. 49 Notwithstanding that holders of the Capital Securities are entitled to vote or consent under any of the circumstances described above, any of the Capital Securities that are owned by the Company, the Issuer Trustees or any affiliate of the Company or any Issuer Trustee, shall, for purposes of such vote or consent, be treated as if they were not outstanding. FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER In the event that New Capital Securities are issued in certificated form, such New Capital Securities will be in blocks having a Liquidation Amount of not less than $100,000 (100 New Capital Securities) and may be transferred or exchanged in such blocks in the manner and at the offices described below. In the event that New Capital Securities are issued in registered, global form (collectively, the "Global Capital Securities"), the Global Capital Securities will be deposited upon issuance with the Property Trustee as custodian for DTC, in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below. Except as set forth below, Global Capital Securities may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in Global Capital Securities may not be exchanged for New Capital Securities in certificated form except in the limited circumstances described below. See "--Exchange of Book-Entry New Capital Securities for Certificated New Capital Securities." Depositary Procedures DTC has advised the Trust and the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. DTC has also advised the Trust and the Company that, pursuant to procedures established by it, (i) upon deposit of Global Capital Securities, DTC will credit the accounts of Participants designated by the Exchange Agent with portions of the Liquidation Amount of such Global Capital Securities and (ii) ownership of such interests in such Global Capital Securities will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Capital Securities). EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN GLOBAL CAPITAL SECURITIES WILL NOT HAVE NEW CAPITAL SECURITIES REGISTERED IN THEIR NAME, WILL NOT RECEIVE PHYSICAL DELIVERY OF NEW CAPITAL SECURITIES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE TRUST AGREEMENT FOR ANY PURPOSE. Payments in respect of a Global Capital Security registered in the name of DTC or its nominee will be payable by the Property Trustee to DTC in its capacity as the registered holder under the Trust Agreement. Under the terms of the Trust Agreement, the Property Trustee will treat the persons in whose names the New Capital Securities, including Global Capital Securities, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Property Trustee nor 50 any agent thereof has or will have any responsibility or liability for (i) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in Global Capital Securities, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in Global Capital Securities or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised the Trust and the Company that its current practice, upon receipt of any payment in respect of securities such as the New Capital Securities, is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in Liquidation Amount of beneficial interests in the relevant security as shown on the records of DTC unless DTC has reason to believe it will not receive payment on such payment date. Payments by the Participants and the Indirect Participants to the beneficial owners of New Capital Securities will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Property Trustee or the Trust. Neither the Trust nor the Property Trustee will be liable for any delay by DTC or any of its participants in identifying the beneficial owners of the New Capital Securities, and the Trust and the Property Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes. Interests in Global Capital Securities will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants. Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. DTC has advised the Trust and the Company that it will take any action permitted to be taken by a holder of New Capital Securities only at the direction of one or more Participants to whose account with DTC interests in Global Capital Securities are credited and only in respect of such portion of the aggregate Liquidation Amount of the New Capital Securities as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Trust Agreement, DTC reserves the right to exchange Global Capital Securities for legended New Capital Securities in certificated form and to distribute such New Capital Securities to its Participants. The information in this section concerning DTC and their book-entry systems has been obtained from sources that the Trust and the Company believe to be reliable, but neither the Trust nor the Company takes responsibility for the accuracy thereof. Exchange of Book-Entry New Capital Securities for Certificated New Capital Securities A Global Capital Security is exchangeable for New Capital Securities in registered certificated form if (i) DTC (x) notifies the Trust that it is unwilling or unable to continue as Depositary for the Global Capital Security or (y) has ceased to be a clearing agency registered under the Exchange Act and the Company fails to appoint a successor Depositary within 90 days, (ii) the Company in its sole discretion elects to cause the issuance of the New Capital Securities in certificated form or (iii) there shall have occurred and be continuing an Event of Default or any event which after notice or lapse of time or both would be an Event of Default under the Trust Agreement. In all cases, certificated New Capital Securities delivered in exchange for any Global Capital Security or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). PAYMENT AND PAYING AGENCY Payments in respect of Global Capital Securities shall be made to DTC, which shall credit the relevant accounts at DTC on the applicable Distribution Dates, or in respect of New Capital Securities that are not held by DTC, such payments shall be made by check mailed to the address of the holder entitled thereto as such 51 address shall appear on the register. The paying agent (the "Paying Agent") shall initially be the Property Trustee and any co-paying agent chosen by the Property Trustee and acceptable to the Administrative Trustees and the Company. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Property Trustee and the Company. In the event that the Property Trustee shall no longer be the Paying Agent, the Administrative Trustees shall appoint a successor (which shall be a bank or trust company acceptable to the Administrative Trustees and the Company) to act as Paying Agent. RESTRICTIONS ON TRANSFER The New Capital Securities will be issued, and may be transferred only, in blocks having a Liquidation Amount of not less than $100,000 (100 New Capital Securities). Any attempted transfer, sale or other disposition of Capital Securities in a block having a Liquidation Amount of less than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any such transferee shall be deemed not to be the holder of such Capital Securities for any purpose, including but not limited to the receipt of Distributions on such Capital Securities, and such transferee shall be deemed to have no interest whatsoever in such Capital Securities. RATING The Capital Securities have not been rated by S&P or Moody's. On February 4, 1997, S&P announced that the preferred stock of the Company was downgraded from "AA-" to "A" and that the Company was removed from CreditWatch (where it had been placed following the Company's announcement that it had entered into the Merger Agreement with A&A). The preferred stock of the Company is currently rated "a3" by Moody's (which is currently reviewing for downgrade its ratings on the securities of the Company). REGISTRAR AND TRANSFER AGENT The Property Trustee will act as registrar and transfer agent for the New Capital Securities. The Property Trustee also acts as registrar and transfer agent for the Old Capital Securities. Registration of transfers of the Capital Securities may be effected without charge by or on behalf of the Trust, but the registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange. The Trust will not be required to register or cause to be registered the transfer of the Capital Securities after they have been called for redemption. INFORMATION CONCERNING THE PROPERTY TRUSTEE The Property Trustee, other than during the occurrence and continuance of an Event of Default, undertakes to perform only such duties as are specifically set forth in the Trust Agreement and, after such Event of Default, must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Trust Agreement at the request of any holder of Trust Securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. If no Event of Default has occurred and is continuing and the Property Trustee is required to decide between alternative causes of action, construe ambiguous or inconsistent provisions in the Trust Agreement or is unsure of the application of any provision of the Trust Agreement, and the matter is not one on which holders of the Capital Securities are entitled under the Trust Agreement to vote, then the Property Trustee shall take such action as is directed by the Company and if not so directed, shall take such action as it deems advisable and in the best interests of the holders of the Trust Securities and will have no liability except for its own bad faith, negligence or willful misconduct. MISCELLANEOUS The Administrative Trustees are authorized and directed to conduct the affairs of and to operate the Trust in such a way that the Trust will not be deemed to be an "investment company" required to be registered under 52 the Investment Company Act or classified as other than a grantor trust for United States federal income tax purposes and so that the Junior Subordinated Debentures will be treated as indebtedness of the Company for United States federal income tax purposes. In this connection, the Company and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of the Trust or the Trust Agreement, that the Company and the Administrative Trustees determine in their discretion to be necessary or desirable for such purposes, as long as such action does not materially adversely affect the interests of the holders of the Trust Securities. Holders of the Trust Securities have no preemptive or similar rights. The Trust may not borrow money or issue debt or mortgage or pledge any of its assets. DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES The Old Junior Subordinated Debentures were issued and the New Junior Subordinated Debentures will be issued as a separate series under the Indenture. The Indenture has been qualified under the Trust Indenture Act. In the event the Exchange Offer is consummated, the Company will exchange the New Junior Subordinated Debentures for the Old Junior Subordinated Debentures. The form and terms of the New Junior Subordinated Debentures are identical in all material respects to the form and terms of the Old Junior Subordinated Debentures, except that the New Junior Subordinated Debentures have been registered under the Securities Act and therefore are not subject to certain restrictions on transfer applicable to the Old Junior Subordinated Debentures and will not provide for any increase in the interest rate thereon. Accordingly, as the context may require, unless expressly stated otherwise, "Junior Subordinated Debentures" means the Old Junior Subordinated Debentures and, in the event the Exchange Offer is consummated, the New Junior Subordinated Debentures. This summary of certain terms and provisions of the Junior Subordinated Debentures and the Indenture does not purport to be complete, and where reference is made to particular provisions of the Indenture, such provisions, including the definitions of certain terms, some of which are not otherwise defined herein, are qualified in their entirety by reference to all of the provisions of the Indenture and those terms made a part of the Indenture by the Trust Indenture Act. GENERAL Concurrently with the issuance of the Old Capital Securities, the Trust invested the proceeds thereof, together with the consideration paid by the Company for the Common Securities, in the Old Junior Subordinated Debentures. Pursuant to the Exchange Offer, the Company will exchange the Old Junior Subordinated Debentures as soon as practicable after the consummation of the Exchange Offer and the Old Junior Subordinated Debentures will be retired and cancelled. The Junior Subordinated Debentures bear interest at the annual rate of 8.205% of the principal amount thereof, payable semi-annually in arrears on January 1 and July 1 of each year (each, an "Interest Payment Date"), commencing July 1, 1997, to the person in whose name each Junior Subordinated Debenture is registered, subject to certain exceptions, at the close of business on the Business Day next preceding such Interest Payment Date. It is anticipated that until the liquidation, if any, of the Trust, each Junior Subordinated Debenture will be held in the name of the Property Trustee in trust for the benefit of the holders of the Trust Securities. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Junior Subordinated Debentures is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on the date such payment was originally payable. Accrued interest that is not paid on the applicable Interest Payment Date will bear additional interest ("Additional Interest") on the amount thereof (to the extent permitted by law) at the rate per annum of 8.205% thereof, compounded semi-annually. The term "interest" as used herein shall include semi-annual interest payments, Additional Interest and Additional Tax Sums (as defined below), as applicable. 53 The Junior Subordinated Debentures mature on January 1, 2027. The Junior Subordinated Debentures are unsecured and rank junior and subordinate in right of payment to all Senior Indebtedness of the Company. Because the Company is a holding company, the right of the Company to participate in any distribution of assets of any subsidiary, upon such subsidiary's liquidation or reorganization or otherwise (and thus the ability of holders of the Capital Securities to benefit indirectly from such distribution), is subject to the prior claims of creditors of that subsidiary, except to the extent that the Company may itself be recognized as a creditor of that subsidiary. Claims on the Company's subsidiaries by creditors other than the Company include long- term debt and certain other short-term borrowings. Accordingly, the Junior Subordinated Debentures are subordinated to all Senior Indebtedness of the Company and effectively subordinated to all existing and future liabilities of the Company's subsidiaries, and holders of Junior Subordinated Debentures should look only to the assets of the Company for payments on the Junior Subordinated Debentures. The Indenture does not limit the incurrence or issuance of other secured or unsecured debt of the Company, including Senior Indebtedness. DENOMINATIONS, REGISTRATION AND TRANSFER The New Junior Subordinated Debentures will be represented by one certificate registered in the name of The Bank of New York as Property Trustee of the Trust. If distributed to holders of Capital Securities in connection with a Tax Event or an Investment Company Event, the New Junior Subordinated Debentures may be represented by one or more global certificates registered in the name of Cede & Co. as the nominee of DTC and one or more New Junior Subordinated Debentures in certificated form. Beneficial interests in New Junior Subordinated Debentures in global form will be shown on, and transfers thereof will be effected only through, records maintained by participants in DTC. Except as described below, New Junior Subordinated Debentures in certificated form will not be issued in exchange for the global certificates. A global security shall be exchangeable for New Junior Subordinated Debentures registered in the names of persons other than Cede & Co. only if (i) DTC notifies the Company that it is unwilling or unable to continue as a depositary for such global security and no successor depositary shall have been appointed, or if at any time DTC ceases to be a "clearing agency" registered under the Exchange Act, at a time when DTC is required to be so registered to act as such depositary, (ii) the Company in its sole discretion determines that such global security shall be so exchangeable or (iii) there shall have occurred and be continuing a Debenture Event of Default. Any global security that is exchangeable pursuant to the preceding sentence shall be exchangeable for certificates registered in such names as DTC shall direct. It is expected that such instructions will be based upon directions received by DTC from its Participants with respect to ownership of beneficial interests in such global security. In the event that New Junior Subordinated Debentures are issued in certificated form, such New Junior Subordinated Debentures will be in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof and may be transferred or exchanged only in such minimum denominations and in the manner and at the offices described below. Payments on New Junior Subordinated Debentures represented by a global security will be made to DTC, as the depositary for the New Junior Subordinated Debentures. In the event New Junior Subordinated Debentures are issued in certificated form, principal and interest will be payable, the transfer of the New Junior Subordinated Debentures will be registrable, and New Junior Subordinated Debentures will be exchangeable for New Junior Subordinated Debentures of other denominations of a like aggregate principal amount, at the corporate office of the Debenture Trustee in New York, New York, or at the offices of any paying agent or transfer agent appointed by the Company, provided that payment of interest may be made at the option of the Company by check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the New Junior Subordinated Debentures are registered to a holder other than the Property Trustee or a nominee of DTC, the record dates will be the immediately preceding December 15 and June 15, respectively. For a description of DTC and the terms of the depositary arrangements relating to payments, transfers, voting rights, redemptions and other notices and other matters, see "Description of Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer." If the New Junior Subordinated Debentures are distributed to the holders of the Trust Securities upon the termination of the Trust, the form, denomination, book-entry and 54 transfer procedures with respect to the Capital Securities as described under "Description of Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer," shall apply to the New Junior Subordinated Debentures mutatis mutandis. PAYMENT AND PAYING AGENTS Payment of principal of (and premium, if any) and any interest on Junior Subordinated Debentures will be made at the office of the Debenture Trustee in The City of New York or at the office of such Paying Agent or Paying Agents as the Company may designate from time to time, except that at the option of the Company payment of any interest may be made, except in the case of Junior Subordinated Debentures in global form, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the register for Junior Subordinated Debentures or (ii) by transfer to an account maintained by the Person entitled thereto as specified in such register, provided that proper transfer instructions have been received by the relevant record date. Payment of any interest on any Junior Subordinated Debenture will be made to the Person in whose name such Junior Subordinated Debenture is registered at the close of business on the record date for such interest, except in the case of a call for redemption after a record date and prior to such Interest Payment Date and defaulted interest. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agent; however, the Company will at all times be required to maintain a Paying Agent in each place of payment for the Junior Subordinated Debentures. Any moneys deposited with the Debenture Trustee or any Paying Agent, or then held by the Company in trust, for the payment of the principal of (and premium, if any) or interest on any Junior Subordinated Debenture and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall, at the request of the Company, be repaid to the Company and the holder of such Junior Subordinated Debenture shall thereafter look, as a general unsecured creditor, only to the Company for payment thereof. OPTION TO DEFER INTEREST PAYMENTS So long as no Debenture Event of Default has occurred and is continuing, the Company has the right under the Indenture to defer the payment of interest at any time or from time to time for a period not exceeding 10 consecutive semi- annual periods, during which Extension Period the Company has the right to make partial payments of interest on any Interest Payment Date. No Extension Period may extend beyond the Stated Maturity or any earlier prepayment date. At the end of such Extension Period, the Company must pay all interest then accrued and unpaid (together with interest thereon at the annual rate of 8.205%, compounded semi-annually, to the extent permitted by applicable law). During an Extension Period, interest will continue to accrue and holders of Junior Subordinated Debentures (and holders of the Capital Securities while Capital Securities are outstanding) will be required to accrue interest income for United States federal income tax purposes. See "Certain Federal Income Tax Consequences--Interest Income and Original Issue Discount." During any such Extension Period, the Company may not, and may not permit any subsidiary of the Company to (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company's capital stock (which includes common and preferred stock) or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company (including Other Debentures) that rank on a parity with or junior to the Junior Subordinated Debentures or make any guarantee payments with respect to any guarantee by the Company of the debt securities of any subsidiary of the Company (including Other Guarantees) if such guarantee ranks on a parity with or junior to the Junior Subordinated Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a stockholders' rights plan, the issuance of capital stock under any such plan in the future, or the redemption or repurchase of any such rights distributed pursuant thereto, (c) payments under the Guarantee and (d) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans for its directors, officers, employees, consultants or advisers). Prior to the termination of any such Extension Period, 55 the Company may further extend such Extension Period, provided that such extension does not cause such Extension Period to exceed 10 consecutive semi- annual periods or to extend beyond the Stated Maturity or any earlier prepayment date. At any time following the termination of any Extension Period and the payment of all amounts then due, the Company may elect to begin a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. The Company must give the Property Trustee and Debenture Trustee notice of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date the Distributions on the Capital Securities would have been payable but for the election to begin or extend such Extension Period or (ii) the date the Administrative Trustees are required to give notice to any securities exchange or other applicable self- regulatory organization or to holders of Capital Securities of the record date or the date such Distributions are payable, but in any event not fewer than five Business Days prior to such record date. An Administrative Trustee shall give notice of the Company's election to begin or extend an Extension Period to the holders of the Capital Securities. There is no limitation on the number of times that the Company may elect to begin an Extension Period. TAX EVENT OR INVESTMENT COMPANY EVENT PREPAYMENT If a Tax Event or an Investment Company Event (each as defined below) shall occur and be continuing, the Company may, at its option, prepay the Junior Subordinated Debentures in whole (but not in part) at any time within 90 days of the occurrence of such Tax Event or Investment Company Event, at a prepayment price (the "Event Prepayment Price") equal to the greater of (i) 100% of the principal amount of such Junior Subordinated Debentures or (ii) as determined by the Quotation Agent (as defined below), the sum of the present value of 100% of the principal amount that would be payable on January 1, 2027, together with the present values of scheduled payments of interest from the prepayment date to January 1, 2027 (the "Remaining Life"), in each case discounted to the prepayment date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued interest thereon to but excluding the date of prepayment. If the Trust is required to pay any additional taxes, duties or other governmental charges as a result of a Tax Event, the Company will also pay any Additional Tax Sums on the Junior Subordinated Debentures. Notice of any prepayment will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Junior Subordinated Debentures to be prepaid at its registered address. Unless the Company defaults in payment of the prepayment price, on and after the prepayment date interest will cease to accrue on such Junior Subordinated Debentures called for prepayment. "Adjusted Treasury Rate" means, with respect to any prepayment date, the Treasury Rate plus (i) 1.00% if such prepayment date occurs on or before January 1, 1998 or (ii) 0.50% if such prepayment date occurs after January 1, 1998. "Treasury Rate" means (i) the yield, under the heading which represents the average for the immediately prior week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Remaining Life (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Remaining Life shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such prepayment date. The Treasury Rate shall be calculated on the third Business Day preceding the prepayment date. 56 "Comparable Treasury Issue" means with respect to any prepayment date the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the Remaining Life that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life. If no United States Treasury security has a maturity which is within a period from three months before to three months after January 1, 2027, the two most closely corresponding United States Treasury securities shall be used as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or extrapolated on a straight-line basis, rounding to the nearest month using such securities. "Quotation Agent" means Morgan Stanley & Co. Incorporated. "Reference Treasury Dealer" means (i) Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the Debenture Trustee after consultation with the Company. "Comparable Treasury Price" means, with respect to any prepayment date, (A) the average of five Reference Treasury Dealer Quotations for such prepayment date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Debenture Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations. "Liquidation Amount" means the stated amount of $1,000 per Capital Security. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any prepayment date, the average, as determined by the Debenture Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such prepayment date. "Additional Tax Sums" means the additional amounts as may be necessary in order that the amount of Distributions then due and payable by the Trust on the outstanding Capital Securities and Common Securities shall not be reduced as a result of any additional taxes, duties and other governmental charges to which the Trust has become subject as a result of a Tax Event. "Tax Event" means the receipt by the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after January 13, 1997, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days after the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Junior Subordinated Debentures, (ii) interest payable by the Company on the Junior Subordinated Debentures is not, or within 90 days after the date of such opinion, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or will be within 90 days after the date of such opinion, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. "Investment Company Event" means the receipt by the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be considered an investment company that is required to be registered under the Investment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective on or after January 13, 1997. 57 RESTRICTIONS ON CERTAIN PAYMENTS The Company also covenanted that it will not, and will not permit any subsidiary of the Company to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company's capital stock (which includes common and preferred stock) or (ii) make any payment of principal, interest or premium, if any, on or repay or repurchase or redeem any debt securities of the Company (including other Debentures) that rank on a parity with or junior to the Junior Subordinated Debentures or make any guarantee payments with respect to any guarantee by the Company of the debt securities of any subsidiary of the Company (including other Guarantees) if such guarantee ranks on a parity with or junior to the Junior Subordinated Debentures (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a stockholder's rights plan, or the issuance of any capital stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under the Guarantee and (d) purchases of common stock related to the issuance of common stock or rights under any of the Company's benefit plans for its directors, officers, employees consultants or advisers) if at such time (i) there shall have occurred any event of which the Company has actual knowledge that (a) with the giving of notice or the lapse of time, or both, would constitute a "Debenture Event of Default" and (b) in respect of which the Company shall not have taken reasonable steps to cure, (ii) the Company shall be in default with respect to its payment of any obligations under the Guarantee or (iii) the Company shall have given notice of its election of an Extension Period as provided in the Indenture and shall not have rescinded such notice, or such Extension Period, or any extension thereof, shall be continuing. MODIFICATION OF INDENTURE From time to time, the Company and the Debenture Trustee may, without the consent of the holders of the Junior Subordinated Debentures, amend, waive or supplement the Indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies (provided that any such action does not materially adversely affect the interest of the holders of the Junior Subordinated Debentures or the holders of Capital Securities so long as they remain outstanding) and qualifying, or maintaining the qualification of, the Indenture under the Trust Indenture Act. The Indenture contains a provision permitting the Company and the Debenture Trustee, with the consent of the holders of not less than a majority in principal amount of the Junior Subordinated Debentures, to modify the rights of the holders of Junior Subordinated Debentures, provided that no such modification may (i) change the fixed maturity of any Junior Subordinated Debentures, or reduce the rate or extend the time of payment of any interest thereon or on any overdue principal amount, or reduce the principal amount thereof, or reduce any amount payable upon any redemption thereof, or change the currency of payment of principal of or any interest thereon or on any overdue principal amount, without the consent of the holder of each Junior Subordinated Debenture so affected, (ii) reduce the aforesaid percentage of Junior Subordinated Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Junior Subordinated Debentures then outstanding, (iii) modify certain provisions of the Indenture relating to waiver of compliance with covenants, waiver of defaults or modification of the Indenture, except to increase the percentage of holders required for such waiver or modification, without the consent of the holders of all Junior Subordinated Debentures then outstanding, or (iv) modify the provisions of the Indenture with respect to the subordination of outstanding Junior Subordinated Debentures in a manner adverse to the holders thereof without the consent of the holder of each Junior Subordinated Debentures so affected; provided further that, so long as any of the Capital Securities remain outstanding, no such modification may be made that adversely affects the holders of such Capital Securities in any material respect, and no termination of the Indenture may occur, and no waiver of any Event of Default or compliance with any covenant under the Indenture may be effective, without the prior consent of the holders of at least a majority of the aggregate Liquidation Amount of such Capital Securities unless and until the principal of the underlying Junior Subordinated Debentures and all accrued and unpaid interest thereon have been paid in full and certain other conditions are satisfied. 58 DEBENTURE EVENTS OF DEFAULT A Debenture Event of Default with respect to the Junior Subordinated Debentures is defined in the Indenture as being: (a) default for 30 days in payment of any installment of interest on the Junior Subordinated Debentures (subject to the deferral of any due date in the case of an Extension Period); (b) default in payment of any principal or premium, if any, on Junior Subordinated Debentures; (c) failure by the Company in performance in any material respect of any of the covenants or agreements (other than covenants to pay interest, principal and premium, which are subject to the foregoing clauses (a) and (b)) in the Indenture specifically contained therein for the benefit of the Junior Subordinated Debentures which shall not have been remedied for a period of 60 days after written notice to the Company by the Debenture Trustee or to the Company and the Debenture Trustee by the holders of not less than 25% in principal amount of the Junior Subordinated Debentures outstanding; or (d) certain events of bankruptcy, insolvency or reorganization of the Company. The Indenture provides that if a Debenture Event of Default under clause (a), (b) or (c) above shall have occurred and be continuing (but, in the case of clause (c), only if the Debenture Event of Default is with respect to less than all Junior Subordinated Debentures outstanding under the Indenture), either the Debenture Trustee or the holders of not less than 25% in principal amount of the then outstanding Junior Subordinated Debentures (each series of Junior Subordinated Debentures voting as a separate class in the case of clauses (a) and (b) above, and all series voting as one class in the case of clause (c) above) may declare the principal of all the Junior Subordinated Debentures, together with any accrued interest, to be immediately due and payable. Should the Debenture Trustee or holders of such Junior Subordinated Debentures fail to make such declaration, the holders of at least 25% in aggregate liquidation amount of the Capital Securities shall have such right. The Indenture also provides that if a Debenture Event of Default under clause (c) or (d) above shall have occurred and be continuing (but, in the case of clause (c), only if the Debenture Event of Default is with respect to all Junior Subordinated Debentures outstanding under the Indenture), either the Debenture Trustee or the holders of not less than 25% in principal amount of the then outstanding Junior Subordinated Debentures (all series voting as one class) may declare the principal of all the Junior Subordinated Debentures, together with any accrued interest, to be immediately due and payable. Should the Debenture Trustee or holders of such Junior Subordinated Debentures fail to make such declaration, the holders of at least 25% in aggregate liquidation amount of the Capital Securities shall have such right. Upon certain conditions, such declaration (including a declaration caused by a default in the payment of principal or interest, the payment for which has subsequently been provided) may be annulled by the holders of at least a majority in principal amount of the Junior Subordinated Debentures. Should the holders of the Junior Subordinated Debentures fail to annul such declaration, the holders of at least a majority in aggregate liquidation amount of the Capital Securities shall have such right. In addition, past defaults may be waived by the holders of a majority in principal amount of the Junior Subordinated Debentures, except a default in the payment of principal of or interest on the Junior Subordinated Debentures or in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the holder of each Junior Subordinated Debenture so affected. Should the holders of the Junior Subordinated Debentures fail to waive such default, the holders of a majority in aggregate liquidation amount of the Capital Securities shall have such right. The Indenture contains a provision entitling the Debenture Trustee, subject to the duty of the Debenture Trustee during default to act with the required standard of care, to be indemnified by the holders of Junior Subordinated Debentures issued under the Indenture before proceeding to exercise any right or power under the Indenture at the request of such holders. The Indenture also provides that the holders of a majority in principal amount of the outstanding Junior Subordinated Debentures issued thereunder may direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or exercising any trust or power conferred on the Debenture Trustee. The Indenture contains a covenant that the Company will file annually with the Debenture Trustee a certificate as to the absence of any default or specifying any default that exists. 59 ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES If a Debenture Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal on the Junior Subordinated Debentures on the date such interest or principal is otherwise payable, a holder of Capital Securities may institute a legal proceeding directly against the Company for enforcement of payment to such holder of the principal of or interest on such related Junior Subordinated Debentures having a principal amount equal to the aggregate Liquidation Amount of the related Capital Securities of such holder (a "Direct Action"). The Company may not amend the Indenture to remove the foregoing right to bring a Direct Action without the prior written consent of the holders of all of the Capital Securities. If the right to bring a Direct Action is removed, the Trust may become subject to reporting obligations under the Securities Exchange Act of 1934, as amended. Notwithstanding any payments made to a holder of Capital Securities by the Company in connection with a Direct Action, the Company shall remain obligated to pay the principal of or interest on the Junior Subordinated Debentures, and the Company shall be subrogated to the rights of the holder of such Capital Securities with respect to payments on the Capital Securities to the extent of any payments made by the Company to such holder in any Direct Action. The holders of the Capital Securities would not be able to exercise directly any remedies, other than those set forth in the preceding paragraph, available to the holders of the Junior Subordinated Debentures unless there shall have been an Event of Default under the Trust Agreement. See "Description of Capital Securities--Events of Default; Notice." CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS The Indenture provides that the Company may not merge or consolidate or sell or convey all or substantially all of its assets unless (i) the successor entity (if other than the Company) is a U.S. entity that assumes the Company's obligations under such Indenture and on the Junior Subordinated Debentures issued under such Indenture, and, after giving effect to such transaction, the Company or the successor would not be in default under such Indenture; and (ii) certain other conditions as prescribed in the Indenture are met. The provisions of the Indenture do not afford holders of the Junior Subordinated Debentures protection in the event of a highly leveraged or other transaction involving the Company that may adversely affect holders of the Junior Subordinated Debentures. SATISFACTION AND DISCHARGE The Indenture provides that when, among other things, all Junior Subordinated Debentures not previously delivered to the Debenture Trustee for cancellation (i) have become due and payable or (ii) will become due and payable at their Stated Maturity within one year, and the Company deposits or causes to be deposited with the Debenture Trustee funds, in trust, for the purpose and in an amount sufficient to pay and discharge the entire indebtedness on the Junior Subordinated Debentures not previously delivered to the Debenture Trustee for cancellation, for the principal (and premium, if any) and interest to the date of the deposit or to the Stated Maturity, as the case may be, then the Indenture will cease to be of further effect (except as to remaining rights of registration of transfer, conversion, substitution and exchange, the rights and obligations of the Debenture Trustee, the Company's obligations to pay all other sums due pursuant to the Indenture and to provide the officers' certificates and opinions of counsel described therein), and the Company will be deemed to have satisfied and discharged the Indenture. SUBORDINATION In the Indenture, the Company has covenanted and agreed that the obligations of the Company to make any payment on account of the principal of and interest on the Junior Subordinated Debentures will be subordinate and junior in right of payment to the Company's obligations to the holders of Senior Indebtedness of the Company to the extent described in the next two paragraphs. Senior Indebtedness of the Company with respect to the Junior Subordinated Debentures will include the existing and future senior notes, senior subordinated notes 60 and subordinated notes of the Company and means (i) any indebtedness of the Company for borrowed or purchased money, whether or not evidenced by bonds, debentures, notes or other written instruments, (ii) obligations under letters of credit, (iii) any indebtedness or other obligations of the Company with respect to commodity contracts, interest rate and currency swap agreements, cap, floor and collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations in currency exchange or interest rates, and (iv) any guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business) or other similar contingent obligations in respect of obligations of others of a type described in (i), (ii) or (iii) above, whether or not such obligation is classified as a liability on a balance sheet prepared in accordance with generally accepted accounting principles, in each case listed in (i), (ii), (iii) and (iv) above, whether outstanding on the date of execution of the Indenture or thereafter incurred, other than obligations "ranking on a parity" with the Junior Subordinated Debentures or "ranking junior" to the Junior Subordinated Debentures (as those terms are defined in the Indenture); provided, however, that the Junior Subordinated Debentures will not be subordinate and junior in right of payment to trade creditors. As of September 30, 1996, there was approximately $583 million of Senior Indebtedness of the Company outstanding. The Indenture does not limit the amount of future increase in Senior Indebtedness of the Company. The Company expects from time to time to issue additional indebtedness constituting Senior Indebtedness. No payments on account of principal (or premium, if any) or interest, if any, in respect of the Junior Subordinated Debentures may be made if there shall have occurred and be continuing a default in any payment with respect to Senior Indebtedness, or an event of default with respect to any Senior Indebtedness resulting in the acceleration of the maturity thereof, or if any judicial proceeding shall be pending with respect to any such default. In the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshaling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company as a whole, whether voluntary or involuntary, all obligations of the Company to holders of Senior Indebtedness of the Company shall be entitled to be paid in full before any payment shall be made on account of the principal of or interest on the Junior Subordinated Debentures. In the event of any such proceeding, after payment in full of all sums owing with respect to Senior Indebtedness of the Company, the holders of the Junior Subordinated Debentures, together with the holders of any obligations of the Company ranking on a parity with the Junior Subordinated Debentures, shall be entitled to be paid from the remaining assets of the Company the amount at the time due and owing on account of unpaid principal of and interest on the Junior Subordinated Debentures before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to the Junior Subordinated Debentures. By reason of such subordination, in the event of the insolvency of the Company, holders of Senior Indebtedness of the Company may receive more, ratably, and holders of the Junior Subordinated Debentures having a claim pursuant to the Junior Subordinated Debentures may receive less, ratably, than the other creditors of the Company. Such subordination will not prevent the occurrence of any Event of Default in respect of the Junior Subordinated Debentures. RESTRICTIONS ON TRANSFER The New Junior Subordinated Debentures will be issued, and may be transferred only, in minimum denominations of not less than $100,000 and multiples of $1,000 in excess thereof. Any transfer, sale or other disposition of Junior Subordinated Debentures in a denomination of less than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any such transferee shall be deemed not to be the holder of such Junior Subordinated Debentures for any purpose, including but not limited to the receipt of payments on such Junior Subordinated Debentures, and such transferee shall be deemed to have no interest whatsoever in such Junior Subordinated Debentures. GOVERNING LAW The Indenture is and the New Junior Subordinated Debentures will be governed by and construed in accordance with the laws of the State of New York. 61 INFORMATION CONCERNING THE DEBENTURE TRUSTEE The Debenture Trustee is subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Junior Subordinated Debentures, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The Debenture Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the Debenture Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. DESCRIPTION OF GUARANTEE The Old Guarantee was executed and delivered by the Company concurrently with the issuance by the Trust of the Old Capital Securities for the benefit of the holders from time to time of the Old Capital Securities. In the event the Exchange Offer is consummated, the Company will exchange the New Guarantee for the Old Guarantee. The New Guarantee Agreement has been qualified under the Trust Indenture Act. The form and terms of the New Guarantee are identical in all material respects to the form and terms of the Old Guarantee, except that the New Guarantee has been registered under the Securities Act. Accordingly, as the context may require, unless expressly stated otherwise, "Guarantee" means the Old Guarantee and, in the event the Exchange Offer is consummated, the New Guarantee. This summary of certain terms and provisions of the Old Guarantee Agreement and the New Guarantee Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, all of the provisions of the Old Guarantee Agreement and the New Guarantee Agreement, including the definitions therein of certain terms, and the Trust Indenture Act. The Bank of New York will act as Guarantee Trustee and will hold the New Guarantee for the benefit of the holders of all Capital Securities. GENERAL Under the New Guarantee the Company will irrevocably agree (and under the Old Guarantee has agreed) to pay in full on a subordinated basis, to the extent set forth herein, the Guarantee Payments (as defined below) to the holders of all Capital Securities, as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert other than the defense of payment. The following payments with respect to the Capital Securities, to the extent not paid by or on behalf of the Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and unpaid Distributions required to be paid on the Capital Securities, to the extent that the Trust has funds on hand available therefor at such time, (ii) the applicable Redemption Price with respect to Capital Securities called for redemption, to the extent that the Trust has funds on hand available therefor at such time and (iii) upon a voluntary or involuntary termination, dissolution, winding-up or liquidation of the Trust (unless the Junior Subordinated Debentures are distributed to holders of the Capital Securities), the lesser of (a) the aggregate of the Liquidation Amount plus accumulated and unpaid Distributions on the Capital Securities to the date of payment, to the extent that the Trust has funds on hand available therefor at such time, and (b) the amount of assets of the Trust remaining available for distribution to holders of Capital Securities in liquidation of the Trust. The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of the Capital Securities or by causing the Trust to pay such amounts to such holders. The Guarantee is an irrevocable guarantee on a subordinated basis of the Trust's related obligations under all Capital Securities, but will apply only to the extent that the Trust has funds sufficient to make such payments, and is not a guarantee of collection. If the Company does not make interest payments on the Junior Subordinated Debentures held by the Trust, the Trust will not be able to pay Distributions on the Capital Securities and will not have funds legally available therefor. In such event, holders of the Capital Securities would not be able to rely on the Guarantee for such payments. 62 The Guarantee ranks subordinate and junior in right of payment to all liabilities of the Company, other than any liabilities which expressly by their terms are made pari passu with or subordinate to the obligations of the Company under the Guarantee (including Other Guarantees). See "--Status of the Guarantee." Since the Company is a holding company, the right of the Company to participate in any distribution of assets of any subsidiary upon such subsidiary's liquidation or reorganization or otherwise (and thus the ability of holders of Capital Securities to benefit indirectly from such distribution), is subject to the prior claims of creditors of that subsidiary, except to the extent that the Company may itself be recognized as a creditor of that subsidiary. Claims on the Company's subsidiaries by creditors other than the Company include long-term debt and certain other short-term borrowings. Accordingly, the Company's obligations under the Guarantee will be effectively subordinated to all existing and future liabilities of the Company's subsidiaries, and claimants should look only to the assets of the Company for payments thereunder. The Guarantee does not limit the incurrence or issuance of other secured or unsecured debt of the Company, including Senior Indebtedness, whether under the Indenture or any other indenture that the Company may enter into in the future or otherwise. The Company has, through the Guarantee, the Guarantee Agreement, the Trust Agreement, the Junior Subordinated Debentures, the Indenture and the Expense Agreement, taken together, fully, irrevocably and unconditionally guaranteed on a subordinated basis all of the Trust's obligations under the Capital Securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the Trust's obligations under the Capital Securities. See "Relationship Among the Capital Securities, the Junior Subordinated Debentures and the Guarantee." STATUS OF THE GUARANTEE The Guarantee constitutes an unsecured obligation of the Company and ranks subordinate and junior in right of payment to all liabilities of the Company (including obligations under the Junior Subordinated Debentures), other than any liabilities which expressly by their terms are made pari passu with or subordinate to the obligations of the Company under the Guarantee. The Guarantee ranks pari passu with all Other Guarantees issued by the Company. The Guarantee constitutes a guarantee of payment and not of collection (i.e., the guaranteed party may institute a legal proceeding directly against the Company to enforce its rights under the Guarantee without first instituting a legal proceeding against any other person or entity). The Guarantee is held for the benefit of the holders of all Capital Securities. The Guarantee will not be discharged except by payment of the Guarantee Payments in full to the extent not paid by the Trust or upon distribution of the Junior Subordinated Debentures to the holders of the Capital Securities. The Guarantee does not place a limitation on the amount of additional Senior Indebtedness that may be incurred by the Company. The Company expects from time to time to incur additional indebtedness constituting Senior Indebtedness. AMENDMENTS AND ASSIGNMENT Except with respect to any changes which do not adversely affect the rights of holders of the Capital Securities in any material respect (in which case no vote will be required), the Guarantee Agreement may not be amended without the prior approval of the holders of not less than a majority of the aggregate Liquidation Amount of outstanding Capital Securities. The manner of obtaining any such approval will be as set forth under "Description of Capital Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees and agreements contained in the Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Company and shall inure to the benefit of the holders of the Capital Securities then outstanding. EVENTS OF DEFAULT An event of default under the Guarantee Agreement will occur upon the failure of the Company to perform any of its payment or other obligations thereunder. The holders of not less than a majority in aggregate 63 Liquidation Amount of the Capital Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of the Guarantee or to direct the exercising of any trust or power conferred upon the Guarantee Trustee under the Guarantee Agreement. Any holder of the Capital Securities may institute a legal proceeding directly against the Company to enforce its rights under the Guarantee without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other person or entity. The Company, as guarantor, is required to file annually with the Guarantee Trustee a certificate as to whether or not the Company is in compliance with all the conditions and covenants applicable to it under the Guarantee Agreement. CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS The Guarantee Agreement provides that the Company shall not consolidate with or merge into any other entity or convey, transfer or lease all or substantially all of its properties and assets to any other entity, and no entity shall consolidate with or merge into the Company or convey, transfer or lease all or substantially all of its properties and assets to the Company, unless (i) either the Company shall be the continuing corporation or the successor entity is organized under the laws of the United States or any state or the District of Columbia and such successor entity expressly assumes the Company's obligations on the Guarantee; (ii) immediately after giving effect thereto, no event of default under the Guarantee Agreement and no event which, after notice or lapse of time or both, would become an event of default under the Guarantee Agreement, shall have happened and be continuing; and (iii) certain other conditions as prescribed in the Guarantee Agreement are met. INFORMATION CONCERNING THE GUARANTEE TRUSTEE The Guarantee Trustee, other than during the occurrence and continuance of a default by the Company in performance of the Guarantee, undertakes to perform only such duties as are specifically set forth in the Guarantee Agreement and, after default with respect to the Guarantee, must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Guarantee Agreement at the request of any holder of the Capital Securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. TERMINATION OF THE GUARANTEE The Guarantee will terminate and be of no further force and effect upon full payment of the applicable Redemption Price of the Capital Securities, upon full payment of the amounts payable upon liquidation of the Trust or upon distribution of Junior Subordinated Debentures to the holders of the Capital Securities. The Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of the Capital Securities must restore payment of any sums paid under the Capital Securities or the Guarantee. GOVERNING LAW The Old Guarantee is and the New Guarantee will be governed by and construed in accordance with the laws of the State of New York. THE EXPENSE AGREEMENT Pursuant to the Expense Agreement, the Company has irrevocably and unconditionally guaranteed to each person or entity to whom the Trust becomes indebted or liable, the full payment of any costs, expenses or liabilities of the Trust, other than obligations of the Trust to pay to the holders of any Trust Securities or other similar interests in the Trust of the amounts due such holders pursuant to the terms of the Trust Securities or such other similar interests, as the case may be. 64 DESCRIPTION OF OLD SECURITIES The forms and terms of the Old Securities are identical in all material respects to the forms and terms of the New Securities, except that (i) the Old Securities have not been registered under the Securities Act, are subject to certain restrictions on transfer and are entitled to certain rights under the Registration Rights Agreement (which rights will terminate upon consummation of the Exchange Offer, except under limited circumstances); (ii) the New Capital Securities will not provide for any increase in the Distribution rate thereon; and (iii) the New Junior Subordinated Debentures will not provide for any increase in the interest rate thereon. The Old Securities provide that, in the event that the Exchange Offer is not consummated on or prior to August 11, 1997, or, in certain limited circumstances, in the event a shelf registration statement (the "Shelf Registration Statement") with respect to the resale of the Old Capital Securities is not declared effective on or prior to August 11, 1997, then interest will accrue (in addition to the stated interest rate on the Junior Subordinated Debentures) at the rate of 0.25% per annum on the principal amount of the Junior Subordinated Debentures and Distributions will accumulate (in addition to the stated Distribution rate on the Capital Securities) at the rate of 0.25% per annum on the Liquidation Amount of the Capital Securities, for the period from the occurrence of such event until such time as the Exchange Offer is consummated or any required Shelf Registration Statement is effective. The New Securities are not, and upon consummation of the Exchange Offer the Old Securities will not be, entitled to any such additional interest or Distributions. Accordingly, holders of Old Capital Securities should review the information set forth under "Risk Factors--Certain Consequences of a Failure to Exchange Old Capital Securities" and "Description of Securities." RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE FULL AND UNCONDITIONAL GUARANTEE Payments of Distributions and other amounts due on the Capital Securities (to the extent the Trust has funds available for the payment of such Distributions) are and will continue to be irrevocably guaranteed by the Company as and to the extent set forth under "Description of Securities-- Description of Guarantee." Taken together, the Company's obligations under the Junior Subordinated Debentures, the Indenture, the Trust Agreement, the Expense Agreement, the Guarantee Agreement and the Guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of Distributions and other amounts due on the Capital Securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the Trust's obligations under the Capital Securities. If and to the extent that the Company does not make payments on the Junior Subordinated Debentures, the Trust will not pay Distributions or other amounts due on the Capital Securities. The Guarantee does not cover payment of Distributions when the Trust does not have sufficient funds to pay such Distributions. In such event, the remedy of a holder of Capital Securities is to institute a Direct Action. The obligations of the Company under the Guarantee are subordinate and junior in right of payment to all liabilities of the Company to the extent and in the manner set forth in the Guarantee Agreement. SUFFICIENCY OF PAYMENTS As long as payments of interest and other payments are made when due on the Junior Subordinated Debentures, such payments will be sufficient to cover Distributions and other payments due on the Capital Securities, primarily because (i) the aggregate principal amount of the Junior Subordinated Debentures will be equal to the sum of the aggregate Liquidation Amount or Redemption Price, as applicable, of the Capital Securities and Common Securities; (ii) the interest rate and interest and other payment dates on the Junior Subordinated Debentures will match the Distribution rate and Distribution and other payment dates for the Trust Securities; (iii) under the Expense Agreement, the Company shall pay for all and any costs, expenses and liabilities of the Trust except the Trust's obligations to holders of Trust Securities under such Trust Securities; and (iv) the Trust Agreement further provides that the Trust will not engage in any activity that is not consistent with the limited purposes thereof. 65 ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES A holder of any Capital Security may institute a legal proceeding directly against the Company to enforce its rights under the Guarantee without first instituting a legal proceeding against the Guarantee Trustee, the Trust or any other person or entity. A default or event of default under any Senior Indebtedness would not constitute a default or Event of Default under the Trust Agreement. However, in the event of payment defaults under, or acceleration of, Senior Indebtedness, the subordination provisions of the Indenture provide that no payments may be made in respect of the Junior Subordinated Debentures until such Senior Indebtedness has been paid in full or any payment default thereunder has been cured or waived. Failure to make required payments on Junior Subordinated Debentures would constitute an Event of Default under the Trust Agreement. LIMITED PURPOSES OF THE TRUST The Capital Securities evidence an undivided beneficial interest in the assets of the Trust, and the Trust exists for the exclusive purposes of issuing and selling the Trust Securities, using the proceeds from the sale of the Common Securities and Old Capital Securities to acquire the Old Junior Subordinated Debentures and exchanging the Old Junior Subordinated Debentures for New Junior Subordinated Debentures in the Exchange Offer pursuant to the Indenture, and engaging in only those other activities necessary, convenient or incidental thereto (such as registering the transfer of Capital Securities). A principal difference between the rights of a holder of a Capital Security and a holder of a Junior Subordinated Debenture is that a holder of a Junior Subordinated Debenture is entitled to receive from the Company the principal amount of and interest accrued on Junior Subordinated Debentures held, while a holder of Capital Securities is entitled to receive Distributions from the Trust (or from the Company under the Guarantee) if and to the extent the Trust has funds available for the payment of such Distributions. RIGHTS UPON TERMINATION Upon any voluntary or involuntary termination, winding-up or liquidation of the Trust involving the liquidation of the Junior Subordinated Debentures, after satisfaction of liabilities to creditors as required by applicable law, the holders of the Trust Securities will be entitled to receive, out of assets held by the Trust, the Liquidation Distribution in cash. See "Description of Securities--Description of Capital Securities--Liquidation of the Trust and Distribution of Junior Subordinated Debentures." Upon any voluntary or involuntary liquidation or bankruptcy of the Company, the Property Trustee, as holder of the Junior Subordinated Debentures, would be a subordinated creditor of the Company, subordinated in right of payment to all Senior Indebtedness as set forth in the Indenture, but entitled to receive payment in full of principal and interest, before any stockholders of the Company receive payments or distributions. Since the Company is the guarantor under the Guarantee and has agreed under the Expense Agreement to pay for all costs, expenses and liabilities of the Trust (other than the Trust's obligations to the holders of its Trust Securities), the positions of a holder of Capital Securities and a holder of Junior Subordinated Debentures relative to other creditors and to stockholders of the Company in the event of liquidation or bankruptcy of the Company are expected to be substantially the same. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a summary of the principal United States federal income tax consequences of the purchase, ownership and disposition of Capital Securities to beneficial owners thereof ("Securityholders"). This summary does not address all tax consequences that may be applicable to Securityholders, nor does it address the tax consequences to (i) persons that may be subject to special treatment under United States federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations and dealers in securities or currencies, (ii) persons that will hold Capital Securities as part of a position in a "straddle" or as part of a "hedging," "conversion" or other integrated investment transaction for federal income tax purposes, (iii) persons whose functional currency is not the United States dollar or (iv) persons that do not hold Capital Securities as capital assets. 66 The statements of law or legal conclusion set forth in this summary constitute the opinion of Sidley & Austin, counsel to the Company and the Trust. Such opinion has not been confirmed by the Internal Revenue Service, by private ruling or otherwise, and is not binding on the Internal Revenue Service or the courts. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated thereunder, Internal Revenue Service rulings and pronouncements and judicial decisions now in effect, all of which are subject to change at any time. Such changes may be applied retroactively in a manner that could cause the tax consequences to vary substantially from the consequences described below, possibly affecting a beneficial owner of Capital Securities adversely. In particular, legislation has been proposed that could affect adversely the Company's ability to deduct interest on the Junior Subordinated Debentures, which may in turn permit the Company to cause a redemption of the Capital Securities. See "--Possible Tax Law Changes." The authorities on which this summary is based are subject to various interpretations, and it is therefore possible that the federal income tax treatment of the purchase, ownership and disposition of Capital Securities may differ from the treatment described below. HOLDERS OF CAPITAL SECURITIES ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS. EXCHANGE OF OLD CAPITAL SECURITIES FOR NEW CAPITAL SECURITIES Under current United States federal income tax law, the exchange of Old Capital Securities for New Capital Securities pursuant to the Exchange Offer will not be a taxable event to Securityholders. The New Capital Securities will be treated as a continuation of the Old Capital Securities. Accordingly, a Securityholder will have the same adjusted tax basis and holding period in the New Capital Securities that such Securityholder had in the Old Capital Securities exchanged therefor. CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES In connection with the issuance of the Old Capital Securities, Sidley & Austin has rendered its opinion to the effect that, under then-current law and assuming compliance with the Indenture, and based on certain facts and assumptions contained in such opinion, the Junior Subordinated Debentures held by the Trust will be classified for United States federal income tax purposes as indebtedness of the Company. CLASSIFICATION OF THE TRUST In connection with the issuance of the Old Capital Securities, Sidley & Austin has rendered its opinion to the effect that, under then-current law and assuming compliance with the terms of the Trust Agreement, and based on certain facts and assumptions contained in such opinion, the Trust will be classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes. As a result, each Securityholder will be treated as owning an undivided beneficial interest in the Junior Subordinated Debentures. By its acceptance of a Capital Security, each Securityholder agrees to treat such Capital Security consistently with the foregoing opinions. Accordingly, each Securityholder will be required to include in its gross income its pro rata share of income on the Junior Subordinated Debentures. See "--Interest Income and Original Issue Discount." No amount included in income with respect to the Capital Securities will be eligible for the dividends-received deduction. INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT The Company has the option, under the terms of the Junior Subordinated Debentures, to defer payments of interest by extending interest payment periods for up to ten consecutive semi-annual periods. See "Description of Securities--Description of Junior Subordinated Debentures--Option to Defer Interest Payments." Under Treasury Regulations, this option should cause stated interest payments on the Junior Subordinated Debentures to be treated as original issue discount ("OID") and the Company intends to so treat the Junior Subordinated 67 Debentures. Holders of debt instruments issued with OID must include that discount in income on an economic accrual basis before the receipt of cash attributable to the discount, regardless of their method of tax accounting. Generally, all of a Securityholder's taxable interest income with respect to the Junior Subordinated Debentures will be accounted for as OID, and actual distributions of stated interest will not be reported separately as taxable income. The amount of OID that accrues in any semi-annual period will approximately equal the amount of the interest that accrues on the Junior Subordinated Debentures in that period at the stated interest rate. In the event that the interest payment period is extended, Securityholders will continue to accrue OID approximately equal to the amount of the interest payment due at the end of the extended interest payment period on an economic accrual basis over the length of the extended interest period. Under recently issued Treasury Regulations, it is possible that the Junior Subordinated Debentures could be considered to have terms and conditions that make the likelihood of the Company's deferring the payment of interest a "remote contingency" for purposes of the OID rules. In that event, (a) the Junior Subordinated Debentures would not be subject to the OID rules at the time of their original issuance, (b) a Securityholder would include its share of interest on the Junior Subordinated Debentures in income in accordance with such holder's regular method of tax accounting and (c) if the Company were to defer the payment of interest, the Junior Subordinated Debentures would generally become subject to the OID rules described above. MARKET DISCOUNT AND PREMIUM Securityholders that did not acquire their interest in the Capital Securities pursuant to an acquisition of Old Capital Securities on their original issue at their original offering price or pursuant to an exchange of such Old Capital Securities for New Capital Securities pursuant to the Exchange Offer may be considered to have acquired their undivided interest in the Junior Subordinated Debentures with market discount, amortizable bond premium or acquisition premium as such terms are defined for United States federal income tax purposes. Such Securityholders are advised to consult their tax advisors as to the income tax consequences of the acquisition, ownership and disposition of the Capital Securities. DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF CAPITAL SECURITIES A distribution by the Trust of the Junior Subordinated Debentures as described under the caption "Description of Securities--Description of Capital Securities--Liquidation of the Trust and Distribution of Junior Subordinated Debentures" is conditioned on receipt by the Company of an opinion of counsel to the effect that such distribution will not be a taxable event to Securityholders for United States federal income tax purposes. Under current United States federal income tax law, such a distribution would not be a taxable event to Securityholders and such a distribution would result in a Securityholder's receiving directly its pro rata share of the Junior Subordinated Debentures previously held indirectly through the Trust, with a holding period and aggregate tax basis equal to the holding period and aggregate tax basis such Securityholder had in its Capital Securities before such distribution. A Securityholder would recognize interest income in respect of Junior Subordinated Debentures received from the Trust in the manner described above under "--Interest Income and Original Issue Discount." SALES OR REDEMPTIONS OF CAPITAL SECURITIES Gain or loss will be recognized by a Securityholder on a sale of Capital Securities (including a redemption for cash) in an amount equal to the difference between the amount realized (which for this purpose, will exclude amounts attributable to accrued interest or OID not previously included in income) and the Securityholder's adjusted tax basis in the Capital Securities sold (or so redeemed). Gain or loss recognized by a Securityholder on Capital Securities held for more than one year will generally be taxable as long-term capital gain or loss. Amounts attributable to accrued interest with respect to a Securityholder's pro rata share of the Junior Subordinated Debentures not previously included in income will be taxable as ordinary income. 68 BACKUP WITHHOLDING TAX AND INFORMATION REPORTING The Trust will report the interest and original issue discount that accrued during the year with respect to the Junior Subordinated Debentures, and any gross proceeds received by the Trust from the retirement or redemption of the Junior Subordinated Debentures, annually to the holders of record of the Capital Securities and the Internal Revenue Service. The Trust currently intends to deliver such reports to holders of record prior to January 31 following each calendar year. It is anticipated that persons who hold Capital Securities as nominees for beneficial owners will report the required tax information to beneficial owners on Form 1099. Payments made on, and proceeds from the sale of, Capital Securities may be subject to a "backup" withholding tax of 31% unless the Securityholder complies with certain identification requirements. Any withheld amounts will generally be allowed as a credit against the Securityholder's federal income tax, provided the required information is timely filed with the Internal Revenue Service. UNITED STATES ALIEN SECURITYHOLDERS For purposes of this discussion, a United States Alien Securityholder is any Securityholder that is a corporation, individual, partnership, estate or trust that, for United States federal income tax purposes, is a foreign corporation, a non-resident alien individual, a foreign partnership or a foreign estate or trust. This discussion assumes that income with respect to the Capital Securities is not effectively connected with a trade or business in the United States in which the United States Alien Securityholder is engaged. Under current United States federal income tax law: (i) payments by the Trust or any of its paying agents to any United States Alien Securityholder generally will not be subject to withholding or other United States federal income tax, provided that, in the case of payments with respect to interest (including OID), (a) the United States Alien Securityholder does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (b) the United States Alien Securityholder is not a controlled foreign corporation that is related to the Company through stock ownership, and (c) either (A) the United States Alien Securityholder certifies to the Trust or its agent, under penalties of perjury, that it is a United States Alien Securityholder and provides its name and address or (B) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "Financial Institution") and holds the Capital Securities in such capacity certifies to the Trust or its agent under penalties of perjury that such statement has been received from the United States Alien Securityholder by it or by a Financial Institution between it and the United States Alien Securityholder and furnishes the Trust or its agent with a copy thereof; and (ii) a United States Alien Securityholder generally will not be subject to withholding or other United States federal income tax on any gain realized upon the sale or other disposition of Capital Securities. POSSIBLE TAX LAW CHANGES On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") proposed by the Clinton administration was released. The Bill would, among other things, generally deny interest deductions for United States federal income tax purposes for interest on an instrument issued by a corporation that has a maximum term of more than 20 years and that is not shown as indebtedness on the separate balance sheet of the issuer or, where the instrument is issued to a related party (other than a corporation), where the holder or some other related party issues a related instrument that is not shown as indebtedness on the issuer's consolidated balance sheet. The above-described provision of the Bill was proposed to be effective generally for instruments issued on or after December 7, 1995. If such provision were to apply to the Junior Subordinated Debentures, the Company would be unable to deduct interest on the Junior Subordinated Debentures for United States federal income tax purposes. However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways and Means Committees issued a joint statement to the effect that it was their intention that the effective date of the President's legislative proposals, if adopted, will be no earlier than the date of appropriate Congressional action. 69 The proposals were not enacted in the recently concluded session of Congress. There can be no assurance, however, that final legislation similar to the Bill or future legislative proposals, future regulations or official administrative pronouncements or future judicial decisions will not affect the ability of the Company to deduct interest on the Junior Subordinated Debentures. Such a change could give rise to a Tax Event, which may permit the Company to cause a redemption of the Capital Securities. See "Description of Securities-- Description of Capital Securities--Redemption" and "Description of Securities--Description of Junior Subordinated Debentures--Tax Event or Investment Company Event Prepayment." Such a tax law change would not alter the United States federal income tax consequences of the purchase, ownership and disposition of Capital Securities to Securityholders. ERISA CONSIDERATIONS GENERAL A fiduciary of an employee benefit plan subject to Title I of ERISA should consider fiduciary standards under ERISA in the context of the particular circumstances of such plan before authorizing an investment in the Capital Securities. Such fiduciary should consider whether the investment satisfies ERISA's diversification and prudence requirements, whether the investment constitutes unauthorized delegation of fiduciary authority and whether the investment is in accordance with the documents and instruments governing the plan. In addition, ERISA and the Code prohibit a wide range of transactions ("Prohibited Transactions") involving the assets of a plan subject to ERISA or the assets of an individual retirement account or plan subject to Section 4975 of the Code (hereinafter an "ERISA Plan") and persons who have certain specified relationships to the ERISA Plan ("parties in interest," within the meaning of ERISA, and "disqualified persons," within the meaning of the Code). Such transactions may require "correction" and may cause the ERISA Plan fiduciary to incur certain liabilities and the parties in interest or disqualified persons to be subject to excise taxes. The acquisition of any Capital Security by any person who is using for such acquisition the assets of an ERISA Plan shall constitute a representation by such person to the Company that (i) if the Company is a "party in interest" or a "disqualified person" with respect to such ERISA Plan, then such security is being acquired pursuant to an exemption from the Prohibited Transaction rules under ERISA and the Code, and (ii) the Company is not a "fiduciary," within the meaning of Section 3(21) of ERISA and the regulations thereunder, with respect to such person's interest in the Capital Securities or the Junior Subordinated Debentures. Governmental plans and certain church plans (each as defined under ERISA) are not subject to the Prohibited Transaction rules. Such plans may, however, be subject to federal, state or local laws or regulations which may affect their investment in the Capital Securities. Any fiduciary of such a governmental or church plan considering an investment in the Capital Securities should determine the need for, and the availability, if necessary, of any exemptive relief under such laws or regulations. THE DISCUSSION HEREIN OF ERISA IS GENERAL IN NATURE AND IS NOT INTENDED TO BE ALL INCLUSIVE. ANY FIDUCIARY OF AN ERISA PLAN, GOVERNMENTAL PLAN OR CHURCH PLAN CONSIDERING AN INVESTMENT IN THE CAPITAL SECURITIES SHOULD CONSULT WITH ITS LEGAL ADVISORS REGARDING THE CONSEQUENCES OF SUCH INVESTMENT. PROHIBITED TRANSACTIONS The Company may be a party in interest or a disqualified person with respect to an ERISA Plan investing in the Capital Securities, and, therefore, such investments by an ERISA Plan may give rise to a Prohibited Transaction. Consequently, before investing in the Capital Securities, any person who is, or who in acquiring such securities is using the assets of, an ERISA Plan should determine that either a statutory or an administrative exemption from the Prohibited Transaction rules discussed below or otherwise available is applicable to such person's investment in the Capital Securities, or that its investment in such securities will not result in a Prohibited Transaction. 70 Certain statutory or administrative exemptions from the Prohibited Transaction rules under ERISA and the Code may be available to an ERISA Plan which is investing in the Capital Securities. Included among these exemptions are: Prohibited Transaction Class Exemption ("PTCE") 90-1, regarding investments by insurance company pooled separate accounts; PTCE 91-38, regarding investments by bank collective investment funds; PTCE 84-14, regarding transactions effected by qualified professional asset managers; PTCE 96-23, regarding transactions effected by in-house asset managers; or PTCE 95- 60, regarding investments by insurance company general accounts. TRUST ASSETS AS "PLAN ASSETS" The Department of Labor has issued final regulations (the "Labor Regulations") as to what constitutes assets of an employee benefit plan ("plan asset") under ERISA. The Labor Regulations provide that, as a general rule, when an ERISA Plan acquires an equity interest in an entity and such interest does not represent a "publicly offered security" nor a security issued by an investment company registered under the Investment Company Act of 1940, the ERISA Plan's assets include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless it is established either that the entity is an operating company or that equity participation in the entity by "benefit plan investors" is not "significant." For purposes of the Labor Regulations, the Trust will not be an investment company nor an operating company and the Old Capital Securities will not constitute a "publicly offered security." As discussed below, at the time of the Exchange Offer, the New Capital Securities may qualify as "publicly offered securities" for purposes of the Labor Regulations, but such result cannot be assured. Under the Labor Regulations, equity participation by benefit plan investors will not be considered "significant" on any date only if, immediately after the most recent acquisition of Capital Securities, the aggregate interest in the Capital Securities held by benefit plan investors will be less than 25% of the value of the Capital Securities. Although it is possible that the equity participation by benefit plan investors on any date will not be "significant" for purposes of the Labor Regulations, such result cannot be assured. Consequently, if ERISA Plans or investors using plan assets of ERISA plans purchase the Capital Securities, the Trust's assets could be deemed to be "plan assets" of such ERISA Plans for purposes of the fiduciary responsibility provisions of ERISA and the Code. Under ERISA, any person who exercises any authority or control respecting the management or disposition of the assets of an ERISA Plan is considered to be a fiduciary of such ERISA Plan. For example, the Property Trustee could therefore become a fiduciary of the ERISA Plans that invest in the Capital Securities and be subject to the general fiduciary requirements of ERISA in exercising its authority with respect to the management of the assets of the Trust. However, the Property Trustee will have only limited discretionary authority with respect to the Trust's assets and the remaining functions and responsibilities performed by the Property Trustee will be for the most part custodial and ministerial in nature. Inasmuch as the Property Trustee or another person with authority or control respecting the management or disposition of the Trust assets may become a fiduciary with respect to the ERISA Plans that will purchase the Capital Securities, there may be an improper delegation by such ERISA Plans of the responsibility to manage plan assets. The New Capital Securities may qualify as "publicly offered securities" under the Labor Regulations if, in addition to such distribution and registration, at the time of the Exchange Offer they are also "widely held" and "freely transferable." Under the Labor Regulations, a class of securities is "widely held" only if it is a class of securities that is owned by 100 or more investors independent of the issuer and of one another. Although it is possible that at the time of the Exchange Offer the New Capital Securities will be "widely held," such result cannot be assured. Whether a security is "freely transferable" for purposes of the Labor Regulations is a factual question to be determined on the basis of all relevant facts and circumstances. If, at the time of the Exchange Offer, the New Capital Securities qualify as "publicly offered securities," the assets of the Trust should not be "plan assets" as of such time. If, at the time of the Exchange Offer, the New Capital Securities do not qualify as "publicly offered securities," the "plan asset" considerations discussed in the immediately preceding paragraph in connection with the Capital Securities could also be applicable in connection with the investment by ERISA Plans or investors' using plan assets of ERISA Plans in the New Capital Securities. 71 PLAN OF DISTRIBUTION Each broker-dealer that receives New Capital Securities for its own account in connection with the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Capital Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by Participating Broker-Dealers during the 90-day period referred to below in connection with resales of New Capital Securities received in exchange for Old Capital Securities if such Old Capital Securities were acquired by such Participating Broker-Dealers for their own accounts as a result of market- making activities or other trading activities. The Company has agreed that this Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of such New Capital Securities for a period ending 90 days after the Expiration Date (subject to extension under certain limited circumstances described herein) or, if earlier, when all such New Capital Securities have been disposed of by such Participating Broker-Dealer. See "The Exchange Offer--Resales of New Capital Securities." The Company will not receive any cash or other proceeds from the issuance of the New Capital Securities offered hereby. New Capital Securities received by broker-dealers for their own accounts in connection with the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Capital Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker- dealer and/or the purchasers of any such New Capital Securities. Any broker- dealer that resells New Capital Securities that were received by it for its own account in connection with the Exchange Offer and any broker or dealer that participates in a distribution of such New Capital Securities may be deemed to be an "underwriter" within the meaning of the Securities Act, and any profit on any such resale of New Capital Securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker- dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. VALIDITY OF SECURITIES Certain matters of Delaware law relating to the validity of the New Capital Securities and the creation of the Trust have been passed upon by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to the Company and the Trust. The validity of the New Guarantee and the New Junior Subordinated Debentures have been passed upon for the Company by Sidley & Austin, Chicago, Illinois. Certain matters relating to United States federal income tax considerations have been passed upon for the Company by Sidley & Austin, Chicago, Illinois. EXPERTS The consolidated financial statements and schedules of the Company, included in and incorporated by reference in the Company's Annual Report (Form 10-K) for the year ended December 31, 1995, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included and incorporated by reference therein and incorporated herein by reference. Such consolidated financial statements and schedules are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. With respect to the unaudited condensed consolidated interim financial information for the three-month periods ended March 31, June 30, and September 30, 1996 and 1995, the six-month periods ended June 30, 1996 and 1995, and the nine-month periods ended September 30, 1996 and 1995, incorporated by reference in this Prospectus, Ernst & Young LLP have reported that they have applied limited procedures in accordance with 72 professional standards for a review of such information. However, their separate reports, included in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1996, and incorporated herein by reference, state that they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted considering the limited nature of the review procedures applied. The independent auditors are not subject to the liability provisions of Section 11 of the Securities Act for their report on the unaudited interim financial information because that report is not a "report" or a "part" of the Registration Statement prepared or certified by the auditors within the meaning of Sections 7 and 11 of the Securities Act. The financial statements and schedules of Alexander & Alexander as of December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 included in the Company's Current Report (Form 8-K) dated January 15, 1997 and incorporated by reference in this Prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports incorporated by reference in this Prospectus. Such financial statements and schedules are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. 73 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN- CORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN- DER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAK- ING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ----------------- TABLE OF CONTENTS
PAGE ---- Available Information..................................................... 6 Incorporation of Certain Documents by Reference........................... 6 Summary................................................................... 8 Risk Factors.............................................................. 17 Use of Proceeds from Sale of Old Capital Securities....................... 22 Aon Capital A............................................................. 22 Aon Corporation........................................................... 23 Acquisition of Alexander & Alexander...................................... 23 Pro Forma Consolidated Financial Information.............................. 25 Ratios of Earnings to Fixed Charges....................................... 32 Accounting Treatment for the Trust........................................ 33 The Exchange Offer........................................................ 33 Description of Securities................................................ 42 Description of Capital Securities........................................ 42 Description of Junior Subordinated Debentures............................ 53 Description of Guarantee................................................. 62 Description of Old Securities............................................. 65 Relationship Among the Capital Securities, the Junior Subordinated Debentures and the Guarantee............................................. 65 Certain Federal Income Tax Consequences................................... 66 ERISA Considerations...................................................... 71 Validity of Securities.................................................... 73 Experts................................................................... 73
UNTIL , 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SE- CURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UN- SOLD ALLOTMENT OR SUBSCRIPTIONS. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- AON CAPITAL A OFFER TO EXCHANGE ITS 8.205% CAPITAL SECURITIES WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 8.205% CAPITAL SECURITIES (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY AON CORPORATION ----------------- PROSPECTUS ----------------- , 1997 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company was organized under and is subject to the Delaware General Corporation Law. Delaware law provides that officers and directors may receive indemnification from their corporations for certain actual or threatened lawsuits. The Delaware law sets out the standard of conduct which the officers and directors must meet in order to be indemnified, the parties who are to determine whether the standard has been met, and the types of expenditures which will be indemnified. Delaware law further provides that a corporation may purchase indemnification insurance, such insurance providing indemnification for the officers and directors whether or not the corporation would have the power to indemnify them against such liability under the provisions of Delaware law. The Company has adopted an article within its Certificate of Incorporation which provides that the Company will indemnify its officers and directors to the full extent permitted by Delaware law. Furthermore, the Company is covered by insurance which will reimburse it within the policy limits for amounts it is obligated to pay in lawsuits involving officers and directors serving in such capacities in which the damages, judgments, settlements, costs, charges or expenses incurred in connection with the defense of the action, suit or proceeding are reimbursable pursuant to the law and the Certificate of Incorporation of the Company. Under the Trust Agreement, the Company has agreed to indemnify, to the fullest extent permitted by applicable law, each of the Issuer Trustees of the Trust, or any predecessor Issuer Trustee of the Trust, and to hold the Issuer Trustees harmless against, any loss, damage, liability, tax, penalty, expense or claim incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the creation, operation or termination of the Trust, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Trust Agreement. II-1 ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES EXHIBIT - ------- 4.1 Junior Subordinated Indenture dated as of January 13, 1997 between Aon Corporation and The Bank of New York, as trustee 4.2 First Supplemental Indenture dated as of January 13, 1997 between Aon Corporation and The Bank of New York, as trustee 4.3 Certificate of Trust of Aon Capital A 4.4 Trust Agreement of Aon Capital A dated as of December 27, 1996 among Aon Corporation, as Depositor, and the trustees named therein 4.5 Amended and Restated Trust Agreement of Aon Capital A dated as of January 13, 1997 among Aon Corporation, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of the Capital Securities 4.6 Forms of Capital Security Certificates for Aon Capital A (included as Exhibits B, C and D to Exhibit 4.5) 4.7 Form of Junior Subordinated Debenture for Aon Corporation (included as Exhibit A to Exhibit 4.2) 4.8 Capital Securities Guarantee Agreement dated as of January 13, 1997 between Aon Corporation and The Bank of New York, as guarantee trustee 4.9 Form of Capital Securities Guarantee Agreement to be executed by Aon Corporation and The Bank of New York, as guarantee trustee 4.10 Capital Securities Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. 4.11 Debenture Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. 4.12 Guarantee Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. 4.13 Agreement as to Expenses and Liabilities dated as of January 13, 1997 between Aon Corporation and Aon Capital A 5.1 Opinion of Sidley & Austin as to validity of the Junior Subordinated Debentures and the Guarantee to be issued by Aon Corporation 5.2 Opinion of special Delaware counsel as to validity of the Capital Securities to be issued by Aon Capital A 8 Opinion of special tax counsel as to certain federal income tax matters 12 Computation of ratios of earnings to fixed charges 23.1 Consent of Ernst & Young LLP 23.2 Consent of Deloitte & Touche LLP 23.3 Consent of Sidley & Austin (included in Exhibits 5.1 and 8) 23.4 Consent of special Delaware counsel (included in Exhibit 5.2) 24 Powers of Attorney (included in the Signatures page of this Registration Statement) 25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the Junior Subordinated Indenture 25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the Amended and Restated Trust Agreement of Aon Capital A 25.3 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for the benefit of the holders of Capital Securities of Aon Capital A 99.1 Form of Letter of Transmittal 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter from Registered Holders to Clients 99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees 99.5 Form of Exchange Agent Agreement
II-2 ITEM 22. UNDERTAKINGS Each of the undersigned Registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of a Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each Registrant pursuant to the foregoing provisions, or otherwise, each Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by each Registrant of expenses incurred or paid by a director, officer or controlling person of each Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrants hereby undertake to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. The undersigned Registrants hereby undertake to supply by means of a post- effective amendment all information concerning a transaction, and the company being acquired or involved therein, that was not the subject of and included in the Registration Statement when it became effective. II-3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, STATE OF ILLINOIS, ON FEBRUARY 5, 1997. AON Corporation Patrick G. Ryan By: _________________________________ PATRICK G. RYAN CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Patrick G. Ryan, Harvey N. Medvin and Raymond I. Skilling, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, including any filings under Rule 462 promulgated under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED BELOW ON FEBRUARY 5, 1997. SIGNATURE TITLE Patrick G. Ryan Chairman, President, Chief Executive - ------------------------------------- Officer and Director (principal PATRICK G. RYAN executive officer) Harvey N. Medvin Executive Vice President, Chief - ------------------------------------- Financial Officer and Treasurer HARVEY N. MEDVIN (principal financial and accounting officer) Daniel T. Carroll Director - ------------------------------------- DANIEL T. CARROLL Franklin A. Cole Director - ------------------------------------- FRANKLIN A. COLE II-4 SIGNATURE TITLE Edgar D. Janotta Director - ------------------------------------- EDGAR D. JANOTTA Perry J. Lewis Director - ------------------------------------- PERRY J. LEWIS Joan D. Manley Director - ------------------------------------- JOAN D. MANLEY Andrew J. McKenna Director - ------------------------------------- ANDREW J. MCKENNA Newton N. Minow Director - ------------------------------------- NEWTON N. MINOW Peer Pedersen Director - ------------------------------------- PEER PEDERSEN Donald S. Perkins Director - ------------------------------------- DONALD S. PERKINS John W. Rogers, Jr. Director - ------------------------------------- JOHN W. ROGERS, JR. George A. Schaefer Director - ------------------------------------- GEORGE A. SCHAEFER Raymond I. Skilling Director - ------------------------------------- RAYMOND I. SKILLING Fred L. Turner Director - ------------------------------------- FRED L. TURNER Arnold R. Weber Director - ------------------------------------- ARNOLD R. WEBER II-5 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AON CAPITAL A HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS, ON FEBRUARY 5, 1997. AON CAPITAL A By: Aon Corporation, as Depositor Michael A. Conway By: _________________________________ Michael A. Conway Senior Vice President II-6 EXHIBIT INDEX EXHIBIT 4.1 Junior Subordinated Indenture dated as of January 13, 1997 between Aon Corporation and The Bank of New York, as trustee 4.2 First Supplemental Indenture dated as of January 13, 1997 between Aon Corporation and The Bank of New York, as trustee 4.3 Certificate of Trust of Aon Capital A 4.4 Trust Agreement of Aon Capital A dated as of December 27, 1996 among Aon Corporation, as Depositor, and the trustees named therein 4.5 Amended and Restated Trust Agreement of Aon Capital A dated as of January 13, 1997 among Aon Corporation, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of the Capital Securities 4.6 Forms of Capital Security Certificates for Aon Capital A (included as Exhibits B, C and D to Exhibit 4.5) 4.7 Form of Junior Subordinated Debenture for Aon Corporation (included as Exhibit A to Exhibit 4.2) 4.8 Capital Securities Guarantee Agreement dated as of January 13, 1997 between Aon Corporation and The Bank of New York, as guarantee trustee 4.9 Form of Capital Securities Guarantee Agreement to be executed by Aon Corporation and The Bank of New York, as guarantee trustee 4.10 Capital Securities Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. 4.11 Debenture Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. 4.12 Guarantee Exchange and Registration Rights Agreement dated as of January 13, 1997 among Aon Corporation, Aon Capital A and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. 4.13 Agreement as to Expenses and Liabilities dated as of January 13, 1997 between Aon Corporation and Aon Capital A 5.1 Opinion of Sidley & Austin as to validity of the Junior Subordinated Debentures and the Guarantee to be issued by Aon Corporation 5.2 Opinion of special Delaware counsel as to validity of the Capital Securities to be issued by Aon Capital A 8 Opinion of special tax counsel as to certain federal income tax matters 12 Computation of ratios of earnings to fixed charges 23.1 Consent of Ernst & Young LLP 23.2 Consent of Deloitte & Touche LLP 23.3 Consent of Sidley & Austin (included in Exhibits 5.1 and 8) 23.4 Consent of special Delaware counsel (included in Exhibit 5.2) 24 Powers of Attorney (included in the Signatures page of this Registration Statement) 25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the Junior Subordinated Indenture 25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the Amended and Restated Trust Agreement of Aon Capital A 25.3 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for the benefit of the holders of Capital Securities of Aon Capital A 99.1 Form of Letter of Transmittal 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter from Registered Holders to Clients 99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees 99.5 Form of Exchange Agent Agreement
EX-4.1 2 JUNIOR SUBORDINATED INDENTURE DATED 01/13/97 ================================================================================ AON CORPORATION AND THE BANK OF NEW YORK TRUSTEE -------------------------------- INDENTURE DATED AS OF JANUARY 13, 1997 JUNIOR SUBORDINATED DEBENTURES ================================================================================ Reconciliation and Tie Sheet* between Provisions of the Trust Indenture Act of 1939, as amended and Indenture Dated as of January 13, 1997 between Aon Corporation and The Bank of New York, Trustee
Section of Act Section of Indenture -------------- -------------------- 310(a)(1) 7.09 310(a)(2) 7.09 310(a)(3) Inapplicable 310(a)(4) Inapplicable 310(b) 7.08, 7.10 310(c) Inapplicable 311(a) 7.13(a), 7.13(c) 311(b) 7.13(b), 7.13(c) 311(c) Inapplicable 312(a) 5.01, 5.02(a) 312(b) 5.02(b) 312(c) 5.03(c) 313(a) 5.04(a) 313(b)(1) Inapplicable 313(b)(2) 5.04(b) 313(c) 5.04(c) 313(d) 5.04(d) 314(a)(1) 5.03(a) 314(a)(2) 5.03(b) 314(a)(3) 5.03(c) 314(a)(4) 4.06 314(b) Inapplicable 314(c)(1) 15.04 314(c)(2) 15.04 314(c)(3) Inapplicable 314(d) Inapplicable 314(e) 15.04 314(f) Omitted 315(a) 7.01 315(b) 6.07 315(c) 7.01 315(d) 7.01 315(e) 6.08 316(a)(1) 6.06, 8.04 316(a)(2) Omitted 316(b) 6.04 316(c) 10.05 317(a) 6.02 317(b) 4.04 318(a) 15.06 ________________________
* This Reconciliation and Tie Sheet is not part of the Indenture. -i- TABLE OF CONTENTS
Page ---- ARTICLE ONE DEFINITIONS Section 1.01 Certain terms defined........................................................... 1 Act............................................................................. 2 Additional Interest............................................................. 2 Administrative Trustee.......................................................... 2 Aon Guarantee................................................................... 2 Aon Trust....................................................................... 3 Applicants...................................................................... 3 Authenticating Agent............................................................ 3 Authorized Newspaper............................................................ 3 Board of Directors.............................................................. 3 Business Day.................................................................... 3 Capital Securities.............................................................. 3 Capital Stock................................................................... 3 Commission...................................................................... 4 Common Securities............................................................... 4 Common Stock.................................................................... 4 Company......................................................................... 4 Depositary...................................................................... 4 Distributions................................................................... 4 Event of Default................................................................ 5 Exchange Act.................................................................... 5 Extension Period................................................................ 5 Indenture....................................................................... 5 Investment Company Event........................................................ 5 Maturity........................................................................ 5 1940 Act........................................................................ 5 Officers' Certificate........................................................... 5 Opinion of Counsel.............................................................. 6 Original Issue Date............................................................. 6 Original Issue Discount Security................................................ 6 Paying Agent.................................................................... 6 Person.......................................................................... 6 Preferred Securities............................................................ 6 principal....................................................................... 6 Property Trustee................................................................ 6 Ranking junior to the Securities................................................ 7 Ranking on a parity with the Securities......................................... 7 record date..................................................................... 7 Register........................................................................ 7 Resolution of the Company....................................................... 7
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Page ---- Responsible Officer............................................................. 8 Rights Plan..................................................................... 8 Security or Securities; outstanding............................................. 8 Securityholder; registered holder............................................... 9 Senior Indebtedness of the Company.............................................. 9 Stated Maturity................................................................. 9 Subsidiary...................................................................... 9 Tax Event....................................................................... 10 Trust Agreement................................................................. 10 Trustee; Principal Office of the Trustee........................................ 10 Trust Indenture Act of 1939..................................................... 10 Trust Securities................................................................ 10 ARTICLE TWO ISSUE, DESCRIPTION, EXECUTION, REGISTRATION OF TRANSFER AND EXCHANGE OF SECURITIES Section 2.01. Amount, series and delivery of Securities....................................... 11 Section 2.02 Form of Securities and Trustee's Certificate.................................... 15 Section 2.03. Denominations of and payment of interest on Securities.......................... 17 Section 2.04. Execution of Securities......................................................... 18 Section 2.05. Registration, transfer and exchange of Securities............................... 18 Section 2.06. Temporary Securities............................................................ 20 Section 2.07. Mutilated, destroyed, lost or stolen Securities................................. 20 Section 2.08. Cancellation and destruction of surrendered Securities.......................... 21 Section 2.09. Authenticating Agents........................................................... 21 Section 2.10. Deferrals of Interest Payment Dates............................................. 23 Section 2.11. Right of Set-Off................................................................ 24 Section 2.12. Shortening or Extension of Stated Maturity...................................... 24 Section 2.13. Agreed tax treatment............................................................ 24 Section 2.14. CUSIP Numbers................................................................... 24 ARTICLE THREE REDEMPTION OF SECURITIES Section 3.01. Applicability of Article........................................................ 25 Section 3.02. Mailing of notice of redemption................................................. 25 Section 3.03. When Securities called for redemption become due and payable.................... 26
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Page ---- ARTICLE FOUR PARTICULAR COVENANTS OF THE COMPANY Section 4.01. Payment of principal of and interest on Securities.............................. 27 Section 4.02. Maintenance of offices or agencies for registration of transfer, exchange and payment of Securities........................................... 27 Section 4.03. Appointment to fill a vacancy in the office of Trustee.......................... 27 Section 4.04. Duties of Paying Agent.......................................................... 28 Section 4.05. Further assurances.............................................................. 28 Section 4.06. Officers' Certificate as to defaults; notices of certain defaults............... 29 Section 4.07. Waiver of covenants............................................................. 29 Section 4.08. Additional Tax Sums............................................................. 29 Section 4.09. Additional Covenants............................................................ 30 Section 4.10. Calculation of Original Issue Discount.......................................... 30 ARTICLE FIVE SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE Section 5.01. Company to furnish Trustee information as to the names and addresses of Securityholders................................................. 31 Section 5.02. Trustee to preserve information as to the names and addresses of Securityholders received by it............................................... 31 Section 5.03. Annual and other reports to be filed by Company with Trustee.................... 32 Section 5.04. Trustee to transmit annual report to Securityholders............................ 33 ARTICLE SIX REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT Section 6.01. Events of Default defined....................................................... 34 Section 6.02. Covenant of Company to pay to Trustee whole amount due on Securities on default in payment of interest or principal................. 37 Section 6.03. Application of moneys collected by Trustee...................................... 38 Section 6.04. Limitation on suits by holders of Securities.................................... 39 Section 6.05. On default Trustee may take appropriate action.................................. 40 Section 6.06. Rights of holders of majority in principal amount of Securities to direct Trustee and to waive default....................................... 40 Section 6.07. Trustee to give notice of defaults known to it, but may withhold in certain circumstances..................................................... 41 Section 6.08. Requirement of an undertaking to pay costs in certain suits under the Indenture or against the Trustee......................................... 41
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Page ---- ARTICLE SEVEN CONCERNING THE TRUSTEE Section 7.01. Upon Event of Default occurring and continuing, Trustee shall exercise powers vested in it, and use same degree of care and skill in their exercise, as a prudent man would use.......................... 42 Section 7.02. Reliance on documents, opinions, etc............................................ 43 Section 7.03. Trustee not liable for recitals in Indenture or in Securities................... 44 Section 7.04. May hold Securities............................................................. 44 Section 7.05. Moneys received by Trustee to be held in trust without interest................. 44 Section 7.06. Trustee entitled to compensation, reimbursement and indemnity................... 44 Section 7.07. Right of Trustee to rely on Officers' Certificate where no other evidence specifically prescribed............................................. 45 Section 7.08. Disqualification; conflicting interests......................................... 45 Section 7.09. Requirements for eligibility of Trustee......................................... 45 Section 7.10. Resignation and Removal of Trustee.............................................. 46 Section 7.11. Acceptance by successor Trustee................................................. 47 Section 7.12. Successor to Trustee by merger, consolidation or succession to business......... 48 Section 7.13. Limitations on rights of Trustee as a creditor to obtain payment of certain claims within three months prior to default or during default, or to realize on property as such creditor thereafter............... 48 ARTICLE EIGHT CONCERNING THE SECURITYHOLDERS Section 8.01. Evidence of action by Securityholders........................................... 52 Section 8.02. Proof of execution of instruments and of holding of Securities.................. 52 Section 8.03. Who may be deemed owners of Securities.......................................... 53 Section 8.04. Securities owned by Company or controlled or controlling persons disregarded for certain purposes............................................. 53 Section 8.05. Instruments executed by Securityholders bind future holders..................... 54 ARTICLE NINE SECURITYHOLDERS' MEETINGS Section 9.01. Purposes for which meetings may be called....................................... 54 Section 9.02. Manner of calling meetings...................................................... 54 Section 9.03. Call of meeting by Company or Securityholders................................... 55 Section 9.04. Who may attend and vote at meetings............................................. 55 Section 9.05. Regulations may be made by Trustee.............................................. 55 Section 9.06. Manner of voting at meetings and record to be kept.............................. 56 Section 9.07. Exercise of rights of Trustee, Securityholders and holders of Preferred Securities not to be hindered or delayed........................... 56
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Page ---- ARTICLE TEN SUPPLEMENTAL INDENTURES Section 10.01. Purposes for which supplemental indentures may be entered into without consent of Securityholders...................................... 56 Section 10.02. Modification of Indenture with consent of holders of a majority in principal amount of Securities............................................ 58 Section 10.03. Effect of supplemental indentures............................................... 59 Section 10.04. Securities may bear notation of changes by supplemental indentures.............. 60 Section 10.05. Revocation and effect of consents............................................... 60 ARTICLE ELEVEN CONSOLIDATION, MERGER, SALE OR CONVEYANCE Section 11.01. Company may consolidate, etc. on certain terms.................................. 60 Section 11.02. Successor corporation substituted............................................... 61 Section 11.03. Opinion of Counsel to Trustee................................................... 61 ARTICLE TWELVE SATISFACTION AND DISCHARGE OF INDENTURE, UNCLAIMED MONEYS Section 12.01. Satisfaction and discharge of Indenture........................................ 61 Section 12.02. Application by Trustee of funds deposited for payment of Securities............ 62 Section 12.03. Repayment of moneys held by Paying Agent....................................... 62 Section 12.04. Repayment of moneys held by Trustee............................................ 62 ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES Section 13.01. Incorporators, stockholders, officers, directors and employees of Company exempt from individual liability................................. 63 ARTICLE FOURTEEN SUBORDINATION OF SECURITIES Section 14.01. Agreement to subordinate....................................................... 63 Section 14.02. Obligation of the Company unconditional........................................ 65 Section 14.03. Limitations on duties to holders of Senior Indebtedness of the Company......... 65 Section 14.04. Notice to Trustee of facts prohibiting payment................................. 65 Section 14.05. Application by Trustee of moneys deposited with it............................. 66 Section 14.06. Subrogation.................................................................... 66
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Page ---- Section 14.07. Subordination rights not impaired by acts or omissions of Company or holders of Senior Indebtedness of the Company.................... 66 Section 14.08. Authorization of Trustee to effectuate subordination of Securities............. 67 Section 14.09. No Payment when Senior Indebtedness in default................................. 67 Section 14.10. Right of Trustee to hold Senior Indebtedness of the Company.................... 67 ARTICLE FIFTEEN MISCELLANEOUS PROVISIONS Section 15.01. Successors and assigns of Company bound by Indenture........................... 68 Section 15.02. Acts of board, committee or officer of successor corporation valid............. 68 Section 15.03. Required notices or demands may be served by mail.............................. 68 Section 15.04. Officers' Certificate and Opinion of Counsel to be furnished upon applications or demands by the Company................................. 68 Section 15.05. Payments due on Saturdays, Sundays, and holidays............................... 69 Section 15.06. Provisions required by Trust Indenture Act of 1939 to control.................. 69 Section 15.07. Indenture and Securities to be construed in accordance with the laws of the State of New York.................................................... 69 Section 15.08. Provisions of the Indenture and Securities for the sole benefit of the parties and the Securityholders...................................... 69 Section 15.09. Indenture may be executed in counterparts...................................... 70 Section 15.10. Securities in foreign currencies............................................... 70
-vii- THIS INDENTURE, dated as of the 13th day of January, 1997 between AON CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter sometimes referred to as the "Company"), party of the first part, and THE BANK OF NEW YORK, a New York banking corporation (hereinafter sometimes referred to as the "Trustee"), party of the second part. WITNESSETH: WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance from time to time of its unsecured junior subordinated debentures or other evidences of indebtedness (hereinafter referred to as the "Securities"), without limit as to principal amount, issuable in one or more series, the amount and terms of each such series to be determined as hereinafter provided, including, without limitation, Securities issued to evidence loans made to the Company of the proceeds from the issuance from time to time by one or more business trusts (each an "Aon Trust," and collectively, the "Aon Trusts") of preferred interests in such Trusts (the "Preferred Securities" which may also be referred to, without limitation, as the "Capital Securities") and common interests in such Trusts (the "Common Securities," and collectively with the Preferred Securities, the "Trust Securities"); to be authenticated by the certificate of the Trustee; and, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and WHEREAS, all acts and things necessary to make the Securities when executed by the Company and authenticated and delivered by the Trustee as in this Indenture provided, the valid, binding and legal obligations of the Company, and to constitute these presents a valid indenture and agreement according to its terms, have been done and performed and the execution of this Indenture and the issue hereunder of the Securities have in all respects been duly authorized, and the Company, in the exercise of the legal rights and power vested in it, executes this Indenture and proposes to make, execute, issue and deliver the Securities; NOW, THEREFORE, in order to declare the terms and conditions upon which the Securities are authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Securities by the holders thereof, the Company covenants and agrees with the Trustee, for the equal and proportionate benefit of the respective holders from time to time of the Securities or of series thereof, as follows: ARTICLE ONE DEFINITIONS Section 1.01 CERTAIN TERMS DEFINED. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (b) All other terms used herein which are defined in the Trust Indenture Act of 1939, whether directly or by reference therein, have the meanings assigned to them therein; (c) All accounting terms used herein and not expressly defined herein shall have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; provided, that when two or more principles are so generally accepted, it shall mean that set of principles consistent with those in use by the Company; and (d) The terms "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Act: The term "Act" has the meaning specified in Section 2.01. Additional Interest: The term "Additional Interest" means the interest, if any, that shall accrue on any interest on the Securities of any series the payment of which has not been made on the applicable interest payment date and which shall accrue at the rate per annum specified or determined as specified in such Security. Additional Tax Sums: The term "Additional Tax Sums" has the meaning specified in Section 4.08. Administrative Trustee: The term "Administrative Trustee" means, in respect of any Aon Trust, each Person identified as an "Administrative Trustee" in the related Trust Agreement, solely in such Person's capacity as Administrative Trustee of such Aon Trust under such Trust Agreement and not in such Person's individual capacity, or any successor administrative trustee appointed as therein provided. Aon Guarantee: The term "Aon Guarantee" means the guarantee by the Company of distributions on the Preferred Securities of an Aon Trust to the extent provided in the Guarantee Agreement. -2- Aon Trust: The terms "Aon Trust" and "Aon Trusts" each have the meaning specified in the recitals to this Indenture. applicants: The term "applicants" has the meaning specified in Section 5.02(b). Authenticating Agent: The term "Authenticating Agent" means any Authenticating Agent appointed by the Trustee pursuant to Section 2.09. Authorized Newspaper: The term "Authorized Newspaper" means a newspaper in the City of Chicago, State of Illinois, and the Borough of Manhattan, The City of New York, State of New York, each of which is printed in the English language and customarily published at least once a day for at least five days in each calendar week and of general circulation in the respective cities. Whenever successive publications are required to be made in an Authorized Newspaper, the successive publications may be made in the same or in a different newspaper meeting the foregoing requirements and in each case on any day of the week. If it is impossible or, in the opinion of the Trustee, impracticable to publish any notice in the manner herein provided, then such publication in lieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice. Board of Directors: The term "Board of Directors," when used with reference to the Company, means the Board of Directors of the Company or the Executive Committee or any other committee of or created by the Board of Directors of the Company duly authorized to act hereunder. Business Day: The term "Business Day" means any day which is not a Saturday or Sunday and which is neither a legal holiday nor a day on which banking institutions in The City of New York are authorized or required by law or executive order to close or a day on which the principal corporate trust office of the Trustee is closed for business. Capital Securities: The term "Capital Securities" has the meaning specified in the recitals to this Indenture. Capital Stock: -3- The term "Capital Stock" means shares of capital stock of any class of any corporation whether now or hereafter authorized regardless of whether such capital stock shall be limited to a fixed sum or percentage in respect of the rights of the holders thereof to participate in dividends and in the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up. Commission: The term "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act of 1939, then the body performing such duties on such date. Common Securities: The term "Common Securities" has the meaning specified in the recitals to this Indenture. Common Stock: The term "Common Stock" means the common stock, par value $1.00 per share, of the Company. Company: The term "Company" means Aon Corporation, a corporation duly organized and existing under the laws of the State of Delaware and, subject to the provisions of Article Eleven, shall also include its successors and assigns. Depositary: The term "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more global Securities, the person designated as Depositary by the Company pursuant to Section 2.01 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter the term "Depositary" shall mean or include each person who is then a Depositary hereunder and if at any time there is more than one such person, the term "Depositary" as used with respect to the Securities of any series shall mean the Depositary with respect to the Securities of such series. Distributions: The term "Distributions," with respect to the Trust Securities issued by an Aon Trust, means amounts payable in respect of such Trust Securities as provided in the related Trust Agreement and referred to therein as "Distributions." -4- Event of Default: The term "Event of Default" with respect to Securities of any series shall mean any event specified as such in Section 6.01 and any other event as may be established with respect to the Securities of such series as contemplated by Section 2.01. Exchange Act: The term "Exchange Act" has the meaning specified in Section 2.02. Extension Period: The term "Extension Period" has the meaning specified in Section 2.10. Indenture: The term "Indenture" means this instrument as originally executed, or, if amended or supplemented as herein provided, then as so amended or supplemented, and shall include the form and terms of particular series of Securities established as contemplated by Sections 2.01 and 2.02. Investment Company Event: The term "Investment Company Event" means in respect of an Aon Trust, the receipt by an Aon Trust of an Opinion of Counsel (as defined in the relevant Trust Agreement) to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), such Aon Trust is or will be considered an investment company that is required to be registered under the 1940 Act, which Change in 1940 Act Law becomes effective on or after the date of original issuance of the Preferred Securities of such Aon Trust. Maturity: The term "Maturity" when used with respect to any Security means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. 1940 Act: The term "1940 Act" means the Investment Company Act of 1940, as amended. Officers' Certificate: The term "Officers' Certificate" shall mean a certificate signed by the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman or any Vice President of the Company (whether or not designated by a number or a word or words added -5- before or after the title Vice President) and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of the Company and delivered to the Trustee. Each such certificate shall include the statements provided for in Section 15.04, if and to the extent required by the provisions thereof and will comply with Section 314 of the Trust Indenture Act of 1939. Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in writing signed by legal counsel, who shall be satisfactory to the Trustee, and who may be an employee of, or counsel to, the Company and delivered to the Trustee. Each such opinion shall include the statements provided for in Section 15.04, if and to the extent required by the provisions thereof and will comply with Section 314 of the Trust Indenture Act of 1939. Original Issue Date: The term "Original Issue Date" means the first date of issuance of each Security. Original Issue Discount Security: The term "Original Issue Discount Security" shall mean any Security which provides for an amount less than the principal amount thereof to be due and payable upon declaration pursuant to Section 6.01. Paying Agent: The term "Paying Agent" means the Trustee or any Person or Persons authorized by the Company to pay the principal or interest on any Securities on behalf of the Company. Person: The term "Person" or "person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof, or any other entity of whatever nature. Preferred Securities: The term "Preferred Securities" has the meaning specified in the recitals to this Indenture. principal: The term "principal," whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include "and premium, if any." Property Trustee: -6- The term "Property Trustee" means, in respect of any Aon Trust, the commercial bank or trust company identified as the "Property Trustee" in the related Trust Agreement, solely in its capacity as Property Trustee of such Aon Trust under such Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as therein provided. Ranking junior to the Securities: The term "ranking junior to the Securities" when used with respect to any obligation of the Company means (i) any Aon Guarantee of Preferred Securities of any Aon Trust, and (ii) any other obligation of the Company which (a) ranks junior to and not equally with or prior to the Securities (or any other obligations of the Company ranking on a parity with the Securities) in right of payment upon the happening of any event of the kind specified in the first sentence of the first paragraph of Section 14.01, or (b) is specifically designated as ranking junior to the Securities by express provision in the instrument creating or evidencing such obligation. The securing of any obligations of the Company, otherwise ranking junior to the Securities, shall be deemed to prevent such obligations from constituting obligations ranking junior to the Securities. Ranking on a parity with the Securities: The term "ranking on a parity with the Securities" when used with respect to any obligation of the Company means any obligation of the Company which (a) ranks equally with and not prior to the Securities in right of payment upon the happening of any event of the kind specified in the first sentence of the first paragraph of Section 14.01, or (b) is specifically designated as ranking on a parity with the Securities by express provision in the instrument creating or evidencing such obligation. The securing of any obligations of the Company, otherwise ranking on a parity with the Securities, shall not be deemed to prevent such obligations from constituting obligations ranking on a parity with the Securities. record date: The term "record date" has the meaning specified in Section 2.03. Register: The term "Register" has the meaning specified in Section 2.05. Resolution of the Company: The term "Resolution of the Company" means a resolution of the Company, in the form of a resolution of the Board of Directors, in the form of a resolution of a duly constituted committee of the Board of Directors, or in the form of a resolution of two or more senior officers of the Company, authorizing, ratifying, setting forth or otherwise validating agreements, execution and delivery of -7- documents, the issuance, form and terms of Securities, or any other actions or proceedings pursuant or with respect to this Indenture. Responsible Officer: The term "Responsible Officer," when used with respect to the Trustee, means the chairman and vice chairman of the board of directors, the president, the chairman and vice chairman of the executive committee of the board of directors, every vice president or officer senior thereto, every assistant vice president, the secretary, every assistant secretary, the treasurer, every assistant treasurer, every corporate trust officer, every assistant corporate trust officer, and every other officer and assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of, and familiarity with, a particular subject. Rights Plan: The term "Rights Plan" means a plan of the Company providing for the issuance by the Company to all holders of its Common Stock of rights entitling the holders thereof to subscribe for or purchase shares of Common Stock or any class or series of preferred stock, which rights (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, in each case until the occurrence of a specified event or events. Security or Securities; outstanding: The term "Security" or "Securities" means any security or securities of the Company, as the case may be, without regard to series, authenticated and delivered under this Indenture. The term "outstanding," when used with reference to Securities and subject to the provisions of Section 8.04, means as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent), provided that such Securities shall have reached their Stated Maturity or, if such Securities are to be redeemed prior to the Stated Maturity thereof, notice of such redemption shall have been given as in Article Three provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered or which have been paid pursuant to the terms of -8- Section 2.07 unless proof satisfactory to the Trustee is presented that any such Securities are held by persons in whose hands any of such Securities is a valid, binding and legal obligation of the Company. In determining whether the holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.01. Securityholder; registered holder: The terms "Securityholder," "holder of Securities," "registered holder" or other similar term, mean any person who shall at the time be the registered holder of any Security or Securities on the Register kept for that purpose in accordance with the provisions of this Indenture. Senior Indebtedness of the Company: The term "Senior Indebtedness of the Company" means (i) any indebtedness of the Company for borrowed or purchased money, whether or not evidenced by bonds, debentures, notes or other written instruments, (ii) obligations under letters of credit, (iii) any indebtedness or other obligations of the Company with respect to commodity contracts, interest rate and currency swap agreements, cap, floor and collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations in currency exchange or interest rates, and (iv) any guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business) or other similar contingent obligations in respect of obligations of others of a type described in (i), (ii) or (iii) above whether or not such obligation is classified as a liability on a balance sheet prepared in accordance with generally accepted accounting principles, in each case listed in (i), (ii), (iii) and (iv) above whether outstanding on the date of execution of this Indenture or thereafter incurred, other than obligations ranking on a parity with the Securities or ranking junior to the Securities; provided, however, that "Senior Indebtedness of the Company" does not include trade creditors. Stated Maturity: The term "Stated Maturity" when used with respect to any Security or any installment of principal thereof or interest thereon means the date specified pursuant to the terms of such Security as the date on which the principal of such Security or such installment of interest is due and payable in the case of such principal, as such date may be shortened or extended or provided pursuant to the terms of such Security and this Indenture. Subsidiary: The term "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting -9- stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. Tax Event: The term "Tax Event" means the receipt by the Company and an Aon Trust of an Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in such matters to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of issuance of the Preferred Securities of such Aon Trust, there is more than an insubstantial risk that (i) the Aon Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to United States federal income tax with respect to income received or accrued on the corresponding series of Securities issued by the Company to such Aon Trust, (ii) interest payable by the Company on such corresponding series of Securities is not, or within 90 days of the date of such Opinion of Counsel, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes, or (iii) the Aon Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties or other governmental charges. Trust Agreement: The term "Trust Agreement" means any Trust Agreement governing any Aon Trust, whether now existing or created in the future, relating to the Securities of any series in each case. Trustee; Principal Office of the Trustee: The term "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, and, subject to the provisions of Article Seven, shall also include its successors. The term "principal office" of the Trustee shall mean the principal corporate trust office of the Trustee in The City of New York, State of New York, at which the corporate trust business of the Trustee shall, at any particular time, be administered. The present address of the office at which the corporate trust business of the Trustee is administered is 101 Barclay Street, Floor 21 West, New York, New York 10286. Trust Indenture Act of 1939: Except as herein otherwise expressly provided or unless the context requires otherwise, the term "Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the date as of which this Indenture was originally executed. Trust Securities: The term "Trust Securities" has the meaning specified in the recitals to this Indenture. -10- ARTICLE TWO ISSUE, DESCRIPTION, EXECUTION, REGISTRATION OF TRANSFER AND EXCHANGE OF SECURITIES Section 2.01. AMOUNT, SERIES AND DELIVERY OF SECURITIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. The terms of each series (which terms shall not be inconsistent with the provisions of this Indenture) including: (1) The designation of the Securities of such series (which shall distinguish the Securities of the series from all other Securities and which shall include the word "subordinated" or a word of like meaning); (2) Any limit upon the aggregate principal amount of the Securities of such series which may be executed, authenticated and delivered under this Indenture; provided, however, that nothing contained in this Section or elsewhere in this Indenture or in such Securities or in a Resolution of the Company or Officers' Certificate or supplemental indenture is intended to or shall limit execution by the Company or authentication and delivery by the Trustee of Securities under the circumstances contemplated by Sections 2.05, 2.06, 2.07, 3.02, 3.03 and 10.04; (3) The date or dates (if any) on which the principal of the Securities of such series is payable; (4) The rate or rates at which the Securities of such series shall bear interest, if any, the rate or rates and extent to which Additional Interest or other interest, if any, shall be payable, the date or dates from which such interest shall accrue, the dates on which such interest shall be payable, the record date for the interest payable on any interest payment date and the right of the Company to defer or extend an interest payment date; (5) The place or places where Securities of such series may be presented for payment and for the other purposes provided in Section 4.02; (6) Any price or prices at which, any period or periods within which, and any terms and conditions upon which Securities of such series may be redeemed, in whole or in part, at the option of the Company; (7) The type or types (if any) of Capital Stock of the Company into which, any period or periods within which, and any terms and conditions upon which Securities of such series may be made payable, converted, exchanged in whole or in part, at the option of the holder or of the Company; -11- (8) If other than denominations of $1,000 and any whole multiple thereof, the denominations in which Securities of such series shall be issuable; (9) If other than the principal amount thereof, the portion of the principal amount of Securities of such series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.01; (10) If other than such coin or currency of the United States of America as at the time of payment is legal tender for payment of public or private debts, the coin or currency (which may be a composite currency) in which payment of the principal of (and premium, if any) and interest, if any, on the Securities of such series shall be payable; (11) If the principal of (and premium, if any) or interest, if any, on the Securities of such series are to be payable, at the election of the Company or a holder thereof, in a coin or currency (including composite currency) other than that in which the Securities of such series are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made; (12) If the amounts of payments of principal of (and premium, if any) or interest, if any, on the Securities of such series may be determined with reference to an index based on a coin or currency (including composite currency) other than that in which the Securities of such series are stated to be payable, the manner in which such amounts shall be determined; (13) If the Securities of such series are payable at Maturity or upon earlier redemption in Capital Stock, the terms and conditions upon which such payment shall be made; (14) The person or persons who shall be registrar for the Securities of such series, and the place or places where the Register of Securities of the series shall be kept; (15) Any Events of Default with respect to the Securities of such series, if not set forth herein; (16) Whether any Securities of such series are to be issuable in global form with or without coupons, and, if so, the Depositary for such global Securities and whether beneficial owners of interests in any such global Security may exchange such interests for definitive Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which, and the place or places where, any such exchanges may occur, if other than in the manner provided in Section 2.05; (17) The form of Trust Agreement and Guarantee Agreement, if applicable; (18) If applicable, the relative degree to which Securities of such series shall be senior to or be subordinated to other series of such Securities or other indebtedness -12- of the Company in right of payment, whether such other series of Securities or other indebtedness are outstanding or not; and (19) Any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture); or in any case, the method for determining such terms, the persons authorized to determine such terms and the limits, if any, within which any such determination of such terms is to be made shall either be established in or pursuant to a Resolution of the Company and set forth in an Officers' Certificate, or set forth in one or more indentures supplemental hereto, prior to the issuance of Securities of any series. The Securities of all series shall be subordinate to Senior Indebtedness of the Company as provided in Article Fourteen. The applicable Resolution of the Company set forth in an Officers' Certificate or supplemental indenture may provide that Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which interest may be determined, with different dates from which such interest shall accrue, with different dates on which such interest may be payable or with any different terms other than Events of Default but all such Securities of a particular series shall for all purposes under this Indenture including, but not limited to, voting and Events of Default, be treated as Securities of a single series. If any of the terms of any series of Securities are established by action taken pursuant to a Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate or supplemental indenture setting forth the terms of the series. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication by it, and the Trustee shall thereupon authenticate and deliver such Securities to or upon the written order of the Company, signed by its Chairman of the Board, or its Chief Executive Officer, or its President, or any Vice Chairman or any Vice President of the Company (whether or not designated by a number or a word or words added before or after the title Vice President), and by its Treasurer or an Assistant Treasurer or its Controller or its Secretary or an Assistant Secretary, without any further corporate action by the Company. If the form or terms of the Securities of the series have been established in or pursuant to a Resolution of the Company and set forth in an Officers' Certificate, or set forth in one or more supplemental indentures hereto, as permitted by this Section and Section 2.02, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon: (a) an Opinion of Counsel stating: (i) If the form and terms of such Securities have been established by or pursuant to a Resolution of the Company and set forth in an Officers' Certificate as permitted by Section 2.02, that such form and terms have been established in conformity with the provisions of this Indenture; -13- (ii) If the form and terms of such Securities have been established by or pursuant to a Resolution of the Company and set forth in one or more indentures supplemental hereto as permitted by Section 2.02, that such form and terms have been established in conformity with the provisions of this Indenture; (iii) That the issuance and sale of such Securities have been duly registered under the Securities Act of 1933, as amended (the "Act"), and a registration statement with respect thereto under the Act has become effective under the Act, or that such issuance and sale are exempt from the registration requirements of the Act; and that any other action by or before any governmental body or authority (except that the offer and sale of such Securities in certain jurisdictions may be subject to the Blue Sky or securities laws of such jurisdictions) required in connection with the issuance and sale of such Securities has been duly taken, specifying the nature thereof, or that no such action is required; (iv) That the issuance and delivery of such Securities does not violate the charter or By-laws of the Company or violate any order or decree of any court or public authority having jurisdiction of which such counsel has knowledge; or result in a breach of the terms, conditions or provisions of, or constitute a default under, any mortgage, indenture, contract, agreement or undertaking known to counsel to which the Company is a party or by which it is bound; (v) That such Securities, when executed by the Company and authenticated by the Trustee in accordance with the terms of this Indenture and delivered to the purchasers thereof against payment of the agreed consideration therefor in accordance with the terms of any purchase or similar agreement, will be entitled to the benefits of this Indenture and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general principles of equity (regardless of whether considered in a proceeding at law or in equity); (vi) If the terms of such Securities provide for the conversion of such Securities into shares of Capital Stock of the Company, or the payment thereof in Capital Stock upon Maturity or earlier redemption of such Securities, that the Company has reserved a sufficient number of shares of Capital Stock for issuance upon such conversion or payment, and such shares of Capital Stock, upon such issuance, will be duly and validly issued, fully paid and nonassessable; (vii) That the Company has the corporate power to issue such Securities, and has duly taken all necessary corporate action with respect to such issuance; -14- (viii) That all laws and requirements in respect of the execution and delivery by the Company of such Securities and the related supplemental indenture, if any, have been complied with and that authentication and delivery of such Securities and the execution and delivery of the related supplemental indenture, if any, by the Trustee will not violate the terms of this Indenture; and (ix) Such other matters as the Trustee may reasonably request; and (b) An Officers' Certificate setting forth the form and terms of the Securities of such series pursuant to this Section and Section 2.02 hereof (but only if the form and terms of the Securities of such series are not set forth in one or more supplemental indentures hereto) and stating that all conditions precedent provided for in this Indenture relating to the issuance of such Securities have been complied with, that no Event of Default with respect to any series of Securities has occurred and is continuing and that the issuance of such Securities is not and will not result in (i) an Event of Default or an event or condition which, upon the giving of notice to, or the acquisition of knowledge by, each such officer, or the lapse of time or both, would become an Event of Default or (ii) a default under the provisions of any other instrument or agreement by which the Company is bound. The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver either an Opinion of Counsel or an Officers' Certificate at the time of issuance of each Security, provided that such Opinion of Counsel and Officers' Certificate, with appropriate modifications, are instead delivered at or prior to the time of issuance of the first Security of such series. Each Security shall be dated the date of its authentication. Section 2.02 FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE. The Securities of each series shall be substantially of the tenor and terms as shall be authorized in or pursuant to a Resolution of the Company and set forth in an Officers' Certificate, or set forth in an indenture or indentures supplemental hereto in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or automated quotation system on which the Securities may be listed, or to conform to usage. If the form of Securities of any series is authorized by action taken pursuant to a Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate contemplated by Section 2.01 setting forth the terms of the series. The Securities may be printed, lithographed or fully or partly engraved. -15- The Trustee's certificate of authentication shall be in substantially the following form: "This is one of the Securities, of the series designated herein, referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By: ______________________________ Authorized Signatory (by manual signature only)" If Securities of a series are issuable in global form, as specified pursuant to Section 2.01, then, notwithstanding clause (8) of Section 2.01 and the provisions of Section 2.03, such Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities of such series from time to time endorsed thereon and that the aggregate amount of outstanding Securities of such series represented thereby may from time to time be increased or reduced to reflect exchanges or transfers. Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, of outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such person or persons as shall be specified in such Security or by the Company. Subject to the provisions of Section 2.04 and, if applicable, Section 2.06, the Trustee shall deliver and redeliver any Security in global form in the manner and upon written instructions given by the person or persons specified in such Security or by the Company. Any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form after the original issuance of the Securities of such series shall be in writing but need not comply with Section 15.04 and need not be accompanied by an Opinion of Counsel. Unless otherwise specified pursuant to Section 2.01, payment of principal of and any premium and any interest on any Security in global form shall be made to the person or persons specified therein. The owners of beneficial interests in any global Security shall have no rights under this Indenture with respect to any global Security held on their behalf by a Depositary, and such Depositary may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the sole holder and owner of such global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary, or impair, as between a Depositary and its participants in any global Security, the operation of customary practices governing the exercise of the rights of a holder of a Security of any series, including, without limitation, the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action that a holder is entitled to give or take under this Indenture. -16- Neither the Company, the Trustee nor any Authenticating Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Each Depositary designated pursuant to Section 2.01 for a global Security must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any other applicable statute or regulation. Section 2.03. DENOMINATIONS OF AND PAYMENT OF INTEREST ON SECURITIES. The Securities of each series shall be issuable as fully registered Securities without coupons in such denominations as shall be specified as contemplated by Section 2.01 (except as provided in Section 2.02 and Section 2.06). In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and integral multiples of $1,000 in excess thereof. If the Securities of any series shall bear interest, each Security of such series shall bear interest from the applicable date at the rate or rates per annum, and such interest shall be payable on the dates, specified on, or determined in the manner provided in, the Security. The person in whose name any Security is registered at the close of business on any record date (as defined below) for the Security with respect to any interest payment date for such Security shall be entitled to receive the interest payable thereon on such interest payment date notwithstanding the cancellation of such Security upon any registration of transfer, exchange or conversion thereof subsequent to such record date and prior to such interest payment date, unless such Security shall have been called for redemption on a date fixed for redemption subsequent to such record date and prior to such interest payment date or unless the Company shall default in the payment of interest due on such interest payment date on such Security, in which case such defaulted interest shall be paid to the person in whose name such Security (or any Security or Securities issued upon registration of or exchange thereof) is registered at the close of business on the record date for the payment of such defaulted interest, or except as otherwise specified as contemplated by Section 2.01. The term "record date" as used in this Section with respect to any regular interest payment date for any Security shall mean such day or days as shall be specified as contemplated by Section 2.01; provided, however, that in the absence of any such provisions with respect to any Security, such term shall mean: (1) if such interest payment date is the first day of a calendar month, record date means the fifteenth day of the calendar month next preceding such interest payment date; or (2) if such interest payment date is the fifteenth day of a calendar month, record date means the first day of such calendar month; provided, further, that (except as otherwise specified as contemplated by Section 2.01) if the day which would be the record date as provided herein is not a Business Day, then it shall mean the Business Day next preceding such day. Such term, as used in this Section, with respect to the payment of any defaulted interest on any Security shall mean (except as otherwise specified as contemplated by Section 2.01) the fifth day next preceding the date fixed by the Company for the payment of defaulted interest, established by notice given by first class mail by or on behalf of the Company to the holder of such Security not less than 10 days preceding such record date, or, if such fifth day is not a Business Day, the Business Day next preceding such fifth day. -17- Section 2.04. EXECUTION OF SECURITIES. The Securities shall be signed on behalf of the Company, manually or in facsimile, by its Chairman of the Board, or its Chief Executive Officer, or its President, or any Vice Chairman, or any Vice President of the Company (whether or not designated by a number or a word or words added before or after the title Vice President), and by its Treasurer or an Assistant Treasurer or its Controller or its Secretary or an Assistant Secretary under its corporate seal, which may be affixed thereto or printed, engraved or otherwise reproduced thereon, by facsimile or otherwise. Only such Securities as shall bear thereon a certificate of authentication substantially in the form recited herein, executed by or on behalf of the Trustee manually by an authorized signatory, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate of authentication by the Trustee upon any Security executed by the Company shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. Typographical or other errors or defects in the seal or facsimile signature on any Security or in the text thereof shall not affect the validity or enforceability of such Security if it has been duly authenticated and delivered by the Trustee. In case any officer of the Company who shall have signed any of the Securities, manually or in facsimile, shall cease to be such officer before the Securities so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Securities nevertheless may be authenticated and delivered or disposed of as though the person who signed such Securities had not ceased to be such officer of the Company; and any Security may be signed on behalf of the Company, manually or in facsimile, by such persons as, at the actual date of the execution of such Security, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such officer. Section 2.05. REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES. Securities of any series (other than a global Security, except as set forth below) may be exchanged for a like aggregate principal amount of Securities of the same series of the same tenor and terms of other authorized denominations. Securities to be exchanged shall be surrendered at the offices or agencies to be maintained by the Company in accordance with the provisions of Section 4.02 and the Company shall execute and the Trustee shall authenticate and deliver, or cause to be authenticated and delivered, in exchange therefor the Security or Securities which the Securityholder making the exchange shall be entitled to receive. The Company shall keep, at one or more of the offices or agencies to be maintained by the Company in accordance with the provisions of Section 4.02 with respect to the Securities of each series, a Register ( the "Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities of such series and the transfer of Securities of such series as in this Article provided. Such Register shall be in written form or in any other form capable of being converted into written form within a reasonable time. At all reasonable times the Register shall be open for inspection by the Trustee and any registrar of the Securities of such series other than the Trustee. Upon due presentment for registration or transfer of any Security of any series at the offices or agencies of the Company to be maintained by the Company in accordance with Section 4.02 with respect to the Securities of such series, the Company shall execute and register and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities of the same series of like tenor and terms for a like aggregate principal amount of authorized denominations. -18- Every Security issued upon registration of transfer or exchange of Securities pursuant to this Section shall be the valid obligation of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Security or Securities surrendered upon registration of such transfer or exchange. All Securities of any series presented or surrendered for exchange, registration of transfer, redemption, conversion or payment shall, if so required by the Company or any registrar of the Securities of such series, be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Company and such registrar, duly executed by the registered holder or by his attorney duly authorized in writing. No service charge shall be made for any exchange or registration of transfer of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Company shall not be required to exchange or register the transfer of (a) any Securities of any series during a period beginning at the opening of business fifteen days before the day of the mailing of a notice of redemption of outstanding Securities of such series and ending at the close of business on the relevant redemption date, or (b) any Securities or portions thereof called or selected for redemption, except, in the case of Securities called for redemption in part, the portion thereof not so called for redemption. Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a global Security representing all or a portion of the Securities of a series may not be transferred, except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary. Notwithstanding the foregoing, except as otherwise specified pursuant to Section 2.01, any global Security shall be exchangeable pursuant to this Section only as provided in this paragraph. If at any time the Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such series, or if at any time the Depositary for the Securities of such series shall no longer be eligible to so act, the Company shall appoint a successor Depositary with respect to the Securities of such series. If (a) a successor Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility (thereby automatically making the Company's election pursuant to Section 2.01 no longer effective with respect to the Securities of such series), (b) the beneficial owners of interests in a global Security are entitled to exchange such interests for definitive Securities of such series and of the same tenor and terms, as specified pursuant to Section 2.01, or (c) the Company in its sole discretion determines that the Securities of any series issued in the form of one or more global Securities shall no longer be represented by such global Security or Securities, then without unnecessary delay, but, if appropriate, in any event not later than the earliest date on which such interest may be so exchanged, the Company shall deliver to the Trustee definitive Securities in aggregate principal amount equal to the principal amount of such global Security, executed by the Company and authenticated by the Trustee. On or after the earliest date on which such interests are or may be so exchanged, such global -19- Security shall be surrendered by the Depositary to the Trustee, as the Company's agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities upon payment by the beneficial owners of such interest, at the option of the Company, of a service charge for such exchange and of a proportionate share of the cost of printing such definitive Securities, and the Trustee shall authenticate and deliver, (a) to each person specified by the Depositary in exchange for each portion of such global Security, an equal aggregate principal amount of definitive Securities of the same series of authorized denominations and of the same tenor and terms as the portion of such global Security to be exchanged, and (b) to such Depositary a global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered global security and the aggregate principal amount of definitive Securities delivered to holders thereof; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before any selection of Securities of that series to be redeemed and ending on the relevant redemption date. If a Security is issued in exchange for any portion of a global Security after the close of business at the office or agency where such exchange occurs on (i) any record date and before the opening of business at such office or agency on the relevant interest payment date, or (ii) any record date for the payment of defaulted interest and before the opening of business at such office or agency on the related proposed date for payment of defaulted interest, then interest or default interest, as the case may be, will not be payable on such interest payment date or proposed date for payment of defaulted interest, as the case may be, in respect of such Security, but will be payable on such interest payment date or proposed date for payment of defaulted interest, as the case may be, only to the person to whom interest in respect of such portion of such global Security is payable in accordance with the provisions of this Indenture and such global Security. Section 2.06. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, the Company may execute and the Trustee shall, upon the written order of the Company, authenticate and deliver temporary Securities of such series (printed or lithographed) of any denomination and substantially in the form of the definitive Securities of such series, but with or without a recital of specific redemption prices or conversion provisions and with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate. Every such temporary Security shall be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Securities. Without unreasonable delay the Company will execute and deliver to the Trustee definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor, at the offices or agencies to be maintained by the Company as provided in Section 4.02 with respect to the Securities of such series, and the Trustee shall, upon the written order of the Company, authenticate and deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder. Section 2.07. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company, in the case of any mutilated Security shall, and in the case of any destroyed, lost or stolen Security in its discretion may, execute, and upon its request the Trustee shall authenticate and deliver, or cause to be authenticated and delivered, a new Security of the same series of like tenor and terms in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In -20- case any such Security shall have matured or shall be about to mature, instead of issuing a substituted Security, the Company may pay or authorize payment of the same (without surrender thereof, except in the case of a mutilated Security). In every case the applicant for a substituted Security or for such payment shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same, or the Trustee or any Paying Agent of the Company may make any such payment, upon the written request or authorization of any officer of the Company. Upon the issue of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses connected therewith (including the fees and expenses of the Trustee). To the extent permitted by mandatory provisions of law, every substituted Security issued pursuant to the provisions of this Section in substitution for any destroyed, lost or stolen Security shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. To the full extent legally enforceable, all Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute now existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. Section 2.08. CANCELLATION AND DESTRUCTION OF SURRENDERED SECURITIES. All Securities surrendered for the purpose of payment, redemption, exchange, substitution or registration of transfer, shall, if surrendered to the Company or any agent of the Company or of the Trustee, be delivered to the Trustee, and the same, together with Securities surrendered to the Trustee for cancellation, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall return cancelled Securities to the Company. If the Company shall purchase or otherwise acquire any of the Securities, however, such purchase or acquisition shall not operate as a payment, redemption or satisfaction of the indebtedness represented by such Securities unless and until the Company, at its option, shall deliver or surrender the same to the Trustee for cancellation. Section 2.09. AUTHENTICATING AGENTS. The Trustee may from time to time appoint one or more Authenticating Agents with respect to one or more series of Securities, which shall be authorized to act on behalf of the Trustee and subject to its direction in authenticating and delivering Securities of such series pursuant hereto as fully to all intents and purposes as though any such Authenticating Agent had been expressly authorized to authenticate and deliver Securities of such series, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as though authenticated by the Trustee. Wherever reference is made in this Indenture to the authentication or delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication or delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an -21- Authenticating Agent. Each Authenticating Agent shall at all times be a corporation (including a banking association) organized and doing business under the laws of the United States or any State or territory thereof or of the District of Columbia, having a combined capital and surplus of at least five million dollars ($5,000,000) authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal, state, territorial, or District of Columbia authorities. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect herein specified in this Section. The Trustee hereby initially appoints The Bank of New York, through its trust offices at 101 Barclay Street, Floor 21 West, New York, New York 10286 as Authenticating Agent. Any corporation succeeding to the corporate agency business of an Authenticating Agent shall continue to be an Authenticating Agent, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent or such successor corporation. Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent herein. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. Any Authenticating Agent by the acceptance of its appointment shall be deemed to have agreed with the Trustee that: it will perform and carry out the duties of an Authenticating Agent as herein set forth, including among other things the duties to authenticate and deliver Securities of any series for which it has been appointed an Authenticating Agent when presented to it in connection with exchanges, registrations of transfer or any redemptions or conversions thereof; it will furnish from time to time as requested by the Trustee appropriate records of all transactions carried out by it as Authenticating Agent and will furnish the Trustee such other information and reports as the Trustee may reasonably require; it is eligible for appointment as Authenticating Agent under this Section and will notify the Trustee promptly if it shall cease to be so qualified; and it will indemnify the Trustee against any loss, liability or expense incurred by the Trustee and will defend any claim asserted against the Trustee by reason of any acts or failures to act of the Authenticating Agent but it shall have no liability for any action taken by it at the specific written direction of the Trustee. -22- Section 2.10. DEFERRALS OF INTEREST PAYMENT DATES. If specified as contemplated by Section 2.01 or Section 2.02 with respect to the Securities of a particular series, so long as no Event of Default has occurred and is continuing, the Company shall have the right, at any time during the term of such series, from time to time to defer the payment of interest on such Securities for such period or periods as may be specified as contemplated by Section 2.01 (each, an "Extension Period") during which Extension Periods the Company shall have the right to make partial payments of interest on any interest payment date. No Extension Period shall end on a date other than an interest payment date or extend beyond the Stated Maturity or any earlier prepayment date. At the end of any such Extension Period the Company shall pay all interest then accrued and unpaid on the Securities (together with Additional Interest or other interest thereon, if any, at the rate specified for the Securities of such series to the extent permitted by applicable law). During any such Extension Period, the Company shall not, and shall cause any Subsidiary not to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's Capital Stock (which includes Common Stock and preferred stock) or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank on a parity with or junior to the Securities of such series or make any guarantee payments with respect to any Aon Guarantee or other guarantee by the Company of the debt securities of any Subsidiary of the Company that by its terms ranks on a parity with or junior to the Securities of such series (other than (a) dividends or distributions in Common Stock; (b) any declaration of a dividend in connection with the implementation of a Rights Plan, the issuance of any Capital Stock of any class or series of preferred stock of the Company under any Rights Plan or the redemption or repurchase of any rights distributed pursuant to a Rights Plan; (c) payments under any Aon Guarantee relating to the Preferred Securities issued by the Aon Trust holding the Securities of such series; and (d) purchases of Common Stock related to the issuance of Common Stock or rights under any of the Company's benefit plans for its directors, officers, employees, consultants or advisors). Before the termination of any Extension Period, the Company may further extend such Extension Period; provided, however, that no Extension Period shall exceed the period or periods specified in such Securities or extend beyond the Stated Maturity of the principal of such Securities or any earlier prepayment date. At any time following the termination of any Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest or other interest then due, the Company may elect to begin a new Extension Period, subject to the above requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. If the Property Trustee of an Aon Trust is the only registered holder of the Securities of a series at the time the Company elects to begin or extend an Extension Period, the Company shall give written notice to such Property Trustee and the Trustee of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date on which Distributions on the corresponding Capital Securities issued by such Aon Trust would have been payable but for the election to begin or extend such Extension Period or (ii) the date the Administrative Trustees of such Aon Trust are required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Capital Securities of the record date or the date such Distributions are payable, but in any event not less than five Business Days prior to such record date. If the Property Trustee of an Aon Trust is not the only holder of the Securities of a series at the time the Company elects to begin or extend an Extension Period, the Company shall give the holders of such Securities and the Trustee written notice of its election to begin or extend such Extension Period at least ten Business Days prior to the earlier of (i) the next succeeding interest payment date or -23- (ii) the date the Company is required to give notice of the record or payment date of such interest payment to any applicable self-regulatory organization or to holders of such Securities. An Administrative Trustee shall give notice of the Company's election to begin or extend an Extension Period to the holders of the outstanding Preferred Securities of such Aon Trust. Section 2.11. RIGHT OF SET-OFF. With respect to the Securities of a series issued to an Aon Trust, notwithstanding anything to the contrary in the Indenture, the Company shall have the right to set off any payment it is otherwise required to make thereunder in respect of any such Security to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under the Aon Guarantee relating to such Security or under Section 6.05 of this Indenture. Section 2.12. SHORTENING OR EXTENSION OF STATED MATURITY. If specified as contemplated by Section 2.01 or Section 2.02 with respect to the Securities of a particular series, the Company shall have the right to (i) shorten the Stated Maturity of the principal of the Securities of such series at any time to any date not earlier than the first date on which the Company has the right, if any, to redeem the Securities of such series, and (ii) extend the Stated Maturity of the principal of the Securities of such series at any time at its election for one or more periods, but in no event to a date later than the 49th anniversary of the first interest payment date following the Original Issue Date of the Securities of such series; provided that, if the Company elects to exercise its right to extend the Stated Maturity of the principal of the Securities of such series pursuant to this clause (ii), at the time such election is made and at the time of extension (A) the Company is not in bankruptcy, otherwise insolvent or in liquidation, (B) the Company is not in default in the payment of any interest or principal on such Securities, (C) in the case of any series of Securities issued to an Aon Trust, such Aon Trust is not in arrears on payments of Distributions on the Preferred Securities issued by such Aon Trust and no deferred Distributions are accumulated, and (D) such Securities are rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any other nationally recognized statistical rating organization. In the event the Company elects to shorten or extend the Stated Maturity of the Securities of a particular series, it shall give notice to the Trustee (not less than 45 days prior to the effectiveness thereof), and the Trustee shall give notice of such shortening or extension to the holders not less than 30 nor more than 60 days prior to the effectiveness thereof. Section 2.13. AGREED TAX TREATMENT. Each Security issued hereunder shall provide that the Company and, by its acceptance of a security or a beneficial interest therein, the holder of, and any Person that acquires a beneficial interest in, such Security agree that for United States federal, state and local tax purposes it is intended that such Security constitute indebtedness. Section 2.14 CUSIP NUMBERS. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to holders of Securities; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the CUSIP numbers. -24- ARTICLE THREE REDEMPTION OF SECURITIES Section 3.01. APPLICABILITY OF ARTICLE. Securities of any series which are redeemable prior to Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article. Section 3.02. MAILING OF NOTICE OF REDEMPTION. In case the Company shall desire to exercise any right to redeem all or, as the case may be, any part of the Securities of any series pursuant to this Indenture, it shall give notice of such redemption to holders of the Securities to be redeemed as hereinafter in this Section provided. The Company covenants that it will pay to the Trustee or one or more Paying Agents, on or before the Business Day next preceding the date fixed for each redemption of Securities, a sum in cash sufficient to redeem on the redemption date all the Securities so called for redemption at the applicable redemption price, together with any accrued interest on the Securities to be redeemed to but excluding the date fixed for redemption. Notice of redemption shall be given to the holders of Securities to be redeemed as a whole or in part by mailing by first class mail, postage prepaid, a notice of such redemption not less than 30 nor more than 60 days prior to the date fixed for redemption to their last addresses as they shall appear upon the Register, but failure to give such notice by mailing in the manner herein provided to the holder of any Security designated for redemption as a whole or in part, or any defect therein, shall not affect the validity of the proceedings for the redemption of any other Security. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives the notice. Each such notice of redemption shall identify the Securities to be redeemed (including CUSIP numbers) and specify the date fixed for redemption and the redemption price at which Securities are to be redeemed (or if the redemption price cannot be calculated prior to the time the notice is required to be given, the manner of calculation thereof), and shall state that payment of the redemption price of the Securities or portions thereof to be redeemed will be made at any of the offices or agencies to be maintained by the Company in accordance with the provisions of Section 4.02 with respect to the Securities to be redeemed, upon presentation and surrender of such Securities or portions thereof, and that, if applicable, interest accrued to the date fixed for redemption will be paid as specified in said notice and on and after said date interest thereon will cease to accrue and shall also specify, if applicable, the conversion price and the date on which the right to convert the Securities will expire and that holders must comply with Article Fifteen hereof in order to convert their Securities. If less than all the Securities of any series are to be redeemed, the notice of redemption to each holder shall specify such holder's Securities of such series to be redeemed as a whole or in part. In case any Security is to be redeemed in part only, the notice which relates to such Security shall state the portion of the principal amount thereof to be redeemed (which shall be equal to the minimum authorized denomination for Securities of such series or any whole multiple thereof), and shall state that on and after the redemption date, upon -25- surrender of such Security, the holder will receive the redemption price in respect to the principal amount thereof called for redemption and, without charge, a new Security or Securities of the same series of authorized denominations for the principal amount thereof remaining unredeemed. If the Securities of any series are to be redeemed, the Company shall give the Trustee, at least 60 days in advance of the date fixed for redemption, notice of the aggregate principal amount of Securities of such series to be redeemed, and, if less than all the Securities of such series are to be redeemed, thereupon the Trustee shall select, by lot, or in any manner it shall deem fair, the Securities of such series to be redeemed as a whole or in part and shall thereafter promptly notify the Company in writing of the particular Securities of such series or portions thereof to be redeemed. If the Securities of any series to be redeemed consist of Securities having different dates on which the principal or any installment of principal is payable or different rates of interest, if any, or different methods by which interest may be determined or have any other different tenor or terms, then the Company may, by written notice to the Trustee, direct that Securities of such series to be redeemed shall be selected from among groups of such Securities having specified tenor or terms and the Trustee shall thereafter select the particular Securities to be redeemed in the manner set forth in the preceding sentence from among the group of such Securities so specified. Section 3.03. WHEN SECURITIES CALLED FOR REDEMPTION BECOME DUE AND PAYABLE. If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place or places stated in such notice at the applicable redemption price, together, if applicable, with any interest accrued (including any Additional Interest or other interest) to but excluding the date fixed for redemption, and on and after such date fixed for redemption (unless the Company shall default in the payment of such Securities at the applicable redemption price, together with any interest accrued to the date fixed for redemption) any interest on the Securities or portions of Securities so called for redemption shall cease to accrue, and, except as provided in Sections 7.05 and 12.04, such Securities shall cease from and after the date fixed for redemption to be entitled to any benefit or security under this Indenture, and the holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and any unpaid interest accrued to but excluding the date fixed for redemption. On presentation and surrender of such Securities at said place of payment in said notice specified, such Securities or portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with any interest accrued to but excluding the date fixed for redemption; provided, however, that, except as otherwise specified as contemplated by Section 2.01, any regular payment of interest becoming due on the date fixed for redemption shall be payable to the holders of the Securities registered as such on the relevant record date as provided in Article Two hereof. Upon surrender of any Security which is redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver at the expense of the Company a new Security of the same series of like tenor and terms of authorized denomination in principal amount equal to the unredeemed portion of the Security so surrendered; except that if a global Security is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary for such global Security, without service charge, a global Security in a denomination equal to and in exchange for the unredeemed portion of the principal of the global Security so surrendered. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the date fixed for redemption at the rate -26- borne by or prescribed therefor in the Security, or, in the case of a Security which does not bear interest, at the rate of interest set forth therefor in the Security to the extent permitted by law. ARTICLE FOUR PARTICULAR COVENANTS OF THE COMPANY The Company covenants as follows: Section 4.01. PAYMENT OF PRINCIPAL OF AND INTEREST ON SECURITIES. The Company will duly and punctually pay or cause to be paid the principal of and interest, if any, on each of the Securities at the time and places and in the manner provided herein and in the Securities. Except as otherwise specified as contemplated by Section 2.01, if the Securities of any series bear interest, each installment of interest on the Securities of such series may at the option of the Company be paid (i) by mailing a check or checks for such interest payable to the Person entitled thereto pursuant to Section 2.03 to the address of such person as it appears on the Register of the Securities of such series or (ii) by transfer to an account maintained by the Person entitled thereto as specified in the Register of Securities, provided that proper transfer instructions have been received by the record date. Section 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR REGISTRATION OF TRANSFER, EXCHANGE AND PAYMENT OF SECURITIES. So long as any of the Securities shall remain outstanding, the Company will maintain an office or agency in the City of Chicago, State of Illinois, or in The City of New York, State of New York, where the Securities may be presented for registration, conversion, exchange and registration of transfer as in this Indenture provided, and where notices and demands to or upon the Company in respect of the Securities or of this Indenture may be served, and where the Securities may be presented for payment. In case the Company shall designate and maintain some office or agency other than the previously designated office or agency, it shall give the Trustee prompt written notice thereof. In case the Company shall fail to maintain any such office or agency or shall fail to give such notice of the location or of any change in the location thereof to the Trustee, presentations and demands may be made and notices may be served at the principal office of the Trustee. In addition to such office or agency, the Company may from time to time constitute and appoint one or more other offices or agencies for such purposes with respect to Securities of any series, and one or more paying agents for the payment of Securities of any series, in such cities or in one or more other cities, and may from time to time rescind such appointments, as the Company may deem desirable or expedient, and as to which the Company has notified the Trustee; provided, however, that no such appointment or rescission shall in any manner relieve the Company of its obligation to maintain such office or agency in the said Cities of Chicago and New York, where Securities of such series may be presented for payment. Section 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder. -27- Section 4.04. DUTIES OF PAYING AGENT. (a) If the Company shall appoint a Paying Agent other than the Trustee with respect to Securities of any series, it will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section and Section 12.03, (1) That it will hold all sums held by it as such agent for the payment of the principal of or interest, if any, on the Securities of such series (whether such sums have been paid to it by the Company or by any other obligor on the Securities of such series) in trust for the benefit of the holders of the Securities of such series entitled to such principal or interest and will notify the Trustee of the receipt of sums to be so held, (2) That it will give the Trustee notice of any failure by the Company (or by any other obligor on the Securities of such series) to make any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and (3) That it will at any time during the continuance of any Event of Default, upon the written request of the Trustee, deliver to the Trustee all sums so held in trust by it. (b) Whenever the Company shall have one or more Paying Agents with respect to the Securities of any series, it will, prior to each due date of the principal of or any interest on a Security of such series, deposit with a Paying Agent of such series a sum sufficient to pay the principal or interest so becoming due, such sum to be held in trust for the benefit of the holders of Securities of such series entitled to such principal or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. (c) If the Company shall act as its own Paying Agent with respect to the Securities of any series, it will, on or before each due date of the principal of or any interest on a Security of such series, set aside, segregate and hold in trust for the benefit of the holder of such Security, a sum sufficient to pay such principal or interest so becoming due and will notify the Trustee of such action, or any failure by it or any other obligor on the Securities of such series to take such action and will at any time during the continuance of any Event of Default, upon the written request of the Trustee, deliver to the Trustee all sums so held in trust by it. (d) Anything in this Section to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for such series by it, or any Paying Agent hereunder, as required by this Section, such sums are to be held by the Trustee upon the trust herein contained. (e) Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 12.03 and 12.04. Section 4.05. FURTHER ASSURANCES. From time to time whenever reasonably demanded by the Trustee, the Company will make, execute and deliver or cause to be made, executed and delivered -28- any and all such further and other instruments and assurances and take all such further action as may be reasonably necessary or proper to carry out the intention of or to facilitate the performance of the terms of this Indenture or to secure the rights and remedies hereunder of the holders of the Securities of any series. Section 4.06. OFFICERS' CERTIFICATE AS TO DEFAULTS; NOTICES OF CERTAIN DEFAULTS. The Company will, so long as any of the Securities are outstanding, deliver to the Trustee no later than 120 days after the end of each calendar year, beginning with the year 1998, a certificate signed by the Company's principal executive officer, principal financial officer or principal accounting officer stating that a review has been made under his or her supervision of the activities of the Company during such year and of the performance under this Indenture and, to the best of his or her knowledge, the Company has complied with all conditions and covenants under this Indenture throughout such calendar year, or if there has been a default in the fulfillment of any such obligation, specifying each such default known and the nature and status thereof. For purposes of this Section, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. Section 4.07. WAIVER OF COVENANTS. The Company may omit in any particular instance to comply with any covenant or condition specifically contained in this Indenture for the benefit of one or more series of Securities, if before the time for such compliance the holders of a majority in principal amount of the Securities of all series affected (all series voting as one class) at the time outstanding (determined as provided in Section 8.04) shall waive such compliance in such instance, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. Section 4.08. ADDITIONAL TAX SUMS. In the case of the Securities of a series issued to an Aon Trust, so long as no Event of Default has occurred and is continuing and except as otherwise specified as contemplated by Section 2.01 or Section 2.02, in the event that (i) an Aon Trust is the holder of all of the Outstanding Securities of such series, (ii) a Tax Event in respect of such Aon Trust shall have occurred and be continuing and (iii) the Company shall not have (a) redeemed the Securities of such series or (b) terminated such Aon Trust pursuant to the termination provisions of the related Trust Agreement, the Company shall pay to such Aon Trust (and any permitted successor or assign under the related Trust Agreement) for so long as such Aon Trust (or its permitted successor or assignee) is the registered holder of any Securities of such series, such additional amounts as may be necessary in order that the amount of Distributions then due and payable by such Aon Trust on the related Preferred Securities and Common Securities that at any time remain outstanding in accordance with the terms thereof shall not be reduced as a result of any additional taxes, duties and other governmental charges to which such Aon Trust has become subject as a result of such Tax Event (but not including withholding taxes imposed on holders of such Preferred Securities and Common Securities) (the "Additional Tax Sums"). Whenever in this Indenture or the Securities there is a reference in any context to the payment of principal of or interest on the Securities, such reference shall be deemed to include payment of the Additional Tax Sums provided for in this paragraph to the extent that, in such context, Additional Tax Sums are, were or would be payable in respect thereof pursuant to the provisions of this Section and express reference to the payment of Additional Tax Sums (if applicable) in any provisions hereof shall not be construed as excluding Additional Tax Sums in those provisions hereof where such express reference is not made; provided, however, that the deferral of the payment of interest pursuant to Section -29- 2.10 or the Securities shall not defer the payment of any Additional Tax Sums that may be then due and payable. Section 4.09. ADDITIONAL COVENANTS. The Company covenants and agrees with each holder of Securities of a series issued to an Aon Trust that it shall not, and it shall cause any Subsidiary not to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any shares of the Company's Capital Stock (which includes Common Stock and preferred stock), or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank on a parity with or junior to the Securities of such series or make any guarantee payments with respect to any Aon Guarantee or other guarantee by the Company of debt securities of any Subsidiary that by its terms ranks on a parity with or junior to the Securities of such series (other than (a) dividends or distributions in Common Stock; (b) any declaration of a dividend in connection with the implementation of a Rights Plan, the issuance of any Capital Stock of any class or series of preferred stock of the Company under any Rights Plan or the redemption or repurchase of any rights distributed pursuant to a Rights Plan; (c) payments under any Aon Guarantee relating to the Preferred Securities issued by the Aon Trust holding the Securities of such series; and (d) purchases of Common Stock related to the issuance of Common Stock or rights under any of the Company's benefit plans for its directors, officers, employees, consultants or advisors) if at such time (i) there shall have occurred any event of which the Company has actual knowledge that (a) with the giving of notice or the lapse of time or both, would constitute an Event of Default hereunder and (b) in respect of which the Company shall not have taken reasonable steps to cure, (ii) the Company shall be in default with respect to its payment of any obligations under the related Aon Guarantee or (iii) the Company shall have given notice of its election to begin an Extension Period as provided in Section 2.10 and shall not have rescinded such notice, or such Extension Period, or any extension thereof, shall be continuing. The Company also covenants with each holder of Securities of a series issued to an Aon Trust (i) to maintain directly or indirectly 100% ownership of the Common Securities of such Aon Trust; provided, however, that any permitted successor or assignee of the Company hereunder may succeed to the Company's ownership of such Common Securities, (ii) not to voluntarily terminate, wind up or liquidate such Aon Trust, except (a) in connection with a prepayment in full of the Securities or a distribution of the Securities of such series to the holders of Preferred Securities in liquidation of such Aon Trust or (b) in connection with certain mergers, consolidations or amalgamations permitted by the relevant Trust Agreement and (iii) to use its reasonable efforts, consistent with the terms and provisions of such Trust Agreement, to cause such Aon Trust to remain classified as a grantor trust and not an association taxable as a corporation for United States federal income tax purposes. Section 4.10. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time. -30- ARTICLE FIVE SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE Section 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO THE NAMES AND ADDRESSES OF SECURITYHOLDERS. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semiannually not more than 5 days after January 15 and July 15 of each year beginning with July 1997, and at such other times as the Trustee may request in writing within 30 days after receipt by the Company of any such request, a list in such form as the Trustee may reasonably require containing all information in the possession or control of the Company, or any Paying Agent or any registrar of the Securities of each series, other than the Trustee, as to the names and addresses of the holders of Securities of such series obtained (in the case of each list other than the first list) since the date as of which the next previous list was furnished; provided, however, that if the Trustee shall be the registrar of the Securities of such series, no such list need be furnished. Any such list may be dated as of a date not more than fifteen days prior to the time such information is furnished or caused to be furnished, and need not include information received after such date. Section 5.02. TRUSTEE TO PRESERVE INFORMATION AS TO THE NAMES AND ADDRESSES OF SECURITYHOLDERS RECEIVED BY IT. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities of each series (1) contained in the most recent list furnished to it as provided in Section 5.01 and (2) received by it in the capacity of Paying Agent or registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished. (b) In case three or more holders of Securities of any series (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Securities of any series or with holders of all Securities with respect to their rights under this Indenture or under such Securities, and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five Business Days after the receipt of such application, at its election, either (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section, or (2) inform such applicants as to the approximate number of holders of Securities of such series or all Securities, as the case may be, whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section, and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application. -31- If the Trustee shall elect not to afford such access to such information, the Trustee shall, upon the written request of such applicants, mail to each of the holders of Securities of such series, or all Securities, as the case may be, whose name and address appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and after payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of Securities of such series or all Securities, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all the holders of Securities of such series or all Securities, as the case may be, with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Each and every holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any Paying Agent nor any registrar shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Securities in accordance with the provisions of subsection (b) of this Section, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b). (d) If there shall be different Trustees acting hereunder with respect to separate series of Securities, applicants shall make separate applications hereunder to each such Trustee, and such Trustees shall collaborate, if necessary, in acting under this Section. Section 5.03. ANNUAL AND OTHER REPORTS TO BE FILED BY COMPANY WITH TRUSTEE. (a) The Company covenants and agrees to file with the Trustee within fifteen days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it will file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. -32- (b) The Company covenants and agrees to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such additional information, documents, and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations. (c) The Company covenants and agrees to transmit to the holders of Securities within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in subsection (c) of Section 5.04 with respect to reports pursuant to subsection (a) of said Section 5.04, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. (d) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). Section 5.04. TRUSTEE TO TRANSMIT ANNUAL REPORT TO SECURITYHOLDERS. (a) On or before July 15, 1997, and on or before July 15 in every year thereafter, if and so long as any Securities are outstanding hereunder, the Trustee shall transmit to the Securityholders as hereinafter in this Section provided, a brief report dated as of the preceding May 15 with respect to any of the following events which may have occurred within the previous twelve (12) months (but if no such event has occurred within such period no report need be transmitted): (1) Any change to its eligibility under Section 7.09, and its qualifications under Section 7.08; (2) The creation of or any material change to a relationship which, with the occurrence of an Event of Default, would create a conflicting interest within the meaning of the Trust Indenture Act; (3) The character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge prior to that of the Securities of any series on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than one-half of one percent of the principal amount of the Securities of all series outstanding as of the date of such report; (4) Any change to the amount, interest rate, and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Securities) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except indebtedness based upon a -33- creditor relationship arising in any manner described in paragraph (2), (3), (4), or (6) of subsection (b) of Section 7.13; (5) Any change to the property and funds, if any, physically in the possession of the Trustee (as such) on the date of such report; (6) Any additional issue of Securities which the Trustee has not previously reported to Securityholders; and (7) Any action taken by the Trustee in the performance of its duties under this Indenture which it has not previously reported to Securityholders and which in its opinion materially affects the Securities of any series, except action in respect of a default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 6.07. (b) The Trustee shall transmit to the Securityholders, as hereinafter provided, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) since the date of the last report transmitted pursuant to the provisions of subsection (a) of this Section (or if such report has not yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which it claims or may claim a lien or charge prior to that of the Securities of any series on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this subsection, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than ten percent of the principal amount of Securities of all series outstanding as of the date of such report, such report to be transmitted within 90 days after such time. (c) Reports pursuant to this Section shall be transmitted by mail to all holders of Securities of any series, as the names and addresses of such holders shall appear upon the Register of the Securities of such series. (d) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with each stock exchange upon which the Securities of any series are listed and also with the Commission. The Company will promptly notify the Trustee when and as the Securities of any series become listed on any stock exchange. ARTICLE SIX REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT Section 6.01. EVENTS OF DEFAULT DEFINED. The term "Event of Default" whenever used herein with respect to Securities of any series shall mean any one of the following events: (a) Default in the payment of any installment of interest upon any of the Securities of such series as and when the same shall become due and payable, and -34- continuance of such default for a period of 30 days (subject to the deferral of any due date in the case of an Extension Period); or (b) Default in the payment of all or any part of the principal of any of the Securities of such series as and when the same shall become due and payable whether upon Maturity, upon any redemption, by declaration or otherwise; or (c) Failure on the part of the Company duly to observe or perform in any material respect any covenants or agreements (other than covenants to pay interest, principal and premium, which are subject to subsections (a) and (b) above of this Section) on the part of the Company in the Securities or in this Indenture (including any supplemental indenture or pursuant to any Officers' Certificate as contemplated by Section 2.01) specifically contained for the benefit of the Securities of such series, for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the holders of not less than 25% in principal amount of the Securities of such series and all other series so benefited (all series voting as one class) at the time outstanding under this Indenture a written notice specifying such failure and stating that such is a "Notice of Default" hereunder; or (d) The commencement by the Company of a voluntary case under Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any other similar state or federal law now or hereafter in effect, or the consent by the Company to the entry of a decree or order for relief in an involuntary case under any such law, or the consent by the Company to the appointment of a liquidating agent or committee, conservator or receiver; or (e) The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the Company in an involuntary case under Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any other similar state or federal law now or hereafter in effect, and the continuance of any such decree or order unstayed and in effect for a period of 90 days, or the appointment of a liquidating agent or committee, conservator or receiver, and the continuance of any such appointment unstayed and in effect for a period of 90 days. If an Event of Default under clauses 6.01(a), 6.01(b) or 6.01(c) shall have occurred and be continuing (but, in the case of clause 6.01(c), only if the Event of Default is with respect to less than all series of Securities then outstanding under this Indenture), unless the principal of all the Securities shall have already become due and payable, either the Trustee or the holders of not less than 25% in principal amount of all the then outstanding Securities of the series as to which such Event of Default under clauses 6.01(a), 6.01(b) or 6.01(c) has occurred (each such series voting as a separate class in the case of an Event of Default under clauses 6.01(a) or 6.01(b), and all such series voting as one class in the case of an Event of Default under clause 6.01(c)), by notice in writing to the Company (and to the Trustee if given by Securityholders) may declare the principal amount (or if Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all the Securities of such series, or of all such series in the case of an Event of Default -35- under clause 6.01(c), in each case together with any accrued interest, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable; provided, however, that in the case of the Securities of a series issued to an Aon Trust, if upon an Event of Default, the Trustee or the holders of at least 25% in principal amount of the outstanding Securities of such series fail to declare the principal of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding series of Preferred Securities then outstanding shall have such right by a notice in writing to the Company and the Trustee. If an Event of Default under clauses 6.01(c), 6.01(d), or 6.01(e) shall have occurred and be continuing (but, in the case of clause 6.01(c)), only if the Event of Default is with respect to all Securities then outstanding under the Indenture), then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the holders of not less than 25% in principal amount of all the then outstanding Securities of each series as to which such Event of Default under clauses 6.01(c), 6.01(d), or 6.01(e) above has occurred (voting as one class), by notice in writing to the Company (and to the Trustee if given by Securityholders) may declare the principal amount (or if Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all the Securities as to which the Event of Default under clauses 6.01(c), 6.01(d), or 6.01(e) above has occurred, together with any accrued interest, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything contained in this Indenture or in the Securities to the contrary notwithstanding; provided, however, that in the case of the Securities of a series issued to an Aon Trust, if upon an Event of Default, the Trustee or the holders of not less than 25% in principal amount of the outstanding Securities of that series fail to declare the principal of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding series of Preferred Securities then outstanding shall have such right by a notice in writing to the Company and the Trustee. The foregoing provisions, however, are subject to the condition that if, at any time after the principal amount (or specified portion thereof) of the Securities of any one or more series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of moneys due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such series (or upon all the Securities, as the case may be) and the principal of any and all Securities of such series (or of any and all the Securities, as the case may be) which shall have become due otherwise than by declaration (with interest on overdue installments of interest to the extent permitted by law and on such principal at the rate or rates of interest borne by, or prescribed therefor in, the Securities of each such series to the date of such payment or deposit) and the amounts payable to the Trustee under Section 7.06, and any and all defaults under the Indenture with respect to Securities of such series (or all Securities, as the case may be), other than the nonpayment of principal of and any accrued interest on Securities of such series (or any Securities, as the case may be) which shall have become due by declaration, shall have been cured, remedied or waived as provided in Section 6.06, then and in every such case the holders of a majority in principal amount of the Securities of such series (or of all the Securities, as the case may be) then outstanding and as to which such Event of Default has occurred (such series or all series voting as one class, if more than one series are so entitled) by written notice to the Company and to the Trustee, may rescind and annul such declaration and its consequences. In the case of Securities issued to an Aon Trust, should the holders of such Securities fail to annul such declaration and waive such default, the holders of a majority in aggregate liquidation preference of related Preferred Securities shall have such -36- right; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair any right consequent thereon. In case the Trustee, any holder of Securities or any holder of Preferred Securities shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, such holder of Securities or such holder of Preferred Securities then and in every such case the Company, the Trustee, the holders of the Securities of such series (or of all the Securities, as the case may be) and the holders of Preferred Securities shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee, the holders of the Securities of such series (or of all the Securities, as the case may be) and the holders of Preferred Securities shall continue as though no such proceedings had been taken. Section 6.02. COVENANT OF COMPANY TO PAY TO TRUSTEE WHOLE AMOUNT DUE ON SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL. The Company covenants that (1) in case default shall be made in the payment of any installment of interest on any of the Securities of any series as and when the same shall become due and payable, and such default shall have continued for a period of 30 days (subject to the deferral of any due date in the case of an Extension Period), or (2) in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series as and when the same shall become due and payable, whether upon Maturity, upon any redemption, by declaration or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities of such series, the whole amount that then shall have become due and payable on all such Securities of such series for principal or interest, or both, as the case may be, with interest upon the overdue principal and installments of interest (to the extent permitted by law) at the rate or rates of interest borne by or prescribed therefor in the Securities of such series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents and counsel, and any expenses or disbursements reasonably incurred, and all reasonable advances made hereunder by the Trustee, its agents, attorneys and counsel, except as a result of its negligence or bad faith. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor upon such Securities, and collect in the manner provided by law out of the property of the Company or any other obligor upon such Securities wherever situated the moneys adjudged or decreed to be payable. The Trustee shall be entitled and empowered, either in its own name or as trustee of an express trust, or as attorney-in-fact for the holders of the Securities of any series, or in any one or more of such capacities (irrespective of whether the principal of the Securities of such series shall then be due and payable, whether upon Maturity, upon any redemption, by declaration or otherwise, and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section) to file and prove a claim or claims for the whole amount of principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such -37- series) and interest owing and unpaid in respect of the Securities of such series and to file such other documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation of the Trustee, its agents and counsel, and for reimbursement of all expenses and disbursements reasonably incurred, and all reasonable advances made hereunder by the Trustee, its agents and counsel, except as a result of its negligence or bad faith) and of the holders of the Securities of such series allowed in any equity receivership, insolvency, bankruptcy, liquidation, arrangement, readjustment, reorganization or any other judicial proceedings relative to the Company or any other obligor on the Securities of such series or their creditors, or their property. The Trustee is hereby irrevocably appointed (and the successive respective holders of the Securities of each series by taking and holding the same shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective holders of the Securities of such series, with authority to make and file in the respective names of the holders of the Securities of such series, or on behalf of the holders of the Securities of such series as a class, any proof of debt, amendment of proof of debt, claim, petition or other document in any such proceeding and to receive payment of any sums becoming distributable on account thereof, and to execute any such other papers and documents and to do and perform any and all such acts and things for and on behalf of such holders of the Securities of such series, as may be necessary or advisable in the opinion of the Trustee in order to have the respective claims of the Trustee and of the holders of the Securities of such series allowed in any such proceeding, and to receive payment of or on account of such claims and to distribute the same, and any receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holders, to pay to the Trustee any amount due to it under Section 7.06; provided, however, that nothing herein shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of such series or the rights of any holder thereof, or to authorize the Trustee to vote in respect of the claim of any holder of Securities of such series in any such proceeding. All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without the possession of any of the Securities of such series, or the production thereof on any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee, shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel, for the ratable benefit of the holders of the Securities of such series. Section 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys collected by the Trustee pursuant to Section 6.02 shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such moneys, upon presentation of the several Securities in respect of which moneys have been collected, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid: First: To the payment of reasonable costs and expenses of collection, and of all amounts payable to the Trustee under Section 7.06; -38- Second: In case the principal of the outstanding Securities in respect of which moneys have been collected shall not have become due and be unpaid, to the payment of any unpaid interest on such Securities, in the order of the maturity of the installments of such interest, with interest upon the overdue installments of interest (so far as permitted by law and to the extent that such interest has been collected by the Trustee) at the rate or rates of interest borne by, or prescribed therefor in, such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; Third: In case the principal of the outstanding Securities in respect of which such moneys have been collected shall have become due and be unpaid, whether upon Maturity, upon any redemption, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon such Securities for principal and interest, if any, with interest on the overdue principal and any installments of interest (so far as permitted by law and to the extent that such interest has been collected by the Trustee) at the rate or rates of interest borne by, or prescribed therefor in, such Securities; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon such Securities, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Security over any other Security, ratably to the aggregate of such unpaid principal and interest; and Fourth: To the payment of the remainder, if any, to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. Section 6.04. LIMITATION ON SUITS BY HOLDERS OF SECURITIES. No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25% in principal amount of all the Securities at the time outstanding (considered as one class) shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 6.06; it being understood and intended, and being expressly covenanted by the taker and holder of every Security with every other taker and holder and the Trustee, that no one or more holders of Securities shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities. For the protection and enforcement of the provisions -39- of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. Notwithstanding any other provisions in this Indenture, the right of any holder of any Security to receive payment of the principal of and interest on such Security, on or after the respective due dates expressed in such Security (or, in the case of redemption on or after the date fixed for redemption), or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder. Section 6.05. ON DEFAULT TRUSTEE MAY TAKE APPROPRIATE ACTION. In case of a default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. All powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee, of any holder of any of the Securities or any holder of Preferred Securities to exercise any right or power accruing upon any default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 8.04, every power and remedy given by this Article or by law to the Trustee, to the Securityholders or the holders of Preferred Securities may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee, by the Securityholders or by the holders of Preferred Securities, as the case may be. In the case of Securities of a series issued to an Aon Trust, any holder of the corresponding series of Preferred Securities issued by such Aon Trust shall have the right, upon the occurrence of an Event of Default described in Section 6.01(a) or (b) above, to institute a suit directly against the Company for enforcement of payment to such holder of principal of (including premium, if any) and interest (including any Additional Interest) on the Securities having a principal amount equal to the aggregate liquidation amount of such Preferred Securities of the corresponding series held by such holder. Section 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The holders of at least a majority in principal amount of the Securities of any one or more series or of all the Securities, as the case may be (voting as one class), at the time outstanding (determined as provided in Section 8.04) shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee under this Indenture with respect to such one or more series; provided, however, that subject to Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by Opinion of Counsel determines that the action so directed may not lawfully be taken, or if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability -40- or be unduly prejudicial to the rights of Securityholders of such one or more series not parties to such direction, and provided further that nothing in this Indenture shall impair the right of the Trustee to take any action deemed proper by the Trustee and which is not inconsistent with such direction by such Securityholders of such one or more series. The holders of at least a majority in principal amount of the Securities of all series as to which an Event of Default hereunder has occurred (all series voting as one class) at the time outstanding (determined as provided in Section 8.04) and, in the case of any Preferred Securities of a series issued to an Aon Trust, the holders of at least a majority in aggregate liquidation amount of the Preferred Securities issued by such Aon Trust, may waive any past default hereunder with respect to such series and its consequences, except a default in the payment of the principal of or interest on any of such Securities or Preferred Securities or in respect of a covenant or provision hereof which under Article Ten cannot be modified or amended without the consent of the holder of each Security so affected. Upon any such waiver, such default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Any such waiver shall be deemed to be on behalf of the holders of all the Securities of such series or, in the case of a waiver by holders of Preferred Securities issued by such Aon Trust, by all holders of Preferred Securities issued by such Aon Trust. Section 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, give to the holders of the Securities of such series in the manner and to the extent provided in subsection (c) of Section 5.04 with respect to reports pursuant to subsection (a) of said Section 5.04, notice of such default actually known to the Trustee unless such default shall have been cured, remedied or waived before the giving of such notice (the term "default" for the purposes of this Section being hereby defined to be the events specified in clauses (c), (d), (e) and (f) of Section 6.01 and default in the payment of the principal of or interest on Securities of any series, not including any periods of grace provided for therein, and irrespective of the giving of written notice specified in any such terms, and irrespective of the delivery of any Officers' Certificate provided for in any such terms); provided, however, that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the Executive Committee, or a Trust Committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the holders of the Securities of such series. Section 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this Indenture agree, and each holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any holder of Securities of any series, or group of such Securityholders, holding in the aggregate more than ten percent in principal amount of all the Securities (all series considered as one class) outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or -41- interest on any Security, on or after the due date expressed in such Security (or in the case of any redemption, on or after the date fixed for redemption). ARTICLE SEVEN CONCERNING THE TRUSTEE Section 7.01. UPON EVENT OF DEFAULT OCCURRING AND CONTINUING, TRUSTEE SHALL EXERCISE POWERS VESTED IN IT, AND USE SAME DEGREE OF CARE AND SKILL IN THEIR EXERCISE, AS A PRUDENT MAN WOULD USE. The Trustee, prior to the occurrence of an Event of Default and after the curing, remedying or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured, remedied or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct; provided, however, that (a) Prior to the occurrence of an Event of Default and after the curing, remedying or waiving of all Events of Default which may have occurred: (1) The duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) In the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of Securities pursuant to Section 6.06 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; -42- (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01; and (e) None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Section 7.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise provided in Section 7.01: (a) The Trustee may rely and shall be fully protected in acting or refraining from acting in good faith upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Resolution of the Company may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company; (c) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Securityholders pursuant to this Indenture, unless such Securityholders shall have offered to the Trustee such adequate security or indemnity against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction; (e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note, other evidence of indebtedness or other paper or document, unless requested in writing to do so by the holders of Securities pursuant to Section 6.06, but the Trustee may make such further inquiry or investigation into such facts or matters as it may see fit; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, -43- not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require adequate indemnity against such costs, expenses or liabilities as a condition to so proceeding; and provided further, that nothing in this subsection (f) shall require the Trustee to give the Securityholders any notice other than that required by Section 6.07. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it hereunder; provided, however, that the Trustee shall be responsible for its own negligence or recklessness with respect to the selection of any such agent or attorney; (h) The Trustee shall be under no responsibility for the approval by it in good faith of any expert for any of the purposes expressed in this Indenture; and (i) The Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture. Section 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN SECURITIES. The recitals contained herein and in the Securities (other than the certificate of authentication on the Securities) shall be taken as the statements of the Company, and the Trustee does not assume any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of the proceeds of the Securities of any series. Section 7.04. MAY HOLD SECURITIES. The Trustee or any agent of the Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 7.08, with the same rights it would have if it were not Trustee or such agent. Section 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST WITHOUT INTEREST. Subject to the provisions of Section 12.04, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder. Section 7.06. TRUSTEE ENTITLED TO COMPENSATION, REIMBURSEMENT AND INDEMNITY. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed to in writing between the Company and the Trustee (which shall not be limited by any provision of law in regard to the compensation of a trustee of any express trust), and, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in connection with the acceptance or administration of its trust under this Indenture (including the reasonable compensation and the reasonable expenses and disbursements of its agents and counsel and of all persons not regularly in its employ) -44- except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Company also covenants and agrees to indemnify each of the Trustee, any predecessor Trustee and their agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part and arising out of or in connection with the acceptance or administration of this trust and performance of their duties hereunder, including the reasonable costs and expenses (including reasonable fees and disbursements of their counsel) of defending themselves against any claim or liability in connection with the exercise or performance of any of the powers or duties hereunder. The obligations of the Company under this Section to compensate the Trustee, to pay or reimburse the Trustee for expenses, disbursements and advances and to indemnify and hold harmless the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of or interest, if any, on the Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 6.01(d) or Section 6.01(e), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law. Section 7.07. RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE WHERE NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided in Section 7.01, whenever in the administration of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting to take any action hereunder, the Trustee (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Company. Section 7.08. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has or shall acquire any conflicting interest, within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 7.09. REQUIREMENTS FOR ELIGIBILITY OF TRUSTEE. The Trustee hereunder shall at all times be a corporation organized and doing business under the laws of the United States or any State or territory thereof or of the District of Columbia authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal, state, territorial, or District of Columbia authority and having its principal office and place of business in the City of Chicago or in the Borough of Manhattan, The City of New York, if there be such a corporation having its principal office and place of business in said places willing to act upon reasonable and customary terms and conditions. If such corporation publishes reports of condition at least annually, pursuant to law or the requirements of the aforesaid supervising or examining authority, then, for the purposes of this Section and to extent permitted by the Trust Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10. Neither the Company, any other obligor upon the -45- Securities, nor any person directly or indirectly controlling, controlled by, or under common control with the Company or any such obligor shall serve as Trustee under this Indenture. Section 7.10. RESIGNATION AND REMOVAL OF TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of such resignation to the Company and by giving to the holders of Securities of the applicable series notice thereof in the manner and to the extent provided in subsection (c) of Section 5.04 with respect to reports pursuant to subsection (a) of Section 5.04. Upon receiving such notice of resignation and if the Company shall deem it appropriate evidence satisfactory to it of such mailing, the Company shall promptly appoint a successor Trustee with respect to the applicable series (it being understood that any successor Trustee may be appointed with respect to the Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Securities of any particular series) by written instrument, in duplicate, executed pursuant to a Resolution of the Company, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee. If no successor Trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, or any Securityholder who has been a bona fide holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 6.08, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee. (b) In case at any time any of the following shall occur: (1) The Trustee shall fail to comply with Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities of the applicable series for at least six months, or (2) The Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder, or (3) The Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee with respect to the applicable series and appoint a successor Trustee with respect to the applicable series by written instrument, in duplicate, executed pursuant to a Resolution of the Company, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to the provisions of Section 6.08, any Securityholder who has been a bona fide holder of a Security or Securities of the applicable series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the applicable series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor Trustee. -46- (c) The holders of a majority in principal amount of the Securities of any one series voting as a separate class or all series voting as one class at the time outstanding (determined as provided in Section 8.04) may at any time remove the Trustee with respect to the applicable series or all series, as the case may be, and appoint a successor Trustee with respect to the applicable series or all series, as the case may be, by written instrument or instruments signed by such holders or their attorneys-in-fact duly authorized, or by the affidavits of the permanent chairman and permanent secretary of a meeting of the Securityholders (as elected in accordance with Section 9.05) evidencing the vote upon a resolution or resolutions submitted thereto with respect to such removal and appointment (as provided in Article Nine), and by delivery thereof to the Trustee so removed, to the successor Trustee and to the Company. (d) Any resignation or removal of the Trustee and any appointment of a successor Trustee pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor Trustee as provided in Section 7.11. Section 7.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor Trustee with respect to all series of Securities appointed as provided in Section 7.10 shall execute, acknowledge and deliver to the Company and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Trustee with respect to all or any applicable series shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties with respect to such series of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, on the written request of the Company or of the successor Trustee, the Trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 7.06, execute and deliver an instrument transferring to such successor Trustee all the rights and powers with respect to such series of the Trustee so ceasing to act. Upon the request of any such successor Trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such Trustee or any successor Trustee to secure any amounts then due it pursuant to the provisions of Section 7.06. In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of such series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-Trustees of the same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective -47- to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of such series to which the appointment of such successor Trustee relates; but, on written request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of such series to which the appointment of such successor Trustee relates. No successor Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Trustee shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09. Upon acceptance of appointment by a successor Trustee as provided in this Section, the successor Trustee shall at the expense of the Company transmit notice of the succession of such Trustee hereunder to the holders of Securities of any applicable series in the manner and to the extent provided in subsection (c) of Section 5.04 with respect to reports pursuant to subsection (a) of said Section 5.04. Section 7.12. SUCCESSOR TO TRUSTEE BY MERGER, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. Section 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS A CREDITOR TO OBTAIN PAYMENT OF CERTAIN CLAIMS WITHIN THREE MONTHS PRIOR TO DEFAULT OR DURING DEFAULT, OR TO REALIZE ON PROPERTY AS SUCH CREDITOR THEREAFTER. (a) Subject to the provisions of subsection (b) of this Section, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company or of any other obligor on the Securities within three months prior to a default, as defined in subsection (c) of this Section, or subsequent to such a default, then, unless and until such default shall be cured, waived or remedied, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the holders of the Securities of the one or more other indenture securities (as defined in subsection (c) of this Section): -48- (1) An amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three-month period, and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection, or from the exercise of any right of set- off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and (2) All property received by the Trustee in respect of any claims as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such three-month period, or an amount equal to the proceeds of any such property if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee: (A) To retain for its own account (i) payments made on account of any such claim by any person (other than the Company) who is liable thereon, (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii) distributions made in cash, securities, or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to title 11 of the United States Code or applicable state laws; (B) To realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three- month period; (C) To realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three-month period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received, the Trustee had no reasonable cause to believe that a default, as defined in subsection (c) of this Section, would occur within three months; or (D) To receive payment on any claim referred to in paragraph (B) or (C) against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of paragraphs (B), (C), and (D), property substituted after the beginning of such three-month period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and to the extent that any claim referred to in any such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre- existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim. -49- If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the holders of Securities of the one or more series for which it is acting as Trustee, and the holders of other indenture securities in such manner that the Trustee, such Securityholders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to title 11 of the United States Code or applicable state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee, such Securityholders, and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to title 11 of the United States Code or applicable state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim in bankruptcy or receivership or in proceedings for reorganization pursuant to title 11 of the United States Code or applicable state law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceeding for reorganization is pending shall have jurisdiction (i) to apportion among the Trustee, such Securityholders, and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, such Securityholders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claim, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee who has resigned or been removed after the beginning of such three-month period shall be subject to the provisions of this subsection (a) as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such three-month period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist: (i) The receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as trustee, occurred after the beginning of such three-month period; and (ii) Such receipt of property or reduction of claim occurred within three months after such resignation or removal; (b) There shall be excluded from the operation of subsection (a) of this Section a creditor relationship arising from: -50- (1) The ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) Advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof is given to the Securityholders at the time and in the manner provided in Section 5.04(c) with respect to reports pursuant to subsections (a) and (b) thereof, respectively; (3) Disbursements made in the ordinary course of business in the capacity of Trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; (4) An indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in subsection (c) of this Section; (5) The ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or (6) The acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper as defined in subsection (c) of this Section. (c) As used in this Section: (1) The term "default" shall mean any failure to make payment in full of the principal of or interest upon any of the Securities or upon the other indenture securities when and as such principal or interest becomes due and payable. (2) The term "other indenture securities" shall mean securities upon which the Company is an obligor (as defined in the Trust Indenture Act of 1939) outstanding under any other indenture (A) under which the Trustee is also trustee, (B) which contains provisions substantially similar to the provisions of subsection (a) of this Section, and (C) under which a default exists at the time of the apportionment of the funds and property held in said special account. (3) The term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand. -51- (4) The term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise, or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. (5) The term "Company" shall mean any obligor upon the Securities. ARTICLE EIGHT CONCERNING THE SECURITYHOLDERS Section 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in this Indenture it is provided that the holders of a specified percentage in principal amount of the Securities of any or all series may take any action (including the making of any demand or request, the giving of any notice, consent, or waiver or the taking of any other action), the fact at the time of taking any such action the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by such Securityholders in person or by agent or proxy appointed in writing, or (b) by the record of such holders of Securities voting in favor thereof at any meeting of such Securityholders duly called and held in accordance with the provisions of Article Nine, or (c) by a combination of such instrument or instruments and any such record of such a meeting of such Securityholders. If there shall be more than one Trustee acting hereunder with respect to separate series of Securities, such Trustees shall collaborate, if necessary, in acting under Article Nine and in determining whether the holders of a specified percentage in principal amount of the Securities of any or all series have taken any such action. Section 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF SECURITIES. Subject to the provisions of Sections 7.01, 7.02 and 9.05, proof of the execution of any instrument by a Securityholder or his agent or proxy and proof of the holding by any person of any of the Securities shall be sufficient if made in the following manner: The fact and date of the execution by any such person of any instrument may be proved in any reasonable manner acceptable to the Trustee. The ownership of Securities of any series shall be proved by the Register of such Securities of such series, or by certificates of the Security registrar or registrars thereof. -52- The Trustee shall not be bound to recognize any person as a Securityholder unless and until title to the Securities held by him is proved in the manner in this Article Eight provided. The record of any Securityholders' meeting shall be proved in the manner provided in Section 9.06. The Trustee may accept such other proof or require such additional proof of any matter referred to in this Section as it shall deem reasonable. Section 8.03. WHO MAY BE DEEMED OWNERS OF SECURITIES. Prior to due presentment for registration of transfer of any Security, the Company, the Trustee and any agent of the Company or the Trustee may deem and treat the person in whose name such Security shall be registered upon the Register of Securities of the series of which such Security is a part as the absolute owner of such Security (whether or not payments in respect of such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or an account of the principal of and interest, subject to Section 2.03, on such Security and for all other purposes; and neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be affected by any notice to the contrary. All such payments so made to any such holder for the time being, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability of moneys payable upon any such Security. Section 8.04. SECURITIES OWNED BY COMPANY OR CONTROLLED OR CONTROLLING PERSONS DISREGARDED FOR CERTAIN PURPOSES. In determining whether the holders of the requisite principal amount of Securities have concurred in any demand, direction, request, notice, vote, consent, waiver or other action under this Indenture, Securities which are owned by the Company or any other obligor on the Securities or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on the Securities shall be disregarded and deemed not to be outstanding for the purpose of any such determination, provided that for the purposes of determining whether the Trustee shall be protected in relying on any such demand, direction, request, notice, vote, consent, waiver or other action, only Securities which a Responsible Officer of the Trustee assigned to its principal office actually knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Securities and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Securities, if any, known by the Company to be owned or held by or for the account of the Company or any other obligor on the Securities or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on the Securities; and, subject to the provisions of Section 7.01, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are outstanding for the purpose of any such determination. -53- Section 8.05. INSTRUMENTS EXECUTED BY SECURITYHOLDERS BIND FUTURE HOLDERS. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the percentage in principal amount of the Securities specified in this Indenture in connection with such action, any holder of a Security which is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee at its principal office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security and any direction, demand, request, notice, waiver, consent, vote or other action of the holder of any Security which by any provisions of this Indenture is required or permitted to be given shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in lieu thereof or upon registration of transfers thereof, irrespective of whether any notation in regard thereto is made upon such Security. Any action taken by the holders of the percentage in principal amount of the Securities of any or all series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all of the Securities of such series subject, however, to the provisions of Section 7.01. ARTICLE NINE SECURITYHOLDERS' MEETINGS Section 9.01. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of holders of Securities of any or all series may be called at any time and from time to time pursuant to the provisions of this Article for any of the following purposes: (1) To give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by holders of Securities of any or all series, as the case may be, pursuant to any of the provisions of Article Six; (2) To remove the Trustee and appoint a successor Trustee pursuant to the provisions of Article Seven; (3) To consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or (4) To take any other action authorized to be taken by or on behalf of the holders of any specified principal amount of the Securities of any or all series, as the case may be, under any other provision of this Indenture or under applicable law. Section 9.02. MANNER OF CALLING MEETINGS. The Trustee may at any time call a meeting of Securityholders to take any action specified in Section 9.01, to be held at such time and at such place in the Borough of Manhattan, State of New York, as the Trustee shall determine. Notice of every meeting of Securityholders setting forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed not less than 20 nor more than 60 days prior to the date fixed for the meeting. -54- Section 9.03. CALL OF MEETING BY COMPANY OR SECURITYHOLDERS. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the holders of not less than ten percent in principal amount of the Securities of any or all series, as the case may be, then outstanding, shall have requested the Trustee to call a meeting of holders of Securities of any or all series, as the case may be, to take any action authorized in Section 9.01 by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of such meeting within 20 days after receipt of such request, then the Company or such holders of Securities in the amount above specified may determine the time and place in the Borough of Manhattan, State of New York for such meeting and may call such meeting to take any action authorized in Section 9.01, by mailing notice thereof as provided in Section 9.02. Section 9.04. WHO MAY ATTEND AND VOTE AT MEETINGS. To be entitled to vote at any meeting of Securityholders a person shall (a) be a holder of one or more Securities with respect to which the meeting is being held, or (b) be a person appointed by an instrument in writing as proxy by such holder of one or more Securities. The only persons who shall be entitled to be present or to speak at any meeting of Securityholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 9.05. REGULATIONS MAY BE MADE BY TRUSTEE. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders, in regard to proof of the holding of Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 8.02 and the appointment of any proxy shall be proved in the manner specified in said Section 8.02; provided, however, that such regulations may provide that written instruments appointing proxies regular on their face, may be presumed valid and genuine without the proof hereinabove or in said Section 8.02 specified. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Securityholders as provided in Section 9.03, in which case the Company or the Securityholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote of the meeting. Subject to the provisions of Section 8.04, at any meeting each Securityholder or proxy shall be entitled to one vote for each $1,000 principal amount of Securities held or represented by him, provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not outstanding and ruled by the permanent chairman of the meeting to be not outstanding; provided, further, that each holder of Original Issue Discount Securities shall be entitled to one vote for each $1,000 amount which would be due upon acceleration of his Original Issue Discount Security on the date of the meeting. Neither a temporary nor a permanent chairman of the meeting shall have a right to vote other than by virtue of Securities held by him or instruments in writing as aforesaid duly designating him as the person to vote on behalf of other Securityholders. Any meeting of Securityholders duly called pursuant to the provisions of Section 9.02 or 9.03 may be adjourned from time to time, and the meeting may be held so adjourned without further notice. -55- At any meeting of Securityholders, the presence of persons holding or representing Securities in principal amount sufficient to take action on the business for the transaction of which such meeting was called shall constitute a quorum, but, if less than a quorum is present, the person or persons holding or representing a majority in principal amount of the Securities represented at the meeting may adjourn such meeting with the same effect for all intents and purposes, as though a quorum had been present. Section 9.06. MANNER OF VOTING AT MEETINGS AND RECORD TO BE KEPT. The vote upon any resolution submitted to any meeting of Securityholders shall be by written ballots on which shall be subscribed the signatures of the holders of Securities or of their representatives by proxy and the principal amount or principal amounts of the Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the permanent secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Securityholders shall be prepared by the permanent secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 9.02. The record shall show the principal amount or principal amounts of the Securities voting in favor of, against, or abstaining from voting on, any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and permanent secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee. Any record so signed and verified shall be conclusive evidence of the matters therein stated. Section 9.07. EXERCISE OF RIGHTS OF TRUSTEE, SECURITYHOLDERS AND HOLDERS OF PREFERRED SECURITIES NOT TO BE HINDERED OR DELAYED. Nothing in this Article contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Securityholders or any rights expressly or impliedly conferred hereunder to make such call any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee, to the Securityholders or the holders of Preferred Securities under any of the provisions of this Indenture or of the Securities. ARTICLE TEN SUPPLEMENTAL INDENTURES Section 10.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURES MAY BE ENTERED INTO WITHOUT CONSENT OF SECURITYHOLDERS. The Company, when authorized by a Resolution of the Company, and the Trustee may from time to time, and at any time enter into an indenture or indentures supplemental hereto, in form satisfactory to such Trustee (which shall comply with the provisions of the Trust Indenture Act of 1939 as then in effect), for one or more of the following purposes: (a) To evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the -56- covenants, agreements and obligations of the Company pursuant to Article Eleven hereof; (b) To add to the covenants of the Company such further covenants, restrictions or conditions as the Company and the Trustee shall consider to be for the protection of the holders of all or any series of Securities (and if such covenants, restrictions or conditions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions or conditions are expressly being included solely for the benefit of such series), and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect to any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default; (c) To add or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; (d) To change or eliminate any of the provisions of this Indenture; provided, however, that any such change or elimination shall become effective only when there is no Security of any series outstanding created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; (e) To establish the form or terms of Securities of any series as permitted by Section 2.01 and 2.02; (f) To cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provisions contained herein or in any supplemental indenture, or to make such other provision in regard to matters or questions arising under this Indenture or any supplemental indenture which shall not adversely affect the interests of the holders of the Securities; provided, however, that such action shall not adversely affect the interest of the holders of Securities of any series in any material respect or, in the case of the Securities of a series issued to an Aon Trust and for so long as any of the corresponding series of Preferred Securities issued by such Aon Trust shall remain outstanding, the holders of such Preferred Securities; (g) To mortgage or pledge to the Trustee as security for the Securities any property or assets which the Company may desire to mortgage or pledge as security for the Securities; and -57- (h) To qualify, or maintain the qualification of, the Indenture under the Trust Indenture Act. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, mortgage, pledge or assignment of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 10.02. Section 10.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF A MAJORITY IN PRINCIPAL AMOUNT OF SECURITIES. With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in principal amount of the Securities of all series at the time outstanding (determined as provided in Section 8.04) affected by such supplemental indenture (voting as one class), the Company, when authorized by a Resolution of the Company, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall be in conformity with the provisions of the Trust Indenture Act of 1939 as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Securities of each such series; provided, however, that no such supplemental indenture shall (i) change the fixed Maturity of any Securities, or reduce the rate or extend the time of payment of any interest thereon or on any overdue principal amount or reduce the principal amount thereof, or change the provisions pursuant to which the rate of interest on any Security is determined if such change could reduce the rate of interest thereon, or reduce the minimum rate of interest thereon, or reduce any amount payable upon any redemption thereof, or adversely affect any right to convert the Securities in accordance herewith, or reduce the amount to be paid at Maturity or upon redemption in Capital Stock or make the principal thereof or any interest thereon or on any overdue principal amount payable in any coin or currency other than that provided in the Security without the consent of the holder of each Security so affected, (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture without the consent of the holders of all Securities then outstanding, (iii) modify any of the provisions of this Section, Section 4.07 or Section 6.06, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the holders of all Securities then outstanding or (iv) modify the provisions of Article Fourteen with respect to the subordination of outstanding Securities of any series in a manner adverse to the holders thereof without the consent of the holder of each Security so affected; provided, however, that, in the case of the Securities of a series issued to an Aon Trust, so long as any of the corresponding series of Preferred Securities issued by such Aon Trust remains outstanding, (i) no such amendment shall be made that adversely affects the holders of such Preferred Securities in any material respect, and no termination of this Indenture shall occur, and no waiver of any Event of Default with respect to such series or compliance with any covenant with respect to such series under this Indenture shall be effective, without the prior consent of the holders of at least a majority of the aggregate liquidation amount of such Preferred Securities then outstanding unless and until the principal (and premium, if any) of the Securities of such series and all accrued and unpaid interest (including any -58- Additional Interest) thereon have been paid in full; and (ii) no amendment shall be made to Section 6.05 of this Indenture that would impair the rights of the holders of such Preferred Securities provided therein or to this Indenture that requires the consent of each holder of the Securities of such series without the prior consent of each holder of such Preferred Securities then outstanding unless and until the principal (and premium, if any) of the Securities of such series and all accrued and unpaid interest (including any Additional Interest) thereon have been paid in full. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities or Preferred Securities, or which modifies the rights of holders of Securities or holders of Preferred Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the holders of Securities or holders of Preferred Securities of any other series. Upon the request of the Company, accompanied by a copy of a Resolution of the Company certified by the Secretary or an Assistant Secretary of the Company authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Company shall mail a notice to the holders of Securities of each series so affected, setting forth in general terms the substance of such supplemental indenture. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. Section 10.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture pursuant to the provisions of this Article, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. The Trustee shall be entitled to receive, and subject to the provisions of Section 7.01 shall be entitled to rely upon, an Opinion of Counsel as conclusive evidence that any such supplemental indenture complies with the provisions of this Article and stating that the Securities affected by the supplemental indenture, when such Securities are authenticated and delivered by the Trustee and executed and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will be valid and binding obligations of the Company, except as any rights thereunder may be -59- limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally and by general equity principles. Section 10.04. SECURITIES MAY BEAR NOTATION OF CHANGES BY SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article, or after any action taken at a Securityholders' meeting pursuant to Article Nine, may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture or as to any action taken at any such meeting. If the Company or the Trustee shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities then outstanding. Section 10.05. REVOCATION AND EFFECT OF CONSENTS. Subject to Section 8.05, until an amendment, supplement, waiver or other action becomes effective, a consent to it by a Securityholder of a Security is a continuing consent conclusive and binding upon such Securityholder and every subsequent Securityholder of the same Security or portion thereof, and of any Security issued upon the registration of transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Security. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent or revoke such consent to such amendment, supplement or waiver, whether or not such Persons continue to be Securityholders after such record date. No such consent shall be valid or effective for more than 180 days after such record date. After an amendment, supplement, waiver or other action becomes effective, it shall bind every Securityholder. ARTICLE ELEVEN CONSOLIDATION, MERGER, SALE OR CONVEYANCE Section 11.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. The Company covenants that it will not merge or consolidate with any other corporation or sell or convey all or substantially all of its assets to any Person unless (i) either the Company shall be the continuing corporation, or the successor corporation (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation shall expressly assume the due and punctual payment of the principal of and interest on all the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Company by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such corporation, (ii) the Company or such successor corporation, as the case may be, shall not, immediately after such merger -60- or consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition, and (iii) in the case of Securities of a series issued to an Aon Trust, such consolidation, merger, sale or conveyance is permitted under the relevant Trust Agreement and Aon Guarantee and does not give rise to any breach or violation of such Trust Agreement or Aon Guarantee. Section 11.02. SUCCESSOR CORPORATION SUBSTITUTED. In case of any such consolidation, merger, sale or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the party of the first part. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Securities issuable hereunder which theretofore shall not have been delivered to the Trustee; and upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Company to the Trustee, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale or conveyance such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate. Section 11.03. OPINION OF COUNSEL TO TRUSTEE. The Trustee shall be entitled to receive, and subject to the provisions of Section 7.01 shall be entitled to rely upon, an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance and any such assumption, complies with the provisions of this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. ARTICLE TWELVE SATISFACTION AND DISCHARGE OF INDENTURE, UNCLAIMED MONEYS Section 12.01. SATISFACTION AND DISCHARGE OF INDENTURE. If (a) the Company shall deliver to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.07) and not theretofore cancelled, or (b) all the Securities of such series not theretofore cancelled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee as trust funds the entire amount sufficient to pay at Maturity or upon redemption all of such Securities not theretofore cancelled or delivered to the Trustee for cancellation, including principal and any interest due or to become due to such date of Maturity or redemption date, as the case may be, and if in either case the Company shall also pay or -61- cause to be paid all other sums payable hereunder by the Company with respect to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities of such series, (except as to (i) remaining rights of registration of transfer, conversion, substitution and exchange and the Company's right of optional redemption of Securities of such series, (ii) rights hereunder of holders to receive payments of principal of, and any interest on, the Securities of such series, and other rights, duties and obligations of the holders of Securities of such series as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee, and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on demand of the Company, and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture. The Company hereby agrees to compensate the Trustee for any services thereafter reasonably and properly rendered and to reimburse the Trustee for any costs or expenses theretofore and thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Securities of such series. Notwithstanding the satisfaction and discharge of this Indenture with respect to the Securities of any or all series, the obligations of the Company to the Trustee under Section 7.06 shall survive. Section 12.02. APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF SECURITIES. Subject to Section 12.04, all moneys deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the holders of the particular Securities of such series, for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest. Section 12.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys with respect to Securities of such series then held by any Paying Agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. Section 12.04. REPAYMENT OF MONEYS HELD BY TRUSTEE. Any moneys deposited with the Trustee or any Paying Agent for the payment of the principal of or any interest on any Securities of any series and not applied but remaining unclaimed by the holders of Securities of such series for two years after the date upon which such payment shall have become due and payable, shall, at the request of the Company, be repaid to the Company by the Trustee or by such Paying Agent; and the holder of any of the Securities of such series entitled to receive such payment shall thereafter look only to the Company for the payment thereof; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once a week for two successive weeks (in each case on any day of the week) in an Authorized Newspaper, or mailed to the registered holders thereof, a notice that said moneys have not been so applied and that after a date named therein any unclaimed balance of said money then remaining will be returned to the Company. -62- ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES Section 13.01. INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES OF COMPANY EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers, directors or employees, as such, of the Company or any successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against every such incorporator, stockholder, officer, director or employee, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom are hereby expressly waived and released as a condition of and as a consideration for, the execution of this Indenture and the issue of such Securities. ARTICLE FOURTEEN SUBORDINATION OF SECURITIES Section 14.01. AGREEMENT TO SUBORDINATE. The Company, for itself, is successors and assigns, covenants and agrees, and each holder of a Security of any series likewise covenants and agrees by his acceptance thereof, that the obligation of the Company to make any payment on account of the principal of and interest on each and all of the Securities of any series shall be subordinate and junior in right of payment to the Company's obligations to the holders of Senior Indebtedness of the Company, and that in the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding- up of or relating to the Company as a whole, whether voluntary or involuntary, all obligations of the Company to holders of Senior Indebtedness of the Company shall be entitled to be paid in full before any payment shall be made on account of the principal of or interest on any of the Securities. In the event of any such proceeding, after payment in full of all sums owing with respect to Senior Indebtedness of the Company, the holders of the Securities of each series, together with the holders of any obligations of the Company ranking on a parity with the Securities, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid principal of and interest on the Securities of any series before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to the -63- Securities. In addition, in the event of any such proceeding, if any payment or distribution of assets of the Company of any kind or character whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities of any series shall be received by the Trustee or the holders of the Securities of any series before all Senior Indebtedness of the Company is paid in full, such payment or distribution shall be held in trust for the benefit of and shall be paid over to the holders of such Senior Indebtedness of the Company or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness of the Company may have been issued, ratably, for application to the payment of all Senior Indebtedness of the Company remaining unpaid until all such Senior Indebtedness of the Company shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness of the Company. The obligations of the Company in respect of the Securities of all series shall rank on a parity with any obligations of the Company ranking on a parity with the Securities. Nothing in this Section 14.01 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.06. The subordination provisions of the foregoing paragraph shall not be applicable to amounts at the time due and owing on the Securities of any series on account of the unpaid principal of or interest on the Securities of such series for the payment of which funds have been deposited in trust with the Trustee or any Paying Agent or have been set aside by the Company in trust in accordance with the provisions of this Indenture; nor shall such provisions impair any rights, interests, or powers of any secured creditor of the Company in respect of any security the creation of which is not prohibited by the provisions of this Indenture. The Company shall give prompt written notice to the Trustee of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company as a whole, whether voluntary or involuntary. The Trustee, subject to the provisions of Section 7.01, shall be entitled to assume that, and may act as if, no such event has occurred unless a Responsible Officer of the Trustee assigned to the Trustee's corporate trust department has received at the principal corporate trust office of the Trustee from the Company or any one or more holders of Senior Indebtedness of the Company or any trustee therefor (who shall have been certified or otherwise established to the satisfaction of the Trustee to be such a holder or trustee) written notice thereof. Upon any distribution of assets of the Company referred to in this Article, the Trustee and holders of the Securities of each series shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which proceedings relating to any event specified in the first sentence of this paragraph are pending for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon, and all other facts pertinent thereto or to this Article, and the Trustee, subject to the provisions of Article Seven, and the holders of the Securities of each series shall be entitled to rely upon a certificate of the liquidating trustee or agent or other person making any distribution to the Trustee or to the holders of the Securities of each series for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. In the absence of any such liquidating trustee, agent or other person, the Trustee shall be entitled to rely upon a written notice by a Person representing himself to be a holder of -64- Senior Indebtedness of the Company (or a trustee or representative on behalf of such holder) as evidence that such Person is a holder of such Senior Indebtedness (or is such a trustee or representative). In the event that the Trustee determines, in good faith, that further evidence is required with respect to the right of any Person, as a holder of Senior Indebtedness of the Company, to participate in any payment or distribution pursuant to this Section, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, as to the extent to which such Person is entitled to participation in such payment or distribution, and as to other facts pertinent to the rights of such Person under this Section, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 14.02. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing contained in this Article or elsewhere in this Indenture is intended to or shall impair, as between the Company and the holders of the Securities of each series, the obligation of the Company, which is absolute and unconditional, to pay to such holders the principal of and interest on such Securities of each series when, where and as the same shall become due and payable, all in accordance with the terms of such Securities, or is intended to or shall affect the relative rights of such holders and creditors of the Company other than the holders of the Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or the holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness of the Company in respect of cash, property, or securities of the Company received upon the exercise of any such remedy. Section 14.03. LIMITATIONS ON DUTIES TO HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY. With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Company shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company, except with respect to moneys held in trust pursuant to the first paragraph of Section 14.01. Section 14.04. NOTICE TO TRUSTEE OF FACTS PROHIBITING PAYMENT. Notwithstanding any of the provisions of this Article or any other provisions of this Indenture, the Trustee shall not at any time be charged with knowledge of the existence of any facts which would prohibit the making of any payment of moneys to or by the Trustee unless and until a Responsible Officer of the Trustee assigned to its corporate trust department shall have received at the principal corporate trust office of the Trustee written notice thereof from the Company or from one or more holders of Senior Indebtedness of the Company or from any trustee therefor who shall have been certified by the Company or otherwise established to the reasonable satisfaction of the Trustee to be such a holder or trustee; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided, however, that, if prior to the fifth Business Day preceding the date upon which by the terms hereof any such moneys may become payable for any purpose, or in the event of the execution of an instrument pursuant to Section 12.01 acknowledging satisfaction and discharge of this Indenture, then if prior to the second Business Day preceding the date of such execution, the Trustee shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full -65- power and authority to receive such moneys and/or apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such date; provided, however, no such application shall affect the obligations under this Article of the Persons receiving such moneys from the Trustee. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, to the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 14.05. APPLICATION BY TRUSTEE OF MONEYS DEPOSITED WITH IT. Anything in this Indenture to the contrary notwithstanding, any deposit of moneys by the Company with the Trustee or any agent (whether or not in trust) for any payment of the principal of or interest on any Securities shall, except as provided in Section 14.04, be subject to the provisions of Section 14.01. Section 14.06. SUBROGATION. Subject to the payment in full of all Senior Indebtedness of the Company, the holders of the Securities of each series shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of assets of the Company applicable to such Senior Indebtedness until the Securities shall be paid in full, and none of the payments or distributions to the holders of such Senior Indebtedness to which the holders of the Securities of any series or the Trustee would be entitled except for the provisions of this Article or of payments over pursuant to the provisions of this Article to the holders of such Senior Indebtedness by the holders of such Securities or the Trustee shall, as among the Company, its creditors other than the holders of such Senior Indebtedness, and the holders of such Securities, be deemed to be a payment by the Company to or on account of such Senior Indebtedness; it being understood that the provisions of this Article are and are intended solely for the purpose of defining the relative rights of the holders of such Securities, on the one hand, and the holders of the Senior Indebtedness of the Company, on the other hand. Section 14.07. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY. No right of any present or future holders of any Senior Indebtedness of the Company to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof with which any such holder may have or be otherwise charged. The holders of Senior Indebtedness of the Company may, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment, change or extend the time of payment of, or renew or alter, any such Senior Indebtedness of the Company, or amend or supplement any instrument pursuant to which any such Senior Indebtedness of the Company is issued or by which it may be secured, or release any security therefor, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness of the Company including, -66- without limitation, the waiver of default thereunder, all without notice to or assent from the holders of the Securities of each series or the Trustee and without affecting the obligations of the Company, the Trustee or the holders of such Securities under this Article. Section 14.08. AUTHORIZATION OF TRUSTEE TO EFFECTUATE SUBORDINATION OF SECURITIES. Each holder of a Security of any series, by his acceptance thereof, authorizes and expressly directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate, as between the holders of such Securities and the holders of Senior Indebtedness of the Company, the subordination provided in this Article. If, in the event of any proceeding or other action relating to the Company referred to in the first sentence of Section 14.01, a proper claim or proof of debt in the form required in such proceeding or action is not filed by or on behalf of the holders of the Securities of any series prior to fifteen days before the expiration of the time to file such claim or claims, then the holder or holders of Senior Indebtedness of the Company shall have the right to file and are hereby authorized to file an appropriate claim for and on behalf of the holders of such Securities. Section 14.09. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. In the event and during the continuation of any default in the payment of principal of (or premium, if any) or interest on any Senior Indebtedness, or in the event that any event of default with respect to any Senior Indebtedness shall have occurred and be continuing and shall have resulted in such Senior Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, unless and until such event of default shall have been cured, waived or remedied or shall have ceased to exist and such acceleration shall have been rescinded or annulled, or in the event any judicial proceeding shall be pending with respect to any such default in payment or such event or default, then no payment or distribution of any kind or character, whether in cash, properties or securities shall be made by the Company on account of principal of (or premium, if any) or interest (including any Additional Interest) if any, on the Securities or on account of the purchase or other acquisition of Securities by the Company or any Subsidiary. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the holder of any Security prohibited by the foregoing provisions of this Section, and if such fact shall, at or prior to the time of such payment, have been made known to the Trustee or, as the case may be, such holder, then and in such event payment shall be paid over and delivered forthwith to the Company. Section 14.10. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS OF THE COMPANY. The Trustee shall be entitled to all of the rights set forth in this Article in respect of any Senior Indebtedness of the Company at any time held by it in its individual capacity to the same extent as any other holder of such Senior Indebtedness, and nothing in this Indenture shall be construed to deprive the Trustee of any of its rights as such holder. Section 14.11. ARTICLE FOURTEEN NOT TO PREVENT DEFAULTS. The failure to make a payment pursuant to the terms of Securities of any series by reason of any provision in this Article shall not be construed as preventing the occurrence of a default under this Indenture. -67- ARTICLE FIFTEEN MISCELLANEOUS PROVISIONS Section 15.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE. All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Company shall bind its successors and assigns, whether so expressed or not. Section 15.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR CORPORATION VALID. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer or officers of the Company shall and may be done and performed with like force and effect by the like board, committee or officer or officers of any corporation that shall at the time be the lawful sole successor of the Company. Section 15.03. REQUIRED NOTICES OR DEMANDS MAY BE SERVED BY MAIL. Any notice or demand which by any provisions of this Indenture is required or permitted to be given or served by the Trustee, by the holders of Securities or by the holders of Preferred Securities to or on the Company may be given or served by registered mail postage prepaid addressed (until another address is filed by the Company with the Trustee for such purpose), as follows: Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606, Attention: Treasurer. Any notice, direction, request, demand, consent or waiver by the Company, by any Securityholder or by any holder of a Preferred Security to or upon the Trustee shall be deemed to have been sufficiently given, made or filed, for all purposes, if given, made or filed in writing at the principal corporate trust office of the Trustee, 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust Trustee Administration. Section 15.04. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE FURNISHED UPON APPLICATIONS OR DEMANDS BY THE COMPANY. Upon any request or application by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which furnishing of such document is specifically required by any provision of this Indenture relating to such particular application or demand no additional certificate or opinion need be furnished. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture, other than certificates provided pursuant to Section 4.06, shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. -68- Any certificate, statement or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, upon the certificate, statement or opinion of or representations by an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of an officer of the Company or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm of accountants, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate or opinion of any independent firm of public accountants filed with the Trustee shall contain a statement that such firm is independent. Section 15.05. PAYMENTS DUE ON SATURDAYS, SUNDAYS, AND HOLIDAYS. In any case where the date of payment of interest on or principal of the Securities of any series or the date fixed for any redemption of any Security of any series shall not be a Business Day, then payment of interest or principal need not be made on such date, but shall be made on the next succeeding Business Day with the same force and effect as if made on the date fixed for the payment of interest on or principal of the Security or the date fixed for any redemption of any Security of such series, and no additional interest shall accrue for the period after such date and before payment. Section 15.06. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939 TO CONTROL. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture which is required to be included in this Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act through operation of Section 318(c) thereof, such required provision shall control. Section 15.07. INDENTURE AND SECURITIES TO BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture and each Security shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State (without regard to conflicts of laws principles thereof). Section 15.08. PROVISIONS OF THE INDENTURE AND SECURITIES FOR THE SOLE BENEFIT OF THE PARTIES AND THE SECURITYHOLDERS. Nothing in this Indenture or in the Securities, expressed or implied, shall give or be construed to give any person, firm or corporation, other than the parties hereto and their successors and assigns and the holders of the Securities, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition and provision herein contained; all its covenants, conditions and provisions being for the sole benefit of the parties hereto and their -69- successors and assigns and of the holders of the Securities and, to the extent expressly provided in Sections 6.01, 6.05, 6.06, 9.07, 10.01 and 10.02, the holders of Preferred Securities. Section 15.09. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 15.10. SECURITIES IN FOREIGN CURRENCIES. Whenever this Indenture provides for any action by, or any distribution to, holders of Securities denominated in United States dollars and in any other currency, in the absence of any provision to the contrary in the form of Security of any particular series, the relative amount in respect of any Security denominated in a currency other than United States dollars shall be treated for any such action or distribution as that amount of United States dollars that could be obtained for such amount on such reasonable basis of exchange and as of such date as the Company may specify in a written notice to the Trustee. The Bank of New York, the party of the second part, hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions, hereinabove set forth. -70- IN WITNESS WHEREOF, AON CORPORATION, the party of the first part, has caused this Indenture to be signed and acknowledged by its ***************** and ----------------- one of its Vice Presidents; and THE BANK OF NEW YORK, the party of the second part, has caused this Indenture to be signed and acknowledged by its _____________________________________________________, all as of the day and year first written above. *one of its Executive Vice Presidents AON CORPORATION By: /s/ Harvey N. Medvin -------------------------------------- Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer By: /s/ James D. White -------------------------------------- Name: James D. White Title: Vice President and Controller THE BANK OF NEW YORK, as Trustee By: /s/ Mary La Gumina -------------------------------------- Name: Mary La Gumina Title: Assistant Vice President -71- EX-4.2 3 FIRST SUPPLEMENTAL INDENTURE DATED 01/13/97 ================================================================================ FIRST SUPPLEMENTAL INDENTURE BETWEEN AON CORPORATION AND THE BANK OF NEW YORK DATED AS OF JANUARY 13, 1997 8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES, DUE JANUARY 1, 2027 ================================================================================ TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS Section 1.01. Definition of Terms................................................. 2 ARTICLE 2 GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED DEBENTURES Section 2.01. Designation and Principal Amount.................................... 5 Section 2.02. Stated Maturity..................................................... 5 Section 2.03. Form and Payment; Minimum Transfer Restriction...................... 5 Section 2.04. Exchange and Registration of Transfer of Junior Subordinated Debentures; Restrictions on Transfers; Depositary.................. 6 Section 2.05. Interest............................................................ 9 ARTICLE 3 REDEMPTION AND PREPAYMENT OF THE JUNIOR SUBORDINATED DEBENTURES Section 3.01. Tax Event or Investment Company Event Prepayment.................... 10 Section 3.02. Notice of Prepayment................................................ 10 ARTICLE 4 EXTENSION OF INTEREST PAYMENT PERIOD Section 4.01. Extension of Interest Payment Period................................ 10 Section 4.02. Notice of Extension................................................. 11 ARTICLE 5 EXPENSES Section 5.01. Payment of Expenses................................................. 11 Section 5.02. Payment upon Resignation or Removal................................. 12 ARTICLE 6 FORM OF JUNIOR SUBORDINATED DEBENTURE Section 6.01. Form of Junior Subordinated Debenture............................... 12
-i- ARTICLE 7 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES Section 7.01. Original Issue of Junior Subordinated Debentures.................... 13 ARTICLE 8 EXCHANGE OF SECURITIES Section 8.01. Mandatory Tender in Exchange Offer.................................. 13 ARTICLE 9 MISCELLANEOUS Section 9.01. Ratification of Indenture; First Supplemental Indenture Controls.... 13 Section 9.02. Trustee Not Responsible for Recitals................................ 14 Section 9.03. Governing Law....................................................... 14 Section 9.04. Separability........................................................ 14 Section 9.05. Counterparts........................................................ 14
-ii- FIRST SUPPLEMENTAL INDENTURE, dated as of January 13, 1997 (the "First ----- Supplemental Indenture"), between Aon Corporation, a Delaware corporation (the - ---------------------- "Company"), and The Bank of New York, as trustee (the "Trustee") under the - -------- ------- Indenture dated as of January 13, 1997 between the Company and the Trustee (the "Base Indenture" and, together with this First Supplemental Indenture, the -------------- "Indenture"). - ---------- WHEREAS, the Company executed and delivered the Base Indenture to the Trustee to provide for the future issuance of the Company's unsecured junior subordinated debentures (the "Debentures") to be issued from time to time in one ---------- or more series as might be determined by the Company under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Base Indenture; WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of two separate series of its Debentures, both to be known as its 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 (collectively, the "Junior Subordinated ------------------- Debentures"), the form and substance of such Junior Subordinated Debentures and - ---------- the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this First Supplemental Indenture; WHEREAS, the Company desires that (x) the first series of Junior Subordinated Debentures (the "Private Debentures") be originally issued on ------------------ January 13, 1997 pursuant to the Indenture, the Purchase Agreement (as defined below) and the Trust Agreement (as defined in Section 1.01), and (y) the second series of Junior Subordinated Debentures (the "Exchange Debentures") be issuable ------------------- upon surrender of and in exchange for the Private Debentures pursuant to Section 8.01; WHEREAS, Aon Capital A, a Delaware statutory business trust (the "Trust"), has offered to the purchasers (the "Purchasers") named in Schedule I ---------- to the Purchase Agreement (the "Purchase Agreement") dated January 8, 1997 among ------------------ the Purchasers, the Trust and the Company in a private placement $800,000,000 aggregate liquidation amount of its 8.205% Capital Securities (the "Capital ------- Securities"), representing undivided beneficial interests in the assets of the - ---------- Trust and proposes to invest the proceeds from the sale of the Capital Securities, together with the proceeds of the sale by the Trust to the Company of $24,000,000 aggregate liquidation amount of its Common Securities, in $824,000,000 aggregate principal amount of the Junior Subordinated Debentures; and WHEREAS, the Company has requested that the Trustee execute and deliver this First Supplemental Indenture and all requirements necessary to make this First Supplemental Indenture a valid instrument in accordance with its terms, and to make the Junior Subordinated Debentures, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects. NOW, THEREFORE, in consideration of the purchase and acceptance of the Junior Subordinated Debentures by the Purchasers, and for the purpose of setting forth, as provided in the Base Indenture, the form and substance of the Junior Subordinated Debentures and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definition of Terms. For all purposes of this First Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms which are defined in the Base Indenture have the same meanings when used in this First Supplemental Indenture; (b) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (c) all other terms used herein which are defined in the Trust Indenture Act of 1939, whether directly or by reference therein, have the meanings assigned to them therein; (d) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; provided, that when two or more principles are so generally accepted, it shall mean that set of principles consistent with those in use by the Company; (e) a reference to a Section or Article is to a Section or Article of this First Supplemental Indenture unless otherwise stated; (f) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this First Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision; (g) headings are for convenience of reference only and do not affect interpretation; (h) the term "prepayment" as used herein means "redemption" as such term is used in the Base Indenture; and (i) the following terms have the meanings given to them in the Trust Agreement: (i) Additional Distributions, (ii) Administrative Trustee, (iii) Affiliate, (iv) Capital Securities Certificate, (v) Capital Securities Exchange and Registration Rights Agreement, (vi) Cedel, (vii) Debenture Exchange and Registration Rights Agreement, (viii) Delaware Trustee, (ix) Distributions, (x) Euroclear, (xi) Exchange Act, (xii) Institutional Accredited Investor, (xiii) Minimum Transfer Legend, (xiv) 144A Global Security, (xv) PORTAL Market, (xvi) Private Placement Legend, (xvii) Property -2- Trustee, (xviii) QIB, (xix) Registration Rights Agreements, (xx) Regulation S, (xxi) Regulation S Global Security, (xxii) Restricted Period, (xxiii) Rule 144, (xxiv) Rule 144A, (xxv) Rule 144(k), (xxvi) Securities Act, (xxvii) Transfer Restriction Termination Date, and (xxviii) Trust Security. "Additional Interest" has the meaning specified in Section 2.05. ------------------- "Adjusted Treasury Rate" means, with respect to any prepayment date, ---------------------- the Treasury Rate plus (i) 1.00% if such prepayment date occurs on or before January 1, 1998 or (ii) 0.50% if such prepayment date occurs after January 1, 1998. "Capital Securities" has the meaning specified in the fourth recital ------------------ to this First Supplemental Indenture. "Comparable Treasury Issue" means with respect to any prepayment date ------------------------- the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the Remaining Life that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life. If no United States Treasury security has a maturity which is within a period from three months before to three months after January 1, 2027, the two most closely corresponding United States Treasury securities shall be used as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or extrapolated on a straight-line basis, rounding to the nearest month using such securities. "Comparable Treasury Price" means, with respect to any prepayment ------------------------- date, (A) the average of five Reference Treasury Dealer Quotations for such prepayment date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations. "Coupon Rate" has the meaning specified in Section 2.05(a). ----------- "Debentures" has the meaning specified in the first recital to this ---------- First Supplemental Indenture. "Definitive Debenture Certificates" means Debentures issued in --------------------------------- definitive, fully registered form. "Event Prepayment Price" has the meaning specified in Section 3.01. ---------------------- "Exchange Debentures" has the meaning specified in the third recital ------------------- to this First Supplemental Indenture. "Extension Period" has the meaning specified in Section 4.01. ---------------- "Global Debenture" has the meaning specified in Section 2.04(a). ---------------- "Global Private Debenture" has the meaning specified in Section ------------------------ 2.04(d). -3- "Interest Payment Date" has the meaning specified in Section 2.05. --------------------- "Junior Subordinated Debentures" has the meaning specified in the ------------------------------ second recital to this First Supplemental Indenture and, unless the context otherwise requires, shall include any Exchange Debentures to be issued and exchanged for any Private Debentures. "Liquidation Amount" means the stated amount of $1,000 per Capital ------------------ Security. "144A Global Debenture" has the meaning specified in Section 2.04(c). --------------------- "Private Debentures" has the meaning specified in the third recital to ------------------ this First Supplemental Indenture. "Purchase Agreement" has the meaning specified in the fourth recital ------------------ to this First Supplemental Indenture. "Purchasers" has the meaning specified in the fourth recital to this ---------- First Supplemental Indenture. "Quotation Agent" means Morgan Stanley & Co. Incorporated. --------------- "Record Date" has the meaning specified in Section 2.05(a). ----------- "Reference Treasury Dealer" means (i) Morgan Stanley & Co. ------------------------- Incorporated and Goldman, Sachs & Co. and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the ----------------------- Company shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the Trustee after consultation with the Company. "Reference Treasury Dealer Quotations" means, with respect to each ------------------------------------ Reference Treasury Dealer and any prepayment date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such prepayment date. "Regulation S Global Debenture" has the meaning specified in Section ----------------------------- 2.04(d). "Remaining Life" has the meaning specified in Section 3.01. -------------- "Restricted Period" means the period of 40 consecutive days beginning ----------------- on and including the later of (x) the day on which the offering of the Capital Securities commences or (y) the Closing Date. "Special Interest" has the meaning specified in Section 2.05(c). ---------------- -4- "Treasury Rate" means (i) the yield, under the heading which ------------- represents the average for the immediately prior week, appearing in the most recently published statistical release designated "H.R.(519)" or any successor publication which is published weekly by the Federal Reserve and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Remaining Life (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Remaining Life shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such prepayment date. The Treasury Rate shall be calculated on the third Business Day preceding the prepayment date. "Trust" has the meaning specified in the fourth recital to this First ----- Supplemental Indenture. "Trust Agreement" means the Amended and Restated Trust Agreement dated --------------- as of January 13, 1997 among the Company, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust. ARTICLE 2 GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED DEBENTURES SECTION 2.01. Designation and Principal Amount. There is hereby authorized two series of Debentures, both to be designated the "8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027," and each limited in aggregate principal amount to $824,000,000, which amount shall be as set forth in any written orders of the Company for the authentication and delivery of Junior Subordinated Debentures pursuant to Section 2.01 of the Base Indenture and Section 7.01(a). SECTION 2.02. Stated Maturity. The Stated Maturity of the Junior Subordinated Debentures is January 1, 2027, and shall not be subject to extension. SECTION 2.03. Form and Payment; Minimum Transfer Restriction. (a) The Debentures shall be issued to the Trust in fully registered definitive form without coupons in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. Principal and interest on the Junior Subordinated Debentures issued in definitive form will be payable, the transfer of such Junior Subordinated Debentures will be registrable and such Junior Subordinated Debentures will be exchangeable for Junior Subordinated Debentures bearing identical terms and provisions at the principal corporate trust office of the Trustee; provided, however, that payment of interest may be made at the option -------- ------- of the Company by check mailed to the registered holder at such address as shall appear in the Register. Notwithstanding the foregoing, so long as the registered holder of any Junior Subordinated -5- Debentures is the property Trustee, the payment of the principal of and interest (including Additional interest, Special Interest and Additional Tax Sums, if any) on such Junior Subordinated Debentures held by the Property Trustee will be made at such place and to such account as may be designated by the Property Trustee. The Register for the Junior Subordinated shall be kept at the principal corporate trust office of the Trustee is hereby appointed registrar for the Junior Subordinated Debentures. (b) The Junior Subordinated Debentures may be transferred or exchanged only in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof, and any attempted transfer, sale or other disposition of Junior Subordinated Debentures in a denomination of less than $100,000 shall be deemed to be void and of no legal effect whatsoever. SECTION 2.04. Exchange and Registration of Transfer of Junior Subordinated Debentures; Restrictions on Transfers; Depositary. If distributed to holders of Capital Securities pursuant to Section 9.4 of the Trust Agreement, the Junior Subordinated Debentures will be issued to such holders in the same form as the Capital Securities that such Junior Subordinated Debentures replace in accordance with the following procedures: (a) So long as Junior Subordinated Debentures are eligible for book- entry settlement with the Depositary, or unless required by law, all Junior Subordinated Debentures that are so eligible will be represented by one or more Junior Subordinated Debentures in global form (a "Global Debenture") registered ---------------- in the name of the Depositary or the nominee of the Depositary. Except as provided in Section 2.04(i) below, beneficial owners of a Global Debenture shall not be entitled to have Definitive Debenture Certificates registered in their names, will not receive or be entitled to receive physical delivery of Definitive Debenture Certificates and will not be registered holders of such Global Debentures; provided, however, that a Definitive Debenture Certificate shall be issued upon any transfer of a beneficial interest in a Global Private Debenture to the Company or an Affiliate of the Company and no Definitive Debenture Certificate, or portion thereof, in respect of which the Company or an Affiliate of the Company held any beneficial interest shall be resold, retransferred or included in any Private Global Security until such Private Debenture is freely tradeable in accordance with Rule 144(k) or exchanged for an Exchange Debenture. (b) The transfer and exchange of beneficial interests in Global Debentures shall be effected through the Depositary in accordance with the Indenture and the procedures and standing instructions of the Depositary and the Trustee shall make appropriate endorsements to reflect increases or decreases in principal amounts of such Global Debentures. (c) Private Debentures that are distributed in replacement of Private Capital Securities represented by a 144A Global Security will be represented by a global Private Debenture (a "144A Global Debenture"). Transfers of beneficial --------------------- interests in a 144A Global Debenture will be subject to the restrictions on transfer contained in the Private Placement Legend and the Minimum Transfer Legend. (d) Private Debentures that are distributed in replacement of Private Capital Securities represented by a Regulation S Global Security will be represented by a global Private Debenture (a "Regulation S Global Debenture", ----------------------------- and together with the 144A Global Debenture, the -6- "Global Private Debenture"). Prior to the expiration of the Restricted Period, - ------------------------ interests in a Regulation S Global Debenture may only be held by the Depositary's participants in the name of a nominee of Euroclear and Cedel. After the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Debenture will not be subject to any restrictions other than the restrictions contained in the Minimum Transfer Legend. After the expiration of the Restricted Period, beneficial interests in the Regulation S Global Debenture may be held by the Depositary's participants other than in the name of a nominee of Euroclear and Cedel. (e) Private Debentures that are distributed in replacement of Definitive Capital Securities Certificates will be represented by Definitive Debenture Certificates and transfers will be subject to the Private Placement Legend, the Minimum Transfer Legend and the requirements of Section 2.04(g)(1) or (g)(2). (f) Exchange Debentures that are distributed in replacement of Exchange Capital Securities will be represented by a Global Debenture or in such other form as the Trustee may direct and will bear the Minimum Transfer Legend. (g) Unless and until the earlier of (i) the date upon which Private Debentures are exchanged for Exchange Debentures or (ii) the Transfer Restriction Termination Date: (1) Definitive to Definitive Transfers. Any transfer of a Definitive Debenture Certificate shall be registered upon the Register only upon receipt by the Trustee of such Definitive Debenture Certificate accompanied by a duly completed and executed assignment in the form of Exhibit A-1 and, in the case of a transfer to an Institutional Accredited Investor, upon the receipt by the Trustee of a written certificate in the form of Exhibit B (or other certificates, legal opinions or other information as the Company may reasonably request to confirm that such transfer is exempt from the registration requirements of the Securities Act); (2) Definitive into a 144A Global Debenture. So long as Private Debentures are eligible for book-entry settlement with the Depositary or unless otherwise required by law, upon any transfer of a Definitive Debenture Certificate to a QIB in accordance with Rule 144A or to a non- U.S. Person in accordance with Regulation S, and upon receipt of the Definitive Debenture Certificate being so transferred, accompanied by a duly completed and executed assignment in the form attached hereto as Exhibit A-1, the Trustee, on behalf of the Trust, shall make an endorsement on any 144A Global Debenture or any Regulation S Global Debenture, as the case may be, to reflect an increase in such Global Debenture and the Trustee, on behalf of the Trust, shall cancel such Definitive Debenture Certificate; (3) 144A Global Debenture into Regulation S Global Debenture. Any transfer in accordance with Rule 904 of Regulation S of a beneficial interest in a 144A Global Debenture to a transferee that takes delivery in the form of a beneficial interest in a Regulation S Global Debenture shall be reflected by an increase in a Regulation S Global Debenture and a corresponding decrease in the 144A Global Debenture only upon receipt by the Trustee of a written certificate in the form of Exhibit C (or such other certifications, legal opinions or other information as the Company may reasonably request to confirm that such transfer is being made pursuant to Rule 904); and -7- (4) Regulation S Global Debenture into 144A Global Debenture. Any transfer of a beneficial interest in a Regulation S Global Debenture to a transferee that takes delivery in the form of a beneficial interest in a 144A Global Debenture shall be reflected by an increase in the 144A Global Debenture and a corresponding decrease in the Regulation S Global Debenture and, prior to the expiration of the Restricted Period, only upon receipt by the Trustee of a written certificate in the form of Exhibit D (or such other certifications, legal opinions or other information as the Company may reasonably require). (h) Any Global Debenture may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of the Indenture as may be required by the Depositary, by any national securities exchange or by the National Association of Securities Dealers, Inc. in order for the Private Debentures to be tradeable on the PORTAL Market or as may be required for the Private Debentures to be tradeable on any other market developed for trading of securities pursuant to Rule 144A or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Junior Subordinated Debentures may be listed or traded or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Junior Subordinated Debentures are subject. (i) Notwithstanding any other provisions of the Indenture (other than the provisions set forth in this Section 2.04(i)), a Global Debenture may not be exchanged in whole or in part for Junior Subordinated Debentures registered, and no transfer of a Global Debenture may be registered, in the name of any person other than the Depositary or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Debenture or (B) has ceased to be a clearing agency registered as such under the Exchange Act and no successor Depositary has been appointed by the Company within 90 days after its receipt of such notice or its becoming aware of such ineligibility, (ii) there shall have occurred and be continuing an Event of Default, or any event which after notice or lapse of time or both would be an Event of Default under the Indenture, with respect to such Debenture, or (iii) the Company, in its sole discretion, instructs the Trustee to exchange such Global Debenture for a Junior Subordinated Debenture that is not a Global Debenture (in which case such exchange shall be effected by the Trustee). The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Debentures. Initially, any Global Debentures shall be registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co. Definitive Junior Subordinated Debentures issued in exchange for all or a part of a Global Debenture pursuant to this Section 2.04(i) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such definitive Junior Subordinated Debentures to the person in whose names such definitive Junior Subordinated Debentures are so registered. So long as Junior Subordinated Debentures are represented by one or more Global Debentures, (i) the registrar for the Junior Subordinated Debentures and the Trustee shall be entitled to -8- deal with the clearing agency for all purposes of the Indenture relating to such Global Debentures as the sole holder of the Junior Subordinated Debentures evidenced by such Global Debentures and shall have no obligations to the holders of beneficial interests in such Global Debentures; and (ii) the rights of the holders of beneficial interests in such Global Debentures shall be exercised only through the clearing agency and shall be limited to those established by law and agreements between such holders and the clearing agency and/or the participants in the clearing agency. At such time as all interests in a Global Debenture have been redeemed, exchanged, repurchased or canceled, such Global Debenture shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and instructions of the Depositary. At any time prior to such cancellation, if any interest in a Global Debenture is exchanged for definitive Junior Subordinated Debentures, redeemed by the Company pursuant to Article 3 or canceled, or transferred for part of a Global Debenture, the principal amount of such Global Debenture shall, in accordance with the standing procedures and instructions of the Depositary be reduced or increased, as the case may be, and an endorsement shall be made on such Global Debenture by, or at the direction of, the Trustee to reflect such reduction or increase. SECTION 2.05. Interest. (a) Each Junior Subordinated Debenture will bear interest at the rate of 8.205% per annum (the "Coupon Rate") from January ----------- 1, 1997 until the principal thereof becomes due and payable, and will bear interest on any overdue principal at the Coupon Rate and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate ("Additional Interest"), compounded ------------------- semiannually, payable (subject to the provisions of Article 4) semiannually in arrears on the 1st day of January and July of each year (each, an "Interest -------- Payment Date"), commencing on July 1, 1997, to the Person in whose name such - ------------ Junior Subordinated Debenture is registered, subject to certain exceptions, at the close of business on the Record Date next preceding such Interest Payment Date. The "Record Date" for payment of interest will be the Business Day next ----------- preceding the Interest Payment Date, unless such Junior Subordinated Debenture is registered to a holder other than the Property Trustee or a nominee of the Depositary, in which case the Record Date for payment of interest will be the fifteenth day of the calendar month next preceding the applicable Interest Payment Date or, if such fifteenth day of the month is not a Business Day, then the Business Day next preceding such day. Until liquidation, if any, of the Trust, each Junior Subordinated Debenture will be held in the name of the Property Trustee in trust for the benefit of the holders of the Trust Securities. (b) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Junior Subordinated Debentures is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on the date such payment was originally payable. (c) If the Company does not comply with certain of its obligations under the Registration Rights Agreements, the Private Debentures shall, in accordance with Section 2(c) of the Capital Securities Exchange and Registration Rights Agreement and Section 2(c) of the Debenture Exchange and Registration Rights Agreement, bear additional interest ("Special Interest") in addition to ---------------- the interest provided for in Section 2.05(a). -9- ARTICLE 3 REDEMPTION AND PREPAYMENT OF THE JUNIOR SUBORDINATED DEBENTURES SECTION 3.01. Tax Event or Investment Company Event Prepayment. If a Tax Event or Investment Company Event shall occur and be continuing, the Company may, at its option, prepay the Junior Subordinated Debentures in whole (but not in part) at any time within 90 days of the occurrence of such Tax Event or Investment Company Event at a prepayment price (the "Event Prepayment Price") ---------------------- equal to the greater of (i) 100% of the principal amount of such Junior Subordinated Debentures or (ii) as determined by the Quotation Agent, an amount equal to the sum of the present value of 100% of the principal amount that would be payable on January 1, 2027, together with the present values of scheduled payments of interest from the prepayment date to January 1, 2027 (the "Remaining --------- Life"), in each case, discounted to the prepayment date on a semi-annual basis - ---- (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued interest thereon to but excluding the prepayment date. SECTION 3.02. Notice of Prepayment. Subject to Article Three of the Base Indenture, notice of any prepayment pursuant to this Article 3 will be mailed at least 30 days but not more than 60 days before the prepayment date to each holder of Junior Subordinated Debentures to be prepaid at such holder's registered address. Unless the Company defaults in payment of the Event Prepayment Price, on and after the prepayment date interest shall cease to accrue on such Junior Subordinated Debentures called for prepayment. If the Trust is required to pay any additional taxes, duties or other governmental charges as a result of a Tax Event, the Company will also pay any Additional Tax Sums on the Junior Subordinated Debentures. ARTICLE 4 EXTENSION OF INTEREST PAYMENT PERIOD SECTION 4.01. Extension of Interest Payment Period. So long no Event of Default under Section 6.01 of the Base Indenture has occurred and is continuing, the Company shall have the right, subject to the provisions of Section 2.10 of the Base Indenture, at any time during the term of the Junior Subordinated Debentures, from time to time to defer the payment of interest by extending the interest payment period of such Junior Subordinated Debentures for a period not exceeding 10 consecutive semi-annual periods (an "Extension --------- Period"), during which Extension Period the Company shall have the right to make partial payments of interest on any Interest Payment Date. No Extension Period shall end on a date other than an Interest Payment Date or extend beyond the Stated Maturity or any earlier prepayment date. To the extent permitted by applicable law, interest, the payment of which has been deferred because of an Extension Period imposed pursuant to this Section 4.01, will bear Additional Interest compounded semi-annually. At the end of the Extension Period, the Company shall pay all interest then accrued and unpaid on the Junior Subordinated Debentures, including any Additional Interest, Special Interest and Additional Tax Sums, if applicable, to the holders of the Junior -10- Subordinated Debentures in whose names the Junior Subordinated Debentures are registered in the Register on the first Record Date preceding the end of the Extension Period. Before the termination of any Extension Period, the Company may further extend such Extension Period, provided that such period together with all such further extensions thereof shall not exceed 10 consecutive semi- annual periods, or extend beyond the Stated Maturity or any earlier prepayment date. At any time following the termination of any Extension Period and upon the payment of any accrued and unpaid Additional Interest and Special Interest then due, the Company may elect to begin a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof. SECTION 4.02. Notice of Extension. (a) If the Property Trustee is the only registered holder of the Junior Subordinated Debentures at the time the Company elects to begin or extend an Extension Period, the Company shall give written notice to the Property Trustee and the Trustee of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date on which Distributions on the Capital Securities issued by the Trust would have been payable but for the election to begin or extend such Extension Period or (ii) the date the Administrative Trustees are required to give notice to any securities exchange or other applicable self- regulatory organization or to holders of such Capital Securities of the record date or the date such Distributions are payable, but in any event not less than five Business Days prior to such record date. An Administrative Trustee shall give notice of the Company's election to begin or extend an Extension Period to the holders of such Capital Securities. (b) If the Property Trustee is not the only holder of the Junior Subordinated Debentures at the time the Company elects to begin or extend an Extension Period, the Company shall give the holders of the Junior Subordinated Debentures and the Trustee written notice of its election to begin or extend such Extension Period at least ten Business Days prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) the date the Company is required to give notice of the record or payment date of such interest payment to any applicable self-regulatory organization or to holders of the Junior Subordinated Debentures. (c) The semi-annual period in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.02 shall be counted as one of the 10 consecutive semi-annual periods permitted in the maximum Extension Period permitted under Section 4.01. ARTICLE 5 EXPENSES SECTION 5.01. Payment of Expenses. In connection with the offering, sale and issuance of the Junior Subordinated Debentures to the Property Trustee and in connection with the offering, sale and issuance of the Trust Securities by the Trust, the Company, in its capacity as borrower with respect to the Junior Subordinated Debentures, shall: (a) pay all costs and expenses relating to the offering, sale and issuance of the Junior Subordinated Debentures, including commissions to the Purchasers payable -11- pursuant to the Purchase Agreement and compensation of the Trustee under the Indenture in accordance with the provisions of Section 7.06 of the Base Indenture; (b) pay all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization of the Trust, the fees and expenses of the Property Trustee and the Delaware Trustee, the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing, and disposition of Trust assets); (c) pay all costs and expenses related to the enforcement by the Property Trustee of the rights of the registered holders of the Capital Securities; (d) be primarily liable for any indemnification obligations arising with respect to the Trust Agreement; and (e) pay any and all taxes and all liabilities, costs and expenses with respect to such taxes of the Trust (but not including withholding taxes imposed on holders of Capital Securities or Common Securities of the Trust). SECTION 5.02. Payment upon Resignation or Removal. Upon termination of this First Supplemental Indenture or the Base Indenture or the removal or resignation of the Trustee pursuant to Section 7.10 of the Base Indenture, the Company shall pay to the Trustee all amounts owed to it under Section 7.06 of the Base Indenture accrued to the date of such termination, removal or resignation. Upon termination of the Trust Agreement or the removal or resignation of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to Section 8.10 of the Trust Agreement, the Company shall pay to the Delaware Trustee or the Property Trustee, and their respective counsel, as the case may be, all amounts owed to them under Section 8.7 of the Trust Agreement accrued to the date of such termination, removal or resignation. ARTICLE 6 FORM OF JUNIOR SUBORDINATED DEBENTURE SECTION 6.01. Form of Junior Subordinated Debenture. The Junior Subordinated Debentures and the Trustee's Certificate of Authentication to be endorsed thereon are to be substantially in the form attached hereto as Exhibit A. -12- ARTICLE 7 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES SECTION 7.01. Original Issue of Junior Subordinated Debentures. (a) Junior Subordinated Debentures in the aggregate principal amount of up to $824,000,000 may be executed by the Company and delivered to the Trustee for authentication by it, and the Trustee shall thereupon authenticate and deliver said Junior Subordinated Debentures to or upon the written order of the Company, signed by its Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman or any Vice President (whether or not designated by a number or word or words added before or after the title Vice President) and by its Treasurer, an Assistant Treasurer, the Controller, its Secretary or an Assistant Secretary, without any further corporate action by the Company as follows: (i) $824,000,000 aggregate principal amount of Private Debentures to be originally issued on the Closing Date (as defined in the Purchase Agreement) and (ii) $824,000,000 aggregate principal amount of Exchange Debentures to be issued upon surrender of and in exchange for the Private Debentures pursuant to Section 8.01. (b) Each Exchange Debenture shall be issued only upon surrender of and in exchange for a like aggregate principal amount of Private Debentures and any Private Debentures surrendered in exchange for Exchange Debentures shall be canceled. Accordingly, the aggregate principal amount of Private Debentures and Exchange Debentures that may be outstanding at any time shall not exceed $824,000,000. ARTICLE 8 EXCHANGE OF SECURITIES SECTION 8.01. Mandatory Tender in Exchange Offer. The Junior Subordinated Debentures will not be convertible into any other securities or property of the Company. The Junior Subordinated Debentures may not be exchanged for Securities of any other series, except that if the Company effects an exchange offer pursuant to Section 2(a) of the Debenture Exchange and Registration Rights Agreement and, if pursuant to such exchange offer, the Company offers to exchange any Private Debentures for Exchange Debentures, then, to the extent permitted by law, each holder of the Private Debentures shall be obligated to tender all the Private Debentures held by such holder in exchange for a like principal amount of the Exchange Debentures in accordance with the Company's instructions. ARTICLE 9 MISCELLANEOUS SECTION 9.01. Ratification of Indenture; First Supplemental Indenture Controls. The Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the -13- extent herein and therein provided. The provisions of this First Supplemental Indenture shall supersede the provisions of the Indenture to the extent the Indenture is inconsistent herewith. SECTION 9.02. Trustee Not Responsible for Recitals. The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture. SECTION 9.03. Governing Law. This First Supplemental Indenture and each Junior Subordinated Debenture shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said State, without regard to the conflicts of law principles thereof. SECTION 9.04. Separability. In case any one or more of the provisions contained in this First Supplemental Indenture or in the Junior Subordinated Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this First Supplemental Indenture or of the Junior Subordinated Debentures, but this First Supplemental Indenture and the Junior Subordinated Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. SECTION 9.05. Counterparts. This First Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. -14- IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written. AON CORPORATION By: /s/ Harvey N. Medvin ----------------------------------- Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer By: /s/ Raymond I. Skilling ------------------------------------- Name: Raymond I. Skilling Title: Executive Vice President and Chief Counsel THE BANK OF NEW YORK, as Trustee By: /s/ Mary La Gumina ------------------------------------ Name: Mary La Gumina Title: Assistant Vice President -15- EXHIBIT A (FORM OF DEFINITIVE JUNIOR SUBORDINATED DEBENTURE) THE DEBENTURES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH HOLDER OF THE DEBENTURES EVIDENCED HEREBY, AND EACH PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN SUCH DEBENTURES, (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURES EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER THE DEBENTURES EVIDENCED HEREBY EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE DEBENTURES EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURES EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT OR SUCH EARLIER TIME AS A TRANSFER OF THE DEBENTURES EVIDENCED HEREBY IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE DEBENTURES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH DEBENTURES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH DEBENTURES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF INTEREST IN RESPECT OF SUCH DEBENTURES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH DEBENTURES. Registered ---------- FOR INFORMATION ON THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY, PLEASE CONTACT AON CORPORATION, 123 NORTH WACKER DRIVE, CHICAGO, ILLINOIS 60606, ATTENTION: TREASURER, TELEPHONE NO.: 312/701-3000. NUMBER R-1 $824,000,000 AON CORPORATION 8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE JANUARY 1, 2027 Dated: January 13, 1997 [CUSIP__________________] Registered Holder: The Bank of New York, as Property Trustee of Aon Capital A AON CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the Registered Holder named above, the principal sum of Eight Hundred Twenty-Four Million Dollars ($824,000,000) on January 1, 2027, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debt. The Company further promises to pay to the registered Holder hereof as hereinafter provided (a) interest on said principal sum (subject to deferral as set forth herein) at the rate per annum specified in the title of this debenture (the "Debenture"), in like coin or currency, semiannually in arrears on the 1st day of January and July (each an "Interest Payment Date") commencing July 1, 1997, from the Interest Payment Date next preceding the date hereof to which interest has been paid or duly provided for (unless (i) no interest has yet been paid or duly provided for on this Debenture, in which case from January 1, 1997, or (ii) the date hereof is before an Interest Payment Date but after the related Record Date (as defined below), in which case from such following Interest Payment Date; provided, however, that if the Company shall default in payment of the interest due on such following Interest Payment Date, then from the next preceding Interest Payment Date to which interest has been paid or duly provided for), until the principal hereof is paid or duly provided for, plus (b) Additional Interest, as defined in the Indenture, to the extent permitted by applicable law, on any interest payment that is not made on the applicable Interest Payment Date, which shall accrue at the rate per annum specified in the title of this Debenture, compounded semiannually. The interest so payable will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this Debenture is registered at the close of business on the Record Date next preceding such Interest Payment Date. The Record Date shall be the Business Day next preceding the Interest Payment Date, unless this Certificate is registered to a holder other than the Property Trustee or a nominee of The Depository Trust Company, in which case the Record Date will be the fifteenth day of the calendar month next preceding such Interest Payment Date or, if such fifteenth day is not a Business Day, then the Business Day next preceding such day. This Debenture may be presented for payment of principal and interest at the principal corporate trust office of The Bank of New York, as paying agent for the Company, maintained for that purpose in the Borough of Manhattan, The A-1 City of New York, State of New York; provided, however, that payment of interest may be made at the option of the Company (i) by check mailed to such address of the person entitled thereto as the address shall appear on the Register of the Debentures or (ii) by transfer to an account maintained by the Person entitled thereto as specified in the Register, provided that proper transfer instructions have been received by the Record Date. Interest on the Debenture will be computed on the basis of a 360-day year of twelve 30-day months. So long as no Event of Default has occurred and is continuing, the Company shall have the right at any time during the term of this Debenture from time to time to defer payment of interest on this Debenture, for up to ten consecutive semiannual interest payment periods with respect to each deferral period (each an "Extension Period"), during which Extension Periods the Company shall have the right to make partial payments of interest on any Interest Payment Date; provided, however, that no Extension Period shall end on a date other than an Interest Payment Date or extend beyond January 1, 2027 or any earlier prepayment date. At the end of each Extension Period, the Company shall pay all interest then accrued and unpaid (together with any Additional Interest thereon to the extent permitted by applicable law, Special Interest, and Additional Tax Sums, if applicable). During any such Extension Period, the Company shall not, and shall cause any Subsidiary of the Company not to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's Capital Stock (which includes Common Stock and preferred stock) or (ii) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank on a parity with or junior to this Debenture or make any guarantee payments with respect to any Aon Guarantee or other guarantee by the Company of the debt securities of any Subsidiary of the Company that by its terms ranks on a parity with or junior to this Debenture (other than (a) dividends or distributions in Common Stock, (b) any declaration of a dividend in connection with the implementation of a Rights Plan, the issuance of any Capital Stock or any class or series of preferred stock of the Company under any Rights Plan or the redemption or repurchase of any rights distributed pursuant to a Rights Plan, (c) payments under any Aon Guarantee relating to the Preferred Securities issued by the Aon Trust holding this Debenture, and (d) purchases of Common Stock related to the issuance of Common Stock or rights under any of the Company's benefit plans for its directors, officers, employees, consultants or advisors). Prior to the termination of any such Extension Period, the Company may further extend such Extension Period; provided, however, that no Extension Period shall exceed ten consecutive semiannual periods or extend beyond January 1, 2027 or any earlier prepayment date. At any time following the termination of any Extension Period and the payment of all accrued and unpaid interest (together with any Additional Interest, Special Interest and Additional Tax Sums, if applicable) then due, the Company may elect to begin a new Extension Period, subject to the above requirements. No interest shall be due and payable during an Extension Period except at the end thereof. If the Property Trustee is the only registered holder of the Debentures of this series, the Company shall give written notice to the Property Trustee and the Trustee of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the next succeeding date on which Distributions on the Capital Securities issued by the relevant Aon Trust would have been payable but for the election to begin or extend such Extension Period or (ii) the date the Administrative Trustees are required to give notice to any securities exchange or other applicable self- regulatory organization or to holders of such Capital Securities of the record date or the date such Distributions are payable, but in any event not less than five Business Days prior to such record date. An Administrative Trustee shall give notice of the Company's election to begin or extend an Extension Period to the holders of such Capital Securities. If the Property Trustee is not the only holder of the Debentures of this series at the time the Company elects to begin or extend an Extension Period, the Company shall give the A-4 holders of the Debentures of this series and the Trustee written notice of its election to begin or extend such Extension Period at least ten Business Days prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) the date the Company is required to give notice of the record or payment date of such interest payment to any applicable self-regulatory organization or to holders of the Debentures of this series. This Debenture is issued pursuant to an Indenture, dated as of January 13, 1997, between the Company, as issuer, and The Bank of New York, a New York banking corporation, as trustee, as supplemented by a First Supplemental Indenture dated as of January 13, 1997 (as further supplemented or amended from time to time, the "Indenture"). Reference is made to the Indenture for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders (the word "Holder" or "Holders" meaning the registered holder or registered holders) of the Debentures. Capitalized terms used herein but not defined herein shall have the respective meanings assigned thereto in the Indenture. By acceptance of this Debenture, the Holder hereof agrees to be bound by the provisions of the Indenture. The Debentures of this series are limited to the aggregate principal amount of Eight Hundred Twenty-Four Million Dollars ($824,000,000). The Debentures evidenced by this Certificate may be transferred or exchanged only in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof, and any attempted transfer, sale or other disposition of Debentures in a denomination of less than $100,000 shall be deemed to be void and of no legal effect whatsoever. The indebtedness of the Company evidenced by this Debenture, including the principal hereof and interest hereon, is, to the extent and in the manner set forth in the Indenture, subordinate and junior in right of payment to the Company's obligations to Holders of Senior Indebtedness of the Company and each Holder of this Debenture, by acceptance hereof, agrees to and shall be bound by such provisions of the Indenture and all other provisions of the Indenture. This Debenture shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee under the Indenture. A-3 IN WITNESS WHEREOF, AON CORPORATION has caused this instrument to be signed, manually or in facsimile, by its Chairman of the Board, or its Chief Executive Officer, or its President or any Vice Chairman, or any Vice President and by its Treasurer or an Assistant Treasurer or its Controller or its Secretary or an Assistant Secretary under the corporate seal of Aon Corporation. AON CORPORATION By: ____________________________ Name: Title: By: ____________________________ Name: Title: [Seal] TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities, of the series designated herein, described in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By: ____________________________ Authorized Signatory (by manual signature only) A-4 REVERSE OF DEBENTURE As provided in and subject to the provisions of the Indenture, if an Event of Default with respect to the payment of principal or interest on the Debentures of this series or with respect to compliance with certain covenants occurs and is continuing, then either the Trustee or the Holders of not less than 25% in principal amount of the then outstanding Debentures of each series as to which such Event of Default has occurred may declare the principal amount of all the Debentures of such series, together with any accrued interest (including any Additional Interest, Special Interest and Additional Tax Sums), to be due and payable immediately, by a notice in writing to the Company (and to the Trustee, if such notice is given by Holders). If the Debentures have been issued to an Aon Trust, upon such an Event of Default, if the Trustee or the Holders of not less than 25% in principal amount of the outstanding Debentures of this series fails to declare the principal of all the Debentures to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding Capital Securities of such Aon Trust then outstanding shall have such right by a notice in writing to the Company and the Trustee, and upon any such declaration the principal amount of and the accrued interest (including any Additional Interest, Special Interest and Additional Tax Sums) on all the Debentures of such series shall become immediately due and payable, provided that the payment of principal and interest on the Debentures shall remain subordinated to the extent provided in the Indenture. If an Event of Default with respect to certain covenants applicable to all series of securities issued under the Indenture (collectively, the "Securities") occurs and is continuing, then either the Trustee or the Holders of not less than 25% in principal amount of all then outstanding Securities under the Indenture (voting as a single class) may declare the principal amount of all such Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if such notice is given by Holders). If the Securities of a series issued under the Indenture have been issued to an Aon Trust, upon such an Event of Default, if the Trustee and the Holders of not less than 25% in principal amount of all outstanding Securities of that series fail to declare the principal of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the corresponding Capital Securities of such Aon Trust then outstanding shall have such right by a notice in writing to the Company and the Trustee; and upon any such declaration the principal amount of and the accrued interest (including any Additional Interest and Special Interest) on all the Securities of that series shall become immediately due and payable, provided that the payment of principal and interest shall remain subordinated to the extent provided in the Indenture. The Indenture provides that in certain events such declaration that principal and accrued interest are due and payable, and the consequences of such declaration, may be rescinded and annulled by the holders of at least a majority in principal amount of the Securities then outstanding under the Indenture as to which such acceleration of the payment of principal and interest has occurred, voting as one class. In the case of Securities issued under the Indenture to one or more Aon Trusts, should the Holders of such Securities fail to rescind and annul such declaration and its consequences, the Holders of at least a majority in aggregate liquidation amount of the corresponding Capital Securities of such Aon Trusts shall have such right. The Indenture also provides that the Holders of at least a majority in principal amount of all of the Securities of all series then outstanding as to which an Event of Default has occurred may, on behalf of all Holders of such Securities, waive any past default under the Indenture other than (a) a default in the payment of the principal of or interest on any of the Securities or (b) a default in respect of a covenant or provision of the Indenture which under the terms of the Indenture cannot be modified or amended without the consent of each Holder of Securities so affected. In the case of Securities of one or more series issued to one or more Aon Trusts, the Indenture provides that the A-5 Holders of at least a majority in aggregate liquidation amount of the corresponding Capital Securities issued by such Aon Trusts shall also have the right to waive such defaults. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in principal amount of the outstanding Securities of all affected series (voting as one class), to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying the rights of the holders of the Securities of each such series; provided, however, that no such supplemental indenture shall (i) change the fixed maturity of any Securities, or reduce the rate or extend the time of payment of interest thereon or on any overdue principal amount, or reduce the principal amount thereof, or reduce any amount payable upon any redemption thereof, or make the principal thereof or any interest thereon or on any overdue principal amount payable in any coin or currency other than that herein prescribed, without the consent of the Holder of each security so affected, (ii) reduce the percentage of Securities, the consent of the Holders of which is required for any such supplemental indenture, without the consent of all Holders of Securities then outstanding, (iii) modify certain provisions of the Indenture relating to waiver of compliance with covenants, waiver of defaults or modification of the Indenture without the consent of all Holders of Securities then outstanding, except to increase the percentage of Holders required for such waiver or modification, or (iv) modify the provisions with respect to the subordination of outstanding Securities of any series in a manner adverse to the Holders thereof, without the consent of the Holder of each security so affected; provided, however, that, in the case of the Securities of a series issued to an Aon Trust, so long as any of the corresponding series of Capital Securities issued by such Aon Trust remains outstanding, (i) no such amendment shall be made that adversely affects the holders of such Capital Securities or Preferred Securities in any material respect, and no termination of the Indenture shall occur, and no waiver of any Event of Default with respect to such series or compliance with any covenant with respect to such series under the Indenture shall be effective, without the prior consent of the holders of at least a majority of the aggregate liquidation amount of such Capital Securities then outstanding, unless and until the principal (and premium, if any) of the Securities of such series and all accrued and unpaid interest (including any Additional Interest) thereon shall have been paid in full and (ii) no amendment shall be made to Section 6.05 of the Indenture (regarding the right of Holders of Capital Securities to institute a suit directly against the Company) that would impair the rights of the Holders of Capital Securities provided therein without the prior consent of all Holders of Capital Securities then outstanding, unless and until the principal (and premium, if any) of the Securities of such series and all accrued and unpaid interest (including any Additional Interest) thereon have been paid in full. Upon the occurrence and during the continuation of a Tax Event or Investment Company Event, the Company may, at its option, at any time within 90 days of the occurrence of such Tax Event or Investment Company Event redeem this Debenture in whole (but not in part) at a prepayment price (the "Event Prepayment Price") equal to the greater of (i) 100% of the principal amount hereof or (ii) as determined by a Quotation Agent, the sum of the present value of 100% of the principal amount that would be payable on January 1, 2027, together with the present values of scheduled payments of interest from the prepayment date to January 1, 2027, in each case discounted to the prepayment date on a semi-annual basis at the Adjusted Treasury Rate, plus, in each case, accrued interest thereon to but excluding the date of prepayment. Any consent or waiver by the Holder of this Debenture given as provided in the Indenture (unless effectively revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued in exchange, A-6 registration of transfer, or otherwise in lieu hereof irrespective of whether any notation of such consent or waiver is made upon this Debenture or such other Debentures. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture, at the places, at the respective times, at the rate and in the coin or currency herein prescribed. If the Company does not comply with certain of its obligations under the Registration Rights Agreements (as defined in the Indenture), this Debenture shall bear additional interest ("Special Interest") in addition to the interest provided for in Section 2.05(a) of the First Supplemental Indenture to the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Debenture may be registered on the Register of the Debentures of this series upon surrender of this Debenture for registration of transfer at the offices maintained by the Company or its agent for such purpose, duly endorsed by the Holder hereof or his attorney duly authorized in writing, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Securities registrar duly executed by the Holder hereof or his attorney duly authorized in writing, but without payment of any charge other than a sum sufficient to reimburse the Company for any tax or other governmental charge incident thereto. Upon any such registration of transfer, a new Debenture or Debentures of authorized denomination or denominations for the same aggregate principal amount will be issued to the transferee in exchange herefor. Prior to due presentment for registration of transfer of this Debenture, the Company, the Trustee, and any agent of the Company or the Trustee may deem and treat the person in whose name this Debenture shall be registered upon the Register of the Debentures of this series as the absolute owner of this Debenture (whether or not this Debenture shall be overdue and notwithstanding any notation of ownership or other writing hereon) for the purpose of receiving payment of or on account of the principal hereof and, subject to the provisions on the face hereof, interest due hereon and for all other purposes; and neither the Company nor the Trustee nor any such agent shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or interest on this Debenture, or for any claim based hereon or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any stockholder, officer, director or employee, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as a part of the consideration for the issue hereof, expressly waived and released. The Company and, by acceptance of this Debenture or a beneficial interest in this Debenture, each holder hereof and any person acquiring a beneficial interest herein, agree that for United States federal, state and local tax purposes it is intended that this Debenture constitute indebtedness. This Debenture shall be deemed to be a contract made under the laws of the State of New York (without regard to conflicts of laws principles thereof) and for all purposes shall be governed by, and construed in accordance with, the laws of said State. A-7 EXHIBIT A-1 FORM OF CERTIFICATE OF TRANSFER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or other taxpayer identification number of transferee: _______________________________________ ________________________________________________________________________________ (Name and Address of Transferee, including Zip Code, must be printed or typewritten) ________________________________________________________________________________ the within Junior Subordinated Deferrable Interest Debenture (the "Debenture") and hereby irrevocably constitutes and appoints _________________________ attorney to transfer said Debenture on the Register of the Debentures, with full power of substitution in the premises. In connection with any transfer of the within Debenture occurring prior to such date as restrictions on the transfer of such security imposed by the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations thereunder shall be terminated in accordance with the Indenture, the undersigned confirms that such Debenture is being transferred: [___] To Aon Corporation or a subsidiary thereof; or [___] Pursuant to an effective registration statement under the Securities Act; or [___] Pursuant to and in compliance with Rule 144A under the Securities Act; or [___] Pursuant to and in compliance with Regulation S under the Securities Act; or [___] To an Institutional Accredited Investor pursuant to and in compliance with the Securities Act; or [___] Pursuant to and in compliance with Rule 144 under the Securities Act: and unless the box below is checked, the undersigned confirms that such Debenture is not being transferred to an "affiliate" of Aon Corporation, as defined in Rule 144 under the Securities Act (an "Affiliate"): [___] The transferee is an Affiliate of Aon Corporation I-1 Date: __________________________ ___________________________________ ___________________________________ Signature(s) Signature(s) must be guaranteed. NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Junior Subordinated Deferrable Interest Debenture in every particular, without alteration or enlargement or any change whatever. I-2 EXHIBIT B FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Trustee Administration Dear Sirs and Mesdames: We understand that the 8.205% Junior Subordinated Deferrable Interest Debentures (the "Debentures") of Aon Corporation ("Aon") are being offered in a transaction not involving any public offering within the United States within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and that the Debentures have not been registered under the Securities Act, and we agree, on our own behalf and on behalf of each account for which we acquire any Debentures, that if, prior to the expiration of the holding period applicable to sales of any Debenture under Rule 144(k) under the Securities Act, we decide to offer, resell or otherwise transfer such Debenture, such Debenture may be offered, resold or otherwise transferred only (i) to Aon or a subsidiary thereof, (ii) pursuant to an effective registration statement under the Securities Act, (iii) inside the United States to a person who is a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) in compliance with Rule 144A, (iv) inside the United States to an Institutional Accredited Investor (as defined below) that, prior to such transfer, furnishes to The Bank of New York, as trustee, a signed letter in the form hereof and such other opinions and certifications that the Property Trustee may request, (v) outside the United States in compliance with Rule 904 under the Securities Act or (vi) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available) and (vii) in each case, in accordance with any applicable securities laws of the States of the United States or any other applicable jurisdiction and in accordance with the legends set forth on the Debentures. We further agree to provide any person purchasing any of the Debentures from us a notice advising such purchaser that resales of such securities are restricted as stated herein. We understand that any Debentures will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the substance of this paragraph. We confirm that: (i) we are an "accredited investor" within the meaning of Rule 501(a)(1), (2) or (3) under the Securities Act or an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1), (2) and (3) under the Securities Act (an "Institutional Accredited Investor"); B-1 (ii) (A) any acquisition of Debentures by us will be for our own account or for the account of one or more other Institutional Accredited Investors or as fiduciary for the account of one or more trusts, each of which is an "accredited investor" within the meaning of Rule 501(a)(7) under the Securities Act and for each of which we exercise sole investment discretion or (B) we are a "bank," within the meaning of Section 3(a)(2) of the Securities Act, or a "savings and loan association" or other institution described in Section 3(a)(5)(A) of the Securities Act that is acquiring Debentures as fiduciary for the account of one or more institutions for which we exercise sole investment discretion; (iii) in the event that we acquire any Debentures, we will acquire Debentures having a minimum purchase price of not less than $100,000 for our own account or for any separate account for which we are acting; (iv) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Debentures; (v) we are not acquiring Debentures with a view to resale or distribution thereof or with any present intention of offering or selling Debentures, except as permitted above; provided that the disposition of our property and property of any accounts for which we are acting as fiduciary shall remain at all times within our control; and (vi) we have had access to such financial and other information and have been afforded the opportunity to ask such questions of representatives of Aon and receive answers thereto, as we deem necessary in connection with our decision to acquire Debentures. We acknowledge that Aon, you and others will rely upon our confirmations, acknowledgments and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate and complete. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. (Name of Transferee) By: ____________________________________ Name: Title: Address: B-2 EXHIBIT C FORM OF TRANSFER CERTIFICATE-- 144A GLOBAL DEBENTURE TO REGULATION S GLOBAL DEBENTURE The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Trustee Administration Re: Aon Corporation (the "Company") 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 (the "Debentures") Reference is hereby made to the Indenture (the "Base Indenture") dated as of January 13, 1997 between the Company and The Bank of New York, as Trustee (as supplemented by the First Supplemental Indenture (the "Supplemental Indenture") dated January 13, 1997, the "Indenture"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to _________________ Private Debentures which are evidenced by a 144A Global Debenture (CUSIP No. 37388AC9) and held with the Depositary in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Private Debentures to a Person that will take delivery thereof in a transaction effected pursuant to and in accordance with Rule 904 under the United States Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor does hereby further certify that: The offer of the Private Debentures was not made to a person in the United States; (A) either: (i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or (ii) the transaction was executed in, or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was pre- arranged with a buyer in the United States; (B) no directed selling efforts have been made in contravention of the requirements of Rule 904(b) of Regulation S, as applicable; C-1 (C) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (D) we have advised the transferee of the transfer restrictions applicable to the Private Debentures. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Terms used in this certificate and not otherwise defined herein or in the Indenture have the meanings set forth in Regulation S under the Securities Act. Dated: [Insert Name of Transferor] By: ________________________________ Name: Title: (If the registered owner is a corporation, partnership or fiduciary, the title of the Person signing on behalf of such registered owner must be stated.) C-2 EXHIBIT D FORM OF TRANSFER CERTIFICATE REGULATION S GLOBAL DEBENTURE TO 144A GLOBAL DEBENTURE The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Trustee Administration Re: Aon Corporation (the "Company") 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 (the "Debentures") Reference is hereby made to the Indenture (the "Base Indenture") dated as of January 13, 1997 between the Company and The Bank of New York, as Trustee (as supplemented by the First Supplemental Indenture (the "Supplemental Indenture") dated as of January 13, 1997, the "Indenture"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to _________________ Private Debentures which are evidenced by a Regulation S Global Debenture (CUSIP No. U00199AB2) and held with the Depositary indirectly in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Private Debentures to a Person that will take delivery thereof in a transaction effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor does hereby certify that the (i) the Transferor's interest in the Private Debentures is being transferred in accordance with the transfer restrictions set forth in the Indenture and in the Private Debenture; and (ii) the transferee is a person who the Transferor reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act, purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, in accordance with all applicable securities laws of the states of the United States and other jurisdictions. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Dated: [Insert Name of Transferor] By: ______________________________ Name: Title: (If the registered owner is a corporation, partnership or fiduciary, the title of the Person signing on behalf of such registered owner must be stated.) D-1 EX-4.3 4 CERTIFICATE OF TRUST OF AON CAPITAL A EXHIBIT 4.3 CERTIFICATE OF TRUST OF AON CAPITAL A THIS Certificate of Trust of Aon Capital A (the "Trust"), dated as of December 27, 1996, is being duly executed and filed by the undersigned, as trustees, to form a business trust under the Delaware Business Trust Act (12 Del. C. (S)3801, et seq.). - ------- -------- 1. Name. The name of the business trust formed hereby is Aon ---- Capital A. 2. Delaware Trustee. The name and business address of the trustee ---------------- of the Trust in the State of Delaware are The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711. 3. Effective Date. This Certificate of Trust shall be effective -------------- upon filing. IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have executed this Certificate of Trust as of the date first-above written. THE BANK OF NEW YORK (DELAWARE), not in its individual capacity but solely as trustee of the Trust /s/ Joseph G. Ernst ------------------------------------------ Name: Joseph G. Ernst Title: Assistant Vice President /s/ James White ------------------------------------------- James White, not in his individual capacity but solely as trustee of the Trust EX-4.4 5 TRUST AGREEMENT OF AON CAPITAL A EXHIBIT 4.4 TRUST AGREEMENT OF AON CAPITAL A THIS TRUST AGREEMENT is made as of December 27, 1996 (this "Trust Agreement"), by and among Aon Corporation, a Delaware corporation, as Depositor (the "Depositor"), and The Bank of New York (Delaware), a Delaware corporation, as trustee, and James White, as trustee (collectively, the "Trustees"). The Depositor and the Trustees hereby agree as follows: 1. The trust created hereby shall be known as "Aon Capital A" (the "Trust"), in which name the Trustees or the Depositor, to the extent provided herein, may conduct the business of the Trust, make and execute contracts, and sue and be sued. 2. The Depositor hereby assigns, transfers, conveys and sets over to the Trust the sum of $10. Such amount shall constitute the initial trust estate. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S) 3801, et seq. (the "Business Trust Act"), and that this document constitute the governing instrument of the Trust. The Trustees are hereby authorized and directed to execute and file a certificate of trust with the Delaware Secretary of State in such form as the Trustees may approve. 3. The Depositor and the Trustees will enter into an amended and restated Trust Agreement or Declaration satisfactory to each such party to provide for the contemplated operation of the Trust created hereby and the issuance of the Capital Securities referred to therein. Prior to the execution and delivery of such amended and restated Trust Agreement or Declaration, the Trustees shall not have any duty or obligation hereunder or with respect of the trust estate, except as otherwise required by applicable law or as may be necessary to obtain prior to such execution and delivery any licenses, consents or approvals required by applicable law or otherwise. Notwithstanding the foregoing, the Trustees may take all actions deemed proper as are necessary to effect the transactions contemplated herein. 4. The Depositor, as sponsor of the Trust, is hereby authorized, in its discretion, (i) to prepare one or more offering memoranda in preliminary and final form relating to the offering and sale of Capital Securities of the Trust in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "1933 Act"), and such other forms or filings as may be required by the 1933 Act, the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended, in each case relating to the Capital Securities of the Trust; (ii) to file and execute on behalf of the Trust, such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents that shall be necessary or desirable to register or establish the exemption from registration of the Capital Securities of the Trust under the securities or "Blue Sky" laws of such jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or desirable; (iii) to execute and file an application, and all other applications, statements, certificates, agreements and other instruments that shall be necessary or desirable, to the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market; (iv) to execute and deliver letters or documents to, or instruments for filing with, a depository relating to the Capital Securities of the Trust; and (v) to execute, deliver and perform on behalf of the Trust one or more purchase agreements, dealer manager agreements, escrow agreements and other related agreements providing for or relating to the sale of the Capital Securities of the Trust. In the event that any filing referred to in this Section 4 is required by the rules and regulations of the Commission, PORTAL or state securities or Blue Sky laws to be executed on behalf of the Trust by the Trustees, the Trustees, in their capacities as trustees of the Trust, are hereby authorized and directed to join in any such filing and to execute on behalf of the Trust any and all of the foregoing, it being understood that the Trustees, in their capacities as trustees of the Trust, shall not be required to join in any such filing or execute on behalf of the Trust any such document unless required by the rules and regulations of the Commission, PORTAL or state securities or Blue Sky laws. 5. This Trust Agreement may be executed in one or more counterparts. 6. The number of trustees of the Trust initially shall be two and thereafter the number of trustees of the Trust shall be such number as shall be fixed from time to time by a written instrument signed by the Depositor which may increase or decrease the number of trustees of the Trust; provided, however, that to the extent required by the Business Trust Act, one trustee of the Trust shall either be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware. Subject to the foregoing, the Depositor is entitled to appoint or remove without cause any trustee of the Trust at any time. Any trustee of the Trust may resign upon thirty days' prior notice to the Depositor. 7. This Trust Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware (with regard to conflict of laws principles). IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed as of the day and year first above written. AON CORPORATION, as Depositor By: /s/ Jerome I. Baer ------------------------------ Name: Jerome I. Baer Title: Vice President--Taxation THE BANK OF NEW YORK (DELAWARE), not in its individual capacity but solely as trustee of the Trust By: /s/ Joseph G. Ernst -------------------------------- Name: Joseph G. Ernst Title: Assistant Vice President /s/ James White --------------------------------- James White, not in his individual capacity but solely as trustee of the Trust EX-4.5 6 AMENDED AND RESTATED TRUST AGREEMENT ================================================================================ AMENDED AND RESTATED TRUST AGREEMENT among AON CORPORATION, as Depositor, THE BANK OF NEW YORK, as Property Trustee, THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee, THE ADMINISTRATIVE TRUSTEES NAMED HEREIN and THE SEVERAL HOLDERS, AS HEREIN DEFINED Dated as of January 13, 1997 AON CAPITAL A - -------------------------------------------------------------------------------- AON CAPITAL A Certain Sections of the Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Trust Agreement Act Section Section (S) 310(a)(1)........................................................ 8.1 (a)(2)........................................................ 8.1 (a)(3)........................................................ 8.9 (a)(4)................................................. 2.7(a)(ii) (b) ........................................................ 8.8 (S) 311(a) ....................................................... 8.13 (b) ....................................................... 8.13 (S) 312(a) ........................................................ 5.7 (b) ........................................................ 5.7 (c) ........................................................ 5.7 (S) 313(a) .................................................... 8.14(a) (a)(4).................................................... 8.14(a) (b) .................................................... 8.14(b) (c) ....................................................... 10.8 (d) .................................................... 8.14(c) (S) 314(a) ....................................................... 8.15 (b) ............................................. Not Applicable (c)(1)....................................................... 8.16 (c)(2)....................................................... 8.16 (c)(3)............................................. Not Applicable (d) ............................................. Not Applicable (e) .................................................. 1.1, 8.16 (S) 315(a) ............................................. 8.2(a), 8.4(a) (b) .................................................. 8.3, 10.8 (c) ..................................................... 8.2(a) (d) ................................................... 8.2, 8.4 (e) ............................................. Not Applicable (S) 316(a) ....................................................... 5.14 (a)(1)(A)................................................. 5.14(c) (a)(1)(B)................................................. 5.14(b) (a)(2)............................................. Not Applicable (b) ....................................................... 5.14 (c) ....................................................... 6.7 (S) 317(a)(1)............................................. Not Applicable (a)(2)............................................. Not Applicable (b) ........................................................ 5.9 (S) 318(a) ...................................................... 10.10
____________ Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Trust Agreement. i TABLE OF CONTENTS
PAGE ---- ARTICLE I. DEFINED TERMS.................................................... 2 SECTION 1.1. Definitions................................................... 2 ARTICLE II. CONTINUATION OF THE TRUST....................................... 15 SECTION 2.1. Name.......................................................... 15 SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business................................................... 15 SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses....................................... 16 SECTION 2.4. Issuance of the Capital Securities............................ 16 SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase of Debentures.................................... 16 SECTION 2.6. Declaration of Trust.......................................... 17 SECTION 2.7. Authorization to Enter into Certain Transactions.............. 17 SECTION 2.8. Assets of Trust............................................... 22 SECTION 2.9. Title to Trust Property....................................... 22 ARTICLE III. PAYMENT ACCOUNT................................................ 22 SECTION 3.1. Payment Account............................................... 22 ARTICLE IV. DISTRIBUTIONS; REDEMPTION....................................... 22 SECTION 4.1. Distributions................................................ 22 SECTION 4.2. Redemption................................................... 23 SECTION 4.3. Subordination of Common Securities........................... 26 SECTION 4.4. Payment Procedures........................................... 27 SECTION 4.5. Tax Returns and Reports...................................... 27 SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.................. 28 SECTION 4.7. Reduction for Payments under Indenture or Pursuant to Direct Actions................................... 28 ARTICLE V. TRUST SECURITIES CERTIFICATES.................................... 28 SECTION 5.1. Initial Ownership............................................ 28 SECTION 5.2. The Trust Securities Certificates; Execution and Delivery Thereof......................................... 28 SECTION 5.3. Form of Trust Secutities Certificates........................ 29 SECTION 5.4. Registration of Transfer and Exchange of Capital Securities Certificates.............................. 30 SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates...................................... 32 SECTION 5.6. Persons Deemed Securityholders............................... 32 SECTION 5.7. Access to List of Securityholders' Names and Addresses.......................................... 33 SECTION 5.8. Maintenance of Office or Agency for Transfers................ 33 SECTION 5.9. Appointment of Paying Agent.................................. 33 SECTION 5.10. Ownership of Common Securities by Depositor.................. 34 SECTION 5.11. Book-Entry Interests......................................... 34 SECTION 5.12. Notices to Clearing Agency................................... 38
ii SECTION 5.13. Procedures for Issuance of Definitive Capital Securities Certificates.............................. 38 SECTION 5.14. Rights of Securityholders.................................... 39 ARTICLE VI. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING....................... 42 SECTION 6.1. Limitations on Voting Rights................................. 42 SECTION 6.2. Notice of Meetings........................................... 43 SECTION 6.3. Meetings of Capital Securityholders.......................... 43 SECTION 6.4. Voting Rights................................................ 44 SECTION 6.5. Proxies, etc................................................. 44 SECTION 6.6. Securityholder Action by Written Consent..................... 44 SECTION 6.7. Record Date for Voting and Other Purposes.................... 45 SECTION 6.8. Acts of Securityholders...................................... 45 SECTION 6.9. Inspection of Records........................................ 46 ARTICLE VII. REPRESENTATIONS AND WARRANTIES................................. 46 SECTION 7.1. Representations and Warranties of the Bank, the Property Trustee and the Delaware Trustee................ 46 SECTION 7.2. Representations and Warranties of Depositor.................. 48 ARTICLE VIII. THE TRUSTEES.................................................. 49 SECTION 8.1. Corporate Property Trustee Required; Eligibility of Trustees.................................................. 49 SECTION 8.2. Certain Duties and Responsibilities.......................... 49 SECTION 8.3. Certain Notices.............................................. 51 SECTION 8.4 Certain Rights of Property Trustee........................... 52 SECTION 8.5. Not Responsible for Recitals or Issuance of Securities................................................ 54 SECTION 8.6. May Hold Securities.......................................... 55 SECTION 8.7. Compensation; Indemnity; Fees................................ 55 SECTION 8.8. Conflicting Interests........................................ 56 SECTION 8.9. Co-Trustees and Separate Trustee............................. 57 SECTION 8.10. Resignation and Removal; Appointment of Successor.................................................... 59 SECTION 8.11. Acceptance of Appointment by Successor....................... 61 SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.................................................. 61 SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust........................................... 62 SECTION 8.14. Reports by Property Trustee.................................. 63 SECTION 8.15. Reports to the Property Trustee.............................. 63 SECTION 8.16. Evidence of Compliance with Conditions Precedent.................................................... 63 SECTION 8.17. Number of Trustees........................................... 64 SECTION 8.18. Delegation of Power.......................................... 64 ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER............................. 65 SECTION 9.1. Termination Upon Expiration Date............................. 65 SECTION 9.2. Early Termination............................................ 65 SECTION 9.3. Termination.................................................. 65
iii SECTION 9.4. Liquidation.................................................. 66 SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the Trust................................. 68 ARTICLE X. MISCELLANEOUS PROVISIONS......................................... 69 SECTION 10.1. Limitation of Rights of Securityholders to Terminate Trust.............................................. 69 SECTION 10.2. Amendment.................................................... 69 SECTION 10.3. Separability................................................. 71 SECTION 10.4. Governing Law................................................ 71 SECTION 10.5. Payments Due on Non-Business Day............................. 71 SECTION 10.6. Successors................................................... 72 SECTION 10.7. Headings..................................................... 72 SECTION 10.8. Reports, Notices and Demands................................. 72 SECTION 10.9. Agreement Not to Petition.................................... 73 SECTION 10.10.Trust Indenture Act; Conflict with Trust Indenture Act................................................ 73 SECTION 10.11.Acceptance of Terms of Trust Agreement, Guarantee an Indenture....................................... 74 SECTION 10.12.Counterparts................................................. 74 EXHIBIT A Certificate of Trust............................................. A-1 EXHIBIT B Form of 144A Global Security..................................... B-1 EXHIBIT C Form of Regulation S Global Security............................. C-1 EXHIBIT D Form of Definitive Capital Security Certificate.................. D-1 EXHIBIT E Form of Common Security Certificate.............................. E-1 EXHIBIT F Form of Letter to be Delivered by Institutional Accredited Investors................................................ F-1 EXHIBIT G Form of Transfer Certificate - 144A Global Security to Regulation S Global Security..................................... G-1 EXHIBIT H Form of Transfer Certificate - Regulation S Global Security to 144A Global Security.................................... H-1 EXHIBIT I Form of Private Placement Legend................................. I-1 EXHIBIT J Form of Minium Transfer Legend................................... J-1
iv AMENDED AND RESTATED TRUST AGREEMENT, dated as of January 13, 1997, among (i) Aon Corporation, a Delaware corporation (including any successors or assigns, the "Depositor"), (ii) The Bank of New York, a New York banking corporation, as property trustee, (in such capacity, the "Property Trustee" and, in its separate corporate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) The Bank of New York (Delaware), a banking corporation that maintains its principal place of business in Delaware, as Delaware trustee (the "Delaware Trustee"), (iv) Harvey Medvin, an individual, Michael Conway, an individual, and James White, an individual, each of whose address is c/o Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606 (each an "Administrative Trustee" and collectively the "Administrative Trustees") and (v) the several Holders, as hereinafter defined. WITNESSETH WHEREAS, the Depositor, the Delaware Trustee and an Administrative Trustee have heretofore duly declared and created a business trust pursuant to the Delaware Business Trust Act by entering into that certain Trust Agreement, dated as of December 27, 1996 (the "Original Trust Agreement"), and by the execution and filing with the Secretary of State of the State of Delaware of a Certificate of Trust, filed on December 27, 1996, substantially in the form attached as Exhibit A; WHEREAS, the Depositor and the Trustees desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Securities by the Trust to the Depositor, (ii) the issuance and sale of the Capital Securities by the Trust pursuant to the Purchase Agreement, (iii) the acquisition by the Trust from the Depositor of all of the right, title and interest in the Debentures, (iv) the mandatory exchange by the Property Trustee with the Depositor of the Private Debentures for the Exchange Debentures, and the exchange by the Trust with the Securityholders of the Private Capital Securities for the Exchange Capital Securities, each such exchange registered under the Securities Act; WHEREAS, upon the effectiveness of the exchange registration agreement referred to in the Capital Securities Exchange and Registration Rights Agreement, this Trust Agreement shall be subject to, and shall be governed by, the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act; 1 NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: ARTICLE I. DEFINED TERMS Section 1.1. Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and (d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" has the meaning specified in Section 6.8. "Additional Distributions" means, with respect to Trust Securities of a given Liquidation Amount and/or a given period, the amount of Additional Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of Debentures for such period. "Additional Tax Sums" has the meaning specified in Section 4.08 of the Indenture. "Administrative Trustee" means a Person satisfying the eligibility requirements set forth in Section 8.1(b) and initially means each of Harvey Medvin, Michael Conway and James White, solely 2 in such Person's capacity as Administrative Trustee of the Trust heretofore created and continued hereunder and not in such Person's individual capacity, or such Administrative Trustee's successor in interest in such capacity, or any successor trustee appointed as herein provided. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Bank" has the meaning specified in the preamble to this Trust Agreement. "Bankruptcy Event" means, with respect to any Person: (a) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such Person in furtherance of any such action. 3 "Bankruptcy Laws" has the meaning specified in Section 10.9. "Business Day" means any day which is not a Saturday or Sunday and which is neither a legal holiday nor a day on which banking institutions in The City of New York are authorized or required by law or executive order to close or a day on which the Corporate Trust Office of the Property Trustee or the Debenture Trustee is closed for business. "Capital Securities Certificate" means a certificate evidencing ownership of Capital Securities, which certificate shall initially be substantially in the form attached as Exhibit B, Exhibit C or Exhibit D, or Exchange Capital Securities. "Capital Securities Exchange and Registration Rights Agreement" means an agreement dated as of January 13, 1997 among the Depositor, the Trust and the Initial Purchasers named in Schedule I to the Purchase Agreement. "Capital Security" means an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. Unless the context otherwise requires, the term "Capital Securities" shall include any Exchange Capital Securities to be issued and exchanged for any Private Capital Securities. "Cedel" means Cedel Bank, societe anonyme. "Certificate Depository Agreement" means the agreement among the Trust, the Property Trustee and DTC, as the initial Clearing Agency, dated as of the Closing Date, relating to the Capital Securities Certificates, as the same may be amended and supplemented from time to time. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. DTC will be the initial Clearing Agency. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means January 13, 1997, which is the date of execution and delivery of this Trust Agreement, or such other date 4 as may be designated the Closing Date pursuant to the Purchase Agreement. "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act. "Common Security" means an undivided beneficial interest in the assets of the Trust, having a Liquidation Amount of $1,000 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. "Common Securities Certificate" means a certificate evidencing ownership of Common Securities, substantially in the form attached as Exhibit E. "Corporate Trust Office" means (i) when used with respect to the Property Trustee, the principal corporate trust office of the Property Trustee located in New York, New York, and (ii) when used with respect to the Debenture Trustee, the principal corporate trust office of the Debenture Trustee located in New York, New York. "Debenture Event of Default" means an "Event of Default" as defined in the Indenture. "Debenture Exchange and Registration Rights Agreement" means an agreement dated as of January 13, 1997 among the Depositor, the Trust and the Initial Purchasers named in Schedule I to the Purchase Agreement. "Debenture Prepayment Date" means, with respect to any Debentures to be redeemed under the Indenture, the date fixed for redemption under the Indenture. "Debenture Tax Event" means a "Tax Event" as defined in the Indenture. "Debenture Trustee" means The Bank of New York, and any successor thereto under the Indenture. "Debentures" means the Depositor's 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027, issued pursuant to the Indenture. 5 "Definitive Capital Securities Certificates" means Capital Securities Certificates issued in definitive, fully registered form. "Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ((S)) 3801, et seq., as it may be amended from time to time. "Delaware Trustee" means the corporation identified as the "Delaware Trustee" in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust heretofore created and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any Delaware Trustee appointed as herein provided. "Depositor" has the meaning specified in the preamble to this Trust Agreement. "Direct Action" has the meaning specified in Section 5.14(c). "Distribution Date" has the meaning specified in Section 4.1(a). "Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.1 and shall include, if applicable, Additional Distributions, Special Distributions and Additional Tax Sums. "DTC" means The Depository Trust Company. "Early Termination Event" has the meaning specified in Section 9.2. "Euroclear" means Morgan Guaranty Trust Company of New York in its capacity as operator of the Euroclear System. "Event of Default" means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) the occurrence of a Debenture Event of Default; or (b) default by the Property Trustee in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or 6 (c) default by the Property Trustee in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or (d) default in the performance, or breach, in any material respect, of any covenant or warranty of the Trustees in this Trust Agreement (other than a covenant or warranty a default in the performance or breach of which is addressed in clause (b) or (c) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the defaulting Trustee or Trustees by the Holders of at least 25% in aggregate Liquidation Amount of the Outstanding Capital Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (e) the occurrence of a Bankruptcy Event with respect to the Property Trustee and the failure to appoint a successor Property Trustee within 60 days thereof. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Capital Securities" means Capital Securities representing undivided beneficial interests in the assets of the Trust, issued by the Trust in an exchange offer for the Private Capital Securities, such exchange offer being registered under the Securities Act, all pursuant to the Capital Securities Exchange and Registration Rights Agreement; provided, however, that the aggregate Liquidation Amount of the Private Capital Securities and the Exchange Capital Securities at any one time outstanding shall not exceed $800,000,000. "Exchange Debentures" means a new series of junior subordinated debentures issued by the Depositor in a mandatory exchange offer for the Private Debentures, such exchange offer being registered under the Securities Act, all pursuant to the Debenture Exchange and Registration Rights Agreement. "Exchange Guarantee" means the Exchange Guarantee extended by the Depositor for the benefit of the Holders of Capital Securities pursuant to the Exchange Guarantee Agreement, and registered under the Securities Act pursuant to the Guarantee Exchange and Registration Rights Agreement. "Exchange Guarantee Agreement" means the Guarantee Agreement to be entered into by the Depositor, as Guarantor, and The Bank of 7 New York, as Guarantee Trustee, pursuant to the Guarantee Exchange and Registration Rights Agreement. "Exchange Offer" means an exchange offer of the Exchange Capital Securities for the Private Capital Securities, which is registered under the Securities Act pursuant to the Capital Securities Exchange and Registration Rights Agreement. "Expense Agreement" means the Agreement as to Expenses and Liabilities between the Depositor and the Trust, as amended from time to time. "Expiration Date" has the meaning specified in Section 9.1. "Global Capital Securities Certificate" means any Capital Securities Certificate in the form of a 144A Global Security, a Regulation S Global Security and, if applicable, any Exchange Capital Security represented in global form and deposited with the Clearing Agency or the Property Trustee as custodian for the Clearing Agency. "Guarantee" means the Private Guarantee with respect to the Private Capital Securities and the Exchange Guarantee with respect to the Exchange Capital Securities. "Guarantee Agreement" means the Capital Securities Guarantee Agreement dated as of January 13, 1997 between the Depositor, as Guarantor, and The Bank of New York, as Guarantee Trustee. "Guarantee Exchange and Registration Rights Agreement" means an agreement dated as of January 13, 1997 among the Depositor, the Trust and the Initial Purchasers named in Schedule I to the Purchase Agreement. "Holder" means a Person in whose name a Trust Security or Trust Securities is registered in the Securities Register; any such Person shall be a beneficial owner within the meaning of the Delaware Business Trust Act. "Indemnified Person" has the meaning specified in Section 8.7(c). "Indenture" means the Indenture, dated as of January 13, 1997, between the Depositor and the Debenture Trustee, as trustee, as supplemented by the First Supplemental Indenture dated as of January 13, 1997, as amended or supplemented from time to time. 8 "Initial Purchasers" means the Purchasers named in Schedule I to the Purchase Agreement. "Institutional Accredited Investor" means an institutional investor that is an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Investment Company Event" means the receipt by the Trust of an Opinion of Counsel to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be considered an "investment company" that is required to be registered under the 1940 Act, which Change in 1940 Act Law becomes effective on or after the date of original issuance of the Capital Securities under this Trust Agreement. "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Like Amount" means (a) with respect to a redemption of Trust Securities, Trust Securities having a Liquidation Amount equal to the principal amount of Debentures to be contemporaneously redeemed in accordance with the Indenture the proceeds of which will be used to pay the Redemption Price of such Trust Securities, and (b) with respect to a distribution of Debentures to Holders of Trust Securities in connection with a dissolution, termination or liquidation of the Trust, Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Debentures are distributed. "Liquidation Amount" means the stated amount of $1,000 per Trust Security. "Liquidation Date" means the date on which Debentures are to be distributed to Holders of Trust Securities in connection with a dissolution, termination and liquidation of the Trust pursuant to Section 9.4(a). "Liquidation Distribution" has the meaning specified in Section 9.4(d). "Minimum Transfer Legend" means the legend substantially in the form attached as Exhibit J. 9 "1940 Act" means the Investment Company Act of 1940, as amended. "Officers' Certificate" means a certificate signed by the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman or any Vice President of the Depositor (whether or not designated by a number or a word or words added before or after the title Vice President) and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of the Depositor and delivered to the appropriate Trustee. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "144A Global Security" has the meaning specified in Section 5.3(b). "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the Property Trustee or the Depositor (including counsel who is an employee of the Depositor), who is experienced in matters related to the substance of the opinion. "Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement. "Outstanding", when used with respect to Trust Securities, means, as of the date of determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except: 10 (a) Trust Securities theretofore cancelled by the Securities Registrar or delivered to the Securities Registrar for cancellation; (b) Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Trust Securities; provided, however, that, if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and (c) Trust Securities which have been paid or in exchange for or in lieu of which other Trust Securities have been executed and delivered pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Capital Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Capital Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Capital Securities that such Trustee actually knows to be so owned shall be so disregarded and (b) the foregoing shall not apply at any time when all of the outstanding Capital Securities are owned by the Depositor, one or more of the Trustees and/or any such Affiliate. Capital Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustee the pledgee's right so to act with respect to such Capital Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor. "Owner" means each Person who is the beneficial owner of a Global Capital Securities Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency). "Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.9 and shall initially be the Bank. "Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee with the Bank in its trust department for the benefit of the Security-holders in which all amounts paid in respect of the Debentures will 11 be held and from which the Property Trustee, through the Paying Agent, shall make payments to the Securityholders in accordance with Sections 4.1 and 4.2. "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "PORTAL Market" means the Private Offerings, Resales and Trading through Automated Linkages Market operated by the National Association of Securities Dealers, Inc. (or any successor thereto). "Private Capital Securities" means the $800,000,000 aggregate Liquidation Amount of the Trust's 8.205% Capital Securities issued pursuant to this Agreement on the Closing Date. "Private Debentures" means the $824,000,000 aggregate principal amount of the Depositor's 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027, issued pursuant to the Indenture on the Closing Date. "Private Guarantee" means the Guarantee extended by the Depositor for the benefit of the Holders of Private Capital Securities pursuant to the Guarantee Agreement. "Private Placement Legend" means the legend substantially in the form attached as Exhibit I. "Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust heretofore created and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor Property Trustee appointed as herein provided. "Purchase Agreement" means the Purchase Agreement, dated as of January 8, 1997, among the Trust, the Depositor and the Purchasers named in Schedule I thereto. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Debenture Prepayment Date 12 and the stated maturity of the Debentures shall be a Redemption Date for a Like Amount of Trust Securities. "Redemption Price" means, with respect to any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to but excluding the Redemption Date, plus the related amount of the premium, if any, paid by the Depositor upon the concurrent redemption of a Like Amount of Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among the Trust Securities. "Registration Rights Agreements" means the Capital Securities Exchange and Registration Rights Agreement, the Debenture Exchange and Registration Rights Agreement and the Guarantee Exchange and Registration Rights Agreement, collectively. "Regulation S" means Regulation S under the Securities Act or any successor provision. "Regulation S Global Security" has the meaning specified in Section 5.3(c). "Relevant Trustee" has the meaning specified in Section 8.10. "Restricted Period" means the period of 40 consecutive days beginning on and including the later of (x) the day on which the offering of the Capital Securities commences or (y) the Closing Date. "Rule 144" means Rule 144 as promulgated under the Securities Act, or any successor rule. "Rule 144A" means Rule 144A as promulgated under the Securities Act, or any successor rule. "Rule 144(k)" means Rule 144(k) as promulgated under the Securities Act, or any successor rule. "Securities Act" means the Securities Act of 1933, as amended. "Securities Register" and "Securities Registrar" have the respective meanings specified in Section 5.4. "Securityholder" means a Person in whose name a Trust Security or Trust Securities is registered in the Securities Register; any such Person shall be a beneficial owner within the meaning of the Delaware Business Trust Act. 13 "Special Distributions" has the meaning specified in the Capital Securities Exchange and Registration Rights Agreement. "Special Interest" has the meaning specified in the Capital Securities Exchange and Registration Rights Agreement. "Successor Securities" has the meaning specified in Section 9.5. "Tax Event" means the receipt by the Depositor and the Trust of an Opinion of Counsel to the effect that, as a result of any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of issuance of the Capital Securities under this Trust Agreement, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to United States federal income tax with respect to income received or accrued on the Debentures, (ii) interest payable by the Depositor on the Debentures is not, or within 90 days after the date of such Opinion of Counsel, will not be, deductible by the Depositor, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or will be within 90 days after the date of such Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties, assessments or other governmental charges. "Transfer Restriction Termination Date" means the first day in which the Capital Securities (other than Capital Securities acquired by the Trust or any Affiliate thereof) may be sold pursuant to Rule 144(k). "Trust" means the Delaware business trust created under the Original Trust Agreement and continued hereby and identified on the cover page to this Trust Agreement. "Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including (i) all exhibits hereto, and (ii) for all purposes of this Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Trust Agreement and any such modification, amendment or supplement, respectively. 14 "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or owing to, the Payment Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement. "Trust Security" means any one of the Common Securities or the Capital Securities. The Trust Securities represent undivided beneficial interests in the Trust Property. "Trust Securities Certificate" means any one of the Common Securities Certificates or the Capital Securities Certificates. "Trustees" means, collectively, the Property Trustee, the Delaware Trustee and the Administrative Trustees. ARTICLE II. CONTINUATION OF THE TRUST SECTION 2.1. Name. The Trust continued hereby shall be known as "Aon Capital A," as such name may be modified from time to time by the Administrative Trustees following written notice to the Securityholders and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business. The name and address of the Delaware Trustee in the State of Delaware is The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust Department, or such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Securityholders and the Depositor. The principal executive office of the Trust is c/o Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606. 15 SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses. The Property Trustee acknowledges receipt in trust from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. SECTION 2.4. Issuance of the Capital Securities. (a) The Depositor, on behalf of the Trust and pursuant to the Original Trust Agreement, executed and delivered the Purchase Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2 and deliver to the Initial Purchasers Capital Securities Certificates in an aggregate amount of 800,000 Capital Securities having an aggregate Liquidation Amount of $800,000,000, against payment by the Initial Purchasers of $802,188,000 (such amount including accumulated distributions from January 1, 1997), which amount the Administrative Trustee shall promptly deliver to the Trust. (b) Contemporaneously with the exchange of Exchange Capital Securities pursuant to the Capital Securities Exchange and Registration Rights Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2, and deliver in accordance with any then applicable delivery instructions, Capital Securities Certificates in an aggregate amount having an aggregate Liquidation Amount equal to the aggregate Liquidation Amount of the Private Capital Securities then being exchanged. SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase of Debentures. Contemporaneously with the execution and delivery of this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2 and deliver to the Depositor Common Securities Certificates, registered in the name of the Depositor, in an aggregate amount of 24,000 Common Securities having an aggregate Liquidation Amount of $24,000,000 against payment by the Depositor of $24,065,640 (such amount including accumulated distributions from January 1, 1997), which amount such Administrative Trustee shall promptly deliver to the Trust. 16 Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust, shall subscribe for and purchase from the Depositor Debentures, registered in the name of the Trust and having an aggregate principal amount equal to $824,000,000, and, in satisfaction of the purchase price for such Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $826,253,640 (such sum being the sum of the amounts delivered to the Property Trustee pursuant to (i) the second sentence of Section 2.4 and (ii) the first sentence of this Section 2.5). SECTION 2.6. Declaration of Trust. The exclusive purposes and functions of the Trust are (a) to issue and sell Trust Securities (including the Exchange Capital Securities pursuant to the Exchange Offer), (b) to use the proceeds from the sale of Trust Securities to acquire the Private Debentures, (c) to exchange the Private Debentures for the Exchange Debentures pursuant to the Indenture and (d) to engage in those activities necessary, convenient or incidental thereto. The Depositor hereby appoints the Property Trustee, the Delaware Trustee and the Administrative Trustees as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein, and the Property Trustee, the Delaware Trustee and the Administrative Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Trust and the Securityholders. The Administrative Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Business Trust Act and accepting service of process on the Trust in the State of Delaware. SECTION 2.7. Authorization to Enter into Certain Transactions. (a) The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section, and in accordance with the following provisions (i) and (ii), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to 17 the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following: (i) As among the Trustees, each Administrative Trustee shall have the power and authority to act on behalf of the Trust with respect to the following matters: (A) the issuance and sale of the Trust Securities including any agreements necessary with respect to such issuance and sale; (B) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the Registration Rights Agreements, the Expense Agreement and the Certificate Depository Agreement and such other agreements as may be necessary or desirable in connection with the purposes and function of the Trust; (C) assisting in the registration of the Exchange Offer and the Exchange Capital Securities under the Securities Act, and under the state securities or blue sky laws, and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act, all in accordance with the Capital Securities Exchange and Registration Rights Agreement; (D) assisting in any listing of the Exchange Capital Securities upon such securities exchange or exchanges as shall be determined by the Depositor and the registration of the Exchange Capital Securities under the Exchange Act and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; (E) the sending of notices (other than notices of default) and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement; (F) the appointment of a Paying Agent and Securities Registrar in accordance with this Trust Agreement; (G) executing the Trust Securities in accordance with this Trust Agreement; (H) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; 18 (I) unless otherwise determined by the Depositor, the Property Trustee or the Administrative Trustees, or as otherwise required by the Delaware Business Trust Act or the Trust Indenture Act, to execute on behalf of the Trust (either acting alone or together with any or all of the Administrative Trustees) any documents that the Administrative Trustees have the power to execute pursuant to this Trust Agreement; and (J) the taking of any action incidental to the foregoing as the Trustees may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (ii) As among the Trustees, the Property Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (A) the establishment of the Payment Account; (B) the receipt of the Debentures; (C) the collection of interest, principal and any other payments made in respect of the Debentures in the Payment Account; (D) the distribution through the Paying Agent of amounts owed to the Securityholders in respect of the Trust Securities; (E) the exercise of all of the rights, powers and privileges of a holder of the Debentures in accordance with the terms of this Trust Agreement; (F) the sending of notices of default and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with this Trust Agreement; (G) the distribution of the Trust Property in accordance with the terms of this Trust Agreement; (H) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the execution of the certificate of cancellation with the Secretary of State of the State of Delaware; (I) to exchange the Private Guarantee for the Exchange Guarantee pursuant to the Guarantee Exchange and Registration Rights Agreement in the exchange in connection with the Exchange Offer; 19 (J) to exchange the Private Debentures for the Exchange Debentures in an exchange in connection with the Exchange Offer pursuant to the Debenture Exchange and Registration Rights Agreement; (K) after an Event of Default (other than under paragraph (b), (c), (d) or (e) of the definition of such term if such Event of Default is by or with respect to the Property Trustee), the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder) and, within 90 days after the occurrence of any Event of Default actually known to an officer of the Property Trustee assigned to its Corporate Trust Office, to give notice thereof to the Securityholders; and (L) except as otherwise provided in this Section 2.7(a)(ii), or in the Trust Indenture Act (regardless of whether applicable or not), the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Administrative Trustees set forth in Section 2.7(a)(i). (b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees on behalf of the Trust shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would cause the Trust to fail or cease to qualify as a "grantor trust" for United States federal income tax purposes, (iv) incur any indebtedness for borrowed money or issue any other debt or (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Administrative Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders. (c) In connection with the issuance and sale of the Capital Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in 20 furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) negotiation of the terms of, and the execution and delivery of, the Purchase Agreement providing for the sale of the Capital Securities; (ii) preparation of an application for designation of the Private Capital Securities for trading in the PORTAL Market at the time of issuance thereof; (iii) the preparation of an offering memorandum and the preparation and filing by the Trust with the Commission and the execution on behalf of the Trust of a registration statement on the appropriate form in relation to the Exchange Offer, including any amendments thereto and/or a "shelf" registration statement to register the Private Capital Securities, the Private Guarantee and the Private Debentures, in each case in accordance with the provisions of the Registration Rights Agreements; (iv) the determination of the states, if any, in which to take appropriate action to qualify or register for sale all or part of the Capital Securities and the Guarantee and the determination of any and all such acts, other than actions which must be taken by or on behalf of the Trust, and the advice to the Trustees of actions they must take on behalf of the Trust, and the preparation for execution and filing of any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such state; and (v) any other actions necessary or desirable to carry out any of the foregoing activities. (d) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the 1940 Act or fail or cease to be classified as a grantor trust for United States federal income tax purposes and so that the Debentures will be treated as indebtedness of the Depositor for United States federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and any Administrative Trustee determines in its discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect in any material respect the interests of the Holders of the Capital Securities. 21 SECTION 2.8. Assets of Trust. The assets of the Trust shall consist of the Trust Property. SECTION 2.9. Title to Trust Property. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Trust and the Securityholders in accordance with this Trust Agreement. ARTICLE III. PAYMENT ACCOUNT SECTION 3.1. Payment Account. (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and any agent of the Property Trustee shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of or interest on, and any other payments or proceeds with respect to, the Debentures. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. ARTICLE IV. DISTRIBUTIONS; REDEMPTION SECTION 4.1. Distributions. (a) Distributions will be made on the Trust Securities at the rate and on the dates that payments of interest are made on the Debentures. Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there are funds of 22 the Trust available for the payment of Distributions. Distributions shall accumulate from January 1, 1997 and, except in the event (and to the extent) that the Depositor exercises its right to defer the payment of interest on the Debentures pursuant to the Indenture, shall be payable semiannually in arrears on January 1 and July 1 of each year, commencing on July 1, 1997. If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), in each case, with the same force and effect as if made on such date (each date on which Distributions are payable in accordance with this Section 4.1(a), a "Distribution Date"). (b) Assuming payments of interest on the Debentures are made when due and assuming compliance by the Depositor and the Trust with their obligations under the Capital Securities Exchange and Registration Rights Agreement (and before giving effect to any Additional Distributions, Special Distributions and Additional Tax Sums, if applicable), Distributions on the Trust Securities shall be payable at a rate of 8.205% per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for any full period shall be computed on the basis of a 360-day year of twelve 30-day months. The amount of Distributions for any partial period shall be computed on the basis of the number of days elapsed in a 360-day year of twelve 30-day months. The amount of Distributions payable for any period shall include the Additional Distributions, Special Distributions and Additional Tax Sums, if any. (c) Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account and shall be payable on each Distribution Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Distributions. (d) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be the 15th day of the month immediately prior to the month in which the relevant Distribution Date occurs. SECTION 4.2. Redemption. (a) On each Debenture Prepayment Date and on the stated maturity of the Debentures, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. 23 (b) Notice of redemption shall be given by the Property Trustee by first- class mail, postage prepaid, mailed not less than 15 nor more than 60 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register. All notices of redemption shall state: (i) the Redemption Date; (ii) the Redemption Price, or if the Redemption Price cannot be calculated prior to the time the notice of redemption is required to be sent, the manner of calculation thereof; (iii) the CUSIP number; (iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total Liquidation Amount of the particular Trust Securities to be redeemed; and (v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accumulate on and after said date. (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Debentures. Redemptions of the Trust Securities shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds then on hand and available in the Payment Account for the payment of such Redemption Price. (d) If the Property Trustee gives a notice of redemption in respect of any Capital Securities, then, by 10:00 a.m., New York City time, on the Redemption Date, the Depositor shall deposit sufficient funds with the Property Trustee to pay the Redemption Price. If such deposit has been made, then, by 12:00 noon, New York City time, on the Redemption Date, subject to Section 4.2(c), the Property Trustee will, with respect to Capital Securities evidenced by one or more Global Capital Securities Certificates, irrevocably deposit with the Clearing Agency for such Capital Securities funds sufficient to pay the applicable Redemption Price and will give such Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the Holders thereof. With respect to Capital Securities evidenced by one or more Definitive Capital Securities Certificates, the Property Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay 24 the Redemption Price with respect to such Capital Securities to the Holders thereof upon surrender of their Definitive Capital Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price and any Distribution payable on or prior to the Redemption Date, but without interest, and such Trust Securities will cease to be outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust Securities will continue to accumulate, at the then applicable rate, from the Redemption Date originally established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the Redemption Price. (e) Payment of the Redemption Price on the Trust Securities shall be made to the Holders thereof as they appear on the Securities Register for the Trust Securities on a date to be established as the record date for the distribution by the Property Trustee, which date shall be not more than 45 days nor less than 15 days prior to the relevant Redemption Date. (f) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated on a pro rata basis (based on Liquidation Amounts) among the Common Securities and the Capital Securities. The particular Capital Securities to be redeemed shall be selected not less than 15 nor more than 60 days prior to the Redemption Date by the Property Trustee from the Outstanding Capital Securities not previously called for redemption, by such method (including, without limitation, on a pro rata basis or by lot) as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions 25 (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of the Liquidation Amount of Capital Securities of a denomination larger than $1,000; provided, however, that redemption must be pro rata on the basis of the Outstanding Capital Securities held by each Holder unless the Property Trustee advised by Opinion of Counsel determines that non-pro rata redemption will not cause the Trust to fail or cease to be classified as a grantor trust for United States federal income tax purposes or, if the Trust might fail or cease to be classified as a grantor trust, will not cause the Trust to be classified as an association taxable as a corporation for United States federal income tax purposes. In any such proration the Property Trustee may make such adjustments so that any Capital Security to be redeemed shall, after such redemption, be in an authorized denomination, subject to Section 5.4(b). The Property Trustee shall promptly notify the Securities Registrar in writing of the Capital Securities selected for redemption and, in the case of any Capital Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Capital Securities shall relate, in the case of any Capital Securities redeemed or to be redeemed only in part, to the portion of the Liquidation Amount of Capital Securities that has been or is to be redeemed. SECTION 4.3. Subordination of Common Securities. (a) Payment of Distributions on, and the Redemption Price of, the Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro rata among the Common Securities and the Capital Securities based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date or Redemption Date any Event of Default resulting from a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution on, or the Redemption Price of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all Outstanding Capital Securities for all Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Capital Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions on, or the Redemption Price of, Capital Securities then due and payable. 26 (b) In the case of the occurrence of any Event of Default resulting from any Debenture Event of Default, the Holder of Common Securities will be deemed to have waived any right to act with respect to any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Capital Securities have been cured, waived or otherwise eliminated. Until any such Event of Default under this Trust Agreement with respect to the Capital Securities has been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Holders of the Capital Securities and not the Holder of the Common Securities, and only the Holders of the Capital Securities will have the right to direct the Property Trustee to act on their behalf. SECTION 4.4. Payment Procedures. Payments of Distributions in respect of the Capital Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if the Capital Securities are held by a Clearing Agency, such Distributions shall be made in immediately available funds to the Clearing Agency, which shall credit the relevant Persons' accounts at such Clearing Agency on the applicable Distribution Dates. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Common Securityholder. SECTION 4.5. Tax Returns and Reports. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and file all United States federal, State and local tax and information returns and reports required to be filed by or in respect of the Trust. In this regard, the Administrative Trustees shall (a) prepare and file (or cause to be prepared and filed) the appropriate Internal Revenue Service Form required to be filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be prepared and furnished) to each Securityholder the appropriate Internal Revenue Service form required to be provided on such form. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing. The Trustees shall comply with United States federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Securityholders under the Trust Securities. 27 SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust. Upon receipt under the Debentures of Additional Sums and the written direction of any of the Administrative Trustees, the Property Trustee shall promptly pay, solely out of monies on deposit pursuant to this Trust Agreement, any taxes, duties or governmental charges of whatsoever nature (other than withholding taxes) imposed on the Trust by the United States or any other taxing authority. SECTION 4.7. Reduction for Payments under Indenture or Pursuant to Direct Actions. Any amount payable hereunder to any Holder of Capital Securities shall be reduced by the amount of any corresponding payment such Holder (or an Owner with respect to the Holder's Capital Securities) has directly received pursuant to Section 6.05 of the Indenture or Section 5.14 of this Trust Agreement. Notwithstanding any such payments, the Depositor shall remain obligated to pay the principal of or interest on the Debentures and the Depositor shall be subrogated to the rights of the Holder (and Owner) of such Capital Securities with respect to payments on the Capital Securities to the extent of any payments made by the Depositor to such Holder (and Owner) pursuant to either of such Sections. ARTICLE V. TRUST SECURITIES CERTIFICATES SECTION 5.1. Initial Ownership. Upon the creation of the Trust and the contribution by the Depositor referred to Section 2.3 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust. SECTION 5.2. The Trust Securities Certificates; Execution and Delivery Thereof. The Capital Securities Certificates shall be issued in denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in excess thereof (subject to Section 5.4(b)), and the Common Securities Certificates shall be issued in denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in excess thereof. The Trust Securities Certificates shall be 28 executed on behalf of the Trust by manual signature of at least one Administrative Trustee. Trust Securities Certificates bearing the manual signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11 and 5.13. At the Closing Date, the Administrative Trustees, or any of them, shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or upon the written order of the Depositor, signed by its Chairman of the Board, any Vice Chairman of the Board, its President, any Vice President, its Treasurer or any Assistant Treasurer or its Controller, without further corporate action by the Depositor, in authorized denominations. SECTION 5.3. Form of Trust Securities Certificates. (a) A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate. (b) Capital Securities offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Capital Securities, substantially in the form of Exhibit B (a "144A Global Security") deposited with the Clearing Agency or the Property Trustee as custodian for the Clearing Agency. Transfers of beneficial interests in the 144A Global Security will be subject to the restrictions on transfer contained in the Private Placement Legend and the Minimum Transfer Legend. Transfers of beneficial interests in the 144A Global Security will be made in accordance with the standing instructions and procedures of the Clearing Agency. (c) Capital Securities offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more permanent global Capital Securities, substantially in the form of Exhibit C (a "Regulation S Global Security") deposited with the Clearing Agency or the Property 29 Trustee as custodian for the Clearing Agency. Prior to the expiration of the Restricted Period, interests in the Regulation S Global Security may only be held by Clearing Agency Participants in the name of a nominee of Euroclear and Cedel. After the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Security will not be subject to any restrictions other than the restrictions contained in the Minimum Transfer Legend. After the expiration of the Restricted Period, beneficial interests in the Regulation S Global Security may be held by Clearing Agency Participants other than in the name of a nominee of Euroclear and Cedel. Transfers of beneficial interests in the Regulation S Global Security will be made in accordance with the standing instructions and procedures of the Clearing Agency. (d) Capital Securities offered and sold to Institutional Accredited Investors in reliance on Regulation D under the Securities Act shall be issued initially in the form of one or more Definitive Capital Securities Certificate, substantially in the form of Exhibit D. Transfers of Definitive Capital Securities Certificates will be subject to the Private Placement Legend, the Minimum Transfer Legend and the requirements contained in Section 5.11(d)(1) or 5.11(d)(2). (e) All Trust Securities shall be dated the date of their execution. (f) Exchange Capital Securities shall be issued in global form deposited with the Property Trustee as custodian for the Clearing Agency or in such other form as the Administrative Trustees may direct and will bear the Minimum Transfer Legend. SECTION 5.4. Registration of Transfer and Exchange of Capital Securities Certificates. (a) (i) The Depositor shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.8, a register for the purpose of registering Trust Securities Certificates and transfers and exchanges of Capital Securities Certificates (the "Securities Register") in which the registrar designated by the Depositor (the "Securities Registrar"), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Capital Securities Certificates and Common Securities Certificates and registration of transfers and exchanges of Capital Securities Certificates, subject to Section 5.4(b), Section 5.10, Section 5.11 and as may otherwise be provided herein. The Bank shall be the initial Securities Registrar. The Securities Registrar shall not be required to register the transfer or exchange of any Capital Securities (x) during a period beginning at 30 the opening of business 15 days before the day of the mailing of a notice of redemption of Capital Securities and ending at the close of business on the day of such mailing or (y) that have been selected for redemption in whole or in part, except the unredeemed portion of any Capital Security redeemed in part. (ii) Upon surrender for registration of transfer of any Capital Securities Certificate at the office or agency maintained pursuant to Section 5.8 and subject to compliance with Section 5.4(b) and Section 5.11, the Administrative Trustees or any one of them shall execute and deliver, in the name of the designated transferee or transferees, one or more new Capital Securities Certificates in authorized denominations of a like aggregate Liquidation Amount dated the date of execution by such Administrative Trustee or Trustees. Subject to Section 5.11, at the option of a Holder, Capital Securities Certificates may be exchanged for other Capital Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Capital Securities Certificates to be exchanged at the office or agency maintained pursuant to Section 5.8. (iii) Every Capital Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to an Administrative Trustee and the Securities Registrar duly executed by the Holder or his attorney duly authorized in writing. Each Capital Securities Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by an Administrative Trustee or the Securities Registrar in accordance with such Person's customary practice; provided that no exchanges of Private Capital Securities for Exchange Capital Securities shall occur until a registration statement shall have been declared effective by the Commission and that any Capital Securities that are exchanged for Exchange Capital Securities shall be canceled by the Property Trustee. (iv) No service charge shall be made for any registration of transfer or exchange of Capital Securities Certificates, but the Securities Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Capital Securities Certificates. (b) The Capital Securities (which includes both the Private Capital Securities and the Exchange Capital Securities) will be issued, and may be transferred, only in blocks having a Liquidation 31 Amount of not less than $100,000 (100 Capital Securities). Any transfer, sale or other disposition of Capital Securities in a block having a Liquidation Amount of less than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any such transferee shall be deemed not to be the Owner or Holder of such Capital Securities for any purpose, including but not limited to the receipt of Distributions on such Capital Securities, and such transferee shall be deemed to have no interest whatsoever in such Capital Securities. All Capital Securities (including the Exchange Capital Securities) will bear the Minimum Transfer Legend. SECTION 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates. If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust shall execute and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the Trust Property, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time. SECTION 5.6. Persons Deemed Securityholders. The Trustees or the Securities Registrar shall treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever (subject to the record date provisions hereof), and neither the Trustees nor the Securities Registrar shall be bound by any notice to the contrary. 32 SECTION 5.7. Access to List of Securityholders' Names and Addresses. At any time when the Property Trustee is not also acting as the Securities Registrar, the Depositor shall furnish or cause to be furnished to the Property Trustee promptly after receipt by an Administrative Trustee of a request therefor from the Property Trustee in writing, a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Securityholders as of the most recent record date. The rights of Securityholders to communicate with other Securityholders with respect to their rights under this Trust Agreement or under the Trust Securities, and the corresponding obligations and rights of the Property Trustee, shall be as provided in the Trust Indenture Act. Each Holder, by receiving and holding a Trust Securities Certificate, and each Owner shall be deemed to have agreed not to hold the Depositor, the Property Trustee or the Administrative Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. SECTION 5.8. Maintenance of Office or Agency for Transfers. The Administrative Trustees shall maintain an office or offices or agency or agencies where Capital Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trustees in respect of the Trust Securities Certificates may be served. The Administrative Trustees initially designate The Bank of New York, 101 Barclay Street, New York, New York 10286, Attn: Corporate Trust Trustee Administration, as the principal corporate trust office for such purposes. The Administrative Trustees shall give prompt written notice to the Depositor and to the Securityholders of any change in the location of the Securities Register or any such office or agency. SECTION 5.9. Appointment of Paying Agent. The Paying Agent shall make Distributions to Securityholders from the Payment Account and shall report the amounts of such Distributions to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the Distributions referred to above. The Administrative Trustees may revoke such power and remove the Paying Agent if such Trustees determine in their sole discretion that the Paying Agent shall have failed to perform its obligations under this Trust Agreement in any material respect. The Paying Agent shall initially be the Bank, 33 and any co-paying agent chosen by the Bank, and acceptable to the Administrative Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees, the Property Trustee and the Depositor. In the event that the Bank shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Administrative Trustees shall appoint a successor that is acceptable to the Property Trustee and the Depositor to act as Paying Agent (which shall be a bank or trust company). The Administrative Trustees shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.2, 8.4 and 8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long as the Bank shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. SECTION 5.10. Ownership of Common Securities by Depositor. At the Closing Date, the Depositor shall acquire and retain beneficial and record ownership of the Common Securities. To the fullest extent permitted by law, other than a transfer in connection with a consolidation, conversion or merger of the Depositor into another Person, or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person, pursuant to Article Eleven of the Indenture, any attempted transfer of the Common Securities shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE." SECTION 5.11. Book-Entry Interests. (a) So long as the Private Capital Securities are eligible for book-entry settlement in the Clearing Agency or unless otherwise required by law, all Private Capital Securities that are so eligible will be represented by one or more Global Capital 34 Securities Certificates deposited with the Clearing Agency or the Property Trustee as custodian for the Clearing Agency, by, or on behalf of, the Trust. No Owner of a beneficial interest in a Global Capital Securities Certificate will receive a Definitive Capital Securities Certificate representing such Owner's beneficial interest in the Private Capital Securities, except as provided in Section 5.11(f) below; provided, however, that the Trust shall issue a Definitive Capital Securities Certificate upon any transfer of a beneficial interest in a Global Capital Security to the Company or an Affiliate of the Company and no Definitive Capital Securities Certificate, or portion thereof, in respect of which the Company or an Affiliate of the Company held any beneficial interest shall be resold, retransferred or included in any Global Capital Security until such Private Capital Security is freely tradeable in accordance with Rule 144(k) or exchanged for an Exchange Capital Security. (b) 144A Global Securities shall initially be registered in the name of a nominee of the Clearing Agency and Regulation S Global Securities shall initially be registered in the name of a nominee for the Clearing Agency for the accounts of Euroclear and Cedel. (c) Transfers of interests in Private Capital Securities between any 144A Global Security and any Regulation S Global Security will be made in accordance with this Trust Agreement (including Section 5.11(d)(3)and (4), as applicable) and in accordance with the standing instructions and procedures of the Clearing Agency. The Property Trustee shall make appropriate endorsements to reflect increases or decreases in the amount of such Global Capital Securities. (d) Unless and until the earlier of (i) the date upon which Private Capital Securities are exchanged for Exchange Capital Securities in connection with an effective registration statement pursuant to the Capital Securities Exchange and Registration Rights Agreement or (ii) the Transfer Restriction Termination Date: (1) Definitive to Definitive Transfers. Any transfer of a Definitive Capital Securities Certificate shall be registered on the Securities Register only upon receipt by the Property Trustee of such Definitive Capital Securities Certificate accompanied by a duly completed and executed assignment in the form attached to Exhibit D and, in the case of a transfer to an Institutional Accredited Investor, upon receipt by the Property Trustee of a written certificate in the form of Exhibit F (or other certificates, legal opinions or other information as the Depositor may reasonably request 35 to confirm that such transfer is exempt from the registration requirements of the Securities Act); (2) Definitive into a Global Capital Security. So long as Private Capital Securities are eligible for book-entry settlement with the Clearing Agency or unless otherwise required by law, upon any transfer of a Definitive Capital Securities Certificate to a QIB in accordance with Rule 144A or to a non-U.S. Person in accordance with Regulation S, and upon receipt of the Definitive Capital Securities Certificate being so transferred accompanied by a duly completed and executed assignment in the form attached to Exhibit D, the Property Trustee on behalf of the Trust shall make an endorsement on any 144A Global Security or any Regulation S Global Security, as the case may be, to reflect an increase in such Global Capital Security and the Property Trustee, on behalf of the Trust, shall cancel such Definitive Capital Securities Certificate. (3) 144A Global Security into Regulation S Global Security. Any transfer in accordance with Rule 904 of Regulation S of a beneficial interest in a 144A Global Security shall be reflected by an increase in the Regulation S Global Security and a corresponding decrease in the 144A Global Security only upon receipt by the Trustee of a written certificate in the form of Exhibit G (or such other certifications, legal opinions or other information as the Depositor may reasonably require to confirm that such transfer is being made pursuant to Rule 904); and (4) Regulation S Global Security into 144A Global Security. Any transfer of a beneficial interest in a Regulation S Global Security to a transferee that takes delivery in the form of a beneficial interest in the 144A Global Security shall be reflected by an increase in the 144A Global Security and a corresponding decrease in the Regulation S Global Security and, prior to the expiration of the Restricted Period, only upon receipt by the Property Trustee of a written certificate in the form of Exhibit H (or such other certifications, legal opinions or other information as the Depositor may reasonably require). (e) Any Global Capital Security may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Trust Agreement as may be required by the Clearing Agency, by any national securities exchange or by the National Association of Securities Dealers, Inc. in order for the Private Capital 36 Securities to be tradeable on the PORTAL Market or as may be required for the Private Capital Securities to be tradeable on any other market developed for trading of securities pursuant to Rule 144A or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Capital Securities may be listed or traded or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Capital Securities are subject. (f) Notwithstanding any other provisions of this Trust Agreement (other than the provisions set forth in this Section 5.11(f)), a Global Capital Security may not be exchanged in whole or in part for Definitive Capital Securities Certificates, and no transfer of a Global Capital Security may be registered, in the name of any Person other than the Clearing Agency or a nominee thereof unless (i) such Clearing Agency (A) has notified the Property Trustee and the Depositor that it is unwilling or unable to continue as Clearing Agency for such Global Capital Security or (B) has ceased to be a clearing agency registered as such under the Exchange Act and no successor Clearing Agency has been appointed by the Depositor within 90 days after its receipt of such notice or its becoming aware of such cessation of registration, (ii) there shall have occurred and be continuing an Event of Default, or any event which after notice or lapse of time or both would be an Event of Default under the Trust Agreement, with respect to such Capital Security or (iii) the Depositor instructs the Property Trustee to exchange such Global Capital Security for Definitive Capital Securities Certificates. (g) Unless and until Definitive Capital Securities Certificates have been issued to Owners pursuant to Section 5.13, the following provisions of this Section 5.11(g) shall be in full force and effect: (i) the Securities Registrar and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Global Capital Securities (including the payment of the Liquidation Amount of and Distributions on the Capital Securities evidenced by Global Capital Securities Certificates and the giving of instructions or directions to Owners of Capital Securities evidenced by Global Capital Securities) as the sole Holder of Capital Securities evidenced by Global Capital Securities and shall have no obligations to the Owners thereof; and (ii) the rights of the Owners of the Global Capital Securities shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such 37 Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Certificate Depository Agreement, unless and until Definitive Capital Securities Certificates are issued pursuant to this Section 5.11 or Section 5.13, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Capital Securities to such Clearing Agency Participants. (h) The Administrative Trustees shall inform the Property Trustee in writing of the effective date of any registration statement registering the Exchange Capital Securities under the Securities Act. Upon the receipt of a certificate from the Administrative Trustees, the Property Trustee will take such actions as shall be necessary to effectuate the exchange any of the Private Capital Securities for Exchange Capital Securities, including but not limited to the issuance of Exchange Capital Securities in the form requested by the Administrative Trustees, the entry of decreases in the Regulation S Global Security and the 144A Global Security or, if applicable, the cancellation of Definitive Capital Securities Certificates. SECTION 5.12. Notices to Clearing Agency. To the extent that a notice or other communication to the Owners is required under this Trust Agreement, unless and until Definitive Capital Securities Certificates shall have been issued to Owners pursuant to Section 5.13, the Trustees shall give all such notices and communications specified herein to be given to Owners to the Clearing Agency, and shall have no obligations to the Owners. SECTION 5.13. Procedures for Issuance of Definitive Capital Securities Certificates. Upon surrender to the Securities Registrar of the typewritten Capital Securities Certificate or Certificates representing the Global Capital Securities Certificates by the Clearing Agency upon occurrence of any of the events described in Section 5.11(f), accompanied by registration instructions, the Administrative Trustees, or any one of them, shall execute and the Securities Registrar shall register the Definitive Capital Securities Certificates in accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Capital Securities Certificates, the Trustees shall recognize the Holders of the Definitive Capital Securities Certificates as Securityholders. The 38 Definitive Capital Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees or any one of them. SECTION 5.14. Rights of Securityholders. (a) The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.9, and the Securityholders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or similar rights. When issued and delivered to Securityholders against payment of the purchase price therefor, the Capital Securities will be fully paid and nonassessable undivided beneficial interests in the Trust Property. The Holders of the Capital Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. (b) For so long as any Capital Securities remain Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails or the Holders of not less than 25% in principal amount of the outstanding Debentures fail to declare the principal of all of the Debentures to be immediately due and payable, the Holders of at least 25% in Liquidation Amount of the Capital Securities then Outstanding shall have such right by a notice in writing to the Depositor and the Debenture Trustee; and upon any such declaration such principal amount of and the accrued interest on all of the Debentures shall become immediately due and payable, provided that the payment of principal and interest on such Debentures shall remain subordinated to the extent provided in the Indenture. At any time after such a declaration of acceleration with respect to the Debentures has been made and before a judgment or decree for payment of the money due has been obtained by the Debenture Trustee as provided in the Indenture, the Holders of a majority in Liquidation Amount of the Capital Securities, by written notice to the Property Trustee, the Depositor and the Debenture Trustee, may rescind and annul such declaration and its consequences if: 39 (i) the Depositor has paid or deposited with the Debenture Trustee a sum sufficient to pay (A) all overdue installments of interest (including any Additional Interest, as defined in the Indenture) on all of the Debentures, (B) the principal of (and premium, if any, on) any Debentures which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Debentures, and (C) all sums paid or advanced by the Debenture Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Debenture Trustee and the Property Trustee, their agents and counsel and all amounts payable to the Debenture Trustee under Section 7.06 of the Indenture; and (ii) all Debenture Events of Default, other than the non-payment of the principal of the Debentures which has become due solely by such acceleration, have been cured or waived as provided in Article Six of the Indenture. The holders of a majority in aggregate Liquidation Amount of the Capital Securities may, on behalf of the Holders of all the Capital Securities, waive any past default under the Indenture, except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Debenture. No such rescission shall affect any subsequent default or impair any right consequent thereon. Upon receipt by the Property Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, by Holders of the Capital Securities all or part of which are represented by Book-Entry Capital Securities Certificates, a record date shall be established for determining Holders of Outstanding Capital Securities entitled to join in such notice, which record date shall be at the close of business on the day the Property Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is 90 days after such record date, such notice of declaration of acceleration, or rescission and 40 annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 5.14(b). (c) For so long as any Capital Securities remain Outstanding, to the fullest extent permitted by law and subject to the terms of this Trust Agreement and the Indenture, upon a Debenture Event of Default specified in Section 6.01(a) or 6.01(b) of the Indenture, any Holder of Capital Securities shall have the right to institute a proceeding directly against the Depositor, pursuant to Article Six of the Indenture, for enforcement of payment to such Holder of the principal amount of or interest on Debentures having a principal amount equal to the Liquidation Amount of the Capital Securities of such Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this Section 5.14(c), the Holders of Capital Securities shall have no right to exercise directly any right or remedy available to the holders of, or in respect of, the Debentures. The Holders of a majority in Liquidation Amount of the Capital Securities at the time Outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred on the Property Trustee with respect to such Capital Securities; provided, however, that the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee being advised by Opinion of Counsel determines that the action so directed may not lawfully be taken, or if the Property Trustee in good faith shall determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders of Capital Securities not parties to such direction, and provided further that nothing in the Trust Agreement shall impair the right of the Property Trustee to take any action deemed proper by the Property Trustee and which is not inconsistent with such direction by such Securityholders. 41 ARTICLE VI. ACTS OF SECURITYHOLDERS; MEETINGS; VOTING SECTION 6.1. Limitations on Voting Rights. (a) Except as provided in this Section, in Sections 5.14, 8.10 and 10.2 and in the Indenture and as otherwise required by law, no Holder of Capital Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association. (b) So long as any Debentures are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or executing any trust or power conferred on the Debenture Trustee with respect to such Debentures, (ii) waive any past default which is waivable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture or the Debentures, where the consent of the holders of Debentures shall be required, without, in each case, obtaining the prior approval of the Holders of at least a majority in Liquidation Amount of all Outstanding Capital Securities; provided, however, that where a consent under the Indenture would require the consent of each holder of Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Holder of Capital Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Holders of Capital Securities, except by a subsequent vote of the Holders of Capital Securities. Subject to Section 8.3, the Property Trustee shall notify all Holders of the Capital Securities of any notice of default received from the Debenture Trustee with respect to the Debentures. In addition to obtaining the foregoing approvals of the Holders of the Capital Securities, prior to taking any of the foregoing actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel to the effect that such action shall not cause the Trust to fail or cease to be classified as a grantor trust for United States federal income tax purposes. (c) If any proposed amendment to this Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any 42 action that would adversely affect in any material respect the powers, preferences or special rights of the Capital Securities, whether by way of amendment to this Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Capital Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least a majority in Liquidation Amount of the Outstanding Capital Securities, except as otherwise provided in Section 10.2(c). Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, it would cause the Trust to fail or cease to be classified as a grantor trust for United States Federal income tax purposes. SECTION 6.2. Notice of Meetings. Notice of all meetings of the Capital Securityholders, stating the time, place and purpose of the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to each Capital Securityholder of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. SECTION 6.3. Meetings of Capital Securityholders. No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Capital Securityholders to vote on any matter upon the written request of the Capital Securityholders of record of 25% of the Capital Securities (based upon their Liquidation Amount) and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Capital Securityholders to vote on any matters as to which Capital Securityholders are entitled to vote. Capital Securityholders of record of 50% of the Outstanding Capital Securities (based upon their Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Capital Securityholders. If a quorum is present at a meeting, an affirmative vote by the Capital Securityholders of record present, in person or by proxy, holding more than a majority of the Capital Securities (based upon their Liquidation Amount) held by the Capital 43 Securityholders of record present, either in person or by proxy, at such meeting shall constitute the action of the Capital Securityholders, unless this Trust Agreement requires a greater number of affirmative votes. SECTION 6.4. Voting Rights. Securityholders shall be entitled to one vote for each $1,000 of Liquidation Amount represented by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote. SECTION 6.5. Proxies, etc. At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution. SECTION 6.6. Securityholder Action by Written Consent. Any action that may be taken by Securityholders at a meeting may be taken without a meeting if Securityholders holding more than a majority of all Outstanding Trust Securities (based upon their Liquidation Amount) entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing. 44 SECTION 6.7. Record Date for Voting and Other Purposes. For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any Distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders or the payment of a Distribution or other action, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes. SECTION 6.8. Acts of Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to an Administrative Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.2) conclusive in favor of the Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Trustee receiving the same deems sufficient. The ownership of Capital Securities shall be proved by the Securities Register. 45 Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise between the Securityholders and the Administrative Trustees or among such Securityholders or Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. SECTION 6.9. Inspection of Records. Upon reasonable notice to the Administrative Trustees and the Property Trustee, the records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder. ARTICLE VII. REPRESENTATIONS AND WARRANTIES SECTION 7.1. Representations and Warranties of the Bank, the Property Trustee and the Delaware Trustee. The initial Property Trustee and the initial Delaware Trustee, each severally on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Securityholders that: (a) the Property Trustee is a New York banking corporation; 46 (b) the Property Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) the Delaware Trustee is a Delaware banking corporation duly organized, validly existing and in good standing with its principal place of business in the State of Delaware; (d) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (e) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and the Delaware Trustee and constitutes the valid and legally binding agreement of each of the Property Trustee and the Delaware Trustee enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (f) the execution, delivery and performance of this Trust Agreement have been duly authorized by all necessary corporate or other action on the part of the Property Trustee and the Delaware Trustee and do not require any approval of stockholders of the Property Trustee and the Delaware Trustee and such execution, delivery and performance will not (i) violate the charter or By-laws of the Property Trustee or the Delaware Trustee, (ii) violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of, any Lien on any properties included in the Trust Property pursuant to the provisions of, any indenture, mortgage, credit agreement, license or other agreement or instrument to which the Property Trustee or the Delaware Trustee is a party or by which it is bound, or (iii) violate any law, governmental rule or regulation of the United States or the State of Delaware, as the case may be, governing the banking, trust or general powers of the Property Trustee or the Delaware Trustee (as appropriate in context) or any order, judgment or decree applicable to the Property Trustee or the Delaware Trustee; (g) neither the authorization, execution or delivery by the Property Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of any of the transactions by the Property Trustee or the Delaware Trustee (as appropriate in context) 47 contemplated herein requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing Federal law governing the banking, trust or general powers of the Property Trustee or the Delaware Trustee, as the case may be, under the laws of the United States, the State of Delaware or the State of New York; and (h) there are no proceedings pending or, to the best of each of the Property Trustee's and the Delaware Trustee's knowledge, threatened against or affecting the Property Trustee or the Delaware Trustee in any court or before any governmental authority, agency or arbitration board or tribunal which, individually or in the aggregate, would materially and adversely affect the Trust or would question the right, power and authority of the Property Trustee or the Delaware Trustee, as the case may be, to enter into or perform its obligations as one of the Trustees under this Trust Agreement. Any successor Property Trustee and Delaware Trustee shall make similar representations and warranties as contained in this Section 7.1 for the benefit of the Depositor and the Securityholders. SECTION 7.2. Representations and Warranties of Depositor. The Depositor hereby represents and warrants for the benefit of the Securityholders that: (a) the Trust Securities Certificates issued at the Closing Date on behalf of the Trust have been duly authorized and will have been duly and validly executed, issued and delivered by the Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement and the Securityholders will be, as of each such date, entitled to the benefits of this Trust Agreement; and (b) there are no taxes, fees or other governmental charges payable by the Trust (or the Trustees on behalf of the Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with the execution, delivery and performance by the Property Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement. 48 ARTICLE VIII. THE TRUSTEES SECTION 8.1. Corporate Property Trustee Required; Eligibility of Trustees. (a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or the requirements of its supervising or examining authority, then, for the purposes of this Section 8.1(a), the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. (b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind that entity. No natural person shall be eligible to act as an Administrative Trustee hereunder unless such person is an employee or officer of, or affiliated with, the Depositor. (c) There shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware and that otherwise meets the requirements of applicable Delaware law that shall act through one or more persons authorized to bind such entity. SECTION 8.2. Certain Duties and Responsibilities. (a) The duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in the case of the Property Trustee, by the Trust Indenture Act, and no implied covenants or obligations shall be read into this Trust Agreement against the Property Trustee. Notwithstanding the foregoing, no provision of this Trust Agreement shall require the Trustees to 49 expend or risk their own funds or otherwise incur any financial liability in the performance of any of their duties hereunder, or in the exercise of any of their rights or powers, if they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section. Nothing in this Trust Agreement shall be construed to release an Administrative Trustee or the Delaware Trustee from liability for his or its own negligence or willful misconduct. To the extent that, at law or in equity, an Administrative Trustee or the Delaware Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust, to any other trustee or to the Securityholders, such Administrative Trustee or the Delaware Trustee shall not be liable to the Trust, to any other trustee or to any Securityholder for such Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Administrative Trustees otherwise existing at law or in equity, are agreed by the Depositor, the Trustees and the Securityholders to replace such other duties and liabilities of the Administrative Trustees and the Delaware Trustee. (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.2(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. (c) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) the Property Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the 50 Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (ii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in Liquidation Amount of the Trust Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; (iii) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Payment Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust Indenture Act; (iv) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing with the Depositor; and money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law; and (v) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of the Administrative Trustees or the Depositor. SECTION 8.3. Certain Notices. Within 90 days after the occurrence of any Event of Default actually known to an officer of the Property Trustee assigned to its Corporate Trust Office, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such Event of Default to the Securityholders, the Administrative Trustees and the Depositor, unless such Event of Default shall have been cured or waived. Within five Business Days after the receipt of notice of the Depositor's exercise of its right to defer the payment of interest on the Debentures pursuant to the Indenture, the Administrative 51 Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such exercise to the Securityholders and the Property Trustee, unless such exercise shall have been revoked. SECTION 8.4 Certain Rights of Property Trustee. Subject to the provisions of Section 8.2: (a) the Property Trustee may rely and shall be fully protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (ii) in construing any of the provisions of this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Capital Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct; (c) any direction or act of the Depositor or the Administrative Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate; 52 (d) whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor or the Administrative Trustees; (e) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or reregistration thereof; (f) the Property Trustee may consult with counsel of its selection (which counsel may be counsel to the Depositor or any of its Affiliates, and may include any of its employees) and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance thereon and in accordance with such advice or opinion; the Property Trustee shall have the right at any time to seek instructions concerning the administration of the Trust or interpretation of this Trust Agreement from any court of competent jurisdiction; (g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust Agreement, unless such Securityholders shall have offered to the Property Trustee such adequate security or indemnity against the costs, expenses (including attorney's fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Property Trustee; (h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit; (i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys and the Property Trustee shall not be responsible for any misconduct or negligence on the 53 part of any agent or attorney appointed by it hereunder; provided, however, that the Property Trustee shall be responsible for its own negligence or recklessness with respect to the selection of any such agent or attorney appointed by it hereunder; (j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders of the Trust Securities which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in acting in accordance with such instructions; (k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement; and (l) the Property Trustee shall not be charged with knowledge of an Event of Default unless an officer of the Property Trustee assigned to its Corporate Trust Office obtains actual knowledge of such event or the Property Trustee receives written notice of such event from the Depositor, any other Trustee or Securityholders holding a majority or more of Capital Securities (based upon Liquidation Amount). No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty to act in accordance with such power and authority. SECTION 8.5. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. 54 The Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Debentures. SECTION 8.6. May Hold Securities. Any Trustee or any other agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13 and except as provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent. SECTION 8.7. Compensation; Indemnity; Fees. The Depositor agrees: (a) to pay to the Trustees from time to time such compensation as shall be agreed in writing between the Depositor and the Property Trustee for all services rendered by them hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence or bad faith; (c) to the fullest extent permitted by applicable law, to indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any officer, director, shareholder, employee, representative or agent of any Trustee, and (iv) any employee or agent of the Trust or its Affiliates (referred to herein as an "Indemnified Person") from and against any loss, damage, liability, tax, penalty, expense or claim of any kind or nature whatsoever incurred by such Indemnified Person by reason of the creation, operation or termination of the Trust or any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Trust Agreement, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of negligence or willful misconduct with respect to such acts or omissions; and 55 (d) to the fullest extent permitted by applicable law, to advance expenses (including legal fees and expenses) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding which expenses shall be advanced, from time to time, prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Depositor of (i) a written affirmation by or on behalf of the Indemnified Person of its or his good faith belief that it or he has met the standard of conduct set forth in this Section 8.7 and (ii) an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in the preceding subsection. The provisions of this Section 8.7 shall survive the termination of this Trust Agreement and the resignation or removal of any Trustee. No Trustee may claim any lien or charge on any Trust Property as a result of any amount due pursuant to this Section 8.7. The Depositor and any Trustee (in the case of the Property Trustee, subject to Section 8.8 hereof) may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders of Trust Securities shall have no rights by virtue of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or improper. Neither the Depositor, nor any Trustee, shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and the Depositor or any Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Trustee may engage or be interested in any financial or other transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Depositor or its Affiliates. SECTION 8.8 Conflicting Interests. If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to 56 the extent and in the manner provided by, and subject to the provisions of, the Trustee Indenture Act and this Trust Agreement. SECTION 8.9. Co-Trustees and Separate Trustee. Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of conforming to the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Depositor and the Administrative Trustees, except in such instances as set forth in the following sentence, by agreed action of the majority of such Trustees, shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to the extent required by law to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case a Debenture Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. Any co- trustee or separate trustee appointed pursuant to this Section shall either be (i) a natural person who is at least 21 years of age and a resident of the United States or (ii) a legal entity with its principal place of business in the United States that shall act through one or more persons authorized to bind such entity. Should any written instrument from the Depositor be required by any co- trustee or separate trustee so appointed for more fully confirming to such co- trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Depositor; provided, however, that, if a Debenture Event of Default shall have occurred and be continuing, the Property Trustee may execute any such instrument on behalf of the Depositor as its agent and attorney-in-fact therefor. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: 57 (a) The Trust Securities shall be executed and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees specified hereunder, shall be exercised, solely by such Trustees and not by such co-trustee or separate trustee. (b) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co- trustee or separate trustee. (c) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case a Debenture Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal; provided, however, that, if a Debenture Event of Default shall have occurred and be continuing, the Property Trustee may execute any such instruments or agreements on behalf of the Depositor as its agent and attorney- in-fact therefor. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section. (d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee or any other trustee hereunder. (e) The Property Trustee shall not be liable by reason of any act of a co- trustee or separate trustee. (f) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. 58 SECTION 8.10. Resignation and Removal; Appointment of Successor. No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 8.11. Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time by giving written notice thereof to the Securityholders and the Depositor. Upon giving such notice, a successor Relevant Trustee shall be appointed in accordance with the second succeeding paragraph. If a successor is not so appointed within a reasonable time not to exceed thirty days from the date of the Relevant Trustee's notice of resignation, or if for any reason the instrument of acceptance by the successor Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within thirty days after giving of such notice of resignation, the Relevant Trustee may petition, at the expense of the Trust, a court of competent jurisdiction in the State of Delaware to appoint a successor. Unless a Debenture Event of Default has occurred and is continuing, any Trustee may be removed for cause at any time by the Holder of the Common Securities. If a Debenture Event of Default has occurred and is continuing, the Property Trustee and the Delaware Trustee may be removed with or without cause at such time by Holders of a majority in Liquidation Amount of the Outstanding Capital Securities. In no event will the Holders of the Capital Securities have the right to vote to appoint, remove or replace the Administrative Trustees, which voting rights are vested exclusively in the Depositor, as Holder of the Common Securities. After removal by the Holders of a majority in Liquidation Amount of the Capital Securities, the successor to the Relevant Trustee may be appointed in accordance with the next paragraph. If a successor is not so appointed within a reasonable time not to exceed thirty days from the date of the Relevant Trustee's removal, or if for any reason the instrument of acceptance by the successor Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within thirty days of such removal, the Relevant Trustee may petition, at the expense of the Trust, a court of competent jurisdiction in the State of Delaware to appoint a successor. If any Trustee shall resign, be removed or become incapable of acting as Trustee, or if a vacancy shall occur in the office of any 59 Trustee for any cause, at a time when no Debenture Event of Default shall have occurred and be continuing, the Common Securityholder, by Act of the Common Securityholder delivered to the retiring Trustee, shall promptly appoint a successor Trustee or Trustees, and the retiring Trustee shall comply with the applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when a Debenture Event of Default shall have occurred and be continuing, the Capital Securityholders, by Act of the Securityholders of a majority in Liquidation Amount of the Capital Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor Trustee shall comply with the applicable requirements of Section 8.11. If an Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, the Common Securityholder by Act of the Common Securityholder delivered to the Administrative Trustee shall promptly appoint a successor Administrative Trustee or Administrative Trustees and such successor Administrative Trustee or Administrative Trustees shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Common Securityholder or the Capital Securityholders and accepted appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. The Property Trustee shall give notice of each resignation and each removal of a Trustee and each appointment of a successor Trustee to all Securityholders in the manner provided in Section 10.8 and shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee. Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (a) the unanimous act of remaining Administrative Trustees if there are at least two of them or (b) otherwise by the Depositor (with the successor in each case being a Person who satisfies the eligibility requirement for Administrative Trustees or Delaware Trustee, as the case may be, set forth in Section 8.1). 60 SECTION 8.11. Acceptance of Appointment by Successor. In case of the appointment hereunder of a successor Relevant Trustee, the successor Relevant Trustee shall execute and deliver an amendment hereto wherein such successor Relevant Trustee shall accept such appointment and which shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Trust. Upon the execution and delivery of such amendment, the resignation or removal of the Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance by any Person, shall become vested with the rights, powers, trusts and duties of the former Relevant Trustee; but, on request of the Trust or any successor Relevant Trustee such former Relevant Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Trust. Upon request of any such successor Relevant Trustee, the Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article. SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Property Trustee or the Delaware Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder, provided such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. 61 SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Trust or any other obligor upon the Trust Securities or the property of the Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions or other amounts due on the Trust Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions or such other amounts) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of any Distributions and other amounts owing and unpaid in respect of the Trust Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee under Section 8.7. Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding. 62 SECTION 8.14. Reports by Property Trustee. (a) Not later than July 15 of each year commencing July 15, 1997, the Property Trustee shall transmit to all Securityholders in accordance with Section 10.8, and to the Depositor, a brief report dated as of the immediately preceding December 31 concerning the Property Trustee and its actions under this Trust Agreement if and as may be required pursuant to Section 313(a) of the Trust Indenture Act. (b) In addition the Property Trustee shall transmit to Securityholders such other reports concerning the Property Trustee and its actions under this Trust Agreement as would be required pursuant to the Trust Indenture Act were this Trust Agreement to be qualified under the Trust Indenture Act at the times and in the manner provided pursuant thereto. (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with any interdealer quotation system or self-regulatory organization upon which the Trust Securities are designated for trading, with the Commission and with the Depositor. SECTION 8.15. Reports to the Property Trustee. The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, such compliance certificate to be delivered annually on or before September 15 of each year beginning in 1997. SECTION 8.16. Evidence of Compliance with Conditions Precedent. Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers' Certificate. 63 SECTION 8.17. Number of Trustees. (a) The number of Trustees shall be five, provided that the Holder of all of the Common Securities by written instrument may increase or decrease the number of Administrative Trustees. The Property Trustee and the Delaware Trustee may be the same Person. (b) If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with the provisions of Section 8.10 relating to appointment of a successor Trustee upon resignation of a Trustee. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all duties imposed upon the Administrative Trustees by this Trust Agreement. SECTION 8.18. Delegation of Power. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 2.7(a) or making any other governmental filing; and (b) The Administrative Trustees shall have power to delegate from time to time to such of their number or to the Depositor the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement, as set forth herein. 64 ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER SECTION 9.1. Termination Upon Expiration Date. Unless earlier terminated, the Trust shall automatically terminate on January 1, 2028 (the "Expiration Date"), following the distribution of the Trust Property in accordance with Section 9.4. SECTION 9.2. Early Termination. The first to occur of any of the following events is an "Early Termination Event": (a) the commencement by the Depositor of a voluntary case under Chapter 7 or Chapter 8 of the federal Bankruptcy Code or any other similar state or federal law now or hereafter in effect, or the consent by the Depositor to the entry of a decree or order for relief in an involuntary case under any such law, or the consent by Aon Corporation to the appointment of a liquidating agent or committee, conservator or receiver; (b) the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the Depositor in an involuntary case under Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any other similar state or federal law now or hereafter in effect, and the continuance of any such decree or order unstayed and in effect for a period of 90 days, or the appointment of a liquidating agent or committee, conservator or receiver for Aon Corporation and the continuance of any such appointment unstayed and in effect for a period of 90 days; (c) the dissolution or liquidation of the Depositor; (d) the written direction to the Property Trustee from the Depositor at any time to dissolve the Trust and distribute Debentures to Securityholders in exchange for the Like Amount of the Trust Securities (which direction is optional and wholly within the discretion of the Depositor), subject to the Depositor having received an Opinion of Counsel to the effect that such distribution will not be a taxable event for United States federal income tax purposes to Holders of Capital Securities; (e) the redemption of all of the Capital Securities in connection with the redemption of all the Debentures; and 65 (f) the entry of an order for dissolution of the Trust by a court of competent jurisdiction. SECTION 9.3. Termination. The respective obligations and responsibilities of the Trustees and the Trust created and continued hereby shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.4, or upon the redemption of all of the Trust Securities pursuant to Section 4.2, of all amounts required to be distributed hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders. SECTION 9.4. Liquidation. (a) If an Early Termination Event specified in clause (a), (b), (c), (d) or (f) of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously as the Trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to each Securityholder a Like Amount of Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by the Property Trustee by first-class mail, postage prepaid mailed not later than 15 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation shall: (i) state the Liquidation Date; (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Debentures; and (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Debentures, or if Section 9.4(d) applies receive a Liquidation Distribution, as the Administrative Trustees or the Property Trustee shall deem appropriate. (b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Trust and distribution of the 66 Debentures to Securityholders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 45 days nor less than 15 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Debentures in exchange for the Outstanding Trust Securities Certificates. (c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Debentures will be issued to Holders of Trust Securities Certificates, upon surrender of such certificates to the Property Trustee or its agent for exchange, (iii) the Depositor shall use its reasonable efforts to have the Debentures listed on the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory organization as the Capital Securities are then listed, including PORTAL, (iv) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Debentures, accruing interest at the rate provided for in the Debentures from the last Distribution Date on which a Distribution was made on such Trust Securities Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates with respect to such Debentures) and (v) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive the Like Amount of Debentures upon surrender of Trust Securities Certificates. (d) In the event that, notwithstanding the other provisions of this Section 9.4, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Debentures in the manner provided herein is determined by the Property Trustee not to be practicable, the Trust Property shall be liquidated, and the Trust shall be dissolved, wound-up and terminated, by the Property Trustee in such manner as the Property Trustee determines. In such event, on the date of the dissolution of the Trust, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If, upon any such dissolution, winding up or termination, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable directly by 67 the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution, winding-up or termination pro rata (determined as aforesaid) with Holders of Capital Securities, except that, if a Debenture Event of Default has occurred and is continuing, the Capital Securities shall have a priority over the Common Securities. SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the Trust. The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any Person, except pursuant to this Article IX. At the request of the Depositor, with the consent of the Administrative Trustees and without the consent of the Holders of the Capital Securities, the Property Trustee or the Delaware Trustee, the Trust may merge with or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided, however, that (i) such successor entity either (a) expressly assumes all of the obligations of the Trust with respect to the Capital Securities or (b) substitutes for the Capital Securities other securities having substantially the same terms as the Capital Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Capital Securities rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of the Debentures, (iii) the Successor Securities are listed or traded, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Capital Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Capital Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Capital Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor has received an opinion of counsel from independent counsel to the 68 Trust experienced in such matters to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Capital Securities (including any Successor Securities) in any material respect, and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an investment company under the 1940 Act and (viii) the Depositor or any permitted successor or assignee owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of 100% in Liquidation Amount of the Capital Securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other Person or permit any other Person to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. ARTICLE X. MISCELLANEOUS PROVISIONS SECTION 10.1. Limitation of Rights of Securityholders to Terminate Trust. Subject to Section 9.2, the death, incapacity, dissolution, liquidation, termination or bankruptcy of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, dissolve, terminate or annul the Trust, nor entitle the legal representatives, successors or heirs of such Person or any Securityholder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. SECTION 10.2. Amendment. (a) This Trust Agreement may be amended from time to time by the Property Trustee, the Delaware Trustee, the Administrative Trustees and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement 69 any provision herein that may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will be classified for United States federal income tax purposes as a grantor trust at all times that any Trust Securities are outstanding or to ensure that the Trust will not be required to register as an investment company under the 1940 Act; provided, however, that any such action shall not adversely affect in any material respect the interests of any Securityholder or the Property Trustee or the Delaware Trustee, and any amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders or (iii) to provide the Property Trustee with the authority to execute on behalf of the Administrative Trustees Definitive Capital Securities Certificates. (b) Except as provided in Section 10.2(c) hereof, any provision of this Trust Agreement may be amended by the Trustees and the Depositor with (i) the consent of Trust Securityholders representing not less than a majority (based upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States federal income tax purposes or the Trust's exemption from status of an investment company under the 1940 Act. (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder (such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment on or after such date; notwithstanding any other provision herein, without the unanimous consent of the Securityholders (such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of this Section 10.2 may not be amended. (d) Notwithstanding any other provisions of this Trust Agreement, no Trustee shall enter into or consent to any amendment 70 to this Trust Agreement which would cause the Trust to fail or cease to qualify for the exemption from status of an investment company under the 1940 Act or fail or cease to be classified as a grantor trust for United States federal income tax purposes. (e) Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor, this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor. (f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment. (g) Neither the Property Trustee nor the Delaware Trustee shall be required to enter into any amendment to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The Property Trustee shall be entitled to receive an Opinion of Counsel and an Officers' Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement. SECTION 10.3. Separability. In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.4. Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES). SECTION 10.5. Payments Due on Non-Business Day. If the date fixed for any payment on any Trust Security shall be a day that is not a Business Day, then such payment need not be made on such date but may be made on the next succeeding day that is a Business Day, with the same force and effect as though made on the date fixed for such payment, and no interest shall accrue thereon for the period after such date. 71 SECTION 10.6. Successors. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust or the Relevant Trustee, including any successor by operation of law. Except in connection with a consolidation, merger, conversion or sale involving the Depositor that is permitted under Article Eleven of the Indenture and pursuant to which the assignee agrees in writing to perform the Depositor's obligations hereunder, the Depositor shall not assign its obligations hereunder. SECTION 10.7. Headings. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. SECTION 10.8. Reports, Notices and Demands. Any report, notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Capital Securityholder, to such Capital Securityholder as such Securityholder's name and address may appear on the Securities Register; and (b) in the case of the Common Securityholder or the Depositor, to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606, Attention: Treasurer, facsimile no.: 312/701-3900. Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees shall be given in writing addressed (until another address is published by the Trust) as follows: (a) with respect to the Property Trustee to The Bank of New York, 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust Trustee Administration, (b) with respect to the Delaware Trustee, to The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust Department and (c) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked "Attention: Administrative Trustees of Aon Capital A." Such notice, demand or other communication to or 72 upon the Trust or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust or the Property Trustee. SECTION 10.9. Agreement Not to Petition. Each of the Trustees and the Depositor agree for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, they shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, insolvency, reorganization or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.9, the Property Trustee agrees, for the benefit of Securityholders, that at the expense of the Depositor, it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be stopped and precluded therefrom and such other defenses, if any, as counsel for the Trustee or the Trust may assert. The provisions of this Section 10.9 shall survive the termination of this Trust Agreement. SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act. (a) This Trust Agreement is intended to be in conformity with the provisions of the Trust Indenture Act that would be required to be part of this Trust Agreement were this Trust Agreement to be qualified under the Trust Indenture Act and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a trustee for the purposes of the Trust Indenture Act. (c) If any provision hereof limits, qualifies or conflicts with the duties imposed under Sections 310 through 318 of the Trust Indenture Act were this Trust Agreement to be qualified under the Trust Indenture Act, such duties shall control. If any provision of this Trust Agreement modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Trust Agreement as so modified or excluded, as the case may be. 73 (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Trust Securities as equity securities representing undivided beneficial interests in the assets of the Trust. SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS. SECTION 10.12. Counterparts. This Trust Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original; but all such counterparts shall together constitute but one and the same instrument. 74 IN WITNESS WHEREOF, the parties have executed this Amended and Restated Trust Agreement of Aon Capital A as of the date first above written. AON CORPORATION By: /s/ Harvey N. Medvin ------------------------------ Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer By: /s/ Raymond I. Skilling ------------------------------ Name: Raymond I. Skilling Title: Executive Vice President and Chief Counsel THE BANK OF NEW YORK, as Property Trustee By: /s/ Mary La Gumina ------------------------------ Name: Mary La Gumina Title: Assistant Vice President THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee By: /s/ Melissa J. Beneduce ------------------------------ Name: Melissa J. Beneduce Title: Assistant Vice President /s/ Harvey Medvin -------------------------- Harvey Medvin, as Administrative Trustee /s/ Michael Conway -------------------------- Michael Conway, as Administrative Trustee /s/ James White -------------------------- James White, as Administrative Trustee 75 EXHIBIT A CERTIFICATE OF TRUST OF AON CAPITAL A THIS Certificate of Trust of Aon Capital A (the "Trust"), dated as of December 27, 1996, is being duly executed and filed by the undersigned, as trustees, to form a business trust under the Delaware Business Trust Act (12 Del. C. (S)3801, et seq.). - ------- -------- 1. Name. The name of the business trust formed hereby is Aon ---- Capital A. 2. Delaware Trustee. The name and business address of the trustee ---------------- of the Trust in the State of Delaware are The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711. 3. Effective Date. This Certificate of Trust shall be effective -------------- upon filing. IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have executed this Certificate of Trust as of the date first-above written. THE BANK OF NEW YORK (DELAWARE), not in its individual capacity but solely as trustee of the Trust ______________________________ Name: ___________________ Title: __________________ ______________________________ James White, not in his individual capacity but solely as trustee of the Trust A-1 EXHIBIT B FORM OF 144A GLOBAL SECURITY This Capital Security is a 144A Global Security within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Capital Security is exchangeable for Capital Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Trust Agreement and no transfer of this Capital Security (other than a transfer of this Capital Security as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Capital Security is presented by an authorized representative of The Depository Trust Company ("DTC"), a New York Corporation (55 Water Street, New York), to Aon Capital A or its agent for registration of transfer, exchange or payment, and any Capital Security issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH HOLDER OF THE CAPITAL SECURITIES EVIDENCED HEREBY, AND EACH PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE CAPITAL SECURITIES EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER SUCH CAPITAL SECURITIES EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN B-1 EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF SUCH CAPITAL SECURITIES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE CAPITAL SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT OR SUCH EARLIER TIME AS A TRANSFER OF SUCH CAPITAL SECURITIES IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND B-2 SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES. BY ITS ACCEPTANCE OF THE CAPITAL SECURITIES EVIDENCED HEREBY OR A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, THE HOLDER OF, AND ANY PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN, SUCH CAPITAL SECURITIES AGREE TO BE BOUND BY THE PROVISIONS OF THE CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, THE GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT AND THE DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF JANUARY 13, 1997 AND RELATING, RESPECTIVELY, TO THE REGISTRATION UNDER THE SECURITIES ACT OF (1) CAPITAL SECURITIES EXCHANGEABLE FOR THE CAPITAL SECURITIES EVIDENCED HEREBY AND REGISTRATION OF THE CAPITAL SECURITIES EVIDENCED HEREBY, (2) THE GUARANTEE BY AON CORPORATION IN RESPECT OF SUCH CAPITAL SECURITIES AND (3) THE 8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JANUARY 1, 2027 ISSUED BY AON CORPORATION. B-3 CERTIFICATE NUMBER R-1 NUMBER OF CAPITAL SECURITIES Up To 200,000 CUSIP NO. 037388AA3 CERTIFICATE EVIDENCING CAPITAL SECURITIES OF AON CAPITAL A 8.205% CAPITAL SECURITIES, (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) Aon Capital A, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is the registered owner of the number of Capital Securities of the Trust specified in Schedule I hereto representing an undivided beneficial interest in the assets of the Trust and designated the Aon Capital A 8.205% Capital Securities (liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The Capital Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.4 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Capital Securities are set forth in, and this certificate and the Capital Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of January 13, 1997, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of Capital Securities as set forth therein. The Holder is entitled to the benefits of the Capital Securities Guarantee Agreement entered into by Aon Corporation, a Delaware corporation, and The Bank of New York, as guarantee trustee, dated as of January 13, 1997 (the "Guarantee"), to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By its acceptance of this certificate representing Capital Securities or a beneficial interest in such Capital Securities, the owner of, and any person that acquires a beneficial interest in, such Capital Securities agree to treat the Debentures described in the Trust Agreement as indebtedness and the Capital Securities as evidence of indirect beneficial ownership in such indebtedness for tax purposes. B-4 In Witness Whereof, one of the Administrative Trustees of the Trust has executed this certificate as of this 13th day of January, 1997. AON CAPITAL A By:_____________________________ Name: James White Administrative Trustee B-5 SCHEDULE I 144A GLOBAL SECURITY The initial number of Capital Securities evidenced by this 144A Global Security is 200,000 CHANGES TO NUMBER OF CAPITAL SECURITIES EVIDENCED BY 144A GLOBAL SECURITY
- ------------------------------------------------------------------------------------------------- | | Number of Capital Securities | | | | | by which this 144A Global | Remaining Capital | | | | Security is to be Reduced | Securities Represented | | | | or Increased, and Reason for | by this 144A Global | | | Date | Reduction or Increase | Security | Notation Made by | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | |----------|-------------------------------|----------------------------|------------------------| | | | | | | | | | | | | | | | - -------------------------------------------------------------------------------------------------
B-6 EXHIBIT C FORM OF REGULATION S GLOBAL SECURITY This Capital Security is a Regulation S Global Security within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Capital Security is exchangeable for Capital Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Trust Agreement and no transfer of this Capital Security (other than a transfer of this Capital Security as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Capital Security is presented by an authorized representative of The Depository Trust Company ("DTC"), a New York Corporation (55 Water Street, New York), to Aon Capital A or its agent for registration of transfer, exchange or payment, and any Capital Security issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES. BY ITS ACCEPTANCE OF THE CAPITAL SECURITIES EVIDENCED HEREBY OR A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, THE HOLDER OF, AND ANY PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN, SUCH CAPITAL SECURITIES AGREE TO BE BOUND BY THE PROVISIONS OF THE CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, THE GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT AND THE DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF JANUARY 13, 1997 AND C-1 RELATING, RESPECTIVELY, TO THE REGISTRATION UNDER THE SECURITIES ACT OF (1) CAPITAL SECURITIES EXCHANGEABLE FOR THE CAPITAL SECURITIES EVIDENCED HEREBY AND REGISTRATION OF THE CAPITAL SECURITIES EVIDENCED HEREBY, (2) THE GUARANTEE BY AON CORPORATION IN RESPECT OF SUCH CAPITAL SECURITIES AND (3) THE 8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JANUARY 1, 2027 ISSUED BY AON CORPORATION. C-2 CERTIFICATE NUMBER S-1 NUMBER OF CAPITAL SECURITIES Up To 200,000 CUSIP NO. U00199AA4 CERTIFICATE EVIDENCING CAPITAL SECURITIES OF AON CAPITAL A 8.205% CAPITAL SECURITIES, (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) Aon Capital A, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is the registered owner of the number of Capital Securities of the Trust specified in Schedule I hereto representing an undivided beneficial interest in the assets of the Trust and designated the Aon Capital A 8.205% Capital Securities (liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The Capital Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.4 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Capital Securities are set forth in, and this certificate and the Capital Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of January 13, 1997, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of Capital Securities as set forth therein. The Holder is entitled to the benefits of the Capital Securities Guarantee Agreement entered into by Aon Corporation, a Delaware corporation, and The Bank of New York, as guarantee trustee, dated as of January 13, 1997 (the "Guarantee"), to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By its acceptance of this certificate representing Capital Securities or a beneficial interest in such Capital Securities, the owner of, and any person that acquires a beneficial interest in, such Capital Securities agree to treat the Debentures described in the Trust Agreement as indebtedness and the Capital Securities as evidence of indirect beneficial ownership in such indebtedness for tax purposes. C-3 In Witness Whereof, one of the Administrative Trustees of the Trust has executed this certificate as of this 13th day of January, 1997. AON CAPITAL A By:____________________________ Name: James White Administrative Trustee C-4 SCHEDULE I REGULATION S GLOBAL SECURITY The initial number of Capital Securities evidenced by this Regulation S Global Security is zero (0). CHANGES TO NUMBER OF CAPITAL SECURITIES EVIDENCED BY REGULATION S GLOBAL SECURITY
- -------------------------------------------------------------------------------- | | Number of Capital Securities | | | | | by which this Regulation S | | | | | Global Security is to be | Remaining Capital | | | | Reduced or Increased, and |Securities Represented | | | | Reason for Reduction or | by this Regulation S | | | Date| Increase | Global Security |Notation Made by | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------| | | | | | |-----|------------------------------|-----------------------|-----------------|
C-5 EXHIBIT D FORM OF DEFINITIVE CAPITAL SECURITY CERTIFICATE THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH HOLDER OF THE CAPITAL SECURITIES EVIDENCED HEREBY, AND EACH PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE CAPITAL SECURITIES EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER SUCH CAPITAL SECURITIES EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF SUCH CAPITAL SECURITIES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE CAPITAL SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE D-1 HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT OR SUCH EARLIER TIME AS A TRANSFER OF SUCH CAPITAL SECURITIES IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES. BY ITS ACCEPTANCE OF THE CAPITAL SECURITIES EVIDENCED HEREBY OR A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, THE HOLDER OF, AND ANY PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN, SUCH CAPITAL SECURITIES AGREE TO BE BOUND BY THE PROVISIONS OF THE CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, THE GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT AND THE DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF JANUARY 13, 1997 AND RELATING, RESPECTIVELY, TO THE REGISTRATION UNDER THE SECURITIES ACT OF (1) CAPITAL SECURITIES EXCHANGEABLE FOR THE CAPITAL SECURITIES EVIDENCED HEREBY AND REGISTRATION OF THE CAPITAL SECURITIES EVIDENCED HEREBY, (2) THE GUARANTEE BY AON CORPORATION IN RESPECT OF SUCH CAPITAL SECURITIES AND (3) THE 8.205% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JANUARY 1, 2027 ISSUED BY AON CORPORATION. D-2 CERTIFICATE NUMBER AI-1 NUMBER OF CAPITAL SECURITIES 5,000 CUSIP NO. 037388AB1 CERTIFICATE EVIDENCING CAPITAL SECURITIES OF AON CAPITAL A 8.205% CAPITAL SECURITIES, (LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY) Aon Capital A, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Morgan Stanley & Co. Incorporated (the "Holder") is the registered owner of Five Thousand (5,000) Capital Securities of the Trust representing an undivided beneficial interest in the assets of the Trust and designated the Aon Capital A 8.205% Capital Securities (liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The Capital Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.4 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Capital Securities are set forth in, and this certificate and the Capital Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of January 13, 1997, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of Capital Securities as set forth therein. The Holder is entitled to the benefits of the Guarantee Agreement entered into by Aon Corporation, a Delaware corporation, and The Bank of New York, as guarantee trustee, dated as of January 13, 1997 (the "Guarantee"), to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By its acceptance of this certificate representing Capital Securities or a beneficial interest in such Capital Securities, the owner of, and any person that acquires a beneficial interest in, such Capital Securities agree to treat the Debentures described in the Trust Agreement as indebtedness and the Capital Securities as evidence of indirect beneficial ownership in such indebtedness for tax purposes. D-3 In Witness Whereof, one of the Administrative Trustees of the Trust has executed this certificate as of this 13th day of January, 1997. AON CAPITAL A By: _________________________ Name: James White Administrative Trustee D-4 FORM OF ASSIGNMENT For value received ________________ hereby sell(s), assign(s) and transfer(s) unto _________________________________________________________________________ ______________________________________________________________________________ (Please insert social security or other taxpayer identification number of assignee.) the within security and hereby irrevocably constitutes and appoints _________________________ attorney to transfer the said security on the books of the Trust, with full power of substitution in the premises. In connection with any transfer of the within security occurring prior to such date as restrictions on the transfer of such security imposed by the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations thereunder shall be terminated in accordance with the Trust Agreement, the undersigned confirms that such security is being transferred: [_] To Aon Corporation or a subsidiary thereof; or [_] Pursuant to an effective registration statement under the Securities Act; or [_] Pursuant to and in compliance with Rule 144A under the Securities Act; or [_] To an Institutional Accredited Investor pursuant to and in compliance with the Securities Act; or [_] Pursuant to and in compliance with Regulation S under the Securities; or [_] Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended; D-5 and unless the box below is checked, the undersigned confirms that such security is not being transferred to an "affiliate" of the Trust as defined in Rule 144 under the Securities Act (an "Affiliate"): [_] The transferee is an Affiliate of the Trust. Dated: ___________________ ___________________ ___________________ Signature(s) Signature(s) must be guaranteed by a commercial bank or trust company or a member firm of a major stock exchange. ___________________________ Signature Guarantee NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of this Security in every particular, without alteration or enlargement or any change whatever. D-6 EXHIBIT E THIS CERTIFICATE IS NOT TRANSFERABLE CERTIFICATE NUMBER C-1 NUMBER OF COMMON SECURITIES 24,000 CERTIFICATE EVIDENCING COMMON SECURITIES OF AON CAPITAL A (LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY) Aon Capital A, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Aon Corporation, a Delaware corporation, (the "Holder") is the registered owner of Twenty-Four Thousand (24,000) Common Securities of the Trust representing an undivided beneficial interest in the assets of the Trust and designated the Common Securities (liquidation amount $1,000 per Common Security) (the "Common Securities"). In accordance with Section 5.10 of the Trust Agreement (as defined below) the Common Securities are not transferable and any attempted transfer hereof shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of January 13, 1997, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Common Securities as set forth therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By its acceptance of this certificate representing Common Securities or a beneficial interest in such Common Securities, the owner of, and any person that acquires a beneficial interest in, such Common Securities agree to treat the Debentures described in the Trust Agreement as indebtedness and the Common Securities as evidence of indirect beneficial ownership in such indebtedness for tax purposes. E-1 In Witness Whereof, one of the Administrative Trustees of the Trust has executed this certificate as of this 13th day of January, 1997. AON CAPITAL A By:________________________ Name: James White Administrative Trustee E-2 EXHIBIT F FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS Aon Corporation 123 North Wacker Drive Chicago, IL 60606 Aon Capital A 123 North Wacker Drive Chicago, IL 60606 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs and Mesdames: We understand that the 8.205% Capital Securities, liquidation preference $1,000 per Capital Security (the "Capital Securities"), of Aon Capital A, a Delaware business trust (including the guarantee (the "Guarantee") of Aon Corporation ("Aon") executed in connection therewith), and the 8.205% Junior Subordinated Deferrable Interest Debentures of Aon (the "Debentures," and, together with the Capital Securities and the Guarantee, the "Securities") are being offered in a transaction not involving any public offering within the United States within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and that the Securities have not been registered under the Securities Act, and we agree, on our own behalf and on behalf of each account for which we acquire any Capital Securities, that if, prior to the expiration of the holding period applicable to sales of any Security under Rule 144(k) under the Securities Act, we decide to offer, resell or otherwise transfer such Security, such Security may be offered, resold or otherwise transferred only (i) to Aon or a subsidiary thereof, (ii) pursuant to an effective registration statement under the Securities Act, (iii) inside the United States to a person who is a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) in compliance with Rule 144A, (iv) inside the United States to an Institutional Accredited Investor (as defined below) that, prior to such transfer, furnishes to the Property Trustee a signed letter in the form hereof, and such other opinions and certifications that the Property Trustee may request, (v) outside the United States in compliance with Rule 904 under the Securities Act or (vi) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available) and (vii) in each case, in accordance with any applicable securities laws of the States of the United States or any other applicable jurisdiction and in accordance with the legends set forth on the Capital Securities and the Debentures. We further agree to provide any person purchasing F-1 any of the Capital Securities or Debentures from us a notice advising such purchaser that resales of such securities are restricted as stated herein. We understand that any Capital Securities will bear a legend reflecting the substance of this paragraph. We confirm that: (i) we are an "accredited investor" within the meaning of Rule 501(a)(1), (2) or (3) under the Securities Act or an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1), (2) and (3) under the Securities Act (an "Institutional Accredited Investor"); (ii) (A) any purchase of Capital Securities by us will be for our own account or for the account of one or more other Institutional Accredited Investors or as fiduciary for the account of one or more trusts, each of which is an "accredited investor" within the meaning of Rule 501(a)(7) under the Securities Act and for each of which we exercise sole investment discretion or (B) we are a "bank," within the meaning of Section 3(a)(2) of the Securities Act, or a "savings and loan association" or other institution described in Section 3(a)(5)(A) of the Securities Act that is acquiring Capital Securities as fiduciary for the account of one or more institutions for which we exercise sole investment discretion; (iii) in the event that we purchase any Capital Securities, we will acquire Capital Securities having a minimum purchase price of not less than $100,000 for our own account or for any separate account for which we are acting; (iv) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Capital Securities; (v) we are not acquiring Capital Securities with a view to resale or distribution thereof or with any present intention of offering or selling Capital Securities, except as permitted above; provided that the disposition of our property and property of any accounts for which we are acting as fiduciary shall remain at all times within our control; and (vi) we have had access to such financial and other information and have been afforded the opportunity to ask such questions of representatives of Aon and receive answers thereto, as we deem necessary in connection with our decision to purchase Capital Securities. F-2 We acknowledge that you and others will rely upon our confirmations, acknowledgments and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate and complete. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. (Name of Purchaser) ____________________________ Name: Title: Address: F-3 EXHIBIT G FORM OF TRANSFER CERTIFICATE-- 144A GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY The Bank of New York 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Trustee Administration Re: Aon Capital A Private Capital Securities Reference is hereby made to the Amended and Restated Trust Agreement, dated as of January 13, 1997 (the "Trust Agreement"), among Aon Corporation, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of Aon Capital A. Capitalized terms used but not defined herein shall have the meanings given to them in the Trust Agreement. This letter relates to _________________ Private Capital Securities which are evidenced by a 144A Global Security (CUSIP No. 037388AA3) and held with the Clearing Agency in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in such Private Capital Securities to a Person that will take delivery thereof in a transaction effected pursuant to and in accordance with Rule 904 under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor does hereby further certify that: The offer of such Private Capital Securities was not made to a person in the United States; (A) either: (i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or (ii) the transaction was executed in, or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was pre-arranged with a buyer in the United States; (B) no directed selling efforts have been made in contravention of the requirements of 904(b) of Regulation S, as applicable; G-1 (C) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (D) we have advised the transferee of the transfer restrictions applicable to such Private Capital Securities. You, the Trust and the Initial Purchasers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Terms used in this certificate and not otherwise defined herein or in the Trust Agreement have the meanings set forth in Regulation S under the Securities Act. Dated:__________________ [Insert Name of Transferor] By:_____________________ Name: Title: (If the registered owner is a corporation, partnership or fiduciary, the title of the Person signing on behalf of such registered owner must be stated.) EXHIBIT H FORM OF TRANSFER CERTIFICATE REGULATION S GLOBAL SECURITY TO 144A GLOBAL SECURITY The Bank of New York 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Trustee Administration Re: Aon Capital A Private Capital Securities Reference is hereby made to the Amended and Restated Trust Agreement, dated as of January 13, 1997 (the "Trust Agreement"), among Aon Corporation, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of Aon Capital A. Capitalized terms used but not defined herein shall have the meanings given to them in the Trust Agreement. This letter relates to _________________ Private Capital Securities which are evidenced by a Regulation S Global Security (CUSIP No. U00199AA4) and held with the Clearing Agency indirectly in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in such Private Capital Securities to a Person that will take delivery thereof in a transaction effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor does hereby certify that (i) the Transferor's interest in such Private Capital Securities is being transferred in accordance with the transfer restrictions set forth in the Trust Agreement; and (ii) the transferee is a person who the Transferor reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act, purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, in accordance with all applicable securities laws of the states of the United States and other jurisdictions. H-1 You, the Trust and the Initial Purchasers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Dated :__________________________ [Insert Name of Transferor] By:__________________________ Name: Title: (If the registered owner is a corporation, partnership or fiduciary, the title of the Person signing on behalf of such registered owner must be stated.) H-2 EXHIBIT I FORM OF PRIVATE PLACEMENT LEGEND THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, EACH HOLDER OF THE CAPITAL SECURITIES EVIDENCED HEREBY, AND EACH PERSON THAT ACQUIRES A BENEFICIAL INTEREST IN SUCH CAPITAL SECURITIES, (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE CAPITAL SECURITIES EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), OFFER, RESELL OR OTHERWISE TRANSFER SUCH CAPITAL SECURITIES EXCEPT (A) TO AON CORPORATION OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF SUCH CAPITAL SECURITIES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (G) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE CAPITAL SECURITIES EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS PROPERTY TRUSTEE, SUCH CERTIFICATIONS OR OTHER INFORMATION AS AON CORPORATION MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE CAPITAL SECURITIES EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT OR SUCH EARLIER TIME AS A TRANSFER OF SUCH CAPITAL SECURITIES IS MADE I-1 PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. I-2 EXHIBIT J FORM OF MINIMUM TRANSFER LEGEND THE CAPITAL SECURITIES EVIDENCED HEREBY WILL BE ISSUED, AND MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES). ANY TRANSFER, SALE OR OTHER DISPOSITION OF SUCH CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES. J-1 [IF CAPITAL SECURITY IS AN EXCHANGE CAPITAL SECURITY, INSERT - FORM OF ASSIGNMENT For Value Received, the undersigned assigns and transfers this Capital Security to:__________________________________________________________ (Insert assignee's social security or tax identification number) ___________________________ (Insert address and zip code of assignee) and irrevocably appoints _____________________________ agent to transfer this Capital Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: Signature(s): ________________________________________________ ________________________________________________ (Sign exactly as your name appears on the other side of this Capital Security Certificate) NOTICE: THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17AD-15. EX-4.8 7 CAPITAL SECURITIES GUARANTEE AGREEMENT CAPITAL SECURITIES GUARANTEE AGREEMENT THIS CAPITAL SECURITIES GUARANTEE AGREEMENT, dated as of January 13, 1997 (the "Guarantee Agreement"), is executed and delivered by Aon Corporation, a Delaware corporation (the "Guarantor"), and The Bank of New York, a New York banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of Aon Capital A, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of January 13, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor, the Property Trustee, the Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing $800,000,000 in aggregate Liquidation Amount (as defined in the Trust Agreement) of its 8.205% Capital Securities (the "Capital Securities") representing preferred undivided beneficial interests in the assets of the Issuer and having the terms set forth in the Trust Agreement; WHEREAS, the Capital Securities will be issued by the Issuer and the proceeds thereof, together with the proceeds from the issuance of the Issuer's Common Securities (as defined herein), will be used to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor which will be deposited with The Bank of New York, as Property Trustee under the Trust Agreement, as trust assets; and WHEREAS, as incentive for the Holders to purchase Capital Securities the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders of the Capital Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the purchase by each Holder of Capital Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time of the Capital Securities. ARTICLE I. DEFINITIONS Section 1.1. Definitions As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; provided, however, that an Affiliate of the Guarantor shall not be deemed to be an Affiliate of the Issuer. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Board of Directors" means either the board of directors of the Guarantor or any committee of that board duly authorized to act hereunder. "Capital Securities" means the 8.205% Capital Securities (Liquidation Amount $1,000 per Capital Security) of the Issuer, the certificates of which bear legends indicating that they have not been registered under the Securities Act and restricting transfers thereof. "Common Securities" means the 8.205% Common Securities (Liquidation Amount $1,000 per Common Security) of the Issuer. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement; provided, however, that, except with respect to a default in payment of any Guarantee Payments, the Guarantor shall have received notice of default and shall not have cured such default within 60 days after receipt of such notice. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Capital Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement) required to be paid on the Capital Securities, to the extent the Issuer shall have funds on hand available therefor at such time, (ii) the redemption price, including all accrued and unpaid Distributions to but excluding the date of redemption (the "Redemption Price") with respect to any Capital Securities called for redemption by the Issuer, to the extent the Issuer shall have funds on hand available therefor at such time, and (iii) upon a voluntary or involuntary termination, dissolution, winding-up or liquidation of the Issuer, unless Debentures are distributed to the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $1,000 per Capital Security plus accumulated and unpaid Distributions on the Capital Securities to but excluding the date of payment, to the extent the Issuer shall have funds on hand available therefor at such time, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). "Guarantee Trustee" means The Bank of New York, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Guarantee Trustee. "Holder" means any holder, as registered on the books and records of the Issuer, of any Capital Securities; provided, however, that in determining whether the holders of the requisite percentage of Capital Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee Trustee. "Indenture" means the Indenture dated as of January 13, 1997, between the Guarantor and The Bank of New York, as trustee, as supplemented by the First Supplemental Indenture dated January 13, 1997, and as may be further supplemented or amended from time to time. -2- "List of Holders" has the meaning specified in Section 2.2(a). "Majority in Liquidation Amount of the Securities" means, except as provided by the Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than 50% of the Liquidation Amount of all then outstanding Capital Securities issued by the Issuer. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman or any Vice President (whether or not designated by a number or a word or words added before or after the title Vice President), and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Responsible Officer" means, with respect to the Guarantee Trustee, any Senior Vice President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of the corporate trust department of the Guarantee Trustee and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of an familiarity with the particular subject. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. -3- ARTICLE II. TRUST INDENTURE ACT SECTION 2.1. Trust Indenture Act; Application. This Guarantee Agreement is not subject to the provisions of the Trust Indenture Act, but the Guarantee Agreement is intended to comply with the requirements of Sections 310 to 317, inclusive, of the Trust Indenture Act. If and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.2. List of Holders. (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (i) semiannually, not more than five days after January 15 and July 15 of each year, beginning with July 15, 1997, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders ("List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (ii) at such other times as the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the Guarantor and is not identical to a previously supplied list of Holders or has not otherwise been received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Guarantee Trustee shall comply with the obligations imposed under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act as if it were subject to the Trust Indenture Act. SECTION 2.3. Reports by the Guarantee Trustee. Not later than July 15 of each year, commencing July 15, 1997, the Guarantee Trustee shall provide to the Holders such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION 2.4. Periodic Reports to the Guarantee Trustee. The Guarantor shall provide to the Guarantee Trustee and the Holders such documents, reports and information, if any, as required by Section 314(a) of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. -4- SECTION 2.5. Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officers' Certificate. SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in Liquidation Amount of the Capital Securities may, by vote, on behalf of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent therefrom. SECTION 2.7. Event of Default; Notice. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first-class postage prepaid, to the Holders, notices of all Events of Default known to the Guarantee Trustee, unless such defaults have been cured or waived before the giving of such notice, provided that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice, or a Responsible Officer charged with the administration of this Guarantee Agreement shall have obtained written notice, of such Event of Default. SECTION 2.8. Conflicting Interests. The Trust Agreement shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. -5- ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE SECTION 3.1. Powers and Duties of the Guarantee Trustee. (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except a Holder exercising his or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment hereunder, and such vesting in the Successor Guarantee Trustee and cessation of right, title and interest with respect to the Guarantee Trustee shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. If and when required by the Guarantee Exchange and Registration Rights Agreement, the Guarantee Trustee shall enter into the Exchange Guarantee Agreement and shall effect the exchange contemplated therein. (b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the Holders. (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements -6- and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act (were it applicable hereto) are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it under the terms of this Guarantee Agreement. SECTION 3.2. Certain Rights of Guarantee Trustee. (a) Subject to the provisions of Section 3.1: (i) The Guarantee Trustee may rely and shall be fully protected in acting or refraining from acting in good faith upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate unless otherwise prescribed herein. (iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its -7- part, request and rely upon an Officers' Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor. (iv) The Guarantee Trustee may consult with legal counsel of its selection, and the advice or opinion of such legal counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance thereon and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the Guarantor or any of its Affiliates and may be one of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction. (v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have offered to the Guarantee Trustee such adequate security or indemnity against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement. (vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it hereunder; provided, however, that the Guarantee Trustee shall be responsible for its own negligence with respect to the selection of any such agent or attorney appointed by it hereunder. (viii) Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (C) shall be protected in acting in accordance with such instructions. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the -8- Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to act in accordance with such power and authority. SECTION 3.3. Compensation. The Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and to reimburse the Guarantee Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by the Guarantee Trustee in accordance with any provision of this Guarantee Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith. SECTION 3.4. Indemnity. The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it harmless against, any and all loss, liability, damage, claim or expense incurred without negligence or bad faith on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any lien or charge on any Guarantee Payments as a result of any amount due to it under this Guarantee Agreement. ARTICLE IV GUARANTEE TRUSTEE SECTION 4.1. Guarantee Trustee: Eligibility. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the requirements of Section 310(a) of the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or the requirements of its supervising or examining authority, then, for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. -9- (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee. (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. ARTICLE V. GUARANTEE SECTION 5.1. Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert other than the defense of payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. -10- SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby waives notice of acceptance of the Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.3. Obligations Not Affected. The obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Capital Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions (other than an extension of time for payment of Distributions that results from the extension of any interest payment period on the Debentures as so provided in the Indenture), Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Capital Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Capital Securities; (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Capital Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Capital Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. -11- There shall be no obligation of the Holders to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in Liquidation Amount of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) to the fullest extent permitted by law, any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a proceeding against the Guarantee Trustee, the Issuer or any other Person. The Guarantor waives any right to require that any action be brought first against the Issuer or any other Person or entity before proceeding directly against the Guarantor. SECTION 5.5. Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of Debentures to Holders as provided in the Trust Agreement. SECTION 5.6 Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement and shall have the right to waive payment by the Issuer pursuant to Section 5.1; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.7 Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive of Section 5.3 hereof. SECTION 5.8. Merger or Consolidation of Guarantor. -12- The Guarantor covenants that it will not consolidate with or merge into any other Person, or transfer, convey or lease all or substantially all of its assets or properties to any other Person, and no other Person shall consolidate with or merge into the Guarantor, or transfer, convey or lease all or substantially all of its assets to the Guarantor, unless (i) either the Guarantor shall be the continuing corporation, or the successor shall be a Person organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such successor shall expressly assume the Guarantor's obligations under this Guarantee Agreement by written instrument satisfactory to the Trustee, executed and delivered to the Trustee by such successor, (ii) immediately after such merger or consolidation, or such transfer, conveyance or lease, no Event of Default hereunder, and no event which, after notice or lapse of time or both would become an Event of Default, shall have happened and be continuing, and (iii) such consolidation, merger, transfer, conveyance or lease is permitted under the Trust Agreement and Indenture and does not give rise to any breach or violation of the Trust Agreement or Indenture. ARTICLE VI. SUBORDINATION SECTION 6.1. Subordination The obligations of the Guarantor under this Guarantee Agreement constitute unsecured obligations of the Guarantor and rank subordinate and junior in right of payment to all other liabilities of the Guarantor (including obligations under the Debentures) except (a) those liabilities which expressly by their terms are made pari passu or subordinate to the obligations of the Guarantor under this Guarantee Agreement and (b) liabilities arising under similar guarantee agreements as described in Section 6.2 hereof. SECTION 6.2. Pari Passu to Similar Guarantees. The obligations of the Guarantor under this Guarantee Agreement shall rank pari passu with the obligations of the Guarantor under any similar guarantee agreements issued by the Guarantor on behalf of the holders of preferred securities or capital securities issued by any Aon Trust (as defined in the Indenture). ARTICLE VII. TERMINATION SECTION 7.1. Termination. This Guarantee Agreement shall terminate and be of no further force and effect upon the earliest of (i) the date on which all of the Capital Securities cease to be outstanding following the consummation of the Exchange Offer, (ii) full payment of the Redemption Price of all Capital Securities, (iii) the distribution of Debentures to the Holders in exchange for all of the Capital Securities or (iv) full -13- payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated if it has been terminated pursuant to one of such clauses (ii) through (iv), as the case may be, if at any time any Holder must restore payment of any sums paid with respect to Capital Securities or this Guarantee Agreement. Sections 3.3 and 3.4 shall survive the termination of the Guarantee Agreement. ARTICLE VIII. MISCELLANEOUS SECTION 8.1. Successors and Assigns. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Capital Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Section 5.8 of this Guarantee Agreement, the Guarantor shall not assign its obligations hereunder. SECTION 8.2. Amendments. Except with respect to any changes which do not adversely affect the rights of the Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of not less than a Majority in Liquidation Amount of all the outstanding Capital Securities. The provisions of Article VI of the Trust Agreement concerning meetings of the Holders shall apply to the giving of such approval. SECTION 8.3. Notices Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and personally delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address, facsimile number or to the attention of such other Person as the Guarantor may give notice to the Holders: Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Facsimile No.: (312) 701-3100 Attention: Treasurer -14- (b) If given to the Issuer, in care of the Guarantee Trustee, at the Issuer's (and the Guarantee Trustee's) address set forth below or such other address as the Guarantee Trustee on behalf of the Issuer may give notice to the Holders: Aon Capital A c/o Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Facsimile No.: (312) 701-3100 Attention: Treasurer with a copy to: The Bank of New York 101 Barclay Street Floor 21W New York, New York 10286 Facsimile No.: (212) 815-5915 Attention: Corporate Trust Trustee Administration (c) if given to any Holder, at the address set forth on the books and records of the Issuer. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or three days after being mailed by first class mail, postage prepaid. SECTION 8.4. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Capital Securities. SECTION 8.5. Interpretation. In this Guarantee Agreement, unless the context otherwise requires: (a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto have the respective meanings assigned to them in Section 1.1; (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; (c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; -15- (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise specified; (f) a reference to the singular includes the plural and vice versa; and (g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. SECTION 8.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -16- THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. AON CORPORATION By: /s/ Harvey N. Medvin ------------------------------------- Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer By: /s/ Raymond I. Skilling -------------------------------------- Name: Raymond I. Skilling Title: Executive Vice President and Chief Counsel THE BANK OF NEW YORK as Guarantee Trustee By: /s/ Mary La Gumina ------------------------------------- Name: Mary La Gumina Title: Assistant Vice President -17- EX-4.9 8 FORM OF CAPITAL SECURITIES GUARANTEE AGREEMENT EXHIBIT 4.9 - -------------------------------------------------------------------------------- CAPITAL SECURITIES GUARANTEE AGREEMENT Between AON CORPORATION (as Guarantor) and THE BANK OF NEW YORK (as Trustee) dated as of ______________, 1997 - -------------------------------------------------------------------------------- CROSS-REFERENCE TABLE*
Section of Trust Section of Capital Securities Indenture Act of 1939, as amended Guarantee Agreement - ----------------------------------- -------------------------------- 310(a) 4.1(a) 310(b) 4.1(c), 2.8 310(c) Inapplicable 311(a) 2.2(b) 311(b) 2.2(b) 311(c) Inapplicable 312(a) 2.2(a) 312(b) 2.2(b) 313 2.3 314(a) 2.4 314(b) Inapplicable 314(c) 2.5 314(d) Inapplicable 314(e) 1.1, 2.5, 3.2 315(a) 3.1(d) 315(b) 2.7 315(c) 3.1(c) 315(d) 3.1(d) 316(a) 1.1, 2.6, 5.4 316(b) 5.4 316(c) 8.2 317(a) Inapplicable 317(b) Inapplicable 318(a) 2.1(b)
___________ * This Cross-Reference Table does not constitute part of the Capital Securities Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS..................................................... 2 SECTION 1.1. Definitions...................................... 2 ARTICLE II. TRUST INDENTURE ACT............................................. 4 SECTION 2.1. Trust Indenture Act; Application................. 4 SECTION 2.2. List of Holders.................................. 4 SECTION 2.3. Reports by the Guarantee Trustee................. 5 SECTION 2.4. Periodic Reports to the Guarantee Trustee........ 5 SECTION 2.5. Evidence of Compliance with Conditions Precedent....................................... 5 SECTION 2.6. Events of Default; Waiver........................ 5 SECTION 2.7. Event of Default; Notice......................... 5 SECTION 2.8. Conflicting Interests............................ 6 ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.............. 6 SECTION 3.1. Powers and Duties of the Guarantee Trustee....... 6 SECTION 3.2. Certain Rights of Guarantee Trustee.............. 7 SECTION 3.3. Compensation..................................... 9 SECTION 3.4. Indemnity........................................ 9 ARTICLE IV. GUARANTEE TRUSTEE............................................... 9 SECTION 4.1. Guarantee Trustee: Eligibility.................. 9 SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee...............................10 ARTICLE V. GUARANTEE.......................................................11 SECTION 5.1. Guarantee........................................11 SECTION 5.2. Waiver of Notice and Demand......................11 SECTION 5.3. Obligations Not Affected.........................11 SECTION 5.4. Rights of Holders................................12 SECTION 5.5. Guarantee of Payment.............................12 SECTION 5.6. Subrogation......................................12 SECTION 5.7. Independent Obligations..........................13 SECTION 5.8. Merger or Consolidation of Guarantor.............13 ARTICLE VI. SUBORDINATION...................................................13 SECTION 6.1. Subordination....................................13 SECTION 6.2. Pari Passu to Similar Guarantees.................14 ARTICLE VII. TERMINATION.....................................................14 SECTION 7.1. Termination......................................14 SECTION 7.2. Termination of Old Guarantee.....................14
-i- ARTICLE VIII. MISCELLANEOUS...................................................14 SECTION 8.1. Successors and Assigns...........................14 SECTION 8.2. Amendments.......................................14 SECTION 8.3. Notices..........................................15 SECTION 8.4. Benefit..........................................16 SECTION 8.5. Interpretation...................................16 SECTION 8.6. Governing Law....................................16
-ii- CAPITAL SECURITIES GUARANTEE AGREEMENT THIS CAPITAL SECURITIES GUARANTEE AGREEMENT, dated as of __________, 1997 (the "Guarantee Agreement"), is executed and delivered by Aon Corporation, a Delaware corporation (the "Guarantor"), and The Bank of New York, a New York banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of Aon Capital A, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of January 13, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Issuer, the Issuer issued $800,000,000 aggregate Liquidation Amount (as defined in the Trust Agreement) of its 8.205% Capital Securities, Liquidation Amount $1,000 per Capital Security (the "Old Capital Securities") representing preferred undivided beneficial interests in the assets of the Issuer and having the terms set forth in the Trust Agreement; WHEREAS, the proceeds from the issuance of the Old Capital Securities, together with the proceeds from the issuance of the Issuer's Common Securities (as defined in Section 1.1), were used to purchase the Debentures (as defined in the Trust Agreement) of the Guarantor which were deposited with The Bank of New York, as Property Trustee, under the Trust Agreement, as trust assets; WHEREAS, as an incentive for the Holders to purchase the Old Capital Securities, the Guarantor irrevocably and unconditionally agreed, to the extent set forth in that certain Capital Securities Guarantee Agreement dated as of January 13, 1997 (the "Old Guarantee Agreement") between the Guarantor and the Guarantee Trustee, for the benefit of the Holders of the Old Capital Securities, to pay to the Holders of the Old Capital Securities the Guarantee Payments (as defined therein) (the "Old Guarantee") and to make certain other payments on the terms and conditions set forth therein; WHEREAS, pursuant to that certain Guarantee Exchange and Registration Rights Agreement, dated as of January 13, 1997 (the "Guarantee Exchange and Registration Rights Agreement"), among the Guarantor, the Issuer and certain Purchasers named therein, the Guarantor and the Issuer agreed that if the Guarantor and the Issuer file a registration statement (the "Registration Statement") to exchange the Old Capital Securities for a like amount of new capital securities (the "New Capital Securities" and, together with the Old Capital Securities, the "Capital Securities"), then the Guarantor and the Issuer will simultaneously include in the Registration Statement an offer to exchange the Old Guarantee for the Guarantee (as defined herein) for the benefit of the Holders of the Capital Securities; WHEREAS, on _______________________, 1997, the Guarantor and the Issuer filed the Registration Statement; WHEREAS, pursuant to the Guarantee Exchange and Registration Rights Agreement, the Guarantor and the Issuer wish to exchange the Old Guarantee for the Guarantee; WHEREAS, the Guarantee will be substantially identical to the Old Guarantee except that the Guarantee will be registered pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), and the Guarantee will not contain provisions restricting transfer in the absence of registration under the Securities Act; and WHEREAS, as required by the Guarantee Exchange Registration Rights Agreement, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders of the Capital Securities the Guarantee Payments (as defined in Section 1.1) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, as required by the Guarantee Exchange Registration Rights Agreement, the Guarantor executes and delivers this Capital Securities Guarantee Agreement and pursuant to Section 5.1 hereof extends the Guarantee for the benefit of the Holders from time to time of the Capital Securities. ARTICLE I. DEFINITIONS SECTION 1.1. Definitions As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; provided, however, that an Affiliate of the Guarantor shall not be deemed to be an Affiliate of the Issuer. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Board of Directors" means either the board of directors of the Guarantor or any committee of that board duly authorized to act hereunder. "Capital Securities" has the meaning set forth in the preamble to this Guarantee Agreement. "Common Securities" means the 8.205% Common Securities (Liquidation Amount $1,000 per Common Security) of the Issuer. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement; provided, however, that, except with respect to a default in payment of any Guarantee Payments, the Guarantor shall have received notice of default and shall not have cured such default within 60 days after receipt of such notice. -2- "Guarantee" has the meaning set forth in Section 5.1. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Capital Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement) required to be paid on the Capital Securities, to the extent the Issuer shall have funds on hand available therefor at such time, (ii) the redemption price, including all accrued and unpaid Distributions to but excluding the date of redemption (the "Redemption Price") with respect to any Capital Securities called for redemption by the Issuer, to the extent the Issuer shall have funds on hand available therefor at such time, and (iii) upon a voluntary or involuntary termination, dissolution, winding-up or liquidation of the Issuer, unless Debentures are distributed to the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $1,000 per Capital Security plus accumulated and unpaid Distributions on the Capital Securities to but excluding the date of payment, to the extent the Issuer shall have funds on hand available therefor at such time, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). "Guarantee Trustee" means The Bank of New York, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Guarantee Trustee. "Holder" means any holder, as registered on the books and records of the Issuer, of any Capital Securities; provided, however, that in determining whether the holders of the requisite percentage of Capital Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee Trustee. "Indenture" means the Indenture dated as of January 13, 1997 between the Guarantor and The Bank of New York, as trustee, as supplemented by the First Supplemental Indenture dated as of January 13, 1997, and as may be further supplemented or amended from time to time. "List of Holders" has the meaning specified in Section 2.2(a). "Majority in Liquidation Amount of the Securities" means, except as provided by the Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than 50% of the Liquidation Amount of all then outstanding Capital Securities issued by the Issuer. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman or any Vice President (whether or not designated by a number or a word or words added before or after the title Vice President), and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; -3- (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Responsible Officer" means, with respect to the Guarantee Trustee, any Senior Vice President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, any Assistant Treasurer, any trust officer or assistant trust officer or any other officer of the corporate trust department of the Guarantee Trustee and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. ARTICLE II. TRUST INDENTURE ACT SECTION 2.1. Trust Indenture Act; Application. (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.2. List of Holders. (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (i) semiannually, not more than five days after January 15 and July 15 of each year, beginning with July 15, 1997, a list, in such form as the Guarantee Trustee may reasonably require, of the names and -4- addresses of the Holders ("List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (ii) at such other times as the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the Guarantor and is not identical to a previously supplied list of Holders or has not otherwise been received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Guarantee Trustee shall comply with the obligations imposed under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act as if it were subject to the Trust Indenture Act. SECTION 2.3. Reports by the Guarantee Trustee. Not later than July 15 of each year, commencing July 15, 1997, the Guarantee Trustee shall provide to the Holders such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION 2.4. Periodic Reports to the Guarantee Trustee. The Guarantor shall provide to the Guarantee Trustee and the Holders such documents, reports and information, if any, as required by Section 314(a) of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION 2.5. Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with such conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officers' Certificate. SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in Liquidation Amount of the Capital Securities may, by vote, on behalf of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent therefrom. SECTION 2.7. Event of Default; Notice. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first-class postage prepaid, to the Holders, notices of all Events of Default -5- known to the Guarantee Trustee, unless such defaults have been cured or waived before the giving of such notice, provided that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice, or a Responsible Officer charged with the administration of this Guarantee Agreement shall have obtained written notice, of such Event of Default. SECTION 2.8. Conflicting Interests. The Trust Agreement shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE SECTION 3.1. Powers and Duties of the Guarantee Trustee. (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement to any Person except to a Holder exercising his or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment hereunder, and such vesting in the Successor Guarantee Trustee and cessation of right, title and interest with respect to the Guarantee Trustee shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. (b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the Holders. (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. -6- (d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act (were it applicable hereto) are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it under the terms of this Guarantee Agreement. SECTION 3.2. Certain Rights of Guarantee Trustee. (a) Subject to the provisions of Section 3.1: -7- (i) The Guarantee Trustee may rely and shall be fully protected in acting or refraining from acting in good faith upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate unless otherwise prescribed herein. (iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor. (iv) The Guarantee Trustee may consult with legal counsel of its selection, and the advice or opinion of such legal counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance thereon and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the Guarantor or any of its Affiliates and may be one of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction. (v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have offered to the Guarantee Trustee such adequate security or indemnity against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement. (vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or -8- attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it hereunder; provided, however, that the Guarantee Trustee shall be responsible for its own negligence with respect to the selection of any such agent or attorney appointed by it hereunder. (viii) Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (C) shall be protected in acting in accordance with such instructions. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to act in accordance with such power and authority. SECTION 3.3. Compensation. The Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and to reimburse the Guarantee Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by the Guarantee Trustee in accordance with any provision of this Guarantee Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith. SECTION 3.4. Indemnity. The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it harmless against, any and all loss, liability, damage, claim or expense incurred without negligence or bad faith on the part of the Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any lien or charge on any Guarantee Payments as a result of any amount due to it under this Guarantee Agreement. -9- ARTICLE IV. GUARANTEE TRUSTEE SECTION 4.1. Guarantee Trustee: Eligibility. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the requirements of Section 310(a) of the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or the requirements of its supervising or examining authority, then, for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee. (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an -10- instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. ARTICLE V. GUARANTEE SECTION 5.1. Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert other than the defense of payment (the "Guarantee"). The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby waives notice of acceptance of the Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.3. Obligations Not Affected. The obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Capital Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions (other than an extension of time for payment of Distributions that results from the extension of any interest payment period on the Debentures as so provided in the Indenture), Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Capital Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Capital Securities; -11- (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Capital Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Capital Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in Liquidation Amount of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) to the fullest extent permitted by law, any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a proceeding against the Guarantee Trustee, the Issuer or any other Person. The Guarantor waives any right to require that any action be brought first against the Issuer or any other Person or entity before proceeding directly against the Guarantor. SECTION 5.5. Guarantee of Payment. This Guarantee creates a guarantee of payment and not of collection. This Guarantee will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of Debentures to Holders as provided in the Trust Agreement. -12- SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement and shall have the right to waive payment by the Issuer pursuant to Section 5.1; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.7. Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive of Section 5.3 hereof. SECTION 5.8. Merger or Consolidation of Guarantor. The Guarantor covenants that it will not consolidate with or merge into any other Person, or transfer, convey or lease all or substantially all of its assets or properties to any other Person, and no other Person shall consolidate with or merge into the Guarantor, or transfer, convey or lease all or substantially all of its assets to the Guarantor, unless (i) either the Guarantor shall be the continuing corporation, or the successor shall be a Person organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such successor shall expressly assume the Guarantor's obligations under this Guarantee Agreement by written instrument satisfactory to the Trustee, executed and delivered to the Trustee by such successor, (ii) immediately after such merger or consolidation, or such transfer, conveyance or lease, no Event of Default hereunder, and no event which, after notice or lapse of time or both would become an Event of Default, shall have happened and be continuing, and (iii) such consolidation, merger, transfer, conveyance or lease is permitted under the Trust Agreement and Indenture and does not give rise to any breach or violation of the Trust Agreement or Indenture. ARTICLE VI. SUBORDINATION SECTION 6.1. Subordination The obligations of the Guarantor under this Guarantee Agreement constitute unsecured obligations of the Guarantor and rank subordinate and junior in right of payment to all other liabilities of the Guarantor (including obligations under the Debentures) except (a) those liabilities which expressly -13- by their terms are made pari passu or subordinate to the obligations of the Guarantor under this Guarantee Agreement and (b) liabilities arising under similar guarantee agreements as described in Section 6.2 hereof. SECTION 6.2. Pari Passu to Similar Guarantees. The obligations of the Guarantor under this Guarantee Agreement shall rank pari passu with the obligations of the Guarantor under any similar guarantee agreements issued by the Guarantor on behalf of the holders of preferred securities or capital securities issued by any Aon Trust (as defined in the Indenture). ARTICLE VII. TERMINATION SECTION 7.1. Termination. This Guarantee Agreement shall terminate and be of no further force and effect upon the earliest of (i) full payment of the Redemption Price of all Capital Securities, (ii) the distribution of Debentures to the Holders in exchange for all of the Capital Securities or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to Capital Securities or this Guarantee Agreement. Sections 3.3 and 3.4 shall survive the termination of the Guarantee Agreement. SECTION 7.2. Termination of Old Guarantee. The Old Guarantee Agreement is hereby terminated and shall have no further force and effect except insofar as required by Section 7.1 therein. ARTICLE VIII. MISCELLANEOUS SECTION 8.1. Successors and Assigns. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Capital Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Section 5.8 of this Guarantee Agreement, the Guarantor shall not assign its obligations hereunder. -14- SECTION 8.2. Amendments. Except with respect to any changes which do not adversely affect the rights of the Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of not less than a Majority in Liquidation Amount of all the outstanding Capital Securities. The provisions of Article VI of the Trust Agreement concerning meetings of the Holders shall apply to the giving of such approval. SECTION 8.3. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and personally delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address, facsimile number or to the attention of such other Person as the Guarantor may give notice to the Holders: Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Facsimile No.: (312) 701-3100 Attention: Treasurer (b) If given to the Issuer, in care of the Guarantee Trustee, at the Issuer's (and the Guarantee Trustee's) address set forth below or such other address as the Guarantee Trustee on behalf of the Issuer may give notice to the Holders: Aon Capital A c/o Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Facsimile No.: (312) 701-3100 Attention: Treasurer with a copy to: The Bank of New York 101 Barclay Street Floor 21W New York, New York 10286 Facsimile No.: (212) 815-5915 Attention: Corporate Trust Trustee Administration (c) if given to any Holder, at the address set forth on the books and records of the Issuer. -15- All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or three days after being mailed by first class mail, postage prepaid. SECTION 8.4. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Capital Securities. SECTION 8.5. Interpretation. In this Guarantee Agreement, unless the context otherwise requires: (a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto have the respective meanings assigned to them in Section 1.1; (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; (c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise specified; (f) a reference to the singular includes the plural and vice versa; and (g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. SECTION 8.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -16- THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. AON CORPORATION By: -------------------------- Name: Title: By: -------------------------- Name: Title: THE BANK OF NEW YORK as Guarantee Trustee By: -------------------------- Name: Title: -17- EX-4.10 9 CAPITAL SECURITIES EXCHANGE AND REGISTRATION CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of January 13, 1997, by and among Aon Capital A, a Delaware business trust (the "Trust"), Aon Corporation, a Delaware corporation ("Aon"), and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. (collectively, the "Purchasers") of the 8.205% Capital Securities of the Trust. 1. Certain Definitions. For purposes of this Capital Securities Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings: (a) "Commission" means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. (b) "Debenture Exchange and Registration Rights Agreement" means the Debenture Exchange and Registration Rights Agreement in respect of the Debentures dated as of January 13, 1997 among Aon, the Trust and the Purchasers. (c) "Debentures" means the 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 of Aon, to be issued pursuant to the Indenture. (d) "Effective Time", in the case of (i) an Exchange Offer, means the date on which the Commission declares the Exchange Offer registration statement effective or on which such registration statement otherwise becomes effective and (ii) a Shelf Registration, means the date on which the Commission declares the Shelf Registration effective or on which the Shelf Registration otherwise becomes effective. (e) "Exchange Act" means the Securities Exchange Act of 1934, or any successor thereto, as amended from time to time. (f) "Exchange Debentures" has the meaning set forth in Section 2(a) hereof. (g) "Exchange Guarantee" has the meaning set forth in Section 2(a) hereof. (h) "Exchange Offer" has the meaning set forth in Section 2(a) hereof. (i) "Exchange Registration" has the meaning set forth in Section 3(c) hereof. (j) "Exchange Securities" has the meaning set forth in Section 2(a) hereof. (k) "Guarantee" means the Guarantee of Aon with respect to the Securities, to the extent set forth in the Guarantee Agreement. (l) "Guarantee Agreement" means the Capital Securities Guarantee Agreement dated as of January 13, 1997 between Aon and The Bank of New York, as Guarantee Trustee (together with its successors and assigns, "Guarantee Trustee"), for the benefit of the holders of the Securities. (m) "Guarantee Exchange and Registration Rights Agreement" means the Guarantee Exchange and Registration Rights Agreement in respect of the Guarantee dated as of January 13, 1997 among Aon, the Trust and the Purchasers. (n) The term "holder" means each of the Purchasers for so long as it owns any Registrable Securities, and its respective successors and assigns who acquire Registrable Securities from time to time, directly or indirectly, from such person or from any successor or assign of such person, in each case for so long as such person owns any Registrable Securities. (o) "Indemnified Person" has the meaning set forth in Section 6(a) hereof. (p) "Indenture" means the Indenture dated as of January 13, 1997, between Aon and The Bank of New York, as Debenture Trustee, as supplemented by the First Supplemental Indenture dated as of January 13, 1997, and as further amended or supplemented from time to time. (q) "Issue Date" means January 13, 1997. (r) "Liquidation Amount" means the stated liquidation preference of the Securities. (s) "New Guarantee Agreement" has the meaning set forth in the Guarantee Exchange and Registration Rights Agreement. (t) The term "person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof, or any other entity of whatever nature. (u) "Purchase Agreement" means the Purchase Agreement dated January 8, 1997, among Aon, the Trust and the Purchasers. (v) "Registrable Securities" means the Securities; provided, however, that such Securities shall cease to be Registrable Securities when (i) the Exchange Offer is conducted as contemplated in Section 2(a); provided that, prior to the consummation of the Exchange Offer, existing Commission interpretations have not been changed such that the Exchange Securities received by holders in the Exchange Offer for Registrable Securities are not or would not be, upon receipt, transferable by each such holder (other than a Restricted Holder) without restriction under the Securities Act in the circumstances contemplated by Section 2(a); and provided further, that any Exchange Security received by a broker-dealer in an Exchange Offer exchange for a Registrable Security that was not acquired by the broker-dealer directly from the Trust will also be a Registrable Security through and including the earlier of the 90th day after the Exchange Offer is completed or such time as such broker-dealer no longer owns such Security; and provided further, however, that any such Securities that, pursuant to the last two sentences of Section 2(a) hereof, are included in a prospectus for use in connection with resales by broker- dealers shall be deemed to 2 be Registrable Securities with respect to Sections 5, 6 and 9 until resale of such Exchange Securities has been effected within the 90-day period referred to in Section 2(a) hereof; (ii) in the circumstances contemplated by Section 2(b), a registration statement registering such Securities (and, in the circumstances contemplated by Section 2(b), other than a registration statement filed in addition to the Exchange Offer, also registering the underlying Debentures and the related Guarantee) under the Securities Act has been declared or becomes effective and such Securities have been sold or otherwise transferred by the holder thereof pursuant to such effective registration statement; (iii) such Securities are sold pursuant to Rule 144 (or any successor provision) promulgated under the Securities Act under circumstances in which any legend borne by such Securities relating to restrictions on transferability thereof, under the Securities Act, is removed by the Trust or pursuant to the Trust Agreement or such Securities are eligible to be sold pursuant to paragraph (k) of Rule 144; or (iv) such Securities shall cease to be outstanding. (w) "Registration Default" has the meaning set forth in Section 2(c) hereof. (x) "Registration Expenses" has the meaning set forth in Section 4 hereof. (y) "Restricted Holder" means (i) a holder that is an affiliate of the Trust or of Aon within the meaning of Rule 405 under the Securities Act, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder's business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities or (iv) a broker-dealer who receives Securities for its own account but did not acquire the Securities as a result of market-making activities or other trading activities. (z) "Resale Period" has the meaning set forth in Section 2(a) hereof. (aa) "Securities" means, collectively, the $800,000,000 aggregate Liquidation Amount of the 8.205% Capital Securities, Liquidation Amount $1,000 per Capital Security, of the Trust to be issued and sold to the Purchasers, and any securities issued in exchange therefor or in lieu thereof pursuant to the Trust Agreement. (bb) "Securities Act" means the Securities Act of 1933, or any successor thereto, as amended from time to time. (cc) "Shelf Registration" has the meaning set forth in Section 2(b) hereof. (dd) "Special Distributions" has the meaning set forth in Section 2(c) hereof. (ee) "Special Interest" has the meaning set forth in Section 2(c) hereof. 3 (ff) "Trust Agreement" means the Amended and Restated Trust Agreement dated as of January 13, 1997 among Aon, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust. (gg) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, as amended from time to time. Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Capital Securities Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Capital Securities Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision. 2. Registration Under the Securities Act. (a) Except as set forth in Section 2(b) below, Aon and the Trust agree, jointly and severally, to use their reasonable best efforts to file under the Securities Act, as soon as practicable, but no later than 150 days after the Issue Date, a registration statement relating to an offer to exchange (the "Exchange Offer") any and all of the Securities for a like aggregate Liquidation Amount of capital securities of the Trust which are substantially identical to the Securities (and which are entitled to the benefits of the Trust Agreement which will be qualified under the Trust Indenture Act) except that they have been registered pursuant to an effective registration statement under the Securities Act and such new capital securities will not contain provisions for Special Distributions or provisions restricting transfer in the absence of registration under the Securities Act (such new capital securities hereinafter called "Exchange Securities") for any or all of the Registrable Securities. Such registration statement shall also relate to, and the consummation of the Exchange Offer shall be conditioned upon the consummation of, an offer to exchange the Debentures for substantially identical debentures of Aon pursuant to the Debenture Exchange and Registration Rights Agreement (the "Exchange Debentures") and to an offer to exchange the Guarantee for a substantially identical guarantee of Aon pursuant to the Guarantee Exchange and Registration Rights Agreement (the "Exchange Guarantee"). Aon and the Trust agree, jointly and severally, to use their reasonable best efforts to cause such registration statement to become effective under the Securities Act within 180 days of the Issue Date. The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply in all material respects with all applicable tender offer rules and regulations under the Exchange Act. Aon and the Trust further agree, jointly and severally, to commence the Exchange Offer promptly after such registration statement has become effective and to hold the Exchange Offer open for at least 30 calendar days, and the Trust agrees to issue Exchange Securities for all Registrable Securities that have been validly tendered and not withdrawn on or prior to the expiration of the Exchange Offer. The Exchange Offer will be deemed to have been completed only if the Exchange Securities received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without restriction under the Securities Act and the Exchange Act, it being understood that broker-dealers receiving Exchange Securities will be subject to certain prospectus delivery requirements with respect to resale of the Exchange 4 Securities. The Exchange Offer shall be deemed to have been completed upon the earlier to occur of (i) the Trust having exchanged the Exchange Securities for all outstanding Registrable Securities pursuant to the Exchange Offer and (ii) the Trust having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been validly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is at least 30 days following the commencement of the Exchange Offer. Aon and the Trust agree, jointly and severally, (x) to include in the registration statement a prospectus for use in connection with any resales of Exchange Securities by a broker-dealer, other than resales of Exchange Securities received by a broker- dealer pursuant to the Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Trust, and (y) to the extent any broker-dealer participates in the Exchange Offer and notifies Aon or causes Aon to be notified in writing that it is a participating broker-dealer, to use their reasonable efforts to keep such registration statement effective for a period (the "Resale Period") beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 90th day after the Exchange Offer has been completed or such shorter period if all Exchange Securities received by such broker-dealer in exchange for Registrable Securities acquired for its own account as a result of market-making or other trading activities have been disposed of by such broker-dealer; and no broker- dealers shall be authorized by Aon to, and shall not, deliver such Prospectus after such period in connection with resales contemplated by this Section 2(a) or otherwise; it being understood that, notwithstanding anything in this Capital Securities Exchange and Registration Rights Agreement to the contrary, Aon shall not be required to comply with any provision of this Section 2(a) or any other provision of this Capital Securities Exchange and Registration Rights Agreement relating to the distribution of Exchange Securities by broker-dealers, to the extent that Aon reasonably concludes that compliance with such provision is no longer required by applicable law or interpretation of the Staff of the Commission. With respect to such registration statement, each broker-dealer that holds Exchange Securities received in the Exchange Offer in exchange for Registrable Securities not acquired by it directly from the Trust shall have the benefit of the rights of indemnification and contribution set forth in Section 6 hereof. (b) If (i) on or prior to the consummation of the Exchange Offer existing Commission interpretations are changed such that the Exchange Securities received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are not or would not be, upon receipt, transferable by each such holder without restriction under the Securities Act, (ii) the Exchange Offer has not been consummated within 210 days following the Issue Date or (iii) the Purchasers so request (but only with respect to the Securities) within 60 days after the consummation of the Exchange Offer with respect to any Securities held by them which are not freely transferable following consummation of the Exchange Offer, in lieu of (or, in the case of clause (iii), in addition to) conducting the Exchange Offer contemplated by Section 2(a), Aon and the Trust shall file under the Securities Act, as soon as practicable, a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities (or, in the case of clause (iii), of the Securities held by the Purchasers for resale by the Purchasers), pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission (the "Shelf Registration"). Unless the Shelf Registration has been filed in addition to conducting the Exchange Offer contemplated by Section 2(a), the Shelf Registration shall also provide for the registration of the Debentures pursuant to the Debenture Exchange and Registration Rights Agreement and for 5 the registration of the Guarantee pursuant to the Guarantee Exchange and Registration Rights Agreement. Aon and the Trust agree, jointly and severally, to use their reasonable best efforts to cause the Shelf Registration to become or be declared effective and to keep such Shelf Registration continuously effective for a period ending on the earlier of (A) the third anniversary of the Issue Date (or, in the case of clause (iii) above, the first anniversary) or (B) the later of (i) such time as there are no longer any Registrable Securities outstanding or (ii) as required under the Debenture Exchange and Registration Rights Agreement. Aon and the Trust further agree, jointly and severally, to supplement or make amendments to the Shelf Registration, as and when required by the rules, regulations or instructions applicable to the registration form used by Aon and the Trust for such Shelf Registration or by the Securities Act or rules and regulations thereunder for shelf registration, and Aon and the Trust agree, jointly and severally, to furnish to the holders of the Registrable Securities copies of any such supplement or amendment prior to its being used and/or filed with the Commission. (c) In the event that (i) Aon and the Trust have not filed the registration statement relating to the Exchange Offer (or, if applicable, the Shelf Registration) on or before the 150th day after the Issue Date, or (ii) such registration statement (or, if applicable, the Shelf Registration) has not become effective or been declared effective by the Commission on or before the 180th day after the Issue Date, or (iii) any of the Exchange Offer, the exchange offer contemplated by the Guarantee Exchange and Registration Rights Agreement and the exchange offer contemplated by the Debenture Exchange and Registration Rights Agreement has not been completed within 210 days after the Issue Date (if the Exchange Offer is then required to be made) or (iv) any registration statement required by Section 2(a) or 2(b) is filed and declared effective but shall thereafter cease to be effective for five business days (except as specifically permitted herein) without being succeeded by an additional registration statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default"), then interest will accrue (in addition to the stated interest rate on the Debentures) at the rate of 0.25% per annum on the principal amount of the Debentures, and the distributions will accumulate (in addition to the stated distribution rate on the Securities) at the rate of 0.25% per annum on the Liquidation Amount of the Securities, for the period from the occurrence of the Registration Default until such time as no Registration Default is in effect. Such additional interest (the "Special Interest") and such additional distributions (the "Special Distributions") will be payable in cash semi-annually in arrears on each January 1 and July 1 in accordance with, and subject to the deferral provisions of, the Indenture and the Trust Agreement, respectively. Special Interest, if any, and Special Distributions, if any, will be computed on the basis of a 365 or 366 day year, as the case may be, and the number of days actually elapsed. (d) Any reference herein to a registration statement shall be deemed to include any document incorporated therein by reference as of the applicable Effective Time and any reference herein to any post-effective amendment to a registration statement shall be deemed to include any document incorporated therein by reference as of a time after such Effective Time. 3. Registration Procedures. If Aon and the Trust file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: 6 (a) At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, Aon shall qualify the Indenture, the New Guarantee Agreement and the Trust Agreement under the Trust Indenture Act. (b) In the event that such qualification would require the appointment of a new trustee under any of the Indenture, the New Guarantee Agreement or the Trust Agreement, such new trustee shall be appointed thereunder pursuant to the applicable provisions thereof. (c) In connection with the joint and several obligations of Aon and the Trust with respect to the registration of the Exchange Securities, the Exchange Guarantee and the Exchange Debentures, as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, Aon and the Trust shall, as soon as reasonably possible (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but no later than 150 days after the Issue Date, a registration statement with respect to the Exchange Registration on any form which may be utilized by Aon and the Trust and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a) hereof, and use its reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; (ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such registration statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such registration statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities; (iii) promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement, and confirm such advice in writing, (A) when such registration statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of the receipt of any comments by the Commission and by the Blue Sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any 7 stop order suspending the effectiveness of such registration statement or the initiation or threatening by the Commission of any proceedings for that purpose, (D) if at any time the joint and several representations and warranties of Aon and the Trust contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by either Aon or the Trust of any notification with respect to the suspension of the qualification of the Exchange Securities and the Exchange Guarantee for sale in any United States jurisdiction or the initiation or, to Aon's or the Trust's knowledge, threatening of any proceeding for such purpose, or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such registration statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder or contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (iv) in the event that Aon and the Trust would be required, pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, without delay prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (v) use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (vi) use their reasonable best efforts to (A) register or qualify the Exchange Securities and the Exchange Guarantee under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker- dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however, that neither Aon nor the Trust shall be required for any such purpose to (1) qualify to do business in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service 8 of process in any such jurisdiction or (3) in the case of Aon, make any changes to its charter or by-laws or any agreement between it and its stockholders or in the case of the Trust, make any changes to the Trust Agreement; (vii) use their reasonable best efforts to obtain the consent or approval of each United States governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; (viii) provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; and (ix) comply with all applicable rules and regulations of the Commission, and make generally available to all holders of Securities as soon as practicable but no later than eighteen months after the Effective Time, an earnings statement of Aon and its subsidiaries complying with Section 11 (a) of the Securities Act (including, at the option of Aon, Rule 158 thereunder). (d) In connection with the joint and several obligations of Aon and the Trust with respect to the Shelf Registration, if applicable, Aon and the Trust shall use their reasonable best efforts to cause the Shelf Registration to become effective to permit the sale of the Registrable Securities by the holders thereof in accordance with the intended method or methods of distribution thereof described in the Shelf Registration. In connection therewith, Aon and the Trust shall as soon as reasonably possible (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable, a registration statement with respect to the Shelf Registration on any form which may be utilized by Aon and the Trust and which shall permit the disposition of the Registrable Securities in accordance with the intended method or methods thereof, as specified in writing to Aon and the Trust by the holders of the Registrable Securities and use their reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; (ii) as soon as practicable, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such registration statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such registration statement and furnish to the holders of the Registrable Securities copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission; (iii) comply with the provisions of the Securities Act applicable to Aon or the Trust in connection with the disposition of all of the 9 Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by the holders thereof, set forth in such registration statement; (iv) provide (A) the holders of the Registrable Securities to be included in such registration statement and not more than one counsel for all the holders of such Registrable Securities, (B) the underwriters (which term, for purposes of this Capital Securities Exchange and Registration Rights Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), if any, thereof, (C) the sales or placement agent, if any, therefor and (D) one counsel for such underwriters or agents, if any, reasonable opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment or supplement thereto; (v) for a reasonable period prior to the filing of such registration statement, and throughout the period specified in Section 2(b), make available at reasonable times at Aon's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(iv) who shall certify to Aon and the Trust that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of Aon and the Trust, and cause the officers, employees, counsel and independent certified public accountants of Aon and the Trust to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by Aon as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or otherwise, except by disclosure by such party in breach of this Agreement), or (B) such person shall be required so to disclose such information pursuant to the subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to, and only to the extent required by, the requirements of such order, and only after such person shall have given Aon prompt prior written notice of such requirement); (vi) promptly notify the selling holders of Registrable Securities, the sales or placement agent, if any, therefor and the managing underwriter or underwriters, if any, thereof and confirm such advice in writing, (A) when such registration statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the Blue Sky or securities commissioner or regulator of any state with respect thereto or any request 10 by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation or threatening by the Commission of any proceedings for that purpose, (D) if at any time the joint and several representations and warranties of Aon and the Trust contemplated by Section 3(d)(xv)(A) or Section 5 cease to be true and correct in all material respects, (E) of the receipt by either Aon or the Trust of any notification with respect to the suspension of the qualification of the Registrable Securities and the Guarantee for sale in any jurisdiction or, to Aon's or the Trust's knowledge, the initiation or threatening of any proceeding for such purpose, or (F) at any time when a prospectus is required to be delivered under the Securities Act, that such registration statement, prospectus, prospectus amendment or supplement or post-effective amendment, or any document incorporated by reference in any of the foregoing, does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (vii) use their best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (viii) if requested by any managing underwriter or underwriters, any placement or sales agent or any holder or counsel for the holders of Registrable Securities, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such holder specifies should be included therein relating to the terms of the sale of such Registrable Securities, including, without limitation, information with respect to the Liquidation Amount or the principal amount, as the case may be, of Registrable Securities being sold by any holder or agent or to any underwriters, the name and description of such holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities, to be sold by such holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; (ix) furnish to each holder of Registrable Securities, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(iv) an executed copy 11 of such registration statement, each such amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and such number of copies of such registration statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such holder, agent or underwriter, as the case may be) and of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, and such other documents, as such holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such holder, offered or sold by such agent or underwritten by such underwriter and to permit such holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and each of Aon and the Trust hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such holder and by any such agent and underwriter, in each case in the form most recently provided to such party by Aon and the Trust, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto; (x) use their reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such registration statement and the Guarantee under such securities laws or blue sky laws of such jurisdictions as any holder of such Registrable Securities and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such holder, agent or underwriter to complete its distribution of Securities pursuant to such registration statement and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of Registrable Securities; provided, however, that neither Aon nor the Trust shall be required for any such purpose to (1) qualify to do business in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(x), (2) consent to general service of process in any such jurisdiction, (3) in the case of Aon, make any changes to its charter or by-laws or any agreement between it and its shareholders or, in the case of the Trust, make any changes to the Trust Agreement; (xi) use their reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the 12 offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; (xii) cooperate with the holders of the Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall be printed, lithographed or engraved, or produced by any combination of such methods, and which shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities; (xiii) provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time; (xiv) enter into not more than one underwriting agreement, engagement letter, agency agreement, "best efforts" underwriting agreement or similar agreement, as appropriate, including (without limitation) provisions relating to indemnification and contribution substantially the same as those set forth in Section 6 hereof, and take such other actions in connection therewith as any holders of Registrable Securities aggregating at least 25% in aggregate Liquidation Amount, or in aggregate principal amount, as the case may be, of the Registrable Securities at the time outstanding shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; provided, that Aon and the Trust shall not be required to (i) enter into any such agreement more than once with respect to all of the Registrable Securities and may delay entering into such agreement until the consummation of any underwritten public offering which Aon and the Trust shall have then undertaken or (ii) enter into any engagement letter, agency agreement, "best effort" underwriting agreement or similar agreement whatsoever with respect to the Registrable Securities, and provided further, that Aon and the Trust shall not be obligated to enter into any such agreement with a broker-dealer which results in the need for a "qualified independent underwriter" (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time (the "Rules and By-Laws of NASD")); (xv) whether or not an agreement of the type referred to in Section (3)(d)(xiv) hereof is entered into and whether or not any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent or any other entity, (A) make such representations and warranties to the holders of such Registrable Securities and the placement or sales agent, if any, therefor and the underwriters, if any, thereof substantially the same as those set forth in Section 1 of the Purchase Agreement and such other representations and warranties as are customarily made with respect to the offering of debt 13 securities pursuant to any appropriate agreement or to a registration statement on the applicable form under the Securities Act; (B) obtain an opinion or opinions of counsel to Aon and the Trust substantially the same as the opinions provided for in Section 5 of the Purchase Agreement with such additions, substitutions or deletions of such matters as are customarily covered in opinions for an underwritten offering, addressed to such holder or holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof and dated the effective date of such registration statement (and if such registration statement contemplates an underwritten offering of a part or all of the Registrable Securities, dated the date of the closing under the underwriting agreement relating thereto) (it being agreed that the matters to be covered by such opinion shall also include, without limitation, the absence of governmental approvals required to be obtained in connection with the Shelf Registration, the offering and sale of the Registrable Securities, this Capital Securities Exchange and Registration Rights Agreement or any agreement of the type referred to in Section (3)(d)(xiv) hereof, except such approvals as may be required under state securities or blue sky laws; and the compliance in all material respects as to form of such registration statement and any documents incorporated by reference therein and of the Indenture, the Guarantee Agreement and the Trust Agreement with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, respectively); and, such opinion shall also state that such counsel has no reason to believe that, as of the date of the opinion and of the registration statement or most recent post- effective amendment thereto, as the case may be, such registration statement and the prospectus included therein, as then amended or supplemented, and the documents incorporated by reference therein (in each case other than the financial statements and other financial information contained therein) contains or contained an untrue statement of a material fact or omits or omitted to state therein a material fact necessary to make the statements therein not misleading (in the case of such documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act)); (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of Aon and the Trust addressed to the selling holders of Registrable Securities, the placement or sales agent, if any, therefor and the underwriters, if any, thereof, dated (i) the effective date of such registration statement and (ii) the effective date of any prospectus supplement to the prospectus included in such registration statement; (D) deliver such other documents and certificates, including officers' certificates, as may be reasonably requested by any holders of at least 25% in aggregate Liquidation Amount, or in aggregate principal amount, as the case may be, of the Registrable Securities at the time outstanding or the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above or those contained in Section 5(a) hereof and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by Aon and the Trust; and (E) undertake such 14 obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 6 hereof; (xvi) notify in writing each holder of Registrable Securities of any proposal by Aon and the Trust to amend or waive any provision of this Capital Securities Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof and of any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; (xvii) in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Rules and By-Laws of NASD) thereof, whether as a holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such broker- dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by (A) if such Rules or By-Laws, including Schedule E thereto (or any successor thereto), shall so require, engaging a "qualified independent underwriter" (as defined in such Schedule (or any successor thereto)) to participate in the preparation of the registration statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (B) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof (or to such other customary extent as may be required by such underwriter), and (C) providing such information to such broker-dealer as may be required in order for such broker- dealer to comply with the requirements of the Rules and By-Laws of NASD; and (xviii) comply with all applicable rules and regulations of the Commission, and make generally available to its holders of the Securities as soon as practicable but in any event not later than eighteen months after the effective date of such registration statement, an earnings statement of Aon and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of Aon, Rule 158 thereunder). (e) In the event that Aon and the Trust would be required, pursuant to Section 3(d)(vi)(F) above, to notify the selling holders of Registrable Securities, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, Aon and the Trust shall without delay prepare and furnish to each such holder, to each placement or sales agent, if any, and to each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and shall not contain an untrue statement of a 15 material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each broker-dealer holding Exchange Securities and each holder of Registrable Securities agrees that upon receipt of any notice from Aon and the Trust pursuant to Section 3(c)(iii)(F) or 3(d)(vi)(F) hereof, as the case may be, such holder shall forthwith discontinue the disposition of Exchange Securities or Registrable Securities, as the case may be, pursuant to the registration statement applicable to such Exchange Securities or Registrable Securities, as the case may be, until such holder shall have received copies of such amended or supplemented prospectus, and if so directed by Aon and the Trust, such holder shall deliver to Aon (at Aon's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Exchange Securities or Registrable Securities, as the case may be, at the time of receipt of such notice. (f) Aon and the Trust may require each holder of Registrable Securities as to which any registration is being effected to furnish in writing to Aon and the Trust such information regarding such holder and such holder's intended method of distribution of such Registrable Securities as Aon and the Trust may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act. Each such holder agrees to notify Aon and the Trust as promptly as practicable of any inaccuracy or change in information previously furnished by such holder to Aon and the Trust or of the occurrence of any event in either case as a result of which any prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such holder or such holder's intended method of distribution of such Registrable Securities or omits to state any material fact regarding such holder or such holder's intended method of distribution of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to Aon and the Trust any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such holder or the distribution of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each such holder shall comply with the provisions of the Securities Act applicable to such holder with respect to the disposition by such holder of Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by such holder set forth in such registration statement. (g) Until the expiration three years after the Issue Date, Aon will not, and will not permit any of its "affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of the Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act or any exemption therefrom; provided, however, that, for purposes of this paragraph, "affiliates" shall not include the Purchasers or any of their affiliates other than Aon and its subsidiaries, officers, managers and directors. (h) If Aon and the Trust file with the Commission a registration statement in respect of the Exchange Offer pursuant to Section 2(a), then Aon and the Trust shall also file with the Commission a registration statement under Section 12 of the Exchange Act and the rules and regulations promulgated thereunder related to the Exchange Securities (and the Securities and the Registrable Securities, if any). Aon and the Trust shall use their 16 reasonable best efforts to cause such registration statement to become effective prior to the 120th day of the fiscal year of the Trust next succeeding the fiscal year in which the Exchange Offer has been consummated. (i) Aon and the Trust may require each holder of Registrable Securities as to which a registration statement is being effected pursuant to Section 2(a), as a condition to such holder's eligibility to exchange the Registrable Securities for the Exchange Securities, that such holder furnish to Aon and the Trust (or an agent thereof) in writing information as to the number of "beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder holds the Registrable Securities that such holder desires to exchange for the Exchange Securities. 4. Registration Expenses. If Aon and the Trust file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: Aon agrees to bear and to pay or cause to be paid promptly upon request being made therefor all expenses incident to the performance by Aon and the Trust or compliance with this Capital Securities Exchange and Registration Rights Agreement, including, without limitation, (a) all Commission and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Securities and the Guarantee for offering and sale under the state securities and blue sky laws referred to in Section 3(d)(x) hereof, including reasonable fees and disbursements of counsel in connection with such qualifications, (c) all expenses relating to the preparation, printing, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, and the certificates representing the Securities and all documents relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of the Debenture Trustee under the Indenture, the Issuer Trustees under the Trust Agreement and the Guarantee Trustee under the Guarantee Agreement and of any escrow agent or custodian, (f) internal expenses (including, without limitation, all salaries and expenses of Aon's officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of Aon and the Trust (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any "qualified independent underwriter" engaged pursuant to Section 3(d)(xvii) hereof, (i) fees, disbursements and expenses of one counsel for the holders of Registrable Securities retained in connection with a Shelf Registration, as selected by the holders of at least a majority in aggregate Liquidation Amount, or the aggregate principal amount, as the case may be, of the Registrable Securities being registered, and fees, expenses and disbursements of any other persons, including special experts, retained by Aon or the Trust in connection with such registration (collectively, the "Registration Expenses"). To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, Aon shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a written request therefor. Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency or brokerage fees and commissions and underwriting discounts and commissions attributable to the sale of 17 such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above, transfer taxes on resale of any of the Securities by such holders and any advertising or solicitation expenses other than expenses specifically referred to above incurred by or on behalf of such holders in connection with any offers they may make. 5. Representations and Warranties. Aon and the Trust, jointly and severally, represent and warrant to, and agree with, each Purchaser and each of the holders from time to time of Registrable Securities that: (a) Each registration statement covering Registrable Securities, the Guarantee, if applicable, and the Debentures and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d)(ix) hereof and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act, the rules and regulations of the Commission promulgated thereunder and any such registration statement and any amendment thereto will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and any such prospectus or any amendment or supplement thereto will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and at all times subsequent to the Effective Time of any such registration statement when a prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(c)(iii)(F) or Section 3(d)(vi)(F) hereof until (ii) such time as Aon and the Trust furnish an amended or supplemented prospectus pursuant to Section 3(c)(iv) or Section 3(e) hereof, as the case may be, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(c) or Section 3(d)(ix) hereof, as then amended or supplemented, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Aon and the Trust by a holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof expressly for use therein. (b) Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or 18 omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Aon and the Trust by a holder of Registrable Securities expressly for use therein. (c) The representations and warranties of the Trust and Aon contained in Section 1 of the Purchase Agreement are true and correct with the same force and effect as though expressly made at and as of the date hereof. 6. Indemnification. (a) Upon the registration of the Registrable Securities pursuant to Section 2 hereof, and in consideration of the agreements of the Purchasers contained herein, and as an inducement to the Purchasers to purchase the Securities, the Trust and Aon, jointly and severally, agree to indemnify and hold harmless each of the holders of Registrable Securities to be included in such registration, and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities and each person, if any, who controls such holder, or such placement or sales agent, if any, or such underwriter, if any, within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each an "Indemnified Person") as follows: (i) against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus (or any amendment or supplement thereto) contained in such registration statement or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission that was made in reliance upon and in conformity with written information relating to such Indemnified Person furnished to the Trust and Aon by, or on behalf of, such Indemnified Person expressly for use in such registration statement or such preliminary, final or summary prospectus (or any amendment or supplement thereto); (ii) against any and all losses, claims, damages and liabilities whatsoever to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission (except as made in reliance upon and in conformity with 19 information relating to such Indemnified Person furnished by, or on behalf of, such Indemnified Person as aforesaid), if such settlement is effected with the written consent of the Trust and Aon; and (iii) against any and all expense whatsoever (including the fees and disbursements of counsel chosen by such Indemnified Person), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission (except as made in reliance upon and in conformity with information relating to such Indemnified Person furnished by, or on behalf of, such Indemnified Person as aforesaid) to the extent that any such expense is not paid under (i) or (ii) above. provided, however, that indemnification with respect to any prospectus shall not inure to the benefit of any holder of Registrable Securities or Exchange Securities from whom the Person asserting any loss, claim, damage, liability or expense purchased such Securities, if a copy of the prospectus (as then amended or supplemented and furnished by Aon to such holder) was not sent or given by or on behalf of such holder to such person if such is required by law at or prior to the sale of such Registrable Securities or Exchange Securities, as the case may be, and if the prospectus (as so amended and supplemented) would have cured the defect giving rise to such loss, claim, damage, liability or expense. (b) Aon may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2 hereof and to entering into any placement or underwriting agreement with respect thereto, that Aon shall have received an undertaking reasonably satisfactory to them from the holder of such Registrable Securities and from each placement agent or underwriter named in any such placement agreement or underwriting agreement, severally and not jointly, to indemnify and hold harmless the Trust and Aon and each person, if any, who controls the Trust or Aon within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, claim, damage, liability and expense described in the indemnity contained in subsection (a) of this Section, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in any registration statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein as furnished by the Trust or Aon to any such holder, agent or underwriter (or any amendment or supplement thereto), in reliance upon and in conformity with written information relating to such holder, or such placement or sales agent, if any, or such underwriter, if any, furnished to the Trust and Aon by or on behalf of such holder, or such placement or sales agent, if any, or such underwriter, if any, expressly for use in such registration statement or such preliminary, final or summary prospectus (or any amendment or supplement thereto). (c) Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the 20 indemnifying parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, however, that when more than one of such holders, such placement or sales agents, if any, or such underwriters, if any, is an indemnified party, each such holder, placement or sales agent or such underwriter, as the case may be, shall be entitled to separate counsel (in addition to any local counsel) in each such jurisdiction to the extent such holder, placement or sales agent or such underwriter, as the case may be, may have interests conflicting with those of the other holder, placement or sales agent or such underwriter, as the case may be. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 6 is for any reason held to be unavailable to such holders, such placement or sales agents, if any, or such underwriters, if any, in accordance with its terms, the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, in such proportions as is appropriate to reflect the relative benefits received by the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other. The relative benefits received by the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other shall be deemed to be in such proportion represented by the percentage that the total commissions and underwriting discounts received by such holders, such placement and sales agents, if any, and such underwriters, if any, to the date of such liability bears to the total sales price (before deducting expenses) received by the Trust and such holders, such placement and sales agents, if any, and such underwriters, if any, from the sale of such Securities made to the date of such liability, and the Trust and Aon are jointly and severally responsible for the balance. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if such holders, such placement and sales agents, if any, and such underwriters, if any, failed to give the notice required under this subsection (c), then the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, shall contribute to such aggregate losses, liabilities, claims, damages and expenses in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other in connection with the statements or omissions which resulted in such liabilities, claims, damages and expenses, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and Aon on the one hand or is supplied by, or on behalf of, such holders, such placement or sales agents, if any, and such underwriters, if any, on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such 21 statement or omission. The Trust, Aon and such holders, such placement or sales agents, if any, and such underwriters, if any, agree that it would not be just and equitable if contributions pursuant to this paragraph were determined pro rata (even if such holders, such placement or sales agents, if any, and such underwriters, if any, were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding the provisions of this paragraph, such holders, such placement or sales agents, if any, and such underwriters, if any, shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities referred to in the second sentence of this paragraph that were offered and sold to the public through such holders, such placement or sales agents, if any, and such underwriters, if any, exceeds the amount of any damages that such holders, such placement or sales agents, if any, and such underwriters, if any, have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled under this paragraph to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls any such holders, such placement or sales agents, if any, and such underwriters, if any, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such holders, such placement or sales agents, if any, and such underwriters, if any, and each person, if any, who controls the Trust or Aon within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Trust or Aon. 7. Underwritten Offerings. (a) Selection of Underwriters. If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by the holders of at least a majority in aggregate Liquidation Amount of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Trust and Aon. (b) Participation by Holders. Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. (c) Consolidated Earnings Statements. In the event of an underwritten offering, Aon agrees to make generally available to holders of Securities as soon as practicable, but in any event not later than eighteen months after the effective date of the applicable registration statement (as defined in Rule 158(c) under the Securities Act), a consolidated earnings statement of Aon (which need not be audited) complying with Section 11 (a) of the Securities Act and the rules and regulations of the Commission thereunder (including, at the option of Aon, Rule 158 under the Securities Act) 22 8. Rule 144. Aon covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, Aon shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to make Rule 144 available to such holder for the sale of Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder's sale pursuant to Rule 144, Aon shall deliver to such holder a written statement as to whether it has complied with such requirements. 9. Miscellaneous. (a) No Inconsistent Agreements. Each of the Trust and Aon represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Capital Securities Exchange and Registration Rights Agreement and that the Debenture Exchange and Registration Rights Agreement and the Guarantee Exchange and Registration Rights Agreement should be construed to be consistent with the terms hereof. (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder and that each party may be irreparably harmed by any such failure and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Capital Securities Exchange and Registration Rights Agreement in accordance with the terms and conditions of this Capital Securities Exchange and Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: if to the Trust or to Aon, then to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois, 60606, Attention: Treasurer, and if to a holder, to the address of such holder set forth in the security register or other records of the Trust, or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (d) Parties in Interest. All the terms and provisions of this Capital Securities Exchange and Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties 23 hereto. In the event that any transferee of any holder of Registrable Securities shall become a holder of Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a party hereto for all purposes and such Registrable Securities shall be held subject to all of the terms of this Capital Securities Exchange and Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Capital Securities Exchange and Registration Rights Agreement. If Aon shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the terms hereof. (e) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Capital Securities Exchange and Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer. In addition, the respective indemnities, representations and warranties set forth herein shall survive the termination hereof. (f) LAW GOVERNING. THIS CAPITAL SECURITIES EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Capital Securities Exchange and Registration Rights Agreement are inserted for convenience only, do not constitute a part of this Capital Securities Exchange and Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Capital Securities Exchange and Registration Rights Agreement. (h) Entire Agreement; Amendments. This Capital Securities Exchange and Registration Rights Agreement and the other agreements referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Capital Securities Exchange and Registration Rights Agreement and such other agreements referred to herein supersede all prior agreements and understandings between the parties with respect to its subject matter. This Capital Securities Exchange and Registration Rights Agreement may be amended and the observance of any term of this Capital Securities Exchange and Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by Aon, the Trust and the holders of at least 66-2/3 percent in aggregate principal amount of the Registrable Securities at the time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 9(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. 24 (i) Inspection. For so long as this Capital Securities Exchange and Registration Rights Agreement shall be in effect, this Capital Securities Exchange and Registration Rights Agreement and a complete list of the names and addresses of all the registered holders of Registrable Securities shall be made available for inspection and copying on any business day by any holder of Registrable Securities at the offices of Aon at the address thereof set forth in Section 9(c) above. (j) Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. (k) Termination. Except for the respective indemnities, representations and warranties set forth herein, this Capital Securities Exchange and Registration Rights Agreement shall terminate when all the Securities, Exchange Securities and Registrable Securities cease to be outstanding. 25 This Capital Securities Exchange and Registration Rights Agreement is hereby executed as of the day and year first above written. AON CORPORATION By: /s/ Harvey N. Medvin ------------------------------------- Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer AON CAPITAL A By: /s/ Harvey N. Medvin -------------------------------------- Name: Harvey N. Medvin Administrative Trustee MORGAN STANLEY & CO. INCORPORATED As Representative of the Purchasers named in Schedule I to the Purchase Agreement By: /s/ Michael Fusco -------------------------------------- (Morgan Stanley & Co. Incorporated) Acting severally, and not jointly and severally, on behalf of themselves and each of the Purchasers named in Schedule I to the Purchase Agreement 26 EX-4.11 10 DEBENTURE EXCHANGE AND REGISTRATION RIGHTS DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of January 13, 1997, by and among Aon Capital A, a Delaware business trust (the "Trust"), Aon Corporation, a Delaware corporation ("Aon"), and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. (collectively, the "Purchasers") of the 8.205% Capital Securities of the Trust. 1. Certain Definitions. For purposes of this Debenture Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings: (a) "Capital Securities Exchange and Registration Rights Agreement" means the Capital Securities Exchange and Registration Rights Agreement in respect of the Capital Securities dated as of January 13, 1997 among Aon, the Trust and the Purchasers. (b) "Commission" means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. (c) "Debentures" means the 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 of Aon, to be issued pursuant to the Indenture. (d) "Effective Time", in the case of (i) an Exchange Offer, means the date on which the Commission declares the Exchange Offer registration statement effective or on which such registration statement otherwise becomes effective and (ii) a Shelf Registration, means the date on which the Commission declares the Shelf Registration effective or on which the Shelf Registration otherwise becomes effective. (e) "Exchange Act" means the Securities Exchange Act of 1934, or any successor thereto, as amended from time to time. (f) "Exchange Debentures" has the meaning set forth in Section 2(a) hereof. (g) "Exchange Guarantee" has the meaning set forth in Section 2(a) hereof. (h) "Exchange Offer" has the meaning set forth in Section 2(a) hereof. (i) "Exchange Registration" has the meaning set forth in Section 3(c) hereof. (j) "Exchange Securities" has the meaning set forth in Section 2(a) hereof. (k) "Guarantee" means the Guarantee of Aon with respect to the Securities, to the extent set forth in the Guarantee Agreement. (l) "Guarantee Agreement" means the Capital Securities Guarantee Agreement dated as of January 13, 1997 between Aon and The Bank of New York, a New York banking corporation, as Guarantee Trustee (together with its successors and assigns "Guarantee Trustee") for the benefit of the holders of the Securities. (m) "Guarantee Exchange and Registration Rights Agreement" means the Guarantee Exchange and Registration Rights Agreement in respect of the Guarantee dated as of January 13 , 1997 among Aon, the Trust and the Purchasers. (n) The term "holder" has the meaning set forth in the Capital Securities Exchange and Registration Rights Agreement; provided, however, that if all the Registrable Securities and all the Securities cease to be outstanding, then it shall have the meaning set forth in the Indenture with respect to the Debentures. (o) "Indemnified Person" has the meaning set forth in Section 6(a) hereof. (p) "Indenture" means the Indenture dated as of January 13, 1997 between Aon and The Bank of New York, as Debenture Trustee, as supplemented by the First Supplemental Indenture dated as of January 13, 1997, and as further amended or supplemented from time to time. (q) "Issue Date" means January 13, 1997. (r) "Liquidation Amount" means the stated liquidation preference of the Securities. (s) "New Guarantee Agreement" has the meaning set forth in the Guarantee Exchange and Registration Rights Agreement. (t) The term "person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof, or any other entity of whatever nature. (u) "Purchase Agreement" means the Purchase Agreement dated January 8, 1997 among Aon, the Trust and the Purchasers. (v) "Registrable Securities" has the meaning set forth in the Capital Securities Exchange and Registration Rights Agreement; provided, however, that if all the Registrable Securities and all the Securities cease to be outstanding, then it shall mean the Debentures which have not been sold, directly or indirectly, pursuant to an effective registration statement under the Securities Act. (w) "Registration Default" has the meaning set forth in Section 2(c) hereof. (x) "Registration Expenses" has the meaning set forth in Section 4 hereof. (y) "Resale Period" has the meaning set forth in the Capital Securities Exchange and Registration Rights Agreement. 2 (z) "Securities" means, collectively, the $800,000,000 aggregate Liquidation Amount of the 8.205% Capital Securities, Liquidation Amount $1,000 per Capital Security, of the Trust to be issued and sold to the Purchasers, and any securities issued in exchange therefor or in lieu thereof pursuant to the Trust Agreement; provided, however, that if all the Registrable Securities and all the Securities cease to be outstanding, then it shall mean the Debentures which have been registered under the Securities Act. (aa) "Securities Act" means the Securities Act of 1933, or any successor thereto, as amended from time to time. (bb) "Shelf Registration" has the meaning set forth in Section 2(b) hereof. (cc) "Special Interest" has the meaning set forth in Section 2(c) hereof. (dd) "Trust Agreement" means the Amended and Restated Trust Agreement dated as of January 13, 1997 among Aon, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust. (ee) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, as amended from time to time. Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Debenture Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Debenture Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision. 2. Registration Under the Securities Act. (a) If Aon and the Trust file a registration statement pursuant to Section 2(a) of the Capital Securities Exchange and Registration Rights Agreement, then Aon and the Trust agree, jointly and severally, to include in such registration statement an offer to exchange (the "Exchange Offer") all of the Debentures for a like aggregate principal amount of a new series of junior subordinated deferrable interest debentures of Aon which are substantially identical to the Debentures (and which are entitled to the benefits of the Indenture which will be qualified under the Trust Indenture Act) except that they have been registered pursuant to an effective registration statement under the Securities Act and such new debentures will not contain provisions for Special Interest or provisions restricting transfer in the absence of registration under the Securities Act (such new debentures hereinafter called "Exchange Debentures"). Such registration statement shall also relate to, and the consummation of the Exchange Offer shall be conditioned upon the consummation of, an offer to exchange the Securities for substantially identical capital securities of the Trust pursuant to the Capital Securities Exchange and Registration Rights Agreement (the "Exchange Securities") and to an offer to exchange the Guarantee for a substantially identical guarantee of Aon pursuant to 3 the Guarantee Exchange and Registration Rights Agreement (the "Exchange Guarantee"). Aon and the Trust agree, jointly and severally, to use their reasonable best efforts to cause such registration statement to become effective under the Securities Act within 180 days of the Issue Date. The Exchange Offer will be registered under the Securities Act on the appropriate form. The Exchange Offer shall be deemed to have been completed upon the completion of the exchange of the Exchange Debentures for all the Debentures pursuant to the Exchange Offer. (b) If (i) Aon and the Trust file a "shelf" registration statement pursuant to Section 2(b) of the Capital Securities Exchange and Registration Rights Agreement without also filing a registration statement pursuant to Section 2(a) thereof or (ii) none of the Securities or the Registrable Securities is outstanding and the Exchange Offer has not been effected, then in the case of clause (i), such "shelf" registration statement shall provide for the registration of the Debentures and, in the case of clause (ii) none of the Securities or the Registrable Securities is outstanding and the Exchange Offer has not been effected, Aon shall file under the Securities Act, as soon as practicable, a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission (in each case, the "Shelf Registration"). In the case of clause (i) only, the Shelf Registration shall also provide for the registration of the Securities pursuant to the Capital Securities Exchange and Registration Rights Agreement and for the registration of the Guarantee pursuant to the Guarantee Exchange and Registration Rights Agreement. Aon and, if applicable, the Trust agree, jointly and severally, to use their reasonable best efforts to cause the Shelf Registration to become or be declared effective and to keep such Shelf Registration continuously effective for a period ending on the earlier of (A) the third anniversary of the Issue Date or (B) such time as there are no longer any Registrable Securities outstanding. Aon and, if applicable, the Trust further agree, jointly and severally, to supplement or make amendments to the Shelf Registration, as and when required by the rules, regulations or instructions applicable to the registration form used by Aon and, if applicable, the Trust for such Shelf Registration or by the Securities Act or rules and regulations thereunder for shelf registration, and Aon and, if applicable, the Trust agree, jointly and severally, to furnish to the holders of the Registrable Securities copies of any such supplement or amendment prior to its being used and/or filed with the Commission. (c) In the event that (i) Aon and, if applicable, the Trust have not filed the registration statement relating to the Exchange Offer (or, if applicable, the Shelf Registration) on or before the 150th day after the Issue Date, or (ii) such registration statement (or, if applicable, the Shelf Registration) has not become effective or been declared effective by the Commission on or before the 180th day after the Issue Date, or (iii) any of the Exchange Offer, the exchange offers contemplated by the Capital Securities Exchange and Registration Rights Agreement and the exchange offer contemplated by the Guarantee Exchange and Registration Rights Agreement has not been completed within 210 days after the Issue Date (if the Exchange Offer is then required to be made) or (iv) any registration statement required by Section 2(a) or 2(b) is filed and declared effective but shall thereafter cease to be effective for five business days (except as specifically permitted herein) without being succeeded by an additional registration statement filed and declared 4 effective (each such event referred to in clauses (i) through (iv), a "Registration Default"), then interest will accumulate (in addition to the stated interest rate on the Debentures) at the rate of 0.25% per annum on the principal amount of the Debentures for the period from the occurrence of the Registration Default until such time as no Registration Default is in effect. Such additional interest (the "Special Interest") will be payable in cash semi- annually in arrears on each July 1 and January 1 in accordance with, and subject to the deferral provisions of, the Indenture. Special Interest, if any, will be computed on the basis of a 365 or 366 day year, as the case may be, and the number of days actually elapsed. (d) Any reference herein to a registration statement shall be deemed to include any document incorporated therein by reference as of the applicable Effective Time and any reference herein to any post-effective amendment to a registration statement shall be deemed to include any document incorporated therein by reference as of a time after such Effective Time. 3. Registration Procedures. If Aon and, if applicable, the Trust file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: (a) At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, Aon shall qualify the Indenture, the New Guarantee Agreement, if applicable, and the Trust Agreement, if applicable, under the Trust Indenture Act. (b) In the event that such qualification would require the appointment of a new trustee under any of the Indenture, the New Guarantee Agreement or the Trust Agreement, such new trustee shall be appointed thereunder pursuant to the applicable provisions thereof. (c) In connection with the joint and several obligations of Aon and the Trust with respect to the registration of the Exchange Securities, the Exchange Guarantee and the Exchange Debentures, as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, Aon and the Trust shall, as soon as reasonably possible (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but no later than 150 days after the Issue Date, a registration statement with respect to the Exchange Registration on any form which may be utilized by Aon and the Trust and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a) hereof, and use its reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; (ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such registration statement for the periods and purposes 5 contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such registration statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities; (iii) promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement, and confirm such advice in writing, (A) when such registration statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of the receipt of any comments by the Commission and by the Blue Sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation or threatening by the Commission of any proceedings for that purpose, (D) if at any time the joint and several representations and warranties of Aon and the Trust contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by either Aon or the Trust of any notification with respect to the suspension of the qualification of the Exchange Securities and the Exchange Guarantee for sale in any United States jurisdiction or the initiation or, to Aon's or the Trust's knowledge, threatening of any proceeding for such purpose, or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such registration statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder or contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (iv) in the event that Aon and the Trust would be required, pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, without delay prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material 6 respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (v) use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (vi) use their reasonable best efforts to (A) register or qualify the Exchange Securities and the Exchange Guarantee under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker- dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however, that neither Aon nor the Trust shall be required for any such purpose to (1) qualify to do business in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) in the case of Aon, make any changes to its charter or by-laws or any agreement between it and its stockholders or in the case of the Trust, make any changes to the Trust Agreement; (vii) use their reasonable best efforts to obtain the consent or approval of each United States governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; (viii) provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; and (ix) comply with all applicable rules and regulations of the Commission, and make generally available to all holders of Securities as soon as practicable but no later than eighteen months after the Effective Time, an earnings statement of Aon and its subsidiaries complying with Section 11 (a) of the Securities Act (including, at the option of Aon, Rule 158 thereunder). (d) In connection with the joint and several obligations of Aon and the Trust with respect to the Shelf Registration, if applicable, Aon and, if applicable, the Trust shall use 7 their reasonable best efforts to cause the Shelf Registration to become effective to permit the sale of the Registrable Securities by the holders thereof in accordance with the intended method or methods of distribution thereof described in the Shelf Registration. In connection therewith, Aon and, if applicable, the Trust shall as soon as reasonably possible (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable, a registration statement with respect to the Shelf Registration on any form which may be utilized by Aon and, if applicable, the Trust and which shall permit the disposition of the Registrable Securities in accordance with the intended method or methods thereof, as specified in writing to Aon and, if applicable, the Trust by the holders of the Registrable Securities and use their reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; (ii) as soon as practicable, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such registration statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such registration statement and furnish to the holders of the Registrable Securities copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission; (iii) comply with the provisions of the Securities Act applicable to Aon or, if applicable, the Trust in connection with the disposition of all of the Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by the holders thereof, set forth in such registration statement; (iv) provide (A) the holders of the Registrable Securities to be included in such registration statement and not more than one counsel for all the holders of such Registrable Securities, (B) the underwriters (which term, for purposes of this Debenture Exchange and Registration Rights Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), if any, thereof, (C) the sales or placement agent, if any, therefor and (D) one counsel for such underwriters or agents, if any, reasonable opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment or supplement thereto; (v) for a reasonable period prior to the filing of such registration statement, and throughout the period specified in Section 2(b), make available at reasonable times at Aon's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(iv) who shall certify to Aon and, if applicable, the Trust that they have 8 a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of Aon and, if applicable, the Trust, and cause the officers, employees, counsel and independent certified public accountants of Aon and, if applicable, the Trust to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by Aon as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or otherwise, except by disclosure by such party in breach of this Agreement), or (B) such person shall be required so to disclose such information pursuant to the subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to, and only to the extent required by, the requirements of such order, and only after such person shall have given Aon prompt prior written notice of such requirement); (vi) promptly notify the selling holders of Registrable Securities, the sales or placement agent, if any, therefor and the managing underwriter or underwriters, if any, thereof and confirm such advice in writing, (A) when such registration statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the Blue Sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation or threatening by the Commission of any proceedings for that purpose, (D) if at any time the joint and several representations and warranties of Aon and, if applicable, the Trust contemplated by Section 3(d)(xv)(A) or Section 5 cease to be true and correct in all material respects, (E) of the receipt by either Aon or the Trust of any notification with respect to the suspension of the qualification of the Registrable Securities and, if applicable, the Guarantee, for sale in any jurisdiction or the initiation or, to Aon's or the Trust's knowledge, threatening of any proceeding for such purpose, or (F) at any time when a prospectus is required to be delivered under the Securities Act, that such registration statement, prospectus, prospectus amendment or supplement or post-effective amendment, or any document incorporated by reference in any of the foregoing, does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder or contains an untrue statement of a material fact or omits to state any material 9 fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (vii) use their best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (viii) if requested by any managing underwriter or underwriters, any placement or sales agent or any holder or counsel for the holders of Registrable Securities, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such holder specifies should be included therein relating to the terms of the sale of such Registrable Securities, including, without limitation, information with respect to the Liquidation Amount or the principal amount, as the case may be, of Registrable Securities being sold by any holder or agent or to any underwriters, the name and description of such holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities, to be sold by such holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; (ix) furnish to each holder of Registrable Securities, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(iv) an executed copy of such registration statement, each such amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and such number of copies of such registration statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such holder, agent or underwriter, as the case may be) and of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, and such other documents, as such holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such holder, offered or sold by such agent or underwritten by such underwriter and to permit such holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and each of Aon and, if applicable, the Trust hereby consents to the use of such prospectus (including such preliminary and summary 10 prospectus) and any amendment or supplement thereto by each such holder and by any such agent and underwriter, in each case in the form most recently provided to such party by Aon and the Trust, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto; (x) use their reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such registration statement and, if applicable, the Guarantee under such securities laws or blue sky laws of such jurisdictions as any holder of such Registrable Securities and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such holder, agent or underwriter to complete its distribution of Securities pursuant to such registration statement and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of Registrable Securities; provided, however, that neither Aon nor, if applicable, the Trust shall be required for any such purpose to (1) qualify to do business in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(x), (2) consent to general service of process in any such jurisdiction, (3) in the case of Aon, make any changes to its charter or by-laws or any agreement between it and its shareholders or, if applicable, in the case of the Trust, make any changes to the Trust Agreement; (xi) use their reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; (xii) cooperate with the holders of the Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall be printed, lithographed or engraved, or produced by any combination of such methods, and which shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities; 11 (xiii) provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time; (xiv) enter into not more than one underwriting agreement, engagement letter, agency agreement, "best efforts" underwriting agreement or similar agreement, as appropriate, including (without limitation) provisions relating to indemnification and contribution substantially the same as those set forth in Section 6 hereof, and take such other actions in connection therewith as any holders of Registrable Securities aggregating at least 25% in aggregate Liquidation Amount, or in aggregate principal amount, as the case may be, of the Registrable Securities at the time outstanding shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; provided, that Aon and, if applicable, the Trust shall not be required to (i) enter into any such agreement more than once with respect to all of the Registrable Securities and may delay entering into such agreement until the consummation of any underwritten public offering which Aon and, if applicable, the Trust shall have then undertaken or (ii) enter into any engagement letter, agency agreement, "best effort" underwriting agreement or similar agreements whatsoever with respect to the Registrable Securities, and provided further, that Aon and, if applicable, the Trust shall not be obligated to enter into any such agreement with a broker-dealer which results in the need for a "qualified independent underwriter" (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time (the "Rules and By- Laws of NASD")); (xv) whether or not an agreement of the type referred to in Section (3)(d)(xiv) hereof is entered into and whether or not any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent or any other entity, (A) make such representations and warranties to the holders of such Registrable Securities and the placement or sales agent, if any, therefor and the underwriters, if any, thereof substantially the same as those set forth in Section 1 of the Purchase Agreement and such other representations and warranties as are customarily made with respect to the offering of debt securities pursuant to any appropriate agreement or to a registration statement on the applicable form under the Securities Act; (B) obtain an opinion or opinions of counsel to Aon and, if applicable, the Trust substantially the same as the opinions provided for in Section 5 of the Purchase Agreement with such additions, substitutions or deletions of such matters as are customarily covered in opinions for an underwritten offering, addressed to such holder or holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof and dated the effective date of such registration statement (and if such registration statement contemplates an underwritten offering of a part or all of the Registrable Securities, dated the date of the closing under the underwriting agreement relating thereto) (it 12 being agreed that the matters to be covered by such opinion shall also include, without limitation, the absence of governmental approvals required to be obtained in connection with the Shelf Registration, the offering and sale of the Registrable Securities, this Debenture Exchange and Registration Rights Agreement or any agreement of the type referred to in Section (3)(d)(xiv) hereof, except such approvals as may be required under state securities or blue sky laws; and the compliance in all material respects as to form of such registration statement and any documents incorporated by reference therein and of the Indenture, the Guarantee Agreement, if applicable, and the Trust Agreement, if applicable, with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, respectively); and, such opinion shall also state that such counsel has no reason to believe that, as of the date of the opinion and of the registration statement or most recent post-effective amendment thereto, as the case may be, such registration statement and the prospectus included therein, as then amended or supplemented, and the documents incorporated by reference therein (in each case other than the financial statements and other financial information contained therein) contains or contained an untrue statement of a material fact or omits or omitted to state therein a material fact necessary to make the statements therein not misleading (in the case of such documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act); (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of Aon and, if applicable, the Trust addressed to the selling holders of Registrable Securities, the placement or sales agent, if any, therefor and the underwriters, if any, thereof, dated (i) the effective date of such registration statement and (ii) the effective date of any prospectus supplement to the prospectus included in such registration statement or post-effective amendment to such registration statement; (D) deliver such other documents and certificates, including officers' certificates, as may be reasonably requested by any holders of at least 25% in aggregate Liquidation Amount, or in aggregate principal amount, as the case may be, of the Registrable Securities at the time outstanding or the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above or those contained in Section 5(a) hereof and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by Aon and, if applicable, the Trust; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 6 hereof; (xvi) notify in writing each holder of Registrable Securities of any proposal by Aon and the Trust to amend or waive any provision of this Debenture Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof and of any amendment or waiver effected pursuant 13 thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; (xvii) in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Rules and By-Laws of NASD) thereof, whether as a holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such broker- dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by (A) if such Rules or By-Laws, including Schedule E thereto (or any successor thereto), shall so require, engaging a "qualified independent underwriter" (as defined in such Schedule (or any successor thereto)) to participate in the preparation of the registration statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (B) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof (or to such other customary extent as may be required by such underwriter), and (C) providing such information to such broker-dealer as may be required in order for such broker- dealer to comply with the requirements of the Rules and By-Laws of NASD; and (xviii) comply with all applicable rules and regulations of the Commission, and make generally available to its holders of the Securities as soon as practicable but in any event not later than eighteen months after the effective date of such registration statement, an earnings statement of Aon and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of Aon, Rule 158 thereunder). (e) In the event that Aon and, if applicable, the Trust would be required, pursuant to Section 3(d)(vi)(F) above, to notify the selling holders of Registrable Securities, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, Aon and, if applicable, the Trust shall without delay prepare and furnish to each such holder, to each placement or sales agent, if any, and to each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each broker-dealer holding Exchange Securities and each holder of Registrable Securities agrees that upon receipt of any notice from Aon and, if applicable, the Trust pursuant to Section 3(c)(iii)(F) or 3(d)(vi)(F) hereof, as the case may be, such holder shall 14 forthwith discontinue the disposition of Exchange Securities or Registrable Securities, as the case may be, pursuant to the registration statement applicable to such Exchange Securities or Registrable Securities, as the case may be, until such holder shall have received copies of such amended or supplemented prospectus, and if so directed by Aon and, if applicable, the Trust, such holder shall deliver to Aon (at Aon's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Exchange Securities or Registrable Securities, as the case may be, at the time of receipt of such notice. (f) Aon and, if applicable, the Trust may require each holder of Registrable Securities as to which any registration is being effected to furnish in writing to Aon and, if applicable, the Trust such information regarding such holder and such holder's intended method of distribution of such Registrable Securities as Aon and the Trust may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act. Each such holder agrees to notify Aon and, if applicable, the Trust as promptly as practicable of any inaccuracy or change in information previously furnished by such holder to Aon and, if applicable, the Trust or of the occurrence of any event in either case as a result of which any prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such holder or such holder's intended method of distribution of such Registrable Securities or omits to state any material fact regarding such holder or such holder's intended method of distribution of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to Aon and, if applicable, the Trust any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such holder or the distribution of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each such holder shall comply with the provisions of the Securities Act applicable to such holder with respect to the disposition by such holder of Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by such holder set forth in such registration statement. (g) Until the expiration three years after the Issue Date, Aon will not, and will not permit any of its "affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of the Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act or any exemption therefrom; provided, however, that, for purposes of this paragraph, "affiliates" shall not include the Purchasers or any of their affiliates other than Aon and its subsidiaries, officers, managers and directors. 4. Registration Expenses. If Aon and, if applicable, the Trust file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: Aon agrees to bear and to pay or cause to be paid promptly upon request being made therefor all expenses incident to the performance by Aon and, if applicable, the Trust 15 or compliance with this Debenture Exchange and Registration Rights Agreement, including, without limitation, (a) all Commission and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Securities and, if applicable, the Guarantee for offering and sale under the state securities and blue sky laws referred to in Section 3(d)(x) hereof, including reasonable fees and disbursements of counsel in connection with such qualifications, (c) all expenses relating to the preparation, printing, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, and the certificates representing the Securities and all documents relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of the Debenture Trustee under the Indenture, the Issuer Trustees under the Trust Agreement and, if applicable, the Guarantee Trustee under the Guarantee Agreement, if applicable, and of any escrow agent or custodian, (f) internal expenses (including, without limitation, all salaries and expenses of Aon's officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of Aon and, if applicable, the Trust (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any "qualified independent underwriter" engaged pursuant to Section 3(d)(xvii) hereof, (i) fees, disbursements and expenses of one counsel for the holders of Registrable Securities retained in connection with a Shelf Registration, as selected by the holders of at least a majority in aggregate Liquidation Amount, or the aggregate principal amount, as the case may be, of the Registrable Securities being registered, and fees, expenses and disbursements of any other persons, including special experts, retained by Aon or, if applicable, the Trust in connection with such registration (collectively, the "Registration Expenses"). To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, Aon shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a written request therefor. Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency or brokerage fees and commissions and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above, transfer taxes on resale of any of the Securities by such holders and any advertising or solicitation expenses other than expenses specifically referred to above incurred by or on behalf of such holders in connection with any offers they may make. 5. Representations and Warranties. Aon and, if applicable, the Trust, jointly and severally, represent and warrant to, and agree with, each Purchaser and each of the holders from time to time of Registrable Securities that: (a) Each registration statement covering Registrable Securities, the Guarantee, if applicable, and the Debentures and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d)(ix) hereof and any 16 further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act, the rules and regulations of the Commission promulgated thereunder and any such registration statement and any amendment thereto will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and any such prospectus or any amendment or supplement thereto will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and at all times subsequent to the Effective Time of any such registration statement when a prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(c)(iii)(F) or Section 3(d)(vi)(F) hereof until (ii) such time as Aon and, if applicable, the Trust furnish an amended or supplemented prospectus pursuant to Section 3(c)(iv) or Section 3(e) hereof, as the case may be, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(c) or Section 3(d)(ix) hereof, as then amended or supplemented, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Aon and, if applicable, the Trust by a holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof expressly for use therein. (b) Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Aon and the Trust, if applicable, by a holder of Registrable Securities expressly for use therein. (c) The representations and warranties of the Trust, if applicable, and Aon contained in Section 1 of the Purchase Agreement are true and correct with the same force and effect as though expressly made at and as of the date hereof. 6. Indemnification. 17 (a) Upon the registration of the Registrable Securities pursuant to Section 2 hereof, and in consideration of the agreements of the Purchasers contained herein, and as an inducement to the Purchasers to purchase the Securities, the Trust and Aon, jointly and severally, agree to indemnify and hold harmless each of the holders of Registrable Securities to be included in such registration, and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities and each person, if any, who controls such holder, or such placement or sales agent, if any, or such underwriter, if any, within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each an "Indemnified Person") as follows: (i) against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus (or any amendment or supplement thereto) contained in such registration statement or caused by any omission or alleged omission to state therein of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission that was made in reliance upon and in conformity with written information relating to such Indemnified Person furnished to the Trust and Aon by, or on behalf of, such Indemnified Person expressly for use in such registration statement or such preliminary, final or summary prospectus (or any amendment or supplement thereto); (ii) against any and all losses, claims, damages and liabilities whatsoever to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission (except as made in reliance upon and in conformity with information relating to such Indemnified Person furnished by, or on behalf of, such Indemnified Person as aforesaid), if such settlement is effected with the written consent of the Trust and Aon; and (iii) against any and all expense whatsoever (including the fees and disbursements of counsel chosen by such Indemnified Person), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or 18 omission (except as made in reliance upon and in conformity with information relating to such Indemnified Person furnished by, or on behalf of, such Indemnified Person as aforesaid) to the extent that any such expense is not paid under (i) or (ii) above. provided, however, that indemnification with respect to any prospectus shall not inure to the benefit of any holder of Registrable Securities or Exchange Securities from whom the Person asserting any loss, claim, damage, liability or expense purchased such Securities, if a copy of the prospectus (as then amended or supplemented and furnished by Aon to such holder) was not sent or given by or on behalf of such person or to such person if such is required by law at or prior to the sale of such Registrable Securities or Exchange Securities, as the case may be, and if the prospectus (as so amended and supplemented) would have cured the defect giving rise to such loss, claim, damage, liability or expense. (b) Aon may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2 hereof and to entering into any placement or underwriting agreement with respect thereto, that Aon shall have received an undertaking reasonably satisfactory to them from the holder of such Registrable Securities and from each placement agent or underwriter named in any such placement agreement or underwriting agreement, severally and not jointly, to indemnify and hold harmless the Trust and Aon and each person, if any, who controls the Trust or Aon within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, claim, damage, liability and expense described in the indemnity contained in subsection (a) of this Section, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in any registration statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein as furnished by the Trust or Aon to any such holder, agent or underwriter (or any amendment or supplement thereto), in reliance upon and in conformity with written information relating to such holder, or such placement or sales agent, if any, or such underwriter, if any, furnished to the Trust and Aon by or on behalf of such holder, or such placement or sales agent, if any, or such underwriter, if any, expressly for use in such registration statement or such preliminary, final or summary prospectus (or any amendment or supplement thereto). (c) Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, however, that when more than one of such holders, such placement or sales agents, if any, or such underwriters, if any, is an indemnified party each such holder, placement or sales agent or such underwriter, as the case may be, shall be entitled to separate counsel (in addition to any local counsel) in each such jurisdiction to the extent such holder, placement or sales agent or such underwriter, as the case may be, may 19 have interests conflicting with those of the other holder, placement or sales agent or such underwriter, as the case may be. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 6 is for any reason held to be unavailable to such holders, such placement or sales agents, if any, or such underwriters, if any, in accordance with its terms, the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, in such proportions as is appropriate to reflect the relative benefits received by the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other. The relative benefits received by the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other shall be deemed to be in such proportion represented by the percentage that the total commissions and underwriting discounts received by such holders, such placement and sales agents, if any, and such underwriters, if any, to the date of such liability bears to the total sales price (before deducting expenses) received by the Trust and such holders, such placement and sales agents, if any, and such underwriters, if any, from the sale of such Securities made to the date of such liability, and the Trust and Aon are jointly and severally responsible for the balance. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if such holders, such placement and sales agents, if any, and such underwriters, if any, failed to give the notice required under this subsection (c), then the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, shall contribute to such aggregate losses, liabilities, claims, damages and expenses in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other in connection with the statements or omissions which resulted in such liabilities, claims, damages and expenses, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and Aon on the one hand or is supplied by, or on behalf of, such holders, such placement or sales agents, if any, and such underwriters, if any, on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Trust, Aon and such holders, such placement or sales agents, if any, and such underwriters, if any, agree that it would not be just and equitable if contributions pursuant to this paragraph were determined pro rata (even if such holders, such placement or sales agents, if any, and such underwriters, if any, were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding the provisions of 20 this paragraph, such holders, such placement or sales agents, if any, and such underwriters, if any, shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities referred to in the second sentence of this paragraph that were offered and sold to the public through such holders, such placement or sales agents, if any, and such underwriters, if any, exceeds the amount of any damages that such holders, such placement or sales agents, if any, and such underwriters, if any, have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled under this paragraph to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls any such holders, such placement or sales agents, if any, and such underwriters, if any, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such holders, such placement or sales agents, if any, and such underwriters, if any, and each person, if any, who controls the Trust or Aon within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Trust or Aon. 7.Underwritten Offerings. (a) Selection of Underwriters. If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by the holders of at least a majority in aggregate Liquidation Amount, or aggregate principal amount, as the case may be, of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Trust, if applicable, and Aon. (b) Participation by Holders. Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. (c) Consolidated Earnings Statements. In the event of an underwritten offering, Aon agrees to make generally available to holders of Securities as soon as practicable, but in any event not later than eighteen months after the effective date of the applicable registration statement (as defined in Rule 158(c) under the Securities Act), a consolidated earnings statement of Aon (which need not be audited) complying with Section 11 (a) of the Securities Act and the rules and regulations of the Commission thereunder (including, at the option of Aon, Rule 158 under the Securities Act) 21 8. Rule 144. Aon covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, Aon shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to make Rule 144 available to such holder for the sale of Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder's sale pursuant to Rule 144, Aon shall deliver to such holder a written statement as to whether it has complied with such requirements. 9. Miscellaneous. (a) No Inconsistent Agreements. Each of the Trust and Aon represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Debenture Exchange and Registration Rights Agreement and that the Capital Securities Exchange and Registration Rights Agreement and the Guarantee Exchange and Registration Rights Agreement should be construed to be consistent with the terms hereof. (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder and that each party may be irreparably harmed by any such failure and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Debenture Exchange and Registration Rights Agreement in accordance with the terms and conditions of this Debenture Exchange and Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: if to the Trust or to Aon, then to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606, Attention: Treasurer, and if to a holder, to the address of such holder set forth in the security register or other records of the Trust or of the Debenture Trustee under the Indenture, as the case may be, or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 22 (d) Parties in Interest. All the terms and provisions of this Debenture Exchange and Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto. In the event that any transferee of any holder of Registrable Securities shall become a holder of Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a party hereto for all purposes and such Registrable Securities shall be held subject to all of the terms of this Debenture Exchange and Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Debenture Exchange and Registration Rights Agreement. If Aon shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the terms hereof. (e) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Debenture Exchange and Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities and the transfer and registration of Registrable Securities by such holder and/or the consummation of an Exchange Offer. (f) LAW GOVERNING. THIS DEBENTURE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Debenture Exchange and Registration Rights Agreement are inserted for convenience only, do not constitute a part of this Debenture Exchange and Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Debenture Exchange and Registration Rights Agreement. (h) Entire Agreement; Amendments. This Debenture Exchange and Registration Rights Agreement and the other agreements referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Debenture Exchange and Registration Rights Agreement and such other agreements referred to herein supersede all prior agreements and understandings between the parties with respect to its subject matter. This Debenture Exchange and Registration Rights Agreement may be amended and the observance of any term of this Debenture Exchange and Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by Aon, the Trust and the holders of at least 66-2/3 percent in aggregate Liquidation Amount or principal amount, as the case may be, of the Registrable Securities at the time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound 23 by any amendment or waiver effected pursuant to this Section 9(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. (i) Inspection. For so long as this Debenture Exchange and Registration Rights Agreement shall be in effect, this Debenture Exchange and Registration Rights Agreement and a complete list of the names and addresses of all the registered holders of Registrable Securities shall be made available for inspection and copying on any business day by any holder of Registrable Securities at the offices of Aon at the address thereof set forth in Section 9(c) above. (j) Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. (k) Termination. Except for the respective indemnities, representations and warranties set forth herein, this Debenture Exchange and Registration Rights Agreement shall terminate when all Securities, Exchange Securities and Registrable Securities cease to be outstanding. 24 This Debenture Exchange and Registration Rights Agreement is executed as of the day and year first above written. AON CORPORATION By: /s/ Harvey N. Medvin ---------------------------------- Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer AON CAPITAL A By: /s/ Harvey N. Medvin ---------------------------------------- Name: Harvey N. Medvin Administrative Trustee MORGAN STANLEY & CO. INCORPORATED As Representative of the Purchasers named in Schedule I to the Purchase Agreement By: /s/ Michael Fusco ---------------------------------------- (Morgan Stanley & Co. Incorporated) Acting severally, and not jointly and severally, on behalf of themselves and each of the Purchasers named in Schedule I to the Purchase Agreement 25 EX-4.12 11 GUARANTEE EXCHANGE AND REGISTRATION RIGHTS GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of January 13, 1997, by and among Aon Capital A, a Delaware business trust (the "Trust"), Aon Corporation, a Delaware corporation ("Aon"), and Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. (collectively, the "Purchasers") of the 8.205% Capital Securities of the Trust. 1. Certain Definitions. For purposes of this Guarantee Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings: (a) "Capital Securities Exchange and Registration Rights Agreement" means the Exchange and Registration Rights Agreement in respect of the Securities dated as of January 13, 1997 among Aon, the Trust and the Purchasers. (b) "Commission" means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. (c) "Debenture Exchange and Registration Rights Agreement" means the Debenture Exchange and Registration Rights Agreement in respect of the Debentures dated as of January 13, 1997 among Aon, the Trust and the Purchasers. (d) "Debentures" means the 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 of Aon, to be issued pursuant to the Indenture. (e) "Effective Time", in the case of (i) an Exchange Offer, means the date on which the Commission declares the Exchange Offer registration statement effective or on which such registration statement otherwise becomes effective and (ii) a Shelf Registration, means the date on which the Commission declares the Shelf Registration effective or on which the Shelf Registration otherwise becomes effective. (f) "Exchange Act" means the Securities Exchange Act of 1934, or any successor thereto, as amended from time to time. (g) "Exchange Debentures" has the meaning set forth in Section 2(a) hereof. (h) "Exchange Guarantee" has the meaning set forth in Section 2(a) hereof. (i) "Exchange Offer" has the meaning set forth in Section 2(a) hereof. (j) "Exchange Securities" has the meaning set forth in Section 2(a) hereof. (k) "Guarantee" means the Guarantee of Aon with respect to the Securities, to the extent set forth in the Guarantee Agreement. (l) "Guarantee Agreement" means the Capital Securities Guarantee Agreement dated as of January 13, 1997 between Aon and The Bank of New York, as Guarantee Trustee (together with its successors and assigns, the "Guarantee Trustee"), for the benefit of the holders of the Securities. (m) The term "holder" has the meaning set forth in the Capital Securities Exchange and Registration Rights Agreement. (n) "Indemnified Person" has the meaning set forth in Section 6(a) hereof. (0) "Indenture" means the Indenture dated as of January 13, 1997, between Aon and The Bank of New York, as Debenture Trustee, as supplemented by the First Supplemental Indenture dated as of January 13, 1997, and as further amended or supplemented from time to time. (p) "Issue Date" means January 13, 1997. (q) "Liquidation Amount" means the stated liquidation preference of the Securities. (r) "New Guarantee Agreement" has the meaning set forth in Section 2(a) hereof. (s) The term "person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association or government or any agency or political subdivision thereof, or any other entity of whatever nature. (t) "Purchase Agreement" means the Purchase Agreement dated January 8, 1997, among Aon, the Trust and the Purchasers. (u) "Registrable Securities" has the meaning set forth in the Capital Securities Exchange and Registration Rights Agreement. (v) "Registration Expenses" has the meaning set forth in Section 4 hereof. (w) "Resale Period" has the meaning set forth in the Capital Securities Exchange and Registration Rights Agreement. (x) "Securities" means, collectively, the $800,000,000 aggregate Liquidation Amount of the 8.205% Capital Securities, Liquidation Amount $1,000 per Capital Security, of the Trust to be issued and sold to the Purchasers, and any securities issued in exchange therefor or in lieu thereof pursuant to the Trust Agreement. (y) "Securities Act" means the Securities Act of 1933, or any successor thereto, as amended from time to time. (z) "Shelf Registration" has the meaning set forth in Section 2(b) hereof. (aa) "Trust Agreement" means the Amended and Restated Trust Agreement dated as of January 13, 1997 among Aon, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust. -2- (bb) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, as amended from time to time. Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Guarantee Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Guarantee Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision. 2. Registration Under the Securities Act. (a) If Aon and the Trust file a registration statement pursuant to Section 2(a) of the Capital Securities Exchange and Registration Rights Agreement, then Aon and the Trust agree, jointly and severally, to include in such registration statement an offer to exchange (the "Exchange Offer") the Guarantee for a new guarantee of Aon to be extended pursuant to a new guarantee agreement to be entered into by Aon and the Guarantee Trustee for the benefit of holders of the Exchange Securities (as defined below), the Registrable Securities, if any, and the Securities, if any (the "New Guarantee Agreement"), which will be qualified under the Trust Indenture Act, such new guarantee to be substantially identical to the Guarantee except that it will relate to the Exchange Securities, the Registrable Securities, if any, and the Securities, if any, and it will be registered pursuant to an effective registration statement under the Securities Act and such new guarantee will not contain provisions restricting transfer in the absence of registration under the Securities Act (such new guarantee hereinafter called "Exchange Guarantee"). Such registration statement shall also relate to, and the consummation of the Exchange Offer shall be conditioned upon the consummation of, an offer to exchange the Debentures for substantially identical debentures of Aon pursuant to the Debenture Exchange and Registration Rights Agreement (the "Exchange Debentures") and to an offer to exchange the Securities for substantially identical capital securities of the Trust pursuant to the Capital Securities Exchange and Registration Rights Agreement (the "Exchange Securities"). Aon and the Trust agree, jointly and severally, to use their reasonable best efforts to cause such registration statement to become effective under the Securities Act within 180 days of the Issue Date. The Exchange Offer will be registered under the Securities Act on the appropriate form. The Exchange Offer shall be deemed to have been completed upon the completion of the exchange of the Exchange Guarantee for the Guarantee pursuant to the Exchange Offer. (b) If Aon and the Trust file a "shelf" registration statement pursuant to Section 2(b) of the Capital Securities Exchange and Registration Rights Agreement without also filing a registration statement pursuant to Section 2(a) thereof, then such "shelf" registration statement shall provide for the registration of the Guarantee (the "Shelf Registration"). The Shelf Registration shall also provide for the registration of the Debentures pursuant to the Debenture Exchange and Registration Rights Agreement and for the registration of and the sale on a continuous or delayed basis by the holders of, all of the Securities pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission pursuant to the Capital Securities Exchange and Registration Rights Agreement. Aon and the Trust agree, jointly and severally, to use their reasonable best efforts to cause the Shelf Registration to become or be declared effective and to keep such Shelf Registration continuously effective for a period ending on the earlier of (A) the third anniversary of the -3- Issue Date or (B) the later of (i) such time as there are no longer any Securities outstanding or (ii) as required under the Debenture Exchange and Registration Rights Agreement. Aon and the Trust further agree, jointly and severally, to supplement or make amendments to the Shelf Registration, as and when required by the rules, regulations or instructions applicable to the registration form used by Aon and the Trust for such Shelf Registration or by the Securities Act or rules and regulations thereunder for shelf registration. (c) Any reference herein to a registration statement shall be deemed to include any document incorporated therein by reference as of the applicable Effective Time and any reference herein to any post-effective amendment to a registration statement shall be deemed to include any document incorporated therein by reference as of a time after such Effective Time. 3. Registration Procedures. If Aon and the Trust file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: (a) At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, Aon shall qualify the Indenture, the New Guarantee Agreement and the Trust Agreement under the Trust Indenture Act. (b) In the event that such qualification would require the appointment of a new trustee under any of the Indenture, the New Guarantee Agreement or the Trust Agreement, such new trustee shall be appointed thereunder pursuant to the applicable provisions thereof. (c) In connection with the joint and several obligations of Aon and the Trust with respect to the registration of the Exchange Securities, the Exchange Guarantee and the Exchange Debentures, as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, Aon and the Trust shall, as soon as reasonably possible (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but no later than 150 days after the Issue Date, a registration statement with respect to the Exchange Registration on any form which may be utilized by Aon and the Trust and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a) hereof, and use its reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; (ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such registration statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such registration statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies -4- of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, as such broker- dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities; (iii) promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement, and confirm such advice in writing, (A) when such registration statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of the receipt of any comments by the Commission and by the Blue Sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation or threatening by the Commission of any proceedings for that purpose, (D) if at any time the joint and several representations and warranties of Aon and the Trust contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by either Aon or the Trust of any notification with respect to the suspension of the qualification of the Exchange Securities and the Exchange Guarantee for sale in any United States jurisdiction or the initiation or, to Aon's or the Trust's knowledge, threatening of any proceeding for such purpose, or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such registration statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder or contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (iv) in the event that Aon and the Trust would be required, pursuant to Section 3(c)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, without delay prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; -5- (v) use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (vi) use their reasonable best efforts to (A) register or qualify the Exchange Securities and the Exchange Guarantee under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker- dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however, that neither Aon nor the Trust shall be required for any such purpose to (1) qualify to do business in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) in the case of Aon, make any changes to its charter or by-laws or any agreement between it and its stockholders or in the case of the Trust, make any changes to the Trust Agreement; (vii) use their reasonable best efforts to obtain the consent or approval of each United States governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; (viii) provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; and (ix) comply with all applicable rules and regulations of the Commission, and make generally available to all holders of Securities as soon as practicable but no later than eighteen months after the Effective Time, an earnings statement of Aon and its subsidiaries complying with Section 11 (a) of the Securities Act (including, at the option of Aon, Rule 158 thereunder). (d) In connection with the joint and several obligations of Aon and the Trust with respect to the Shelf Registration, if applicable, Aon and the Trust shall use their reasonable best efforts to cause the Shelf Registration to become effective to permit the sale of the Registrable Securities by the holders thereof in accordance with the intended method or methods of distribution thereof described in the Shelf Registration. In connection therewith, Aon and the Trust shall as soon as reasonably possible (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable, a registration statement with respect to the Shelf Registration on any form which may be utilized by Aon and the Trust and which shall -6- permit the disposition of the Registrable Securities in accordance with the intended method or methods thereof, as specified in writing to Aon and the Trust by the holders of the Registrable Securities and use their reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; (ii) as soon as practicable, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such registration statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such registration statement and furnish to the holders of the Registrable Securities copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission; (iii) comply with the provisions of the Securities Act applicable to Aon or the Trust in connection with the disposition of all of the Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by the holders thereof, set forth in such registration statement; (iv) provide (A) the holders of the Registrable Securities to be included in such registration statement and not more than one counsel for all the holders of such Registrable Securities, (B) the underwriters (which term, for purposes of this Guarantee Exchange and Registration Rights Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), if any, thereof, (C) the sales or placement agent, if any, therefor and (D) one counsel for such underwriters or agents, if any, reasonable opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment or supplement thereto; (v) for a reasonable period prior to the filing of such registration statement, and throughout the period specified in Section 2(b), make available at reasonable times at Aon's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(iv) who shall certify to Aon and the Trust that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of Aon and the Trust, and cause the officers, employees, counsel and independent certified public accountants of Aon and the Trust to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by Aon as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such -7- registration statement or otherwise, except by disclosure by such party in breach of this Agreement), or (B) such person shall be required so to disclose such information pursuant to the subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to, and only to the extent required by, the requirements of such order, and only after such person shall have given Aon prompt prior written notice of such requirement); (vi) promptly notify the selling holders of Registrable Securities, the sales or placement agent, if any, therefor and the managing underwriter or underwriters, if any, thereof and confirm such advice in writing, (A) when such registration statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the Blue Sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such registration statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation or threatening by the Commission of any proceedings for that purpose, (D) if at any time the joint and several representations and warranties of Aon and the Trust contemplated by Section 3(d)(xv)(A) or Section 5 cease to be true and correct in all material respects, (E) of the receipt by either Aon or the Trust of any notification with respect to the suspension of the qualification of the Registrable Securities and the Guarantee for sale in any jurisdiction or the initiation or, to Aon's or the Trust's knowledge, threatening of any proceeding for such purpose, or (F) at any time when a prospectus is required to be delivered under the Securities Act, that such registration statement, prospectus, prospectus amendment or supplement or post-effective amendment, or any document incorporated by reference in any of the foregoing, does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (vii) use their best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (viii) if requested by any managing underwriter or underwriters, any placement or sales agent or any holder or counsel for the holders of Registrable Securities, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such holder specifies should be included -8- therein relating to the terms of the sale of such Registrable Securities, including, without limitation, information with respect to the Liquidation Amount or the principal amount, as the case may be, of Registrable Securities being sold by any holder or agent or to any underwriters, the name and description of such holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities, to be sold by such holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post- effective amendment; (ix) furnish to each holder of Registrable Securities, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(iv) an executed copy of such registration statement, each such amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and such number of copies of such registration statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such holder, agent or underwriter, as the case may be) and of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, and such other documents, as such holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such holder, offered or sold by such agent or underwritten by such underwriter and to permit such holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and each of Aon and the Trust hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such holder and by any such agent and underwriter, in each case in the form most recently provided to such party by Aon and the Trust, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto; (x) use their reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such registration statement and the Guarantee under such securities laws or blue sky laws of such jurisdictions as any holder of such Registrable Securities and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is -9- required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such holder, agent or underwriter to complete its distribution of Securities pursuant to such registration statement and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of Registrable Securities; provided, however, that neither Aon nor the Trust shall be required for any such purpose to (1) qualify to do business in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(x), (2) consent to general service of process in any such jurisdiction, (3) in the case of Aon, make any changes to its charter or by-laws or any agreement between it and its shareholders or, in the case of the Trust, make any changes to the Trust Agreement; (xi) use their reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; (xii) cooperate with the holders of the Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall be printed, lithographed or engraved, or produced by any combination of such methods, and which shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities; (xiii) provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time; (xiv) enter into not more than one underwriting agreement, engagement letter, agency agreement, "best efforts" underwriting agreement or similar agreement, as appropriate, including (without limitation) provisions relating to indemnification and contribution substantially the same as those set forth in Section 6 hereof, and take such other actions in connection therewith as any holders of Registrable Securities aggregating at least 25% in aggregate Liquidation Amount, or in the aggregate principal amount, as the case may be, of the Registrable Securities at the time outstanding shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; provided, that Aon and the Trust shall not be required to (i) enter into any such agreement more than once with respect to all of the Registrable Securities and may delay entering into such agreement until the consummation of any underwritten public offering which Aon and the Trust shall have then undertaken or (ii) enter into any engagement letter, agency agreement, "best effort" underwriting agreement -10- or similar agreements whatsoever with respect to the Registrable Securities, and provided further, that Aon and the Trust shall not be obligated to enter into any such agreement with a broker-dealer which results in the need for a "qualified independent underwriter" (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time (the "Rules and By- Laws of NASD")); (xv) whether or not an agreement of the type referred to in Section (3)(d)(xiv) hereof is entered into and whether or not any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent or any other entity, (A) make such representations and warranties to the holders of such Registrable Securities and the placement or sales agent, if any, therefor and the underwriters, if any, thereof substantially the same as those set forth in Section 1 of the Purchase Agreement and such other representations and warranties as are customarily made with respect to the offering of debt securities pursuant to any appropriate agreement or to a registration statement on the applicable form under the Securities Act; (B) obtain an opinion or opinions of counsel to Aon and the Trust substantially the same as the opinions provided for in Section 5 of the Purchase Agreement with such additions, substitutions or deletions of such matters as are customarily covered in opinions for an underwritten offering, addressed to such holder or holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof and dated the effective date of such registration statement (and if such registration statement contemplates an underwritten offering of a part or all of the Registrable Securities, dated the date of the closing under the underwriting agreement relating thereto) (it being agreed that the matters to be covered by such opinion shall also include, without limitation, the absence of governmental approvals required to be obtained in connection with the Shelf Registration, the offering and sale of the Registrable Securities, this Guarantee Exchange and Registration Rights Agreement or any agreement of the type referred to in Section (3)(d)(xiv) hereof, except such approvals as may be required under state securities or blue sky laws; and the compliance in all material respects as to form of such registration statement and any documents incorporated by reference therein and of the Indenture, the Guarantee Agreement and the Trust Agreement with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder, respectively); and, such opinion shall also state that such counsel has no reason to believe that, as of the date of the opinion and of the registration statement or most recent post-effective amendment thereto, as the case may be, such registration statement and the prospectus included therein, as then amended or supplemented, and the documents incorporated by reference therein (in each case other than the financial statements and other financial information contained therein) contains or contained an untrue statement of a material fact or omits or omitted to state therein a material fact necessary to make the statements therein not misleading (in the case of such documents, in the light of the circumstances existing at the time that such -11- documents were filed with the Commission under the Exchange Act); (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of Aon and the Trust addressed to the selling holders of Registrable Securities, the placement or sales agent, if any, therefor and the underwriters, if any, thereof, dated (i) the effective date of such registration statement and (ii) the effective date of any prospectus supplement to the prospectus included in such registration statement or post-effective amendment to such registration statement; (D) deliver such other documents and certificates, including officers' certificates, as may be reasonably requested by any holders of at least 25% in aggregate Liquidation Amount, or in the aggregate principal amount, as the case may be, of the Registrable Securities at the time outstanding or the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above or those contained in Section 5(a) hereof and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by Aon and the Trust; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 6 hereof; (xvi) notify in writing each holder of Registrable Securities of any proposal by Aon and the Trust to amend or waive any provision of this Guarantee Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof and of any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; (xvii) in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Rules and By-Laws of NASD) thereof, whether as a holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such broker- dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by (A) if such Rules or By-Laws, including Schedule E thereto (or any successor thereto), shall so require, engaging a "qualified independent underwriter" (as defined in such Schedule (or any successor thereto)) to participate in the preparation of the registration statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (B) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof (or to such other customary extent as may be required by such underwriter), and (C) providing such information to such broker-dealer as -12- may be required in order for such broker-dealer to comply with the requirements of the Rules and By-Laws of NASD; and (xviii) comply with all applicable rules and regulations of the Commission, and make generally available to its holders of the Securities as soon as practicable but in any event not later than eighteen months after the effective date of such registration statement, an earnings statement of Aon and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of Aon, Rule 158 thereunder). (e) In the event that Aon and the Trust would be required, pursuant to Section 3(d)(vi)(F) above, to notify the selling holders of Registrable Securities, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, Aon and the Trust shall without delay prepare and furnish to each such holder, to each placement or sales agent, if any, and to each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each broker-dealer holding Exchange Securities and each holder of Registrable Securities agrees that upon receipt of any notice from Aon and the Trust pursuant to Section 3(c)(iii)(F) or 3(d)(vi)(F) hereof, as the case may be, such holder shall forthwith discontinue the disposition of Exchange Securities or Registrable Securities, as the case may be, pursuant to the registration statement applicable to such Exchange Securities or Registrable Securities, as the case may be, until such holder shall have received copies of such amended or supplemented prospectus, and if so directed by Aon and the Trust, such holder shall deliver to Aon (at Aon's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Exchange Securities or Registrable Securities, as the case may be, at the time of receipt of such notice. (f) Aon and the Trust may require each holder of Registrable Securities as to which any registration is being effected to furnish in writing to Aon and the Trust such information regarding such holder and such holder's intended method of distribution of such Registrable Securities as Aon and the Trust may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act. Each such holder agrees to notify Aon and the Trust as promptly as practicable of any inaccuracy or change in information previously furnished by such holder to Aon and the Trust or of the occurrence of any event in either case as a result of which any prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such holder or such holder's intended method of distribution of such Registrable Securities or omits to state any material fact regarding such holder or such holder's intended method of distribution of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to Aon and the Trust any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such holder or the distribution of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to -13- be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each such holder shall comply with the provisions of the Securities Act applicable to such holder with respect to the disposition by such holder of Registrable Securities covered by such registration statement in accordance with the intended methods of disposition by such holder set forth in such registration statement. (g) Until the expiration three years after the Issue Date, Aon will not, and will not permit any of its "affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of the Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act or any exemption therefrom; provided, however, that, for purposes of this paragraph, "affiliates" shall not include the Purchasers or any of their affiliates other than Aon and its subsidiaries, officers, managers and directors. 4. Registration Expenses. If Aon and the Trust file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: Aon agrees to bear and to pay or cause to be paid promptly upon request being made therefor all expenses incident to the performance by Aon and the Trust or compliance with this Guarantee Exchange and Registration Rights Agreement, including, without limitation, (a) all Commission and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Securities and the Guarantee for offering and sale under the state securities and blue sky laws referred to in Section 3(d)(x) hereof, including reasonable fees and disbursements of counsel in connection with such qualifications, (c) all expenses relating to the preparation, printing, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, and the certificates representing the Securities and all documents relating hereto, (d) messenger and delivery expenses, (e) fees and expenses of the Debenture Trustee under the Indenture, the Issuer Trustees under the Trust Agreement and the Guarantee Trustee under the Guarantee Agreement, and of any escrow agent or custodian, (f) internal expenses (including, without limitation, all salaries and expenses of Aon's officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of Aon and the Trust (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any "qualified independent underwriter" engaged pursuant to Section 3(d)(xvii) hereof, (i) fees, disbursements and expenses of one counsel for the holders of Registrable Securities retained in connection with a Shelf Registration, as selected by the holders of at least a majority in aggregate Liquidation Amount, or the aggregate principal amount, as the case may be, of the Registrable Securities being registered, and fees, expenses and disbursements of any other persons, including special experts, retained by Aon or the Trust in connection with such registration (collectively, the "Registration Expenses"). To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, Aon shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a written request therefor. Notwithstanding the foregoing, the holders of the -14- Registrable Securities being registered shall pay all agency or brokerage fees and commissions and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above, transfer taxes on resale of any of the Securities by such holders and any advertising or solicitation expenses other than expenses specifically referred to above incurred by or on behalf of such holders in connection with any offers they may make. 5. Representations and Warranties. Aon and the Trust, jointly and severally, represent and warrant to, and agree with, each Purchaser and each of the holders from time to time of Registrable Securities that: (a) Each registration statement covering the Exchange Securities, the Exchange Guarantee and the Exchange Debentures or the Registrable Securities, the Guarantee and the Debentures and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d)(ix) hereof and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act, the rules and regulations of the Commission promulgated thereunder and any such registration statement and any amendment thereto will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and any such prospectus or any amendment or supplement thereto will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and at all times subsequent to the Effective Time of any such registration statement when a prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(c)(iii)(F) or Section 3(d)(vi)(F) hereof until (ii) such time as Aon and the Trust furnish an amended or supplemented prospectus pursuant to Section 3(c)(iv) or Section 3(e) hereof, as the case may be, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(c) or Section 3(d)(ix) hereof, as then amended or supplemented, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission promulgated thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Aon and the Trust by a holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof expressly for use therein. (b) Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the -15- Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Aon and the Trust by a holder of Registrable Securities expressly for use therein. (c) The representations and warranties of the Trust and Aon contained in Section 1 of the Purchase Agreement are true and correct with the same force and effect as though expressly made at and as of the date hereof. 6. Indemnification. (a) Upon the registration of the Exchange Guarantee or the Guarantee, as the case may be, pursuant to Section 2 hereof, and in consideration of the agreements of the Purchasers contained herein, and as an inducement to the Purchasers to purchase the Securities, the Trust and Aon, jointly and severally, agree to indemnify and hold harmless, each of the holders of Registrable Securities to which the Exchange Guarantee or the Guarantee relates, and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities and each person, if any, who controls such holder, or such placement or sales agent, if any, or such underwriter, if any, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each an "Indemnified Person") as follows: (i) against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which the Exchange Guarantee or the Guarantee were registered under the Securities Act, or caused by the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus (or any amendment or supplement thereto) contained in such registration statement or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission that was made in reliance upon and in conformity with written information relating to such Indemnified Person furnished to the Trust and Aon by, or on behalf of, such Indemnified Person expressly for use in such registration statement or such preliminary, final or summary prospectus (or any amendment or supplement thereto); -16- (ii) against any and all losses, claims, damages and liabilities whatsoever to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission (except as made in reliance upon and in conformity with information relating to such Indemnified Person furnished by, or on behalf of, such Indemnified Person as aforesaid), if such settlement is effected with the written consent of the Trust and Aon; and (iii) against any and all expense whatsoever (including the fees and disbursements of counsel chosen by such Indemnified Person), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission (except as made in reliance upon and in conformity with information relating to such Indemnified Person furnished by, or on behalf of, such Indemnified Person as aforesaid) to the extent that any such expense is not paid under (i) or (ii) above. provided, however, that indemnification with respect to any prospectus shall not inure to the benefit of any holder of Registrable Securities or Exchange Securities from whom the Person asserting any loss, claim, damage, liability or expense purchased such Securities, if a copy of the prospectus (as then amended or supplemented and furnished by Aon to such holder) was not sent or given by or on behalf of such holder to such person if such is required by law at or prior to the sale of such Registrable Securities or Exchange Securities, as the case may be, and if the prospectus (as so amended and supplemented) would have cured the defect giving rise to such loss, claim, damage, liability or expense. (b) Aon may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2 hereof and to entering into any placement or underwriting agreement with respect thereto, that Aon shall have received an undertaking reasonably satisfactory to them from the holder of such Registrable Securities and from each placement agent or underwriter named in any such placement agreement or underwriting agreement, severally and not jointly, to indemnify and hold harmless the Trust and Aon and each person, if any, who controls the Trust or Aon within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, claim, damage, liability and expense described in the indemnity contained in subsection (a) of this Section, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in any registration statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein as furnished by the Trust or Aon to any such holder, agent or underwriter (or any amendment or supplement thereto), in reliance upon and in conformity with written information relating to such holder, or such placement or sales agent, if any, or such underwriter, if any, furnished to the Trust and Aon by or on behalf of such holder, or such placement or sales agent, if any, or such underwriter, if any, expressly for use in such registration statement or such preliminary, final or summary prospectus (or any amendment or supplement thereto). -17- (c) Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, however, that when more than one of such holders, such placement or sales agents, if any, or such underwriters, if any, is an indemnified party each such holder, placement or sales agent or such underwriter, as the case may be, shall be entitled to separate counsel (in addition to any local counsel) in each such jurisdiction to the extent such holder, placement or sales agent or such underwriter, as the case may be, may have interests conflicting with those of the other holder, placement or sales agent or such underwriter, as the case may be. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 6 is for any reason held to be unavailable to such holders, such placement or sales agents, if any, or such underwriters, if any, in accordance with its terms, the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, in such proportions as is appropriate to reflect the relative benefits received by the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other. The relative benefits received by the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other shall be deemed to be in such proportion represented by the percentage that the total commissions and underwriting discounts received by such holders, such placement and sales agents, if any, and such underwriters, if any, to the date of such liability bears to the total sales price (before deducting expenses) received by the Trust and such holders, such placement and sales agents, if any, and such underwriters, if any, from the sale of such Securities made to the date of such liability, and the Trust and Aon are jointly and severally responsible for the balance. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if such holders, such placement and sales agents, if any, and such underwriters, if any, failed to give the notice required under this subsection (c), then the Trust, Aon and such holders, such placement and sales agents, if any, and such underwriters, if any, shall contribute to such aggregate losses, liabilities, claims, damages and expenses in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Trust and Aon on the one hand and such holders, such placement and sales agents, if any, and such underwriters, if any, on the other in connection with the statements or omissions which resulted in such liabilities, claims, damages and expenses, as well as any other relevant equitable considerations. The relative fault shall be determined by reference -18- to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust and Aon on the one hand or is supplied by, or on behalf of, such holders, such placement or sales agents, if any, and such underwriters, if any, on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Trust, Aon and such holders, such placement or sales agents, if any, and such underwriters, if any, agree that it would not be just and equitable if contributions pursuant to this paragraph were determined pro rata (even if such holders, such placement or sales agents, if any, and such underwriters, if any, were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding the provisions of this paragraph, such holders, such placement or sales agents, if any, and such underwriters, if any, shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities referred to in the second sentence of this paragraph that were offered and sold to the public through such holders, such placement or sales agents, if any, and such underwriters, if any, exceeds the amount of any damages that such holders, such placement or sales agents, if any, and such underwriters, if any, have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled under this paragraph to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls any such holders, such placement or sales agents, if any, and such underwriters, if any, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such holders, such placement or sales agents, if any, and such underwriters, if any, and each person, if any, who controls the Trust or Aon within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Trust or Aon. 7. Miscellaneous. (a) No Inconsistent Agreements. Each of the Trust and Aon represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to the Guarantee or any other securities which would be inconsistent with the terms contained in this Guarantee Exchange and Registration Rights Agreement and that the Debenture Exchange and Registration Rights Agreement and the Capital Securities Exchange and Registration Rights Agreement should be construed to be consistent with the terms hereof. (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder and that each party may be irreparably harmed by any such failure and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Guarantee Exchange and Registration Rights Agreement in accordance with the terms and conditions of this Guarantee Exchange and Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. -19- (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: if to the Trust or to Aon, then to Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606, Attention: Treasurer, and if to a holder, to the address of such holder set forth in the security register or other records of the Trust, or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (d) Parties in Interest. All the terms and provisions of this Guarantee Exchange and Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto. In the event that any transferee of any holder of Registrable Securities shall become a holder of Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a party hereto for all purposes and such Registrable Securities shall be held subject to all of the terms of this Guarantee Exchange and Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Guarantee Exchange and Registration Rights Agreement. If Aon shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the terms hereof. (e) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Guarantee Exchange and Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer. In addition, the respective indemnities, representations and warranties set forth herein shall survive the termination hereof. (f) LAW GOVERNING. THIS GUARANTEE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Guarantee Exchange and Registration Rights Agreement are inserted for convenience only, do not constitute a part of this Guarantee Exchange and Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Guarantee Exchange and Registration Rights Agreement. (h) Entire Agreement; Amendments. This Guarantee Exchange and Registration Rights Agreement and the other agreements referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its -20- subject matter. This Guarantee Exchange and Registration Rights Agreement and such other agreements referred to herein supersede all prior agreements and understandings between the parties with respect to its subject matter. This Guarantee Exchange and Registration Rights Agreement may be amended and the observance of any term of this Guarantee Exchange and Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by Aon, the Trust, and the holders of at least 66-2/3 percent in aggregate principal amount of the Registrable Securities at the time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 7(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. (i) Inspection. For so long as this Guarantee Exchange and Registration Rights Agreement shall be in effect, this Guarantee Exchange and Registration Rights Agreement and a complete list of the names and addresses of all the registered holders of Registrable Securities shall be made available for inspection and copying on any business day by any holder of Registrable Securities at the offices of Aon at the address thereof set forth in Section 9(c) above. (j) Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. (k) Termination. Except for the respective indemnities, representations and warranties set forth herein, this Guarantee Exchange and Registration Rights Agreement shall terminate when all the Securities, Exchange Securities and Registrable Securities cease to be outstanding. -21- This Agreement is hereby executed as of the day and year first above written. AON CORPORATION By: /s/ Harvey N. Medvin ------------------------------------ Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer AON CAPITAL A By: /s/ Harvey N. Medvin ------------------------------------ Name: Harvey N. Medvin Administrative Trustee MORGAN STANLEY & CO., INCORPORATED As Representative of the Purchasers named in Schedule I to the Purchase Agreement By: /s/ Michael Fusco ------------------------------------ (Morgan Stanley & Co. Incorporated) Acting severally, and not jointly and severally, on behalf of themselves and each of the Purchasers named in Schedule I to the Purchase Agreement -22- EX-4.13 12 AGREEMENT AS TO EXPENSES AND LIABILITIES AGREEMENT AS TO EXPENSES AND LIABILITIES AGREEMENT dated as of January 13, 1997, between Aon Corporation, a Delaware corporation ("Aon"), and Aon Capital A, a Delaware business trust (the "Trust"). WHEREAS, the Trust intends to issue its 8.205% Common Securities (the "Common Securities") to, and purchase 8.205% Junior Subordinated Deferrable Interest Debentures (the "Debentures") from, Aon, and to issue and sell its 8.205% Capital Securities (the "Private Capital Securities") with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of January 13, 1997, as the same may be amended from time to time (the "Trust Agreement"); WHEREAS, Aon will directly or indirectly own all of the 8.205% Common Securities of the Trust and will issue the Debentures; WHEREAS, the Trust may issue a new series of 8.205% capital securities (the "Exchange Capital Securities" and, together with the "Private Capital Securities," the "Capital Securities") in connection with an exchange offer (the "Exchange Offer") registered under the Securities Act of 1933, as amended; NOW, THEREFORE, in consideration of the purchase by each holder of the Capital Securities, which purchase Aon hereby agrees shall benefit Aon and which purchase Aon acknowledges will be made in reliance upon the execution and delivery of this Agreement, Aon and Trust hereby agree as follows: ARTICLE I SECTION 1.1. Guarantee by Aon Corporation Subject to the terms and conditions hereof, Aon hereby irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any costs, expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Capital Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the Capital Securities or such other similar interests, as the case may be. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof. SECTION 1.2. Terms of Agreement. This Agreement shall terminate and be of no further force and effect upon the later of (a) the date on which full payment has been made of all amounts payable to all holders of all the Capital Securities (whether upon redemption, liquidation, exchange or otherwise) and (b) the date on which there are no Beneficiaries remaining; provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Capital Securities or any Beneficiary must restore payment of any sums paid under the Capital Securities, under any Obligation, under the Capital Securities Guarantee Agreement dated the date hereof by Aon Corporation and The Bank of New York, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute. SECTION 1.3. Waiver of Notice. Aon hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and Aon hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 1.4. No Impairment. The obligations, covenants, agreements and duties of Aon under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations; (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust. There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, Aon with respect to the happening of any of the foregoing. SECTION 1.5. Enforcement. A Beneficiary may enforce this Agreement directly against Aon, and Aon waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against Aon. 2 SECTION 1.6. Subrogation. Aon shall be subrogated to all rights (if any) of the Trust in respect of any amounts paid to the Beneficiaries by Aon under this Agreement; provided, however, that Aon shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Agreement. ARTICLE II SECTION 2.1. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of Aon and shall inure to the benefit of the Beneficiaries. SECTION 2.2. Amendment. So long as there remains any Beneficiary or any Capital Securities of any series are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Capital Securities. SECTION 2.3. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same by personal delivery, by facsimile transmission or by first-class mail, addressed as follows (and if so given, shall be deemed given when so delivered, upon receipt of confirmation if by facsimile, or three days after mailed if by first-class mail): Aon Capital A c/o Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Attention: Treasurer Facsimile No.: 312/701-3900 3 Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Attention: Treasurer Facsimile No.: 312/701-3900 SECTION 2.4. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York (without regard to conflict of laws principles). 4 THIS AGREEMENT is executed as of the day and year first above written. AON CORPORATION By: /s/ Harvey N. Medvin ------------------------- Name: Harvey N. Medvin Title: Executive Vice President, Chief Financial Officer and Treasurer By: /s/ Raymond I. Skilling ------------------------- Name: Raymond I. Skilling Title: Executive Vice President and Chief Counsel AON CAPITAL A By: /s/ Harvey N. Medvin ------------------------ Name: Harvey N. Medvin Administrative Trustee 5 EX-5.1 13 OPINION OF SIDLEY & AUSTIN EXHIBIT 5.1 [LETTERHEAD OF SIDLEY & AUSTIN APPEARS HERE] February 5, 1997 The Board of Directors Aon Corporation 123 North Wacker Drive Chicago, Illinois 60606 Re: Aon Corporation Registration Statement on Form S-4 ----------------------------------- Ladies and Gentlemen: We refer to the Registration Statement on Form S-4 (the "Registration Statement") being filed by Aon Corporation, a Delaware corporation (the "Company"), and Aon Capital A, a special purpose statutory business trust created under the laws of the State of Delaware (the "Trust"), with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), relating to: (i) the exchange offer by the Trust of $800,000,000 aggregate Liquidation Amount of the 8.205% Capital Securities (liquidation amount $1,000 per Capital Security) of the Trust (the "New Capital Securities") for up to $800,000,000 aggregate Liquidation Amount of the outstanding 8.205% Capital Securities (liquidation amount $1,000 per Capital Security) of the Trust (the "Old Capital Securities"); (ii) the exchange by the Company with the Trust of $824,000,000 aggregate principal amount of the Company's 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 (the "New Debentures") for $824,000,000 aggregate principal amount of the Company's outstanding 8.205% Junior Subordinated Deferrable Interest Debentures due January 1, 2027 (the "Old Debentures"); and (iii) the guarantee (the "New Guarantee") by the Company of the payment of Distributions on, and payments on liquidation or redemption of, the New Capital Securities pursuant to the Capital Securities Guarantee Agreement (the "New Guarantee Agreement") to be entered into between the Company and The Bank of New York, as Trustee (the "Guarantee Trustee"), which is to be exchanged for the guarantee (the "Old Guarantee") by the Company of the payment of the Distributions on, and payments on liquidation or redemption of, the Old Capital Securities pursuant to the Capital Securities Guarantee Agreement dated as of January 13, 1997 between the Company and The Bank of New York, as Trustee. The New Capital Securities are to be issued under the Amended and Restated Trust Agreement dated as of January 13, 1997 (the "Trust Agreement") among the Company, as Depositor, The Bank of New York, as Property CHICAGO SIDLEY & AUSTIN The Board of Directors Aon Corporation February 5, 1997 Page 2 Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrative Trustees named therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust. The New Debentures are to be issued under the Junior Subordinated Indenture dated as of January 13, 1997 between the Company and The Bank of New York, as Debenture Trustee, as supplemented by the First Supplemental Indenture thereto dated as of January 13, 1997 (collectively, the "Indenture"). Capitalized terms not defined herein have the meanings specified in the Registration Statement. We are familiar with the proceedings to date with respect to the proposed issuance of the New Capital Securities, the New Debentures and the New Guarantee and have examined such records, documents and questions of law, and have satisfied ourselves as to such matters of fact, as we have considered relevant and necessary as a basis for the opinions expressed below. Based on the foregoing, we are of the opinion that: 1. All necessary corporate action has been taken to authorize and issue the New Debentures and the New Guarantee. 2. The New Debentures will be legally issued and binding obligations of the Company (except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the enforcement of creditors' rights generally and by the effect of general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law) when (i) the Registration Statement, as finally amended, shall have become effective under the Securities Act and the Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and (ii) the New Debentures shall have been duly executed and authenticated as provided in the Indenture and shall have been duly delivered against surrender and cancellation of a like principal amount of the Old Debentures in the manner described in the Registration Statement. 3. The New Guarantee will be a legally issued and binding obligation of the Company (except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting the enforcement of creditors' rights generally and by the effect of general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law) when (i) the Registration Statement, as finally amended, shall have become effective under the Securities Act and the New Guarantee Agreement shall have been qualified under the Trust Indenture Act and (ii) the New Guarantee Agreement shall have been duly executed and delivered by the Company and the Guarantee Trustee. CHICAGO SIDLEY & AUSTIN The Board of Directors Aon Corporation February 5, 1997 Page 3 For purposes of rendering the foregoing opinions, we have relied, as to various questions of fact material to such opinions, upon certificates of officers of the Company. We have also examined originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and other statements of government officials and other instruments, have examined such questions of law and have satisfied ourselves as to such matters of fact as we have considered relevant and necessary as a basis for such opinions. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of all natural persons and the conformity with the original documents of any copies thereof submitted to us for our examination. The opinions expressed above are limited to the General Corporate Law of the State of Delaware, the laws of the State of New York and the federal laws of the United States of America. We do not find it necessary for the purposes of this opinion to cover, and accordingly we express no opinion as to, the application of the securities or blue sky laws of the various states to the issuance of the New Debentures in exchange for the Old Debentures or to the issuance of the New Guarantee in exchange for the Old Guarantee. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to all references to our firm included in or made a part of the Registration Statement. Very truly yours, /s/ Sidley & Austin EX-5.2 14 OPINION OF SPECIAL DELAWARE COUNSEL EXHIBIT 5.2 [Letterhead of Richards, Layton & Finger] February 5, 1997 Aon Capital A c/o Aon Corporation 123 N. Wacker Drive Chicago, Illinois 60606 Re: Aon Capital A ------------- Ladies and Gentlemen: We have acted as special Delaware counsel for Aon Corporation, a Delaware corporation (the "Company"), and Aon Capital A, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated December 27, 1996 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on December 27, 1996; (b) The Trust Agreement of the Trust, dated as of December 27, 1996, among the Company, as Depositor, and the trustees of the Trust named therein; Aon Capital A February 5, 1997 Page 2 (c) The Amended and Restated Trust Agreement of the Trust, dated as of January 13, 1997, including Exhibits A, B, C, D, E, I and J thereto) (the "Trust Agreement"), among the Company, as Depositor, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust; (d) The Registration Statement on Form S-4, including a preliminary prospectus ("Prospectus"), relating to the 8.205% Capital Securities of the Trust representing undivided beneficial interests in the assets of the Trust (each, a "Capital Security" and collectively, the "Capital Securities"), as proposed to be filed by the Company and the Trust with the Securities and Exchange Commission on or about February 5, 1997; and (e) A Certificate of Good Standing for the Trust, dated February 5, 1997, obtained from the Secretary of State. Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement and the Certificate are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due creation or due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due Aon Capital A February 5, 1997 Page 3 authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Capital Security is to be issued by the Trust (collectively, the "Capital Security Holders") of a Capital Securities Certificate for such Capital Security and the payment for the Capital Security acquired by it, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Capital Securities are issued and sold to the Capital Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder that are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act. 2. The Capital Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Capital Security Holders, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Capital Security Holders may be obligated to make payments as set forth in the Trust Agreement. We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Validity of Securities" in the Prospectus. In giving the foregoing consents, we do not thereby admit that we come within the category of Persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Except as Aon Capital A February 5, 1997 Page 4 stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other Person for any purpose. Very truly yours, /s/ Richards, Layton & Finger EX-8 15 OPINION OF SPECIAL TAX COUNSEL EXHIBIT 8 [Letterhead of Sidley & Austin] February 5, 1997 Aon Corporation 123 North Wacker Drive Chicago, IL 60606 Ladies and Gentlemen: We have acted as counsel to Aon Corporation, a Delaware corporation (the "Company"), and Aon Capital A, a Delaware statutory business trust (the "Trust"), in connection with the offer (the "Exchange Offer") by the Trust to exchange its registered 8.205% Capital Securities for its outstanding non- registered 8.205% Capital Securities, as described in the Registration Statement on Form S-4 (the "Registration Statement"), which is being filed by the Company and the Trust with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. The Registration Statement includes the Prospectus (the "Prospectus") relating to such offer. Capitalized terms not defined herein have the meanings specified in the Prospectus. In rendering the opinion expressed below, we have examined the Prospectus and such other documents as we have deemed relevant and necessary, including, without limitation, the Trust Agreement, the Indenture, the Old Guarantee Agreement and the New Guarantee Agreement. Such opinion is conditioned, among other things, upon the accuracy and completeness of the facts, information and representations contained in the Prospectus as of the date hereof and the continuing accuracy and completeness thereof as of the date of the consummation of the Exchange Offer. We have assumed that the transactions contemplated by the Prospectus and such other documents will occur as provided therein and that there will be no material change to the Prospectus or any of such other documents between the date hereof and the date of the consummation of the Exchange Offer. Aon Corporation February 5, 1997 Page 2 Based upon and subject to the foregoing, we are of the opinion that the discussion set forth in the Prospectus under the caption "Certain Federal Income Tax Consequences" constitutes, in all material respects, a fair and accurate summary of the matters addressed therein, based upon current law and the assumptions stated or referred to therein. We assume no obligation to update or supplement this letter to reflect any facts or circumstances which may hereafter come to our attention with respect to the opinion expressed above, including any changes in applicable law which may hereafter occur. We hereby consent to the filing of this letter as an Exhibit to the Registration Statement and to all references to our Firm included in or made a part of the Registration Statement. Very truly yours, /s/ Sidley & Austin EX-12 16 COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES Aon Corporation and Consolidated Subsidiaries Combined With Unconsolidated Subsidiaries Computation of Ratio of Earnings to Fixed Charges
Supplemental(2) Supplemental(2) (millions except ratios) Pro Forma(1) Pro Forma(1) Pro Forma Pro Forma Twelve Months Nine Months Twelve Months Nine Months Ended Dec. 31, Ended Sept 30, Ended Dec. 31, Ended Sept 30, 1995 1996 1995 1996 ---------------------------------------------------------------------------- Income from continuing operations before provision for income taxes 392.4 325.7 551.5 415.8 Less: minority interests (71.4) (54.2) Interest on indebtedness 121.1 82.1 147.9 100.0 Interest on ESOP 5.3 3.5 5.3 3.5 Portion of rents representative of interest factor 21.4 20.0 49.3 41.0 ---------------------------------------------------------------------------- Income as adjusted 540.2 431.3 682.6 506.1 ============================================================================ Fixed Charges: Interest on indebtedness 121.1 82.1 147.9 100.0 Interest on ESOP 5.3 3.5 5.3 3.5 Portion of rents representative of interest factor 21.4 20.0 49.3 41.0 ---------------------------------------------------------------------------- Total fixed charges 147.8 105.6 202.5 144.5 ============================================================================ Ratio of earnings to fixed charges 3.7 4.1 3.4 3.5 ============================================================================
(1) Gives effect to the increase in fixed charges as a result of the issuance of the Capital Securities. (2) Gives effect to the increase in fixed charges as a result of the issuance of the Capital Securities and the acquisition of Alexander & Alexander as reflected in the pro forma condensed consolidated statements of income. The supplemental pro forma ratios exclude any restructuring charges that may be incurred and any cost savings the Company may realize. Aon Corporation and Consolidated Subsidiaries Combined With Unconsolidated Subsidiaries Computation of Ratio of Earnings to Fixed Charges
Nine Months Ended Sept 30, Years Ended December 31, ----------------- --------------------------------- ------ (millions except ratios) 1996 1995 1995 1994 1993 1992(1) 1991 ------- ------- ------ ------ ------ ------ ------ Income from continuing operations before provision for income taxes $374.9 $360.9 $458.0 $397.0 $331.6 $179.1 $242.4 Add back fixed charges: Interest on indebtedness 32.9 41.2 55.5 46.4 42.3 41.9 40.7 Interest on ESOP 3.5 4.1 5.3 5.9 6.5 6.9 7.2 Portion of rents representative of interest factor 20.0 18.0 21.4 28.7 26.1 19.2 15.4 ------ ------ ------ ------ ------ ------ ------ Income as adjusted $431.3 $424.2 $540.2 $478.0 $406.5 $247.1 $305.7 ====== ====== ====== ====== ====== ====== ====== Fixed charges: Interest on indebtedness $ 32.9 $ 41.2 $ 55.5 $ 46.4 $ 42.3 $ 41.9 $ 40.7 Interest on ESOP 3.5 4.1 5.3 5.9 6.5 6.9 7.2 Portion of rents representative of interest factor 20.0 18.0 21.4 28.7 26.1 19.2 15.4 ------ ------ ------ ------ ------ ------ ------ Total fixed charges $ 56.4 $ 63.3 $ 82.2 $ 81.0 $ 74.9 $ 68.0 $ 63.3 ====== ====== ====== ====== ====== ====== ====== Ratio of earnings to fixed charges 7.6 6.7 6.6 5.9 5.4 3.6 4.8 ====== ====== ====== ====== ====== ====== ======
(1) Income from continuing operations before provision for income taxes excludes the cumulative effect of changes in accounting principles. EX-23.1 17 CONSENT OF ERNST & YOUNG LLP Exhibit 23.1 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-4) and related Prospectus of Aon Corporation and Aon Capital A for the registration of $800,000,000 of 8.205% Capital Securities of Aon Capital A and to the incorporation by reference therein of our reports dated February 8, 1996, with respect to the consolidated financial statements and schedules of Aon Corporation included in and incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP Chicago, Illinois February 3, 1997 EX-23.2 18 CONSENT OF DELOITTE AND TOUCHE LLP EXHIBIT 23.2 We consent to the use in this Registration Statement of Aon Corporation and Aon Capital A on Form S-4 of our report dated February 14, 1996 on the consolidated balance sheets of Alexander & Alexander Services Inc. as of December 31, 1995 and 1994, and the results of operations and cash flows for each of the three years in the period ended December 31, 1995, incorporated by reference in the Prospectus, which is part of this Registration Statement. We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/ Deloitte & Touche LLP Baltimore, Maryland February 5, 1997 EX-25.1 19 FORM T-1 STATEMENT OF ELIGIBILITY OF THE BANK OF N.Y. THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d) OF REGULATION S-T ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- AON CORPORATION (Exact name of obligor as specified in its charter) Delaware 36-3051915 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 123 N. Wacker Drive Chicago, Illinois 60606 (Address of principal executive offices) (Zip code) ------------------------ Junior Subordinated Deferrable Interest Debentures (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 24th day of January, 1997. THE BANK OF NEW YORK By: /S/ STEPHEN J. GIURLANDO --------------------------- Name: STEPHEN J. GIURLANDO Title: ASSISTANT VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................... $ 4,404,522 Interest-bearing balances............. 732,833 Securities: Held-to-maturity securities........... 789,964 Available-for-sale securities......... 2,005,509 Federal funds sold in domestic offices of the bank: Federal funds sold.................... 3,364,838 Loans and lease financing receivables: Loans and leases, net of unearned income ...................28,728,602 LESS: Allowance for loan and lease losses ................584,525 LESS: Allocated transfer risk reserve..........................429 Loans and leases, net of unearned income, allowance, and reserve 28,143,648 Assets held in trading accounts......... 1,004,242 Premises and fixed assets (including capitalized leases)................... 605,668 Other real estate owned................. 41,238 Investments in unconsolidated subsidiaries and associated companies............................. 205,031 Customers' liability to this bank on acceptances outstanding............... 949,154 Intangible assets....................... 490,524 Other assets............................ 1,305,839 ----------- Total assets............................ $44,043,010 =========== LIABILITIES Deposits: In domestic offices................... $20,441,318 Noninterest-bearing .........8,158,472 Interest-bearing ...........12,282,846 In foreign offices, Edge and Agreement subsidiaries, and IBFs...... 11,710,903 Noninterest-bearing ............46,182 Interest-bearing ...........11,664,721 Federal funds purchased in domestic offices of the bank: Federal funds purchased............... 1,565,288 Demand notes issued to the U.S. Treasury.............................. 293,186 Trading liabilities..................... 826,856 Other borrowed money: With original maturity of one year or less............................. 2,103,443 With original maturity of more than one year............................ 20,766 Bank's liability on acceptances executed and outstanding.............. 951,116 Subordinated notes and debentures....... 1,020,400 Other liabilities....................... 1,522,884 ----------- Total liabilities....................... 40,456,160 ----------- EQUITY CAPITAL Common stock............................ 942,284 Surplus................................. 525,666 Undivided profits and capital reserves.............................. 2,129,376 Net unrealized holding gains (losses) on available-for-sale securities............................ ( 2,073) Cumulative foreign currency translation adjustments............... ( 8,403) ----------- Total equity capital.................... 3,586,850 ----------- Total liabilities and equity capital ........................... $44,043,010 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot ) Thomas A. Renyi ) Directors Alan R. Griffith ) - -------------------------------------------------------------------------------- EX-25.2 20 FORM T-1 STATEMENT OF ELIGIBILITY OF THE BANK OF N.Y. THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d) OF REGULATION S-T ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- AON CAPITAL A (Exact name of obligor as specified in its charter) Delaware Applied For (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) c/o Aon Corporation 123 N. Wacker Drive Chicago, Illinois 60606 (Address of principal executive offices) (Zip code) ---------------------- Capital Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION A TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT F 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 2. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 24th day of January, 1997. THE BANK OF NEW YORK By: /S/ STEPHEN J. GIURLANDO ___________________________ Name: STEPHEN J. GIURLANDO Title: ASSISTANT VICE PRESIDENT Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin..................... $ 4,404,522 Interest-bearing balances............... 732,833 Securities: Held-to-maturity securities............. 789,964 Available-for-sale securities........... 2,005,509 Federal funds sold in domestic offices of the bank: Federal funds sold...................... 3,364,838 Loans and lease financing receivables: Loans and leases, net of unearned income .....................28,728,602 LESS: Allowance for loan and lease losses ..................584,525 LESS: Allocated transfer risk reserve............................429 Loans and leases, net of unearned income, allowance, and reserve.......... 28,143,648 Assets held in trading accounts........... 1,004,242 Premises and fixed assets (including capitalized leases)..................... 605,668 Other real estate owned................... 41,238 Investments in unconsolidated subsidiaries and associated companies............................... 205,031 Customers' liability to this bank on acceptances outstanding................. 949,154 Intangible assets......................... 490,524 Other assets.............................. 1,305,839 ----------- Total assets.............................. $44,043,010 =========== LIABILITIES Deposits: In domestic offices..................... $20,441,318 Noninterest-bearing ...........8,158,472 Interest-bearing .............12,282,846 In foreign offices, Edge and Agreement subsidiaries, and IBFs...... 11,710,903 Noninterest-bearing ..............46,182 Interest-bearing .............11,664,721 Federal funds purchased in domestic offices of the bank: Federal funds purchased................. 1,565,288 Demand notes issued to the U.S. Treasury................................ 293,186 Trading liabilities....................... 826,856 Other borrowed money: With original maturity of one year or less............................... 2,103,443 With original maturity of more than one year.............................. 20,766 Bank's liability on acceptances exe- cuted and outstanding................... 951,116 Subordinated notes and debentures......... 1,020,400 Other liabilities......................... 1,522,884 ----------- Total liabilities......................... 40,456,160 ----------- EQUITY CAPITAL Common stock.............................. 942,284 Surplus................................... 525,666 Undivided profits and capital reserves................................ 2,129,376 Net unrealized holding gains (losses) on available-for-sale securities.............................. ( 2,073) Cumulative foreign currency transla- tion adjustments........................ ( 8,403) ----------- Total equity capital...................... 3,586,850 ----------- Total liabilities and equity capital ................................ $44,043,010 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot ) Thomas A. Renyi ) Directors Alan R. Griffith ) -5- EX-25.3 21 FORM T-1 STATEMENT OF ELIGIBILITY THE BANK OF N.Y. THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d) OF REGULATION S-T ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- AON CORPORATION (Exact name of obligor as specified in its charter) Delaware 36-3051915 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) c/o Aon Corporation 123 N. Wacker Drive Chicago, Illinois 60606 (Address of principal executive offices) (Zip code) ---------------------- Guarantee of Capital Securities of Aon Capital A (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. (See Note on page 3.) 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7A - 29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of Practice. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 24th day of January, 1997. THE BANK OF NEW YORK By: /s/ Stephen J. Giurlando ----------------------------- Name: Stephen J. Giurlando Title: Assistant Vice President -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin................... $ 4,404,522 Interest-bearing balances............. 732,833 Securities: Held-to-maturity securities........... 789,964 Available-for-sale securities......... 2,005,509 Federal funds sold in domestic offices of the bank: Federal funds sold.................... 3,364,838 Loans and lease financing receivables: Loans and leases, net of unearned income ...................28,728,602 LESS: Allowance for loan and lease losses ................584,525 LESS: Allocated transfer risk reserve..........................429 Loans and leases, net of unearned income, allowance, and reserve 28,143,648 Assets held in trading accounts......... 1,004,242 Premises and fixed assets (including capitalized leases)................... 605,668 Other real estate owned................. 41,238 Investments in unconsolidated subsidiaries and associated companies............................. 205,031 Customers' liability to this bank on acceptances outstanding............... 949,154 Intangible assets....................... 490,524 Other assets............................ 1,305,839 ----------- Total assets............................ $44,043,010 =========== LIABILITIES Deposits: In domestic offices................... $20,441,318 Noninterest-bearing .........8,158,472 Interest-bearing ...........12,282,846 In foreign offices, Edge and Agreement subsidiaries, and IBFs.... 11,710,903 Noninterest-bearing ............46,182 Interest-bearing ...........11,664,721 Federal funds purchased in domestic offices of the bank: Demand notes issued to the U.S. Treasury.............................. 293,186 Trading liabilities..................... 826,856 Other borrowed money: With original maturity of one year or less............................. 2,103,443 With original maturity of more than one year............................ 20,766 Bank's liability on acceptances exe- cuted and outstanding................. 951,116 Subordinated notes and debentures....... 1,020,400 Other liabilities....................... 1,522,884 ---------- Total liabilities....................... 40,456,160 ---------- EQUITY CAPITAL Common stock............................ 942,284 Surplus................................. 525,666 Undivided profits and capital reserves.............................. 2,129,376 Net unrealized holding gains (losses) on available-for-sale securities............................ ( 2,073) Cumulative foreign currency transla- tion adjustments...................... ( 8,403) ---------- Total equity capital.................... 3,586,850 ---------- Total liabilities and equity capital ........................... $44,043,010 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot ) Thomas A. Renyi ) Directors Alan R. Griffith ) EX-99.1 22 FORM OF LETTER OF TRANSMITTAL EXHIBIT 99.1 LETTER OF TRANSMITTAL AON CAPITAL A Offer to Exchange Its 8.205% Capital Securities Which Have Been Registered Under the Securities Act of 1933 for Any and All of Its Outstanding 8.205% Capital Securities (Liquidation Amount $1,000 per Capital Security) pursuant to the Prospectus dated _____, 1997 ================================================================================ THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 p.m., NEW YORK CITY TIME, ON ______________, 1997 (AS SUCH DATE AND TIME MAY BE EXTENDED BY AON CORPORATION AND AON CAPITAL A IN THEIR SOLE DISCRETION, THE "EXPIRATION DATE"). ================================================================================ If you desire to accept the Exchange Offer, this Letter of Transmittal should be completed, signed and delivered to:
By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier: The Bank of New York The Bank of New York The Bank of New York 101 Barclay Street - 7E Attn: Enrique Lopez 101 Barclay Street New York, New York 10286 (212) 571 - 3080 Corporate Trust Services Window Attn: Reorganization Section Ground Level (For Eligible Institutions Only) New York, New York 10286 Confirm by Telephone: Attn: Reorganization Section (212) 815-6333 For Information Call: (212) 815-6333
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA A FACSIMILE NUMBER OTHER THAN THAT SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned hereby acknowledges receipt of the Prospectus dated ____________, 1997 (as the same may be amended or supplemented from time to time, the "Prospectus") of Aon Capital A, a Delaware business trust (the "Trust"), and this Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Trust's offer (the "Exchange Offer") to exchange its 8.205% Capital Securities (the "New Capital Securities") which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like Liquidation Amount of its outstanding 8.205% Capital Securities (the "Old Capital Securities"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. This Letter of Transmittal is to be completed either if (a) certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth under "The Exchange Officer -- Procedures for Tendering Old Capital Securities" in the Prospectus and an Agent's Message (as defined below) is not delivered. Certificates, or book-entry confirmation of a book-entry transfer of such Old Capital Securities into the Exchange Agent's account at the Depository Trust Company ("DTC"), as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term "book-entry confirmation" means a confirmation of book-entry transfer of Old Capital Securities into the Exchange Agent's account at DTC. The term "Agent's Message" means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by this Letter of Transmittal and that the Trust and Aon may enforce this Letter of Transmittal against such participant. If a registered holder (which term, for purposes of this document, shall include a participant in the book-entry transfer facility system at DTC whose name appears on a security position listing as the owner of the Old Capital Securities) desires to tender Old Capital Securities and such Old Capital Securities are not immediately available or time will not permit all documents required by the Exchange Offer to reach the Exchange Agent (or if the procedures for book-entry transfer cannot be completed on a timely basis) prior to the Expiration Date, a tender may be effected in accordance with the guaranteed delivery procedures set forth in Instruction 2. The undersigned hereby tenders to the Trust and Aon Corporation, a Delaware corporation ("Aon"), the aggregate Liquidation Amount of the Old Capital Securities described in Box 1 below (the "Tendered Old Capital Securities") in exchange for a like aggregate Liquidation Amount of the Trust's New Capital Securities which have been registered under the Securities Act, upon the terms and subject to the conditions described in the Prospectus and this Letter of Transmittal. The undersigned is the registered holder of all the Tendered Old Capital Securities and the undersigned represents that it has received from each beneficial owner of Tendered Old Capital Securities ("Beneficial Owners") a duly completed and executed form of "Instruction to Registered Holder from Beneficial Owner" accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal. Subject to and effective upon the acceptance for exchange of the Tendered Old Capital Securities tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Trust all right, title and interest in, to and under the Tendered Old Capital Securities. Unless otherwise indicated under "Special Delivery Instructions" below (Box 4), the undersigned hereby directs that the New Capital Securities exchanged for the Tendered Old Capital Securities be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Old Capital Securities, that such New Capital Securities be credited to the account indicated below maintained at DTC. If applicable, substitute certificates representing Old Capital Securities not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Old Capital Securities, will be credited to the -2- account indicated below maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery Instructions" below (Box 4), please send or cause to be sent the certificates for New Capital Securities (and accompanying documents, as appropriate) to the undersigned at the address shown below in Box 1. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney in fact (with full knowledge that the Exchange Agent is also acting as agent of Aon and the Trust in connection with the Exchange Offer) of the undersigned with respect to the Tendered Old Capital Securities, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), subject only to the right of withdrawal described in Instruction 6, to (i) deliver certificates for the Tendered Old Capital Securities to Aon or the Trust or cause ownership of the Tendered Old Capital Securities to be transferred to, or upon the order of, the Trust, on the books of the registrar for the Old Capital Securities and deliver all accompanying evidences of transfer and authenticity to, or transfer ownership of such Old Capital Securities on the account books maintained by DTC to, or upon the order of, the Trust, upon receipt by the Exchange Agent, as the undersigned's agent, of the New Capital Securities to be issued in exchange for such Old Capital Securities pursuant to the Exchange Offer, and (ii) receive for the account of the Trust all benefits and otherwise exercise all rights of beneficial ownership of the Tendered Old Capital Securities, all in accordance with the terms of the Exchange Offer. The undersigned understands that tenders of Old Capital Securities pursuant to any one of the procedures described under the caption "The Exchange Offer - Procedures for Tendering Old Capital Securities" in the Prospectus and in the instructions hereto will, upon Aon's and the Trust's acceptance for exchange of such Tendered Old Capital Securities, constitute a binding agreement among the undersigned, Aon and the Trust upon the terms and subject to the conditions of the Exchange Offer, subject only to withdrawal of such tenders on the terms set forth in Instruction 6. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, Aon and the Trust may not be required to accept for exchange any of the Tendered Old Capital Securities. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any Beneficial Owner(s), and every obligation of the undersigned or any Beneficial Owners hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned and such Beneficial Owner(s). The undersigned hereby represents, warrants and agrees that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Tendered Old Capital Securities and that the Trust will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances when the Tendered Old Capital Securities are acquired by the Trust as contemplated herein, and the Tendered Old Capital Securities are not subject to any adverse claims or proxies. The undersigned warrants and agrees that the undersigned and each Beneficial Owner will, upon request, execute and deliver any additional documents deemed by Aon, the Trust or the Exchange Agent to be necessary or desirable to complete the tender, exchange, sale, assignment and transfer of the Tendered Old Capital Securities, and that the undersigned will comply with its obligations under the Registration Rights Agreement. The undersigned has read and agrees to all of the terms of the Exchange Offer. The undersigned hereby represents and warrants that the information set forth in Box 2 is true and correct. BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL (OR DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF), THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT (i) NEITHER THE UNDERSIGNED NOR ANY BENEFICIAL OWNER(S) IS AN "AFFILIATE" OF AON OR THE TRUST, (ii) ANY NEW -3- CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S) ARE BEING ACQUIRED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S) IN THE ORDINARY COURSE OF BUSINESS OF THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S), (iii) THE UNDERSIGNED AND EACH BENEFICIAL OWNER HAVE NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (iv) IF THE UNDERSIGNED OR ANY BENEFICIAL OWNER IS NOT A BROKER-DEALER, THE UNDERSIGNED AND ANY SUCH BENEFICIAL OWNER IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL (OR DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF), THE UNDERSIGNED OR ANY BENEFICIAL OWNER(S) OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS THE RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT). Aon and the Trust have agreed that, subject to the provisions of the Registration Rights Agreement and to the limitations described in the Prospectus, the Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer (as defined below) in connection with resales of New Capital Securities received in exchange for Old Capital Securities where such Old Capital Securities were acquired by such Participating Broker-Dealer for its own account as a result of market-making activities or other trading activities, for a period ending 90 days after the Expiration Date or, if earlier, when all such New Capital Securities have been disposed of by such Participating Broker-Dealer. In that regard, each broker- dealer who acquired Old Capital Securities for its own account as a result of market-making or other trading activities (a "Participating Broker-Dealer"), by tendering such Old Capital Securities and executing this Letter of Transmittal or effecting delivery of an Agent's Message in lieu thereof, agrees that, upon receipt of notice from Aon or the Trust of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the Registration Rights Agreement, such Participating Broker-Dealer will suspend the sale of New Capital Securities (or the New Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to the Prospectus until Aon or the Trust has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to such Participating Broker-Dealer or Aon or the Trust has given notice that the sale of the New Capital Securities (or the New Guarantee or the New Junior Subordinated Debentures, as applicable) may be resumed, as the case may be. Any person, including any Participating Broker-Dealer, who is an "affiliate" of Aon or the Trust may not rely on the interpretive letters referred to above and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. -4- Each New Capital Security will accumulate Distributions from the most recent Distribution Date on the Old Capital Securities surrendered in exchange for such New Capital Securities or, if no Distributions have been paid or provided for on such Old Capital Securities, from January 1, 1997. As a result, holders of Old Capital Securities that are accepted for exchange will not receive accumulated Distributions on such Old Capital Securities for any period from and after the most recent Distribution Date on such Old Capital Securities or, if no Distributions have been paid or provided for on such Old Capital Securities, from and after January 1, 1997, and such holders will be deemed to have waived the right to receive any Distributions on such Old Capital Securities. Except as stated in the Prospectus, this tender is irrevocable. -5-
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THE BOXES BOX 1 DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED (Attach additional signed pages, if necessary) - ------------------------------------------------------------------------------------------------------------------------------------ Name(s) and address(es) of Certificate Aggregate Registered Holder(s), Number(s)* Liquidation Aggregate exactly as name(s) of Old Amount Liquidation appear(s) on Old Capital Capital Represented Amount Securities Certificate(s) Securities by Certificate(s) Tendered** or on a security position listing (Please fill in, if blank) - ------------------------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- ==================================================================================================================================== * Need not be completed by book-entry holders. ** Old Capital Securities may be tendered in whole or in part in denominations of $100,000 (100 Old Capital Securities)or any integral multiple of $1,000 in excess thereof, provided that if any Old Capital Securities are tendered for exchange in part, the untendered aggregate Liquidation Amount thereof must be $100,000 (100 Old Capital Securities) or any integral multiple of $1,000 in excess thereof. All Old Capital Securities held shall be deemed tendered unless a lesser number is specified in this column. See Instruction 6. BOX 2 BENEFICIAL OWNER(S) ==================================================================================================================================== State of Principal Residence of Each Beneficial Aggregate Liquidation Amount of Tendered Old Capital Owner of Tendered Old Capital Securities Securities Held for Account of Beneficial Owner - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ ====================================================================================================================================
-6- If delivery of Old Capital Securities is to be made by book-entry transfer to the account maintained by the Exchange Agent at DTC, then tenders of Old Capital Securities must be effected in accordance with the procedures mandated by DTC's Automated Tender Offer Program and the procedures set forth in the Prospectus under the caption "The Exchange Offer - Procedures for Tendering Old Capital Securities - Book Entry Transfer."
- ------------------------------------------------------------------------------ BOX 3 (TO BE COMPLETED BY ELIGIBLE INSTITUTIONS ONLY) - ------------------------------------------------------------------------------ [_] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY BOOK- ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution_______________________________ DTC Account Number__________________________________________ Transaction Code Number_____________________________________ [_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name of Registered Holder(s)________________________________ Window Ticket Number (if any)_______________________________ Date of Execution of Notice of Guaranteed Delivery__________ Name of Institution which Guaranteed Delivery_______________ If Guaranteed Delivery is to be made By Book-Entry Transfer: Name of Tendering Institution_______________________________ DTC Account Number__________________________________________ Transaction Code Number_____________________________________ - ------------------------------------------------------------------------------
-7- - ------------------------------------------------------------------------ BOX 3 (CONT'D) [_] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE. [_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ____________________________________________________________ Address: ____________________________________________________________ - ------------------------------------------------------------------------------
-8- - ------------------------------------------------------------------------------ BOX 4 SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 4, 7 and 8) To be completed ONLY if the New Capital Securities are to be issued in the name of someone other than the registered holder(s) of the Old Capital Securities whose name(s) appear(s) above (Box 1) or if Old Capital Securities delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account other than the account indicated above (Box 3).
Issue [_] Old Capital Securities not tendered [_] New Capital Securities to: Name(s): ----------------------------------------------------------------------- Address: ----------------------------------------------------------------------- ----------------------------------------------------------------------- ----------------------------------------------------------------------- (include Zip Code) Area Code and Telephone Number: ------------------------------------------------------------- Tax Identification or Social Security No.: ----------------------------------------------------------- [_] Credit unexchanged Old Capital Securities delivered by book-entry transfer to the DTC account set forth below. -------------------------------------- (DTC Account Number, if applicable) - ------------------------------------------------------------------------------------------------------------------
-9- ================================================================================ BOX 5 SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4, 7 and 8) To be completed ONLY if certificates for the New Capital Securities exchanged for the Old Capital Securities and for untendered Old Capital Securities are to be sent to someone other than the registered holder(s) whose name(s) appear(s) above (Box 1), or to such registered holder(s) at an address other than that shown above (Box 1). Mail New Capital Securities and any untendered Old Capital Securities to: Name(s): - -------------------------------------------------------------------------------- (please print) Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (include Zip Code) Area Code and Telephone Number: -------------------------------------------------------- Tax Identification or Social Security No.: -------------------------------------------------------- ================================================================================ -10- =============================================================================== BOX 6 USE OF GUARANTEED DELIVERY [_] CHECK HERE ONLY IF OLD CAPITAL SECURITIES ARE BEING TENDERED BY MEANS OF A NOTICE OF GUARANTEED DELIVERY. See Instruction 2. If this box is checked, please provide the following information: Name(s) of Registered Holder(s): --------------------------------------------- - ------------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: -------------------------- Name of Institution which Guaranteed Delivery: ------------------------------- =============================================================================== -11- ================================================================================ BOX 7 TENDERING HOLDER SIGNATURE (See Instructions 1, 4 and 7) In Addition, Complete Substitute Form W-9 on page 13 - -------------------------------------------------------------------------------- X __________________________________________ X __________________________________________ (Signature(s) of Registered Holder(s) or Authorized Signatory) Note: The above lines must be signed by the registered holder(s) of Old Capital Securities exactly as their name(s) appear(s) on certificate(s) for Old Capital Securities hereby tendered or on a security position listing, or by person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith (including such opinions of counsel, certifications and other information as may be required by Aon or the Trust to comply with the restrictions on transfer applicable to the Old Capital Securities). If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer, or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. See Instruction 7. Dated: ___________________________________ Name(s): ___________________________________ ___________________________________ (please print) Capacity: ___________________________________ ___________________________________ (full title) Street Address: _____________________________ ___________________________________ ___________________________________ (include Zip Code) Area Code and Telephone Number: ___________________________________ Tax Identification or Social Security Number(s): ___________________________________ Guarantee of Signature(s) (If required by Instructions 4 and 7) Authorized Signature X __________________________________________ Name: _______________________________________ (please print) Title: ______________________________________ Name of Firm: _______________________________ (Must be an Eligible Institution as defined in Instruction 2) Address: ____________________________________ ____________________________________ ____________________________________ (include Zip Code) Area Code and Telephone Number: ______________________________________ Dated: ______________________________________ ================================================================================ -12- Substitute Request for Taxpayer Give form to the Form W-9 Identification Number and Certification requester. DO NOT send to the IRS. - -------------------------------------------------------------------------------- Please print or type Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part 1 below. See instructions on page 2 if your name has changed.) - -------------------------------------------------------------------------------- Business name (Sole proprietors see instructions on page 2.) - -------------------------------------------------------------------------------- Please check appropriate box: [_] Individual/Sole proprietor [_] Corporation [_] Partnership [_] Other . _____________________ - -------------------------------------------------------------------------------- Address (number, street, and apt. or suite no.) - -------------------------------------------------------------------------------- City, State, and ZIP code Requestor's a name and address (optional) - -------------------------------------------------------------------------------- Part 1 Taxpayer Identification Number (TIN) List account number(s) here (optional) - -------------------------------------------------------------------------------- Enter your TIN in the appropriate box. For individuals, this is your social security number (SSN). For sole proprietors, see the enclosed guidelines. For other entities, it is your employer identification number (EIN). If you do not have a number, see How To Get a TIN below. Social security number: [___-__-___] OR Employer identification number: [__-_______] - -------------------------------------------------------------------------------- Note: If the account is in more than one name, see the chart on the enclosed guidelines on whose number to enter. - -------------------------------------------------------------------------------- Part II For Payees Exempt From Backup Withholding (See the enclosed guidelines on page 2) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Part III Certification - -------------------------------------------------------------------------------- Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me) and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. Certification Instructions.--You must cross out Item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. For real estate transactions, Item 2 does not apply. For mortgage interest paid, the acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. (Also see Part III Instructions on page 2.) - -------------------------------------------------------------------------------- Sign Here Signature . Date . - -------------------------------------------------------------------------------- 13 INSTRUCTIONS TO LETTER OF TRANSMITTAL FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. Delivery of this Letter of Transmittal and Certificates. Certificates for the Tendered Old Capital Securities, as well as a properly completed and duly executed copy of this Letter of Transmittal, with any required signature guarantees, a Substitute Form W-9 (or facsimile thereof) and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date; provided, however, that book-entry transfers of Old Capital Securities may be effected in accordance with the procedures mandated by DTC's Automatic Tender Offer Program ("ATOP"). Although delivery of Old Capital Securities may be effected through ATOP, this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in lieu of this Letter of Transmittal, and any other required documents, must in any case be delivered to and received by the Exchange Agent at one of its addresses set forth above on or prior to the Expiration Date, or the guaranteed delivery procedure set forth in Instruction 2 must be complied with. THE METHOD OF DELIVERY OF CERTIFICATES FOR OLD CAPITAL SECURITIES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS TO BE BY MAIL, THE USE OF REGISTERED MAIL, WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Neither Aon nor the Trust will accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a Letter of Transmittal (or facsimile thereof or delivery of an Agent's Message in lieu thereof), waives any right to receive any notice of the acceptance of such tender. 2. Guaranteed Delivery Procedures. Holders who wish to tender their Old Capital Securities but (i) the certificates for such Old Capital Securities are not immediately available, (ii) who cannot deliver their Old Capital Securities, Letter of Transmittal and any other documents required by the Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, must tender their Old Capital Securities according to the guaranteed delivery procedures set forth below, including completion of Box 6. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) on or prior to the Expiration Date, a completed and signed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery), substantially in the form accompanying this Letter of Transmittal, must have been delivered to the Exchange Agent; and (iii) the certificates (or a book-entry confirmation (as defined in the Prospectus)) representing the Tendered Old Capital Securities, in proper form for transfer, together with a completed and signed Letter of Transmittal or, in the case of a book-entry tender, an Agent's Message in lieu of this Letter of Transmittal, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within five New York Stock Exchange, Inc. trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. The Notice of Guaranteed Delivery may be delivered by hand, or transmitted by facsimile or mail to the Exchange Agent, and must include a guarantee by an Eligible Institution in the form set forth in such -14- Notice. For Old Capital Securities to be properly tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As used herein and in the Prospectus, "Eligible Institution" means a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as "an eligible guarantor institution," including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association. 3. Beneficial Owner Instructions to Registered Holders. Only a holder in whose name the Old Capital Securities are registered on the books of the registrar or on a security position listing (or the legal representative or attorney-in-fact of such registered holder) may execute and deliver this Letter of Transmittal (or an Agent's Message in lieu thereof). Any Beneficial Owner of Old Capital Securities who is not the registered holder must arrange promptly with the registered holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the registered holder of the Instructions to Registered Holder from Beneficial Owner form accompanying this Letter of Transmittal. 4. Guarantee of Signatures. No signature guarantee on this Letter of Transmittal is required if: (i) this Letter of Transmittal is signed by the registered holder of Old Capital Securities tendered herewith, unless such holder(s) has completed either the box entitled "Special Issuance Instructions" (Box 4) or the box entitled "Special Delivery Instructions" (Box 5) above, or (ii) such Old Capital Securities are tendered for the account of a firm that is an Eligible Institution. In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 7. 5. Inadequate Space. If the space provided in the box captioned "Description of Old Capital Securities" is inadequate, the certificate number(s) and/or the aggregate Liquidation Amount of Old Capital Securities and any other required information should be listed on a separate signed schedule which is attached to this Letter of Transmittal. 6. Partial Tenders and Withdrawal Rights. Tenders of Old Capital Securities will be accepted only in the aggregate Liquidation Amount of $100,000 (100 Old Capital Securities) or any integral multiple of $1,000 (1 Old Capital Security) in excess thereof, provided that if any Old Capital Securities are tendered for exchange in part, the untendered aggregate Liquidation Amount thereof must be $100,000 (100 Old Capital Securities) or any integral multiple of $1,000 (1 Old Capital Security) in excess thereof. If less than the entire aggregate Liquidation Amount of Old Capital Securities evidenced by any certificate submitted is tendered, the tendering holder should fill in the Liquidation Amount tendered in the column labeled "Aggregate Liquidation Amount Tendered" of the box entitled "Description of Old Capital Securities Tendered" (Box 1) above. The entire aggregate Liquidation Amount of Old Capital Securities delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire aggregate Liquidation Amount of all Old Capital Securities is not tendered, new certificate(s) for Old Capital Securities for the Liquidation Amount of Old Capital Securities not tendered and New Capital Securities exchanged for any Old Capital Securities tendered will be sent to the holder at his or her registered address, unless a different address is -15- provided in the appropriate box on this Letter of Transmittal, as soon as practicable following the Expiration Date. As set forth below, tenders of Old Capital Securities may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective, a written or facsimile transmission of such notice of withdrawal must be received by the Exchange Agent at one of its addresses set forth above on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Old Capital Securities to be withdrawn, the aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and (if certificates for Old Capital Securities have been tendered) the name of the registered holder of the Old Capital Securities as set forth on the certificate for the Old Capital Securities, if different from that of the person who tendered such Old Capital Securities. If certificates for the Old Capital Securities have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such certificates for the Old Capital Securities, the tendering holder must submit the serial numbers shown on the particular certificates for the Old Capital Securities to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Capital Securities tendered for the account of an Eligible Institution. If Old Capital Securities have been tendered pursuant to the procedures for book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering Old Capital Securities," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Capital Securities. Withdrawals of tenders of Old Capital Securities may not be rescinded. Old Capital Securities properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described in the Prospectus under "The Exchange Offer--Procedures for Tendering Old Capital Securities." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by Aon and the Trust, in their sole discretion, whose determination shall be final and binding on all parties. Aon, the Trust, any affiliates or assigns of Aon or the Trust, the Exchange Agent or any other person shall not be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Old Capital Securities which have been tendered but which are withdrawn will be returned to the holder thereof promptly after withdrawal. 7. Signatures on the Letter of Transmittal; Bond Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Tendered Old Capital Securities, the signature(s) must correspond exactly with the name(s) as written on the face of the certificates, or on a security position listing, without alteration, enlargement or any change whatsoever. If any of the Tendered Old Capital Securities are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any Tendered Old Capital Securities are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of the Letter of Transmittal documents as there are names in which certificates are held. If this Letter of Transmittal is signed by the registered holder(s) of Tendered Old Capital Securities and New Capital Securities are to be issued (and any untendered aggregate Liquidation Amount of Old Capital Securities is to be reissued) to the registered holder(s), the registered holder(s) need not and should not endorse any Tendered Old Capital Securities nor provide a separate bond power. In any other case, such registered holder(s) must either duly endorse the certificate(s) for Old Capital Securities tendered or transmit a properly executed bond power with the certificate(s), with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution. -16- If this Letter of Transmittal is signed by a person other than the registered holder(s) of any Old Capital Securities listed, the certificates must be endorsed or accompanied by appropriate bond powers, in each case, signed exactly as the name or names of the registered holder(s) appear(s) on the certificates, and also must be accompanied by such opinions of counsel, certifications and other information as Aon or the Trust may require in accordance with the restrictions on transfer applicable to the Old Capital Securities. The signature on the endorsement or bond power must be guaranteed by an Eligible Institution. If this Letter of Transmittal, any certificate for Old Capital Securities, bond power, power of attorney or any other document required by this Letter of Transmittal is signed by a trustee, executor, administrator, guardian, attorney- in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and, unless waived by Aon and the Trust, proper evidence satisfactory to Aon and the Trust, in their sole discretion, of such person's authority to so act must be submitted with this Letter of Transmittal. Endorsements on certificates or signatures on bond powers required by this Instruction 7 must be guaranteed by an Eligible Institution. 8. Special Delivery Instructions. If New Capital Securities are to be issued in the name of a person other than the registered holder(s) of Tendered Old Capital Securities or are to be sent to a name and address other than the name and address of the person signing this Letter of Transmittal or if Old Capital Securities delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to a DTC account other than that of the person signing this Letter of Transmittal, the appropriate boxes (Box 4 and/or Box 5) on this Letter of Transmittal should be completed. Certificates for Old Capital Securities not exchanged will be returned by mail or, if tendered by book-entry transfer, by crediting the account indicated above maintained at DTC. See Instruction 6. 9. Transfer Taxes. Holders who tender their Old Capital Securities for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Capital Securities are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Tendered Old Capital Securities, or if a transfer tax is imposed for any reason other than the exchange of Old Capital Securities in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. 10. Tax Identification Number. A holder whose Tendered Old Capital Securities are accepted for exchange should provide the Exchange Agent with such holder's correct taxpayer identification number ("TIN"), which, in the case of a holder who is an individual, is his or her social security number. If the Exchange Agent is not provided with the correct TIN, the holder or other payee may be subject to a $50 penalty imposed by the Internal Revenue Service (the "IRS"). In addition, payments to such holders or other payees with respect to Old Capital Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup withholding. To prevent backup withholding with respect to payments of distributions on the New Capital Securities, each tendering holder should provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), and that the holder is not subject to backup withholding because (i) the holder is exempt from backup withholding, or (ii) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup -17- withholding as a result of failure to report all interest or dividends, or (iii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the New Capital Securities will be registered in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for information on which TIN to report. Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. Such holders should nevertheless complete the attached Substitute Form W-9, and write "exempt" on the face thereof, to avoid possible erroneous backup withholding. A foreign person may qualify as an exempt recipient by submitting a properly completed IRS Form W-8, signed under penalties of perjury, attesting to that holder's exempt status. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. Aon and the Trust reserve the right in their sole discretion to take whatever steps are necessary to comply with the Trust's obligation regarding backup withholding. Any amount paid as backup withholding will be creditable against a holder's tax liability. 11. Validity of Tenders. All questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of Tendered Old Capital Securities will be determined by Aon and the Trust, in their sole discretion, whose determination shall be final and binding on all parties. Aon and the Trust reserve the absolute right, in their sole and absolute discretion, to reject any and all tenders determined by them not to be in proper form or the acceptance of which, or exchange for, may, in the view of Aon and the Trust or of counsel to Aon and the Trust, be unlawful. Aon and the Trust also reserve the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer as set forth in the Prospectus under "The Exchange Offer -- Conditions to the Exchange Offer" or any condition, defect or irregularity in any tender of Old Capital Securities of any particular holder whether or not similar conditions, defects or irregularities are waived in the case of other holders. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by Aon and the Trust will be final and binding on all parties. No tenders of Old Capital Securities will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Aon, the Trust, any affiliates or assigns of Aon or the Trust, the Exchange Agent or any other person shall not be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. 12. Mutilated, Lost, Stolen or Destroyed Certificates. Any tendering holder whose Old Capital Securities have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instruction. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing mutilated, lost, stolen or destroyed certificate(s) have been followed. 13. Questions, Requests for Assistance and Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus and this Letter of Transmittal may be directed to the Exchange Agent at the address and telephone number set forth on the front of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. 14. Acceptance of Tendered Old Capital Securities and Issuance of New Capital Securities; Return of Old Capital Securities. Subject to the terms and conditions of the Exchange Offer, Aon and the Trust will accept for exchange all validly tendered Old Capital Securities as soon as practicable after the Expiration Date and will issue New Capital Securities therefor as soon as practicable thereafter. For purposes of the Exchange -18- Offer, Aon and the Trust shall be deemed to have accepted the Tendered Old Capital Securities when, as and if Aon and the Trust have given written or oral notice thereof to the Exchange Agent. If any Tendered Old Capital Securities are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Old Capital Securities will be returned, without expense, to the undersigned at the address shown below or at a different address as may be indicated herein under "Special Delivery Instructions." IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF OR AN AGENT'S MESSAGE IN LIEU THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE. -19- GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer. Social Security numbers have nine digits separated by two hyphens: i.e. 000-00- 0000. Employer identification number have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. ================================================================================ Give the SOCIAL SECURITY For this type of account number of -- ================================================================================ 1. Individual The individual 2. Two or more individuals The actual owner of the (joint account) account or, if combined funds, the first individual on the account/1/ 3. Custodian account of a minor The minor/2/ (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor-trustee/1/ trust account (grantor is also trustee) b. So-called trust account that The actual owner/1/ is not a legal or valid trust under State law ================================================================================ Give the EMPLOYER IDENTIFICATION For this type of account number of-- ================================================================================ 5. Sole proprietorship account The Owner/3/ 6. A valid trust, estate, or Legal entity (Do not furnish the pension trust identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)/4/ 7. Corporate The Corporation 8. Association, club, religious, The organization charitable, educational, or other tax-exempt organization 9. Partnership The partnership 10. A broker or registered The broker or nominee nominee 11. Account with the Department The public entity of Agriculture in the name of a public entity (such as a State or local government, school district, or person) that receives agricultural program payments ================================================================================ /1/ List first and circle the name of the person whose number you furnish. /2/ Circle the minor's name and furnish the minor's social security number. /3/ You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your SSN or EIN. /4/ List first and circle the name of the legal trust, estate, or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name issued. -20- Section references are to the Internal Revenue Code. Purpose of Form.--A person who is required to file an information return with the IRS must get your correct TIN to report income paid to you, real estate transactions, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. Use Form W-9 to give your correct TIN to the requester (the person requesting your TIN) and, when applicable, (1) to certify the TIN you are giving is correct (or you are waiting for a number to be issued), (2) to certify you are not subject to backup withholding, or (3) to claim exemption from backup withholding if you are an exempt payee. Giving your correct TIN and making the appropriate certifications will prevent certain payments from being subject to backup withholding. What is Backup Withholding?--Persons making certain payments to you must withhold and pay to the IRS 31% of such payments under certain conditions. This is called "backup withholding." Payments that could be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding. If you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return, your payments will not be subject to backup withholding. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the requester, or 2. The IRS tells the requester that you furnished an incorrect TIN, or 3. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or 4. You do not certify to the requester that you are not subject to backup withholding under 3 above (for reportable interest and dividend accounts opened after 1983 only), or 5. You do not certify your TIN. See the Part III Instructions for exceptions. Certain payees and payments are exempt from backup withholding and information reporting. See the Part II Instructions and the separate Instructions for the Requester of Form W-9. How to Get a TIN.--If you do not have a TIN, apply for one immediately. To apply, get Form SS-5, Application for a Social Security Number Card (for individuals), from your local office of the Social Security Administration, or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), from your local IRS office. If you do not have a TIN, write "Applied For" in the space for the TIN in Part I, sign and date the form, and give it to the requester. Generally, you will then have 60 days to get a TIN and give it to the requester. If the requester does not receive your TIN within 60 days, backup withholding, if applicable, will begin and continue until you furnish your TIN. -21- Note: Writing "Applied For" on the form means that you have already applied for a TIN OR that you intend to apply for one soon. As soon as you receive your TIN, complete another Form W-9, include your TIN, sign and date the form, and give it to the requester. Penalties Failure To Furnish TIN.--If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil Penalty for False Information With Respect to Withholding.--If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. Criminal Penalty for Falsifying Information.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. Misuse of TINs.--If the requester discloses or uses TINs in violation of Federal law, the requester may be subject to civil and criminal penalties. Specific Instructions Name.--If you are an individual, you must generally enter the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your name, the last name shown on your social security card and your new last name. Sole Proprietor.--You must enter your individual name. (Enter either your SSN or EIN in Part 1). You may also enter your business name or "doing business as" name on the business name line. Enter your name as shown on your social security card and business name as it was used to apply for your EIN on Form SS-4. Part I--Taxpayer Identification Number (TIN) You must enter your TIN in the appropriate box. If you are a sole proprietor, you may enter your SSN or EIN. Also see the chart on page 20 for further clarification of name and TIN combinations. If you do not have a TIN, follow the instructions under How To Get A TIN on page 21. Part II--For Payees Exempt From Backup Withholding Individuals (including sole proprietors) are not exempt from backup withholding. Corporations are exempt from backup withholding for certain payments, such as interest and dividends. If you are exempt from backup withholding, you should still complete this form to avoid possible erroneous backup withholding. Enter your correct TIN in Part I, write "Exempt" in Part II, and sign and date the form. If you are a nonresident alien or a foreign entity not subject to backup withholding, give the requester a completed Form W-8, Certificate of Foreign Status. -22- Part III--Certification For a joint account, only the person whose TIN is shown in Part I should sign. 1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984 and Broker Accounts Considered Active During 1983. You must give your correct TIN, but you do not have to sign the certification. 2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After 1983 and Broker Accounts Considered Inactive During 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out Item 2 in the certification before signing the form. 3. Real Estate Transactions. You must sign the certification. You may cross out Item 2 of the certification. 4. Other Payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified of an incorrect TIN. Other payments include payments made in the course of the requester's trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services, payments to a nonemployee for services (including attorney and accounting fees), and payments to certain fishing boat crew members. 5. Mortgage Interest Paid by You, Acquisitions or Abandonment of Secured Property, Cancellation of Debt, or IRA Contributions. You must give your correct TIN, but you do not have to sign the certification. Privacy Act Notice Section 6109 requires you to give your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to a payer. Certain penalties may also apply. -23- EX-99.2 23 FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY for Tender of 8.205% Capital Securities (Liquidation Amount $1,000 per Capital Security) of Aon Capital A As set forth in the Exchange Offer (as defined below), this Notice of Guaranteed Delivery (or a facsimile hereof) or one substantially equivalent hereto or the electronic form used by The Depository Trust Company ("DTC") for this purpose must be used to accept the Exchange Offer if certificates for 8.205% Capital Securities due January 1, 2027 (the "Old Capital Securities") of Aon Capital A, a Delaware statutory business trust (the "Trust"), are not immediately available to the registered holder of such Old Capital Securities, or if a participant in DTC is unable to complete the procedures for book-entry transfer on a timely basis of Old Capital Securities to the account maintained by The Bank of New York (the "Exchange Agent") at DTC, or if time will not permit all documents required by the Exchange Offer to reach the Exchange Agent prior to 5:00 p.m., New York City time, on ________________, 1997, unless extended (the "Expiration Date"). This Notice of Guaranteed Delivery (or a facsimile hereof) or one substantially equivalent hereto may be delivered by mail (registered or certified mail is recommended), by facsimile transmission, by hand or overnight carrier to the Exchange Agent. See "The Exchange Offer - Procedures for Tendering Old Capital Securities." Capitalized terms used herein and not defined herein have the meanings assigned to them in the Exchange Offer. The Exchange Agent is: The Bank of New York By Registered or Certified Mail: By Facsimile: By Hand/Overnight Carrier: The Bank of New York The Bank of New York The Bank of New York 101 Barclay Street - 7E Attn: Enrique Lopez 101 Barclay Street New York, New York 10286 (212) 571-3080 Corporate Trust Services Window Attn: Reorganization Section Ground Level (For Eligible Institutions Only) New York, New York 10286 Confirm by Telephone: Attn: Reorganization Section (212) 815-6333 For Information Call: (212) 815-6333
Delivery of this Notice of Guaranteed Delivery to an address other than as set forth above or transmission of this Notice of Guaranteed Delivery via a facsimile number other than the number listed above will not constitute a valid delivery. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution (as defined therein) under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to the Trust and to Aon Corporation, a Delaware corporation ("Aon"), the aggregate liquidation amount of Old Capital Securities indicated below pursuant to the guaranteed delivery procedures and upon the terms and subject to the conditions set forth in the accompanying Prospectus dated__________, 1997 (as the same may be amended or supplemented from time to time, the "Prospectus") and in the related Letter of Transmittal (which together with the Prospectus constitute the "Exchange Offer"), receipt of which is hereby acknowledged. The undersigned hereby represents, warrants and agrees that the undersigned has full power and authority to tender, exchange, sell, assign, and transfer the Tendered Old Capital Securities and that the Trust will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances when the Tendered Old Capital Securities are acquired by the Trust as contemplated herein, and the Tendered Old Capital Securities are not subject to any adverse claims or proxies. The undersigned warrants and agrees that the undersigned and each Beneficial Owner will, upon request, execute and deliver any additional documents deemed by Aon, the Trust or the Exchange Agent to be necessary or desirable to complete the tender, exchange, sale, assignment and transfer of the Tendered Old Capital Securities, and that the undersigned will comply with its obligations under the Registration Rights Agreement. The undersigned has read and agrees to all of the terms of the Exchange Offer. BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS NOTICE OF GUARANTEED DELIVERY, THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT (i) NEITHER THE UNDERSIGNED NOR ANY BENEFICIAL OWNER(S) IS AN "AFFILIATE" OF AON OR THE TRUST, (ii) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S) ARE BEING ACQUIRED BY THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S) IN THE ORDINARY COURSE OF BUSINESS OF THE UNDERSIGNED AND ANY BENEFICIAL OWNER(S), (iii) THE UNDERSIGNED AND EACH BENEFICIAL OWNER HAVE NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (iv) IF THE UNDERSIGNED OR ANY BENEFICIAL OWNER IS NOT A BROKER-DEALER, THE UNDERSIGNED OR ANY SUCH BENEFICIAL OWNER IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS NOTICE OF GUARANTEED DELIVERY, THE UNDERSIGNED OR ANY BENEFICIAL OWNER(S) OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS THE RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT). All questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of Tendered Old Capital Securities will be determined by Aon and the Trust, in their sole discretion, whose determination shall be final and binding on all parties. Aon and the Trust reserve the absolute right, in their sole and absolute discretion, to reject any and all tenders determined by Aon and the Trust not to be in proper form or the acceptance of which, or exchange for, may, in the view of Aon and the Trust or of counsel to Aon and the Trust, be unlawful. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. -2- Name(s) of Registered Holder(s): ------------------------------------------------ - -------------------------------------------------------------------------------- Please Print Address(es): -------------------------------------------------------------------- - -------------------------------------------------------------------------------- Area Code and Tel. No(s): ------------------------------------------------------- X -------------------------------------------------------------------------- X -------------------------------------------------------------------------- Signature(s) of Owner(s) or Authorized Signatory Must be signed by the registered holder(s) of the Tendered Old Capital Securities as their name(s) appear(s) on certificates for such Tendered Old Capital Securities, or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below.
Aggregate Liquidation Certificate No(s) Amount Represented Aggregate Liquidation (if available) by Certificate Amount Tendered - ------------------- ------------------------- --------------------- - ------------------- ------------------------- --------------------- - ------------------- ------------------------- --------------------- - ------------------- ------------------------- --------------------- - ------------------- ------------------------- ---------------------
If Old Capital Securities will be delivered by book-entry transfer to The Depository Trust Company, provide the following information: Signature: ------------------------------------------------------------ Account Number: --------------------------------------------------------------- Date: ----------------------------------------------------------------- THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED -3- GUARANTEE (Not to be used for signature guarantee) The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker, government securities dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association recognized program (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees delivery to the Exchange Agent, at one of its addresses set forth above, either certificates for the Old Capital Securities tendered hereby, in proper form for transfer, or confirmation of the book-entry transfer of such Old Capital Securities to the Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof or an Agent's Message in lieu thereof) and any other documents required by the Letter of Transmittal, all within five (5) business days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must communicate the guarantee to the Exchange Agent and must deliver the Letter of Transmittal and certificates for the Old Capital Securities tendered hereby to the Exchange Agent within the time period shown hereon and that failure to do so could result in a financial loss to the undersigned. - ---------------------------------- ----------------------------------------- Firm Authorized Signature Name - ---------------------------------- ------------------------------------- Address (Please Type or Print) - ---------------------------------- Title Zip Code ----------------------------------- Dated _____________________________, 1996 Area Code and Tel. No.: -------------------------------------------------------- DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. -4- EX-99.3 24 FORM OF LETTER FROM REGISTERED HOLDERS TO CLIENTS EXHIBIT 99.3 AON CAPITAL A OFFER TO EXCHANGE Its 8.205% Capital Securities Which Have Been Registered Under the Securities Act of 1933 for Any and All of Its Outstanding 8.205% Capital Securities (Liquidation Amount $1,000 per Capital Security) To Our Clients: Enclosed for your consideration are the Prospectus, dated ____________, 1997 (as the same may be amended and supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (which together with the Prospectus constitute the "Exchange Offer"), in connection with the offer by Aon Capital A, a Delaware statutory business trust (the "Trust), to exchange the Trust's 8.205% Capital Securities due January 1, 2027 ( the "New Capital Securities") which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for any and all of the Trust's outstanding 8.205% Capital Securities due January 1, 2027 (the "Old Capital Securities"), upon the terms and subject to the conditions set forth in the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on _______________, 1997, unless extended (the "Expiration Date"). We are holding Old Capital Securities for your account. An exchange of the Old Capital Securities can be made only by us and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to exchange the Old Capital Securities held by us for your account. The Exchange Offer provides a procedure for holders to tender by means of guaranteed delivery. We request information as to whether you wish us to exchange any or all of the Old Capital Securities held by us for your account upon the terms and subject to the conditions of the Exchange Offer. Your attention is directed to the following: 1. The forms and terms of the New Capital Securities are the same in all material respects as the forms and terms of the Old Capital Securities (which they replace) except that the New Capital Securities have been registered under the Securities Act. Distributions on the New Capital Securities will accumulate from the most recent January 1 or July 1 on which distributions were paid or provided for on the Old Capital Securities, or, if no distributions have been paid or provided for on the Old Capital Securities, from January 1, 1997. 2. Based on an interpretation by the staff of the Division of Corporation Finance of the Securities and Exchange Commission (the "SEC") as set forth in certain interpretive letters addressed to third parties in other transactions, New Capital Securities issued pursuant to the Exchange Offer in exchange for Old Capital Securities may be offered for resale, resold and otherwise transferred by a holder thereof (other than a holder which is an "affiliate" of Aon or the Trust within the meaning of Rule 405 under the Securities Act or a "broker" or "dealer" registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Capital Securities are acquired in the ordinary course of such holder's business and such holder is not engaging, does not intend to engage, and has no arrangement or understanding with any person to participate, in the distribution of such New Capital Securities. See "Shearman & Sterling," SEC No-Action Letter (available July 2, 1993), "Morgan Stanley & Co., Inc.," SEC No-Action Letter (available June 5, 1991) and "Exxon Capital Holdings Corporation," SEC No-Action Letter (available May 13, 1988). 3. The Exchange Offer is not conditioned on any minimum aggregate liquidation amount of Old Capital Securities being tendered except that Old Capital Securities may be tendered only in an aggregate liquidation amount of $100,000 (100 Old Capital Securities) and integral multiples of $1,000 (1 Old Capital Security) in excess thereof. The New Capital Securities will be exchanged for the Old Capital Securities at the rate of one New Capital Security ($1,000 liquidation amount) for each Old Capital Security ($1,000 liquidation amount). 4. Notwithstanding any other provisions of the Exchange Offer, or any extension of the Exchange Offer, Aon Corporation, a Delaware corporation ("Aon"), and the Trust will not be required to accept any Old Capital Securities for exchange or to exchange any New Capital Securities for any Old Capital Securities and may terminate the Exchange Offer (whether or not any Old Capital Securities have been accepted for exchange) or may waive any conditions to or amend the Exchange Offer, if any of the conditions described in the Prospectus under "The Exchange Offer - Conditions of the Exchange Offer" have occurred or exist or have not been satisfied. 5. Tendered Old Capital Securities may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date, if such Old Capital Securities have not previously been accepted for exchange pursuant to the Exchange Offer. 6. Any transfer taxes applicable to the exchange of Old Capital Securities pursuant to the Exchange Offer will be paid by Aon, except as otherwise provided in Instruction 9 of the Letter of Transmittal. If you wish to have us tender any or all of your Old Capital Securities, please so instruct us by completing, detaching and returning to us the instruction form attached hereto. An envelope to return your instructions is enclosed. If you authorize a tender of your Old Capital Securities, the entire liquidation amount of Old Capital Securities held for your account will be tendered unless otherwise specified on the instruction form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf by the Expiration Date. The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of the Old Capital Securities in any jurisdiction in which the making of the Exchange Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction or would otherwise not be in compliance with any provision of any applicable security law. -2- AON CAPITAL A OFFER TO EXCHANGE Its 8.205% Capital Securities Which Have Been Registered Under the Securities Act of 1933 for Any and All of Its Outstanding 8.205% Capital Securities (Liquidation Amount $1,000 per Capital Security) Instructions to Registered Holder from Beneficial Owner The undersigned acknowledge(s) receipt of your letter and the enclosed Prospectus and the related Letter of Transmittal in connection with the offer by the Trust to exchange New Capital Securities for Old Capital Securities. This will instruct you to tender the liquidation amount of Old Capital Securities indicated below held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal. The undersigned represents that (i) the New Capital Securities acquired pursuant to the Exchange Offer are being obtained in the ordinary course of the undersigned's business, (ii) the undersigned is not engaging, does not intend to engage, and has no arrangement or understanding with any person to participate, in the distribution of such New Capital Securities, and (iii) the undersigned is not an "affiliate," as defined under Rule 405 of the Securities Act, of Aon or the Trust. If the undersigned is a "broker" or "dealer" registered under the Exchange Act that acquired Old Capital Securities for its own account pursuant to its market-making or other trading activities (other than Old Capital Securities acquired directly from Aon or the Trust or an affiliate of Aon or the Trust) (a "Participating Broker-Dealer"), the undersigned represents and agrees, consistent with certain interpretive letters issued by the staff of the Division of Corporation Finance of the SEC to third parties in other transactions, that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Capital Securities. Notwithstanding the foregoing, the undersigned does not thereby admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned understands that Aon and the Trust have agreed that, subject to the provisions of the Registration Rights Agreement (as defined in the Prospectus) and to the limitations described under "The Exchange Offer - Resales of New Capital Securities" in the Prospectus, the Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of New Capital Securities received in exchange for Old Capital Securities where such Old Capital Securities were acquired by such Participating Broker-Dealer for its own account as a result of market-making activities or other trading activities, for a period ending 90 days after the Expiration Date or, if earlier, when all such New Capital Securities have been disposed of by such Participating Broker-Dealer. If the undersigned is a Participating Broker-Dealer, the undersigned agrees that, upon receipt of notice from Aon or the Trust of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the registration rights agreement, such Participating Broker-Dealer will suspend the sale of New Capital Securities pursuant to the Prospectus until Aon or the Trust has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented -3- Prospectus to such Participating Broker-Dealer or Aon or the Trust has given notice that the sale of the New Capital Securities may be resumed, as the case may be. Sign Here ..................................... Signature(s) Securities which are to be tendered: Tender all of the Old Capital Securities Aggregate Liquidation Amount* ---------------------------- [_] Old Capital Securities.......................... .................................................... Name(s) (Please Print) .................................................... Address .................................................... Zip Code .................................................... Area Code and Telephone No. Dated: ______________, 1997 ________________________ *Unless otherwise indicated, it will be assumed that all of the Old Capital Securities listed are to be tendered. -4- EX-99.4 25 FORM OF LETTER TO BROKER AND DEALERS EXHIBIT 99.4 AON CAPITAL A OFFER TO EXCHANGE Its 8.205% Capital Securities Which Have Been Registered Under the Securities Act of 1933 for Any and All of Its Outstanding 8.205% Capital Securities (Liquidation Amount $1,000 per Capital Security) ____________, 1997 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We are enclosing herewith an offer by Aon Capital A, a Delaware statutory business trust (the "Trust"), to exchange the Trust's new 8.205% Capital Securities due January 1, 2027 (the "New Capital Securities") which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for any and all of the Trust's outstanding 8.205% Capital Securities due January 1, 2027 (the "Old Capital Securities"), upon the terms and subject to the conditions set forth in the accompanying Prospectus, dated ____________, 1997 (as the same amended and supplemented from time to time, the "Prospectus"), and related Letter of Transmittal (which together with the Prospectus constitutes the "Exchange Offer"). The Exchange Offer provides a procedure for holders to tender the Old Capital Securities by means of guaranteed delivery. The Exchange Offer will expire at 5:00 p.m., New York City time, on ____________, 1997, unless extended (the "Expiration Date"). Tendered Old Capital Securities may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date, if such Old Capital Securities have not previously been accepted for exchange pursuant to the Exchange Offer. Based on an interpretation by the staff of the Division of Corporation Finance of the Securities and Exchange Commission (the "SEC") as set forth in certain interpretive letters addressed to third parties in other transactions, New Capital Securities issued pursuant to the Exchange Offer in exchange for Old Capital Securities may be offered for resale, resold and otherwise transferred by a holder thereof (other than a holder which is an "affiliate" of Aon or the Trust within the meaning of Rule 405 under the Securities Act or a "broker" or "dealer" registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Capital Securities are acquired in the ordinary course of such holder's business and such holder is not engaging, does not intend to engage, and has no arrangement or understanding with any person to participate, in the distribution of such New Capital Securities. See "Shearman & Sterling," SEC No-Action Letter (available July 2, 1993), "Morgan Stanley & Co., Inc.," SEC No-Action Letter (available June 5, 1991) and "Exxon Capital Holding Corporation," SEC No-Action Letter (available May 13, 1988). The Exchange Offer is not conditioned on any minimum aggregate liquidation amount of Old Capital Securities being tendered except that Old Capital Securities may be tendered only in an aggregate liquidation amount of $100,000 (100 Old Capital Securities) and integral multiples of $1,000 (1 Old Capital Security) in excess thereof. Notwithstanding any other provisions of the Exchange Offer, or any extension of the Exchange Offer, Aon Corporation, a Delaware corporation ("Aon"), and the Trust will not be required to accept for exchange, or to exchange, any New Capital Securities for any Old Capital Securities and may terminate the Exchange Offer (whether or not any Old Capital Securities have been accepted for exchange) or may waive any conditions to or amend the Exchange Offer, if any of the conditions described in the Prospectus under "The Exchange Offer - Conditions of the Exchange Offer" have occurred or exist or have not been satisfied. For your information and for forwarding to your clients for whom you hold Old Capital Securities registered in your name or in the name of your nominee, we are enclosing the following documents: 1. A Prospectus, dated ____________, 1997. 2. A Letter of Transmittal for your use and for the information of your clients. 3. A printed form of letter which may be sent to your clients for whose accounts you hold Old Capital Securities registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer. 4. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 of the Internal Revenue Service (included in the Letter of Transmittal after the instructions thereto). WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. Any inquiries you may have with respect to the Exchange Offer may be addressed to, and additional copies of the enclosed materials may be obtained from, the Exchange Agent at the following telephone number: (212) 815-6333. Very truly yours, Aon Capital A NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU AS THE AGENT OF THE TRUST, AON, THE EXCHANGE AGENT OR ANY OTHER PERSON, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. EX-99.5 26 FORM OF EXCHANGE AGENT AGREEMENT EXHIBIT 99.5 ___________, 199__ EXCHANGE AGENT AGREEMENT ------------------------ The Bank of New York Corporate Trust Trustee Administration 101 Barclay Street - 21st Floor New York, New York 10286 Ladies and Gentlemen: Aon Corporation, a Delaware corporation (the "Company"), and Aon Capital A, a Delaware statutory business trust (the "Trust"), propose to make an offer (the "Exchange Offer") to exchange up to $800,000,000 aggregate liquidation amount of the Trust's 8.205% Capital Securities due January 1, 2027 (the "Old Securities"), which have been registered under the Securities Act of 1933, as amended, for a like aggregate liquidation amount of the Trust's outstanding 8.205% Capital Securities due January 1, 2027 (the "New Securities"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus, dated ___________, 199__ (the "Prospectus") and in the related Letter of Transmittal, proposed to be distributed to all record holders of the Old Securities. The Old Securities and the New Securities are collectively referred to herein as the "Securities." The Company and the Trust hereby appoint The Bank of New York to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to The Bank of New York. The Exchange Offer is expected to be commenced by the Company and the Trust on or about _____________, 1997. The Letter of Transmittal accompanying the Prospectus (or in the case of book entry securities, the ATOP system) is to be used by the holders of the Old Securities to accept the Exchange Offer and contains instructions with respect to the delivery of certificates for Old Securities tendered in connection therewith. The Exchange Offer shall expire at 5:00 P.M., New York City time, on _____________, 1997 or on such later date or time to which the Company and the Trust may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company and the Trust expressly reserve the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (confirmed in writing) or written notice to you before 9:00 A.M., New York City time, on the business day following the previously scheduled Expiration Date. The Company and the Trust expressly reserve the right to amend or terminate the Exchange Offer, and not to accept for exchange any Old Securities not theretofore accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer." The Company and the Trust will give oral (confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable. In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 1. You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus captioned "The Exchange Offer" or as specifically set forth herein; provided, however, that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish an account with respect to the Old Securities at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book- Entry Transfer Facility's systems may make book-entry delivery of the Old Securities by causing the Book-Entry Transfer Facility to transfer such Old Securities into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. 3. You are to examine each of the Letters of Transmittal and certificates for Old Securities (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Old Securities, and any book-entry confirmations (as defined in the Prospectus) received by you with respect to Old Securities, to ascertain whether: (i) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and that such book-entry confirmations are in due and proper form and contain the information required to be set forth therein; (ii) the Old Securities have otherwise been properly tendered; (iii) Old Securities are tendered in aggregate liquidation amounts of $100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess thereof and if any Old Securities are tendered for exchange in part, the untendered aggregate liquidation amount thereof is $100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess thereof and (iv) holders have provided their correct Tax Identification Number or required certification. Determination of all questions as to validity, form, eligibility and acceptance for exchange of any Old Securities shall be made by the Company or the Trust, whose determination shall be final and binding. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or any of the certificates for Old Securities are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all require- -2- ments and to take any other action as may be necessary or advisable to cause such irregularity to be corrected. 4. With the approval of the President, Senior Vice President, Executive Vice President, or any Vice President of the Company or an Administrative Trustee of the Trust (such approval, if given orally, to be confirmed in writing) or any other party designated by such an officer in writing, you are authorized to waive any irregularities in connection with any tender of Old Securities pursuant to the Exchange Offer. 5. Tenders of Old Securities may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer," and Old Securities shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this paragraph 5, Old Securities which the President, Senior Vice President, Executive Vice President, or any Vice President of the Company or an Administrative Trustee of the Trust shall approve as having been properly ten dered shall be considered to be properly tendered (such approval, if given orally, shall be confirmed in writing). 6. You shall advise the Company and the Trust with respect to any Old Securities as soon as possible after 5:00 p.m. New York City time, on the Expiration Date and accept their instructions with respect to disposition of such Old Securities. 7. You shall accept tenders: (a) in cases where the Old Securities are registered in two or more names only if signed by all named holders; (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and (c) from persons other than the registered holder of Old Securities provided that customary transfer requirements, including any applicable transfer taxes, are fulfilled. You shall accept partial tenders of Old Securities where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Securities to the transfer agent for split-up and return any untendered Old Securities to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. -3- 8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company or the Trust will notify you (such notice if given orally, to be confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Old Securities properly tendered and you, on behalf of the Company and the Trust, will exchange such Old Securities for New Securities and cause such Old Securities to be cancelled. Delivery of New Securities will be made on behalf of the Company and the Trust by you at the rate of $1,000 aggregate liquidation amount of New Securities for each $1,000 aggregate liquidation amount of the corresponding series of Old Securities tendered promptly after notice (such notice if given orally, to be confirmed in writing) of acceptance of said Old Securities by the Company and the Trust; provided, however, that in all cases, Old Securities tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Old Securities (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees and any other required documents. You shall issue New Securities only in denominations of $100,000 (100 Capital Securities) or any integral multiple of $1,000 in excess thereof. 9. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Old Securities tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. 10. The Company and the Trust shall not be required to exchange any Old Securities tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company and the Trust not to exchange any Old Securities tendered shall be given (and confirmed in writing) by the Company or the Trust to you. 11. If, pursuant to the Exchange Offer, the Company and the Trust do not accept for exchange all or part of the Old Securities tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Old Securities (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them. 12. All certificates for reissued Old Securities, unaccepted Old Securities or for New Securities shall be forwarded by (a) first-class certified mail, return receipt requested under a blanket surety bond protecting you and the Company and the Trust from loss or liability arising out of the non-receipt or non-delivery of such certificates or (b) by registered mail insured separately for the replacement value of each of such certificates. 13. You are not authorized to pay or offer to pay any concessions, -4- commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders. 14. As Exchange Agent hereunder you: (a) shall have no duties or obligations other than those specifically set forth herein or as may be subsequently agreed to in writing by you and the Company and the Trust; (b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the certificates or the Old Securities represented thereby deposited with you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; (c) shall not be obligated to take any legal action hereunder which might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity; (d) may reasonably rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party or parties; (e) may reasonably act upon any tender, statement, request, comment, agreement or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith believe to be genuine or to have been signed or represented by a proper person or persons; (f) may rely on and shall be protected in acting upon written or oral instructions from any officer of the Company and the Trust; (g) may consult with your counsel with respect to any questions relating to your duties and responsibilities and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by you hereunder in good faith and in accordance with the advice or opinion of such counsel; and (h) shall not advise any person tendering Old Securities pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Old Securities. -5- 15. You shall take such action as may from time to time be requested by the Company or the Trust or their respective counsel (and such other action as you may reasonably deem appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms as may be approved from time to time by the Company and the Trust, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company or the Trust will furnish you with copies of such documents at your request. All other requests for information relating to the Exchange Offer shall be directed to the Company and the Trust, Attention: ____________________. 16. You shall advise by facsimile transmission or telephone, and promptly thereafter confirm in writing to _____________________________ of the Company and the Trust and such other person or persons as it may request, daily (and more frequently during the week immediately preceding the Expiration Date and if otherwise requested) up to and including the Expiration Date, as to the number of Old Securities which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately report ing and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Company and the Trust or any such other person or persons upon oral request made from time to time prior to the Expiration Date of such other information as it or he or she reasonably requests. Such coopera tion shall include, without limitation, the granting by you to the Company and the Trust and such person as the Company and the Trust may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company and the Trust shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate liquidation amount of Old Securities tendered, the aggregate liquidation amount of Old Securities accepted and deliver said list to the Company and the Trust. 17. Letters of Transmittal, book-entry confirmations and Notices of Guaranteed Delivery shall be stamped by you as to the date and the time of receipt thereof and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities, or one year, whichever is longer, and thereafter shall be delivered by you to the Company and the Trust. You shall dispose of unused Letters of Transmittal and other surplus materials by returning them to the Company or the Trust. 18. You hereby expressly waive any lien, encumbrance or right of set- off whatsoever that you may have with respect to funds deposited with you for the payment of trans fer taxes by reasons of amounts, if any, borrowed by the Company or the Trust, or any of its subsidiaries or affiliates pursuant to any loan or credit agreement with you or for compensation owed to you hereunder or for any other matter. -6- 19. For services rendered as Exchange Agent hereunder, you shall be entitled to such compensation as set forth on Schedule I attached hereto. 20. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal and further acknowledge that you have examined each of them. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to the duties, liabilities and indemnification of you as Exchange Agent, which shall be controlled by this Agreement. 21. The Company and the Trust covenant and agree to indemnify and hold you harmless in your capacity as Exchange Agent hereunder against any loss, liability, cost or expense, including reasonable attorneys' fees and expenses, arising out of or in connection with any act, omission, delay or refusal made by you in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document reasonably believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Securities reasonably believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Old Securities; provided, however, that the Company and the Trust shall not be liable for indemnification or otherwise for any loss, liability, cost or expense to the extent arising out of your bad faith, gross negligence or willful misconduct. In no case shall the Company and the Trust be liable under this indemnity with respect to any claim against you unless the Company and the Trust shall be notified by you, by letter or cable or by facsimile confirmed by letter, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or notice of commencement of action. The Company and the Trust shall be entitled to participate at their own expense in the defense of any such claim or other action, and, if the Company and the Trust so elect, the Company or the Trust may assume the defense of any pending or threatened action against you in respect of which indemnification may be sought hereunder with counsel reasonably acceptable to you, in which case the Company or the Trust, as applicable, shall not thereafter be liable under this paragraph for the fees and disbursements of legal counsel retained by you; provided that the Company and the Trust shall not be entitled to assume the defense of any such action if the named parties to such action include the Company or the Trust and you and representation of the parties by the same legal counsel would, in your opinion, be inappropriate due to actual or potential conflicting interests between them. It is understood that neither the Company nor the Trust shall be liable under this paragraph for the fees and disbursements of more than one legal counsel for you. In the event that the Company or the Trust shall assume the defense of any such suit with counsel reasonably acceptable to you, the Company or the Trust, as applicable, shall not therewith be liable for the fees and expenses of any counsel retained by you. Without the prior written consent of the Company and the Trust, you will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, -7- action or proceeding in respect of which indemnification could be sought in accordance with the indemnification provisions of this Agreement (whether or not you, the Company or the Trust or any of their directors, officers and controlling persons is an actual or potential party to such claim, action or proceeding), unless such settlement or consent includes an unconditional release of the Company and the Trust and their directors, officers and controlling persons from all liability arising out of such claim, action or proceeding. 22. You shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Tax Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service. The Company and the Trust understand that you are required to deduct 31% on payments to holders who have not supplied their correct Taxpayer Identification Number or required certification. Such funds will be turned over to the Internal Revenue Service in accordance with applicable regulations. 23. You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Old Securities, your check in the amount of all transfer taxes so payable, and the Company and the Trust shall reimburse you for the amount of any and all transfer taxes payable in respect of the exchange of Old Securities; provided, however, that you shall reimburse the Company or the Trust for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you. 24. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles. 25. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Without limiting the foregoing, the parties hereto expressly agree that no holder of Old Securities or New Securities shall have any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 26. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 27. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 28. This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by a written instrument -8- signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally. 29. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: If to the Company or the Trust: ___________________________ ___________________________ ___________________________ Facsimile: ________________ Attention: ________________ If to the Exchange Agent: The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Facsimile: (212) 815-5915 Attention: Corporate Trust Trustee Administration 30. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company or the Trust any certificates for Securities, funds or property then held by you as Exchange Agent under this Agreement. 31. This Agreement shall be binding and effective as of the date hereof. -9- Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. AON CORPORATION By:_____________________________ Name: Title: AON CAPITAL A By:_____________________________ Name: Title: Administrative Trustee Accepted as of the date first above written: THE BANK OF NEW YORK, as Exchange Agent By:_____________________ Name: Title: -10- SCHEDULE I FEES -11- -----END PRIVACY-ENHANCED MESSAGE-----